Government

Tax

Renaissance Promoter Pleads Guilty to $75 M Fraud

Todd Eugene Strand of Murrieta, Calif., pleaded guilty in a Kansas City, Kan., federal court to conspiracy to defraud the United States in the assessment and computation of taxes and mail fraud charges for his involvement in a tax fraud scheme, the Justice Department and the U.S.
Tax

Illinois Tax Scam Promoters Indicted

A prominent Southern Illinois automobile dealer and three promoters of a tax fraud scheme in the U.S. Virgin Islands were charged with a variety of tax and wire fraud-related charges in an indictment returned last Friday and made public today, the Justice Department and the Internal Revenue Service (IRS) announced.A federal grand jury in East St. Louis, Ill. returned the 21-count indictment, which charges James A. Auffenberg Jr. of Swansea, Ill., Peter G. Fagan of De Leon, Texas, James W. Ferguson III of Amarillo, Texas, and J. David Jackson of St. Croix, U.S.
Tax

GAO Audit Reveals IRS Security Weaknesses

The Government Accountability Office recently reported that the Internal Revenue Service has made limited progress toward correcting or mitigating previously reported information security weaknesses. The report found 66 percent of the weaknesses that GAO had previously identified still existed.As part of its audit of the IRS’s 2005-06 financial statements, the GAO took a look at what the agency was doing to correct previously reported information security weaknesses.
Tax

Govt. Sues to Shut Down 125 Jackson Hewitt Franchises

The Justice Department has sued to shut down 125 franchises of No. 2 U.S. tax preparer Jackson Hewitt Tax Service Inc. after the IRS accused the outlets of submitting thousands of fraudulent returns that cost the government more than $70 million. The Justice Department said the franchises' fraudulent practices included using phony W-2 forms, bogus deductions and fuel tax credits and false claims regarding the earned income tax credit. Jackson Hewitt Tax Services Inc. is the nation's second largest tax preparer.
Tax

House Approves Taxpayer Protection Act

The House Ways and Means Committee approved H.R. 1677, the "Taxpayer Protection Act of 2007," which seeks to crack down on RALs and prevent identity theft.
Tax

IRS Private Collection Earns Passing Mark & Controversy

A much-debated program to use private companies to collect unpaid taxes has been given a generally positive assessment by a Treasury Department auditor.Even so, an employee union and some members of Congress are hoping to end the Internal Revenue Service program before it expands as planned later in the year, Government Executive magazine reported."Overall, the IRS has taken proactive measures to effectively develop and implement the program," J. Russell George, Treasury inspector general for tax administration, wrote in his audit report.

SEC Selects Accounting Fellows

The Securities and Exchange Commission's Office of the Chief Accountant has selected four professional accounting fellows for two-year terms beginning this summer. At the SEC, the newly selected professional accounting fellows will be involved in the study and development of rule proposals under the federal securities laws, liaison with the professional accounting and auditing standards-setting bodies, and consultation with registrants on accounting and reporting matters.Robert B.
Tax

Tax Cheat Avoids $100 Million Penalty

Incorrectly worded Justice Department documents filed as part of the biggest tax prosecution ever will cause the federal government to miss out on $100 million.Telecommunications entrepreneur Walter Anderson, who admitted hiding hundreds of millions of dollars from the IRS and District of Columbia tax collectors, was sentenced Tuesday to nine years in prison and ordered to repay about $23 million to the city. But U.S.
Practice Management

Another Enron in Europe?

Many European businesses are failing to effectively implement corporate governance codes which is heightening the risk of a serious corporate scandal on the scale of that involving Enron, new research claims. A poll of Europe's 500 largest publicity listed firms found just 56 percent had the necessary policies in place to protect against ethic and compliance failures, with only 9 percent expecting budgets aimed at addressing the issue to increase.

Court Throws Out PCAOB Lawsuit

A federal judge has dismissed a lawsuit seeking to invalidate the Public Company Accounting Oversight Board (PCAOB) on constitutional grounds.The Free Enterprise Fund said in a statement that it will appeal the decision. The 2006 suit, which was also brought by the Competitive Enterprise Institute and a small audit firm, contends that the PCAOB violates the appointments clause of the U.S. Constitution because the Securities and Exchange Commission does not have the power to appoint PCAOB members.U.S.

