The latest attempt at passing marriage tax penalty relief bill was approved by the Senate Finance Committee Wednesday, under the leadership of Senator William Roth. The bill offers a complete restructuring of the standard deduction and the tax brackets so that married taxpayers pay taxes as if they are two single taxpayers. The bill is expected to land on the Senate floor in July. President Clinton has indicated a willingness to sign such a measure, but only if a Medicare prescription drug bill is incorporated into the plan.
A list of 50 individuals and businesses owing delinquent taxes to the State of Maryland appeared on the Maryland Comptroller's web site yesterday. The list reflects approximately $10 million in unpaid taxes.Maryland is not the first state to attempt this type of public humiliation. Others participating in such a program include California, Connecticut, Illinois, Montana, New Jersey, New York City, and Washington D.C.
According to the Americans for Tax Reform, a non-profit lobbying, research, and educational organization which is working to fight tax increases of any kind, today, June 16, 2000, is National Cost of Government Day.
The vote by the House of Representatives to repeal the estate tax made the headlines when nay-sayers spoke publicly that this was only good for the rich. It also is good for the financial planner who serves the very rich.Because it looks as if the estate tax will be banned over a 10-year period, those in high incomes or with large inheritances will have to make some very heady decisions as to what to do to lower their tax liability.
One of the effects of the modernized IRS is the necessity to service businesses faster and resolve issues before they become too difficult to handle.A new section of the Large and Mid-Size Business Division (LMSB) will focus on just that for the food, retail and pharmaceutical industries.
An historic vote in the House today will pave the way for the eventual repeal of the oppressive estate tax. The vote was 279-136 to repeal the "death tax" over a period of 10 years. Sixty-five Democrats voted in favor of this bill, enough to override a projected veto by President Clinton.The tax affects about 2% of Americans, many of whom are owners of farms and family businesses. It is estimated that the repeal of the tax will cost the government approximately $50 billion per year.
The European Union (EU) is considering a new program that will “level the playing field” by making U.S. high-tech companies subject to the same type of Value Added Tax (VAT) that European companies enjoy. Initial reaction among U.S. companies is that this program will discourage sales in Europe or, at least, will result in a higher price structure for items sold via the Internet to European customers.The VAT rate is 15% to 25% on non-physical goods, such as software and data. Estimates are that the tax will cost U.S.
The 1040PC provided a paper-saving method for filing tax returns, by presenting a scannable tax return prepared on a computer. The method didn’t quite catch on, and with the momentum that electronic filing has gained, the IRS feels the time is right for dropping the 1040PC format altogether.The 1040PC format will not exist in the spring of 2001, and will therefore not appear as an option on computer programs that prepare tax returns.
A recent study by Syracuse University has confirmed that for the first time ever, low income taxpayers are more likely to be audited by the IRS than high income taxpayers.Low income taxpayers, defined as the "working poor" with annual income below $25,000, are being targeted to catch fraudulent claims of earned income tax credits.Audits of low income taxpayers, which the study said also included taxpayers who don't file any taxes (income = $0), generally are handled through computer generated correspondence.
The small business committee chairmen from the U.S. Senate and House have joined forces to ask Treasury Secretary Lawrence Summers to rethink the recent release of Revenue Procedure 2000-22, which requires small businesses with average annual gross receipts of over $1,000,000 to use the accrual method of accounting.Previous law provided a threshold of $5,000,000 in annual gross receipts before the accrual method was required.
Current legislation swiftly moving through the House of Representatives could ensure that employees receive tax incentive breaks when they exercise their right to purchase stock from their employers.Controversy exists, of course. Labor unions and Democrats have gone public in saying that the legislation needs to make certain employees don't abuse this privilege by replacing traditional retirement plans with stock buys.Current rules state that employees have to pay taxes when they buy shares.
Implementing the VAT (value-added tax) in many countries across the world is a no-brainer in most arenas. However, in Lebanon, where the VAT begins in about eight months, the government may not be ready to face the VAT's reality in actually collecting the tax.Why? Reports state that the government in Lebanon has had a hard time implementing income and property taxes.
The IRS has declared Saturday May 20 as National Problem Solving Day.Since the IRS' Problem Solving Days began in November 1997, over 63,000 people have been given assistance through appointments, walk-in service or over the telephone. In most cases, they are given assistance and were able to resolve their problem. In the other cases, taxpayers are given advice or information about why they can't be helped further. Many other taxpayers who called to set up an appointment for Problem Solving Days have their problems taken care of over the phone and never need to visit the IRS.
In a move sure to appeal to the important high-tech industry, the US House of Representatives has approved a five year extension on the moratorium on Internet taxation.The moratorium, which allows for e-commerce to be conducted free from any federal taxation issues, is seen as a way to continue encouraging the growth of a new medium, but at the same time does not address the even more important issue of state taxation of electronic commerce activities.Cynics may say that the move is a purely political one, coming in an election year when politicians are looking to the growing high tech i
In a surprise move, the IRS, without seeking input from small business owners and other interested groups, is preparing to release a new set of guidelines that will require many businesses with revenue over $1 million to use the accrual method of accounting. These guidelines are due to be released next week.Current law requires that businesses with revenue over $5 million must use the accrual method of accounting. Most businesses with revenue that is beneath this threshold may opt to use the accrual method, or may use the cash method of accounting.
The Wall Street Journal reported today that approximately 40% of audits of 1992 estate tax returns resulted in either no change or a reduced tax. The IRS audited about 19% of all estate tax returns filed for 1992.In many cases a reduced tax resulted from a decline in the value of property originally reported on the estate return.Nearly 20 percent of the 1992 estate returns that were examined resulted in no change in the tax computation. The results of the 1992 audit are being heralded as good news.
Businesses that must account for inventories and that have a three-year average of $1 million or less in gross receipts now have an option of using the cash method of accounting. Effective for tax years ending in December 1999, a new Revenue Procedure may result in tax savings for many small businesses.The IRS has issued Revenue Procedure 2000-22 which provides an exception to the accrual accounting rules for small taxpayers, which are defined as taxpayers with average annual gross receipts of $1 million or less.
The Wall Street Journal today reported that Treasury Secretary Lawrence Summers has asked a core group of some of the nation’s top accountants, lawyers and investment firms to join him in a series of meetings to limit corporate tax shelters.According to reports, Summers and the group will focus on how to strengthen the Treasury’s rules that govern the various professions, like accounting, that are associated with the tax-shelter industry.In addition to helping solve the problem, any further legislation related to this area looks like it will not happen this year.