Income tax

Tax

Obama Pushes Off-shore, Preparer Fee Limits

Senators Barack Obama (D-IL)), Norm Coleman (R-MN) and Carl Levin (D-MI) have introduced a bill designed to crack down on the use of offshore jurisdictions as tax havens and toughen penalties for abusive shelter transactions.The bill, S. 681, would establish a list of 34 "Offshore Secrecy Jurisdictions" and authorize the Treasury Department to impose sanctions on foreign jurisdictions found to be impeding the enforcement of U.S.
Tax

PwC Ordered To Pay $10 Million For Negligence

Big Four firm PricewaterhouseCoopers has been hit with a judgment for negligent misrepresentation in a case relating to the firm's involvement in the collapse of Boston-based The Mariner Health Group. The firm was fined $10,000,004 but was found not guilty of fraud and racketeering.The case stems from a 1995 sale of nursing facilities to the Mariner Group by two Georgia businessmen and brothers, Samuel B. Kellett and Stiles A. Kellett Jr., who took the bulk of their proceeds in shares of Mariner. PwC was Mariner's accounting firm.
A&A

IRS Offers Free Small Business e-Newsletter

The IRS has started a news service, e-News for Small Businesses. Distributed every Wednesday, it brings timely, useful tax information right to your computer, including, but not limited to:Important, upcoming tax dates What’s new on the IRS Web site Reminders and tips to assist businesses with tax compliance IRS news releases and special IRS announcements E-News’ convenient format will put IRS tax information at your fingertips.
Tax

IRS Shuts Down Preparers Seeking Bogus Phone Refunds

IRS e-News reports that search warrants were carried out in seven cities this week by special agents from the Internal Revenue Service. According to affidavits filed in federal court, the IRS is seeking evidence from tax-preparation businesses suspected of preparing returns on behalf of clients requesting egregious amounts involving this year’s special telephone excise tax refund.IRS criminal investigators served search warrants at tax preparation businesses in Atlanta, Ga.; Dallas, Tyler and Athens, Texas; Riverside, Calif.; Miami, Fla.; and Baton Rouge, La.
A&A

Small Business Tax Breaks Included In Minimum Wage Bill

The U.S. House of Representatives agreed on Friday to attach $1.3 billion in tax breaks for small businesses to legislation that would raise the federal minimum wage from $5.15 to $7.25 an hour over two years.
Tax

Unpaid Trust Fund Taxes Are Serious Business

One category of taxes the IRS considers a priority is unpaid employment taxes. Unfortunately some businesses engage in “pyramiding” – repeatedly withholding trust fund taxes from employees but intentionally failing to send them to the IRS. Regardless of the reason a business has for not paying, federal law requires that employment taxes be paid to the government on time. Failure to do so may subject you to penalties and interest, collection actions, or seizure of assets.
Tax

Reminder: New Address For Form 1042 Filers

The IRS is reminding taxpayers that all forms in the 1042 series should now be mailed to Ogden Service Center, P.O. Box 409101, Ogden, UT 84409. These forms had been mailed to Philadelphia, PA in past years. The forms affected include: Form 1042, Annual Withholding Tax Return for U.S. Source Income of Foreign Persons, Form 1042-S, Foreign Person's U.S. Source Income Subject to Withholding, and Form 1042-T, Annual Summary and Transmittal of Forms 1042-S.
Tax

Non-Profits Service Fund Software Launched

Kintera Inc. has unveiled its first software as a service fund accounting system for non-profits.Built on its social constituent relationship management platform, Kintera Sphere Fundware will allow non-profit and government organizations to track the flow of funds from end to end, integrating with business applications such as e-commerce, utility billing and management for grants and donors.“One of the things in the back of people’s minds is where is the money going,” said Harry Chiu, senior vice president of product management for Kintera.
Technology

Tax Prep Software Put To The Test

While a reported 60 percent of taxpayers use a paid preparer to complete their tax returns, there are still many individual filers who prepare their own returns using tax prep software. In two separate instances in 2006, tax courts ruled against filers who tried to blame their erroneous returns on the software they used.
Tax

