The Internal Revenue Service (IRS) announced last week that taxpayers have until January 23, 2006 to file an election form to take part in the global settlement program for 21 specified transactions, and there will be no deadline extension.

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KPMG is getting tough with former clients and even using some federal evidence against them as evidence for their defense. The Big Four accounting firm is still speaking with federal prosecutors concerning their possible indictment for selling overly aggressive tax shelters. Two of those ex-clients are R. Cary McNair and his brother, D. Calhoun. They are the wealthy sons of Robert C. McNair, oilman and owner of the NFL Houston Texans. In December 2000, both brothers sued KPMG in state court on grounds that the accounting firm knowingly sold them sham tax shelters.

The investigation and possible prosecution of KPMG has been the focus of a larger investigation by the Department of Justice (DOJ) into abusive tax shelters sold to corporate taxpayers and wealthy individuals by accounting firms, banks, and law firms. There are now signs that DOJ is working toward a decision.DOJ found that KPMG sold four types of overly aggressive tax shelters to over 350 people between 1997 and 2001 that brought in $214 million in fees according to the Senate Subcommittee on Investigations. These shelters cost the Government around $1.4 billion in unpaid taxes.

Justice Department officials are mulling whether to seek a criminal indictment against KPMG for obstruction of justice and the sale of abusive tax shelters, the Wall Street Journal reported Thursday.Talks between federal prosecutors and KPMG could determine the fate of the Big Four accounting firm, the Journal reported, citing lawyers briefed on the case.If the firm is indicted, KPMG could suffer the fate of now-defunct Arthur Andersen, which could not withstand a Justice Department obstruction of justice indictment and its association with scandal-ridden Enron Corp."In light of the A

With the nation's largest accounting firms returning to their core business of auditing publicly held companies, they seem to be moving away from the tax-shelter business that landed the firms-and their clients-in the hot seat with the Internal Revenue Service.The tax-shelter boom of the 1990s, complete with a marketing machine operating at full speed, seems to be phasing out as the IRS cracks down on abusive shelters, such as Son of Boss.Last Thursday, the IRS announced it had collected a record $3.2 billion in taxes and penalties from participants in an abusive tax shelter known as Son

Tread carefully if you are thinking of moving family estate assets into a partnership to reduce your tax burden. A U.S.

The Internal Revenue Service this week issued guidance describing and rebutting frivolous arguments taxpayers should avoid when filing their tax returns.“Every filing season, thousands of taxpayers hear groundless theories suggesting that they don’t have to pay taxes or file returns,” said IRS Commissioner Mark W. Everson. “We want people to know the truth about these frivolous arguments: they don’t work.”IRS Notice 2005-30 describes 23 frivolous arguments that taxpayers should avoid when filing their returns.

Washington DC - The Justice Department this week sued Nicholas P. Magalhaes, of Altamonte Springs, Florida, formerly of Smithtown, New York, to bar his alleged promotion of an abusive tax shelter for employers. The government’s complaint, which was filed in the U.S. District Court for the Eastern District of New York, contends that Magalhaes and his businesses -- Asset Accumulation, Inc., Pinnacle Wealth Group, L.L.C., Strategic Ventures, Inc., and Pinnacle Wealth Concepts, Ltd. -- sell what they purport to be voluntary employees’ beneficiary association (VEBA) plans to employers.