FDIC Chair Calls Wal-Mart's Bank Retreat 'Wise'

Federal Deposit Insurance Corporation (FDIC) chairman Sheila Bair said Wal-Mart Stores Inc. made a "wise choice" in withdrawing its 2005 application to operate an industrial loan corporation (ILC), a form of bank, from the FDIC.Wal-Mart the application was surrounded by "manufactured controversy" over its bid to acquire its own bank, bizjournals.com reported. "This decision will remove the controversy surrounding their intentions," Bair said. "They don't need an ILC to play an important role in expanding access to financial services, they can do so by partnering with banks and others.
Tax

Connecticut Considers Income Tax Increases

The Connecticut Legislature is considering a measure that would increase the personal income tax rate for high income taxpayers and reduce the sales tax rate.While reducing the sales tax rate from 6 to 4.5 percent, the proposal, CT SB 1385, also would eliminate the property tax credit, establish a refundable credit equal to 20 percent of the earned income tax credit.The proposal also would increase the C corporation tax from $250 to $400 and increase the estate tax rate from 5 to 5.5 percent.
A&A

Tax Gap Solutions Burden Small Businesses

Proposals recently issued by the Treasury Department to close the tax gap, which focus on small businesses and the self-employed, would generate only $2.9 billion in revenue, one percent of the estimated total, while they would increase the paperwork requirements on small businesses, and even turn them into tax collectors, bizjournals.com reports. “That’s 1 cent on the dollar,” Senator Max Baucus, (D – Mont.) told Treasury Secretary Henry Paulson.
Community News

Florida Bill Proposes Tax Tribunal

The Florida Legislature is considering a bill establishing a tax tribunal. The tribunal would settle all disputes sought under the state’s tax laws while holding the powers of an administrative court. The bill, FL HB 1369, would allow licensed accountants, enrolled agents and attorneys would be allowed to represent taxpayers before the tribunal.
Tax

Budget Blueprint Raises IRS Enforcement Funds

The budget blueprint for fiscal years 2008 through 2012 approved by the Senate Budget Committee provides special treatment to increased funding for IRS tax enforcement.The budget resolution would allow the government to break its discretionary spending limit for 2008 in order to total up to $399 million specifically earmarked for enforcement, if and when $6.83 billion was already provided for enforcement.President Bush previously requested $4.93 billion for IRS enforcement in his FY '08 budget.NAEA E@lert notes that the only binding feature of the budget resolution is its estab
A&A

Wisconsin Proposes Privacy Protection for Tax Preparers

The Wisconsin Legislature is considering a bill designed to prohibit a tax preparer or an entity that employs tax preparers from disclosing information obtained in the preparation of a client's tax return unless the tax preparer or entity discloses the parties to whom the tax preparer or entity intends to disclose the information, and the client consents in writing.The Bill, WI SB 69, has been referred to the committee of jurisdiction.
Community News

Employee Costs, Govt. Regs Top Indiana Concerns

Indiana CPAs are guardedly optimistic with respect to the business climate in the U.S. economy for 2007 and slightly more optimistic about the prospects for Indiana’s economy, according to the recent poll conducted by the Indiana CPA Society. In comparison, in 2006, Indiana CPAs were a bit more neutral concerning Indiana’s economy.On a continuous rating scale from zero to 100 with zero being very pessimistic, 50 being neutral, and 100 being very optimistic, Indiana CPAs were found to be guardedly optimistic about the prospects for the U.S. economy with an average rating of 64.2.
Tax

NAEA Chairman Testifies on Tax Gap Closures

National Association of Enrolled Agents (NAEA) Government Relations Chair Roger Harris Wednesday testified before the Internal Revenue Service Oversight Board about potential options for closing the tax gap. “While economists and statisticians may parse IRS data and arrive at any number of conclusions, common sense seems to indicate that any serious strategy to narrow the tax gap will of necessity include measures aimed at shoring up reporting compliance,” said Harris.
Education & Careers

New Senate Democrats Reveal Tax Priorities

Six freshman Democratic Senators joined with Senator Chuck Schumer (D-NY) to introduce S. 614, the Middle Class Opportunity Act of 2007, which focuses on the alternative minimum tax, the dependent care credit, the child tax credit, and education credits, NAEA E@lert reports.
A&A

Maryland Hopes Tax Preparers & Massage Parlors Soothe Deficit

Faced with a $1.5-billion budget deficit, Maryland legislators are focusing on widening the list of taxable services to extend the tax base. And they’ve lumped tax preparers in among escort services and massage parlors as targets of new sales taxes.Under bill MD HB 448, Maryland would charge the state’s sales and use tax for such commercial services as tanning salons, massage parlors, escorts and tax preparation.The bill is scheduled for a hearing on March 14.

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