Legislation

Tax

Section 403(b) retirement plan rules finalized

The Treasury Department and the IRS have released final regulations related to retirement savings arrangements sponsored by public schools and charitable organizations, often referred to as "section 403(b) plans." These regulations are the first comprehensive section 403(b) regulations since 1964.
Tax

House Ways and Means Committee votes to stop IRS debt collection program

On Wednesday, the House Ways and Means Committee agreed to pull the plug on the IRS's controversial debt collection program. The IRS has been contracting out a portion of its federal tax debt collection to private companies."The collection of taxes is a core government function," said Representative John Lewis (D-GA). "It is the Internal Revenue Service's mission.
Tax

States quick to take advantage of new nexus non-rules

It was only a couple of weeks ago that we reported the U.S. Supreme Court had refused to hear two cases that would have addressed the issue of substantial economic presence in a state being enough to constitute nexus. In Lanco, Inc. v. Director U.S. and FIA Card Services N.A. f/k/a MBNA America Bank, N.A. v. Commissioner, U.S., NJ and West Virginia chose to apply income taxes on corporations that had no physical presence in the state. In Lanco, A Delaware-based company licenses trademarks to women's apparel stores in New Jersey.
Tax

Charges dropped against former KPMG execs, appeal filed

Federal indictments have been dropped against 13 KPMG execs accused of orchestrating a tax shelter scheme that cost the government $2.5 billion. Cases are still pending against three former KPMG executives for whom the firm was not required to pay legal fees, Robert Pfaff, John Larson and David Greenberg, and two others who are not affiliated with KMPG.
Tax

IRS budget continues path through Congress

The Senate Appropriations Subcommittee on Financial Services and General Government has approved the IRS budget of $11.1 billion for fiscal year 2008 after the budget was approved by the House. The amount is slightly ($112.5 million) above President Bush's suggested budget and $544.5 higher than the fiscal year 2007 budget.Included in the IRS budget is $6.8 billion slated for enforcement activities, $2.1 billion for taxpayer services, and $282 million for modernization.
Tax

New provision would change tax preparers' role and increase fees

The American Institute of Certified Public Accountants (AICPA) is urging Congress to modify a provision it approved that has resulted in a fundamental change in the role of tax return preparers and will likely cause an increase in preparer fees for taxpayers.
Tax

House and Senate zero in on taxation of fund managers

The House and Senate have introduced bills that would dramatically change the income tax treatment of "carried interest" profits earned by fund managers in their capacity as general partners of investment partnerships. Hedge fund managers, private equity fund managers, and real estate operators are the targets for legislation that would eliminate the perceived benefits derived from doing business through partnerships.House of Representatives ProposalH.R.
Tax

Senate fights back on recent Supreme Court nexus issue

A bill has been introduced in the U.S. Senate that would require businesses to have a physical presence in a state in order to be subject to income and "other business activity taxes." This proposed legislation is offered in direct response to the recent U.S. Supreme Court refusal to consider two cases wherein states assessed income and franchise taxes on companies with no physical presence in the state.The Supreme Court's inaction in the matters of Lanco, Inc. v. Director U.S. and FIA Card Services N.A. f/k/a MBNA America Bank, N.A. v.
Education & Careers

House votes to change student aid

On Wednesday, the U.S. House of Representatives voted to cut $19 billion in federal subsidies to student lenders over five years, and increase grants for needy students and cut interest rates in half on federally backed loans with the savings. The bill passed, 273-149, with 47 Republicans joining Democrats. While it appears that President George W. Bush opposes some elements of this bill, it is likely that some overhaul of student aid will become law before the end of the year.
Tax

AMT reform options include possible change in SALT deduction

Senators Charles Grassley (R-IA) and Max Baucus (D-MT) have introduced legislation to completely repeal the Alternative Minimum Tax, without requiring any offset of tax revenue from another source. Other lawmakers are mulling the possibility of trading the revenue from the AMT for a change in another area of individual income tax that would result in replacing the AMT revenue.The U.S.
Tax

Supreme Court to hear case on deduction of fees for investment advice

The U.S. Supreme Court has agreed to hear a case where the deductibility of investment advice fees incurred by a trust is in question. In the case, Knight v.
Tax

Supreme Court inaction could change nexus rules

The U.S. Supreme Court announced on Monday it would not hear two cases that could have long-ranging effects on the nexus rules followed by state taxing authorities. The cases both involved situations where states assessed income and franchise taxes to companies with no physical presence in the state.In West Virginia, Bank of America's FIA Card Services, formerly MBNA, was attempting to seek a refund of $460,000 in income and franchise taxes assessed by the state.
Tax

Blackstone ruling would close loophole, raise taxes

U.S. House and Senate committee members are scrambling to enact legislation that would close what some call a loophole in the Tax Code, a provision that provides tax breaks to partnerships that engage primarily in passive activities and that are publicly traded.
Community News

BDO Seidman snags guilty verdict

National CPA firm BDO Seidman LLP has been found grossly negligent by a Florida jury for failing to find fraud in an audit that resulted in costing a Portuguese Bank $170 million. The verdict opens up the opportunity for the bank to pursue punitive damages that could exceed $500 million.The audit in question was of a now-defunct financial services company, E.S. Bankest LLC, located in Miami, Florida. Two former executives of E.S.
A&A

President Vetos Small Business Tax Breaks

President Bush vetoed the supplemental appropriations bill Congress narrowly passed last week. The bill, which primarily would have provided money necessary to continue military operations in Iraq, also included a set of tax breaks for small businesses.
Tax

IRS Submits Taxpayer Assistance Blueprint

In response to a congressional mandate for the development of a five-year plan, the Internal Revenue Service submitted to Congress the completed Taxpayer Assistance Blueprint.The Blueprint is the result of extensive IRS research conducted into the needs, preferences and behaviors of taxpayers and partners who assist them in complying with the tax laws, such as volunteer and paid tax return preparers.The plan includes a variety of specific recommendations for improving IRS services for taxpayers and partners, an important element of a comprehensive strategy to reduce the tax gap by helpin
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

U.S. Business Leaders Seek Reg. Reductions

A all-star panel of American business and government leaders pushed Tuesday for a rollback in regulations they say are necessary to keep U.S.
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.

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