Why Taxpayers Don’t Claim EITC

Complex steps for claiming the Earned Income Tax Credit and a lack of awareness about the benefit are the most common reasons why taxpayers fail to claim it, according to H&R Block.H&R Block, which prepared one of every four tax returns claiming the EITC in 2006, helped more than 5 million taxpayers claim nearly $10 billion in EITC benefits last year. Still, the IRS estimates that nearly a quarter of those who qualify don't claim the valuable credit, leaving as much as $1 billion unclaimed.The EITC offsets income taxes as a work incentive for low-income Americans.
Tax

EAs Should Note President's 2008 Budget Request

Enrolled Agents should take special note of President Bush's fiscal year 2008 budget proposal to allow the Internal Revenue Service to terminate installment agreements.One of the surprisingly few requests aimed at narrowing the tax gap in the president's request would end installment agreements when a taxpayer fails to file a timely return or fails to make timely required tax deposits.At the top of the president's list is expanded information reporting, followed by increased penalties and new requirements for large businesses.
Tax

Treasury Releases Blue Book for FY 2008

The Treasury Department unveiled its General Explanations of the Administration's Fiscal Year 2008 Revenue Proposals also known as the "Blue Book."The Bush administration proposed tax measures that will weigh in with a net cost of $1.9 trillion over the next 10 years. A substantial portion of the Blue Book re-proposes measures that have been included in Blue Books for the last several years. At the top of the administration's list of proposals were provisions to make permanent the income tax cuts enacted in 2001 and 2003.
Tax

H&R Block Opens 1 Million Accounts

H&R Block Inc. announced that the H&R Block Bank reached its goal of opening one million bank accounts for free nearly three months earlier than expected because of the overwhelming popularity of the prepaid card.The company expected to reach its goal by the end of tax season - April 17 this year. Instead, the milestone was reached after slightly more than two months of offering the accounts, which can be accessed with the H&R Block Emerald Prepaid MasterCard®.In those two months, the card has helped H&R Block clients save nearly $30 million on check-cashing fees.
Tax

Ford Hybrids Still Qualify for Tax Credit

The Internal Revenue Service announced that purchasers of qualified Ford Motor Company vehicles may continue to claim the Alternative Motor Vehicle Credit. Also, four qualifying 2008 Ford hybrid vehicles were announced. The announcement comes after the IRS concluded its quarterly review of the number of hybrid vehicles sold. Ford sold 5,645 qualifying vehicles to retail dealers during the quarter ending Dec. 31, 2006.
Tax

IRS to Scrutinize Excessive Per Diem Payments

Companies that routinely reimburse employees for travel expenses using per diems that are higher than the federal rates, had better make sure the amounts are tracked and documented carefully.The Internal Revenue Service is going after these unsubstantiated amounts and can impose taxes on the entire per diem.
Tax

Patents on Tax Ideas Trouble the IRS and Tax Attorneys

Since 1998, when a federal appeals court ruled that business methods could be patented, the U.S. Patent Office has issued patents to 49 tax strategies.
Tax

Wealthy Tax Cheats Getting Away with Billions

The Internal Revenue Service (IRS) commissioner admits it—superrich taxpayers are using accounting tricks to avoid paying their full share of taxes, and they’re getting away with it.Advertisement
Tax

Judge Targets Improper Government Pressure in KPMG Case

KPMG created tax shelters that were later declared illegal, but Judge Lewis Kaplan has ruled that the government used improper coercion in seeking KPMG cooperation. The New York Times reports that the statements made by two KPMG partners will not be used at their trials.KPMG vice-chairman Richard Smith and former partner Mark Watson were financially pressured to waive their Fifth Amendment rights and speak with federal prosecutors as well. When they spoke with prosecutors without these rights, they were exposing themselves to legal risk, according to the Assocated Press.
Tax

Tax Practitioners Question Planned Methods to Curb Malpractice

A wide-ranging Internal Revenue Service (IRS) proposal to strengthen malpractice enforcement has sparked objections from tax practitioners and attorneys.The agency would publicly list the names of tax attorneys and accountants who are under investigation for alleged violations of IRS professional practice rules, according to Tuesday’s Wall Street Journal. Current rules say the names are kept private until the IRS Office of Professional Responsibility formally investigates and assesses a penalty.

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