Legal issues

Practice Management

West Virginia May Make EAs Exempt from Sales, Service Tax

A bill being considered by the West Virginia legislature would exempt enrolled agents from sales and service taxes. The bill, WV SB 371, proposes that a number of professions – including enrolled agents – be exempted from the state's consumers sales and service tax.A nearly identical bill was introduced last year, but was not enacted. SB 371 has been referred to the Senate Finance Committee.

States Seek Improved CPA Interstate Mobility

Several states are seeking to change state law to allow for individual CPAs licensed in other states with substantially equivalent licensing requirements to provide client services in person, by mail or electronically without securing an additional license or temporary registration, reports the Ohio e-CPA Weekly.Following Ohio’s lead, a total of six states have already introduced “no notification/no fee” legislation and six others are planning do to so this year. Virginia, Wisconsin and Missouri have previously adopted mobility laws similar to Ohio’s.
Tax

Double-Check Creative, Risky Tax Arguments

Anyone who has ever felt used and abused by the government because they have to fork over hard-earned wages will recognize the protests listed on the IRS document, The Truth about Frivolous Tax Arguments. Just in case you were thinking of challenging Uncle Sam’s authority to impose taxes, you may want to check the results for the many individuals and groups who’ve gone before you in attempting to avoid compliance with federal tax laws, recommends the National Association of Enrolled Agents.
Practice Management

Clients Seek 2007's 'Dirty Dozen' Scams

The Internal Revenue Service’s release of its "Dirty Dozen", 12 of the most common – and blatant – tax scams offers tax preparers a most wanted list of don’ts and an opportunity to prepare themselves for customers seeking illegal means for lowering their tax liability.Firm owner Kent West, CPA/PFS, from Mooreland, Okla.
A&A

FEI Comments on Proposed SOX Changes

In separate letters submitted to the Securities and Exchange Commission (SEC) and the Public Company Accounting Oversight Board (PCAOB), Financial Executives International’s (FEI) Committee on Corporate Reporting (CCR) and Small Public Company Task Force (SPCTF), voiced concerns with recent changes proposed by the SEC and PCAOB to Section 404 of Sarbanes-Oxley.The letters, which come in conjunction with today’s comment deadline on proposed auditing standards and management guidance by the SEC and PCAOB, emphasize the importance of alignment between both agencies.
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

Tax Court Goes All in on Poker

The U.S. Tax Court was not bluffing when it ruled that tournament poker is gambling, not a sport, and thus not exempt from the Section 165(d) limitations of the tax code.
A&A

Online Posting of Delinquents Creates Revenue

Pennsylvania has recently joined the 20 states and the District of Columbia in posting the names of individuals and businesses who owe taxes on their web sites, using names such as Maryland’s “Caught in the Web,” or South Carolina’s “Debtor’s Corner,” to bring pressure on tax scofflaws.In many cases, the threat of disclosure is enough to persuade taxpayers to pay, says Illinois Revenue Director Brian Hamer.
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

E-mails As Evidence: Business Owners Face New Procedures

Changes in federal employment law may change the way you and your employees store e-mails and e-messages, but Business & Legal Reports reports that one of the key changes facing small business owners this year is not a change in law at all.The U.S. Supreme Court established a set of new procedures dealing with electronic messages that may be needed as evidence in trials. Why is the procedural change important to you? One look at your computer inbox, electronic communication has exploded in recent years, leaving the postal carrier feeling a bit lonely these days.
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

Tips For Reporting Misclassified Employees

Most employers make every effort to meet their employment tax obligations. They take the care to review all factors affecting their relationship with their workers and classify their workers as employees or independent contractors accordingly.
Tax

School Bus Driver Allegedly Prepared Returns On Side

The United States has sued a St. Louis woman in federal court to permanently bar her from preparing federal income tax returns for others, the Justice Department announced today. The civil injunction suit against Yolanda White alleges that she prepared federal income tax returns for customers improperly claiming fabricated or exaggerated income tax deductions.According to the government complaint, filed in the U.S. District Court for the Eastern District of Missouri, White works as a school bus driver but also prepares fraudulent income tax returns for others.
A&A

Legislation To Boost Electronic Payment Processing

Many treasurers dream of eliminating paper from their processes and are moving both data and funds entirely electronically, according to Business Finance magazine.Several new pieces of legislation will facilitate the move to electronic payment processing. One is back-office conversion, or BOC. Effective March 2007, BOC will allow retailers and other businesses to convert checks to electronic data streams.
Community News

New Mexico: Bill Requires Wage Report, Information Return E-filing

A bill – NM SB 344 – requiring businesses with more than 50 employees to file all employee information returns electronically was referred to the New Mexico Senate Corporations and Transportation Committee.The bill also would require businesses with more than 50 employees to file quarterly wage reports electronically. Penalties for failure to file electronic wage reports would be $500 for businesses with between 50 and 250 employees, and $1,000 for businesses with more than 250 employees.
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.
A&A

Liquidation Sales Ruled Non-Business Income in Illinois, Missouri, Utah

Recent court decisions in Illinois, Missouri, and Utah have ruled that gains from a liquidation sale of a business do not constitute taxable business income.In each case, the respective state revenue department disagreed with the companies' classification of the gains and issued the companies notices of deficiency.

SBA Sued for $100 Million

Diamond Ventures, an Atlanta-based venture capitalist partnership, filed a $100 million discrimination lawsuit against the Small Business Administration (SBA) in 2003 (U.S. District Court Case #03-1449-Gladys Kessler, Judge) which claims that the SBA improperly denied its application for a Small Business Investment Corporation (SBIC) license and that Diamond was subjected to unusual standards. The purpose of the SBIC program is to augment capital provided by private partnerships for small businesses.

Foreign Criminal Extraditions

We hear about criminal indictments stemming from accounting violations in our own country but do not hear about foreign extraditions from the U.S. or to the U.S. from other countries.
Technology

The Exciting Life of an IRS Attorney

Former IRS attorney, Robert Steinbuch, filed suit last spring against his former girlfriend, Jessica Cutler. CNN is reporting that the lawsuit is about to head for trial. It seems that while the two were dating, Cutler maintained a blog (Web log) detailing her sexual encounters with Steinbuch as well as her relationships with other boyfriends and sex partners. The Cutler blog was picked up by a Washington, D.C. gossip web site and suddenly Steinbuch and Cutler were national celebrities.

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