Legislation

Practice Management

New York Consumer Bill Targets Tax Preparers

A bill before the New York Legislature, designed to educate taxpayers about tax preparers’ qualifications, would require the Department of Taxation and Finance to publish a "consumer bill of rights regarding tax preparers."The bill, NY SB 2970, calls for extensive RAL disclosure requirements, but exempts enrolled agents. If passed, the legislation would require that all tax preparers obtain a license from the Department.
Tax

Florida Rep. Proposes Interest Exclusion

Representative Cliff Stearns (R-FL) introduced H.R. 228, a bill designed to encourage savings among low and middle-income taxpayers and by allowing the exclusion of $400 of interest income from gross income ($800 for joint filers). It also would save tax preparers the trouble of tracking down information on small amounts of interest earned. E@lert estimates that this bill is only marginally more likely to pass than another bill recently authored by Rep. Stearns that would require the Ten Commandments to be displayed at the U.S. Capitol.
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.
A&A

HSA Rollover Transition Deadline

The Internal Revenue Service and U.S. Treasury recently issued guidance regarding how employers can rollover their health Flexible Spending Arrangements (health FSAs) and Health Reimbursement Arrangements (HRAs) to Health Savings Accounts (HSAs) for their employees. The guidance provides a special transition rule for transfers for 2006. Under the transition rule, the amendment, election and transfer must take place by March 15, 2007.The Tax Relief and Health Care Act of 2006, Pub. L. No. 109-432, enacted Dec.
Tax

Kansas Looks to Cut Corporate Income Tax

The Kansas Legislature likely will include a cut in corporate income tax this session, but just how deep such a cut will be made remains uncertain, reports the Wichita Eagle.The House Taxation Committee is expected to receive two bills reducing the corporate income tax rate. Both houses of the Legislature and Gov.
Community News

Mass. Gov. Announces Property Tax Breaks

Massachusetts Gov. Deval Patrick unveiled a plan Thursday to give lower-income homeowners the same type of property tax breaks available to some senior citizens, in an attempt to fulfill a key campaign pledge, the Associated Press reports.Beginning in January, an estimated 100,000 families and individuals would be eligible for a state tax credit of up to $860 a year under the new program. The current average statewide property tax bill is $3,800 per household.“The bottom line is that people in Massachusetts have been paying more and getting less," said Patrick.
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.
Practice Management

KPMG Tax Shelter Woes Continue

Big Four firm KPMG has received more setbacks in the firm's quest to clear its name of wrongdoing in the much-publicized tax shelter fraud scandal. Judge T. John Ward of the Federal District Court for the Eastern District of Texas ruled recently that Blips, the name of one of the tax shelters created, marketed, and sold by KPMG and the subject of ongoing legislation against 16 former KPMG employees, is not a legitimate tax shelter.Blips stands for Bond-Linked Issue Premium Structure.
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

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.

The Democratic Congress and Your Money

With the installation of a Democratic House and Senate in January, their legislative actions can affect people all over the world and Americans may be wondering about matters concerning their money. Big changes are unlikely, according to Don Patrick, MBA, a certified financial planner and advisor for over 26 years and managing director of Atlanta-based Integrated Financial Group, but some changes may occur in the way in which money is handled.
Tax

Remember These Key Tax Changes, Credits and Deductions

As taxpayers begin gathering their financial documents for the 2006 filing season, Ernst & Young offers its 2007 Tax Guide that is filled with reminders on new credits and deductions.Personal Tax Credits for the Purchase of Residential Energy-Efficient Property — A non-business credit of up to $500 is available for certain energy-efficient improvements, such as insulation, or exterior doors and windows.
Tax

IRS Begins Implementing Extenders Legislation

The Internal Revenue Service (IRS) has announced new guidelines helping tax filers in 2007 claim extended deductions and other tax advantages included in the Tax Relief and Health Care Act of 2006.
Tax

Moratorium Lifted on Suspended Cash Balance Conversion Applications

The Internal Revenue Service (IRS) has lifted a moratorium on determination letter applications for conversions from traditional defined benefit pension plans to so-called cash balance plans.

HSAs Expanded in Last Days of Congress

Congress gave final approval to H.R. 6111, the "Tax Relief and Health Care Act of 2006", with provisions that expand Health Savings Accounts (HSAs) and incorporates provisions from H.R. 6134, the "Health Opportunity Patient Empowerment Act of 2006". The new provisions would make several improvements to the HSA program. In September, Ways and Means Chairman Bill Thomas (R-CA) said, "HSAs are still relatively new, but we are already seeing them grow in popularity.
Tax

What Gives with Giving?

America is a generous country and during the holiday season even more people think about giving to charity. A study from Network for Good, who process online charitable donations of over one million non-profit groups, reports on the over $100 million donated to 20,000 groups through the site since November 2001. Findings show that: The average age of online donors is 38 Offline donors tend to be over 60 years old The most generous online donors are from New York, Connecticut and
Tax

Congress' Last Hours Extend Tax Breaks, Creates Iraq Accounting Oversight Office

Residents of states that do not levy income tax, college students and their families, teachers and many high-tech companies, are among the beneficiaries of the tax and trade bill passed by the House on Friday and the Senate on Saturday morning at 4 a.m. Earlier in the week, the Senate extended the term of the Office of the Special Inspector General for Iraq Reconstruction which was set up by Congress to provide oversight of the Iraq Relief and Reconstruction Fund and all obligations, expenditures, and revenues associated with reconstruction and rehabilitation activities in Iraq.
Tax

Congress May Extend Sales Tax Deduction This Week

If the House of Representatives and the Senate do not extend the sales tax deduction during the final days of the lame duck session, residents of the seven states that do not levy personal income tax, who itemize their deductions, will see an increase in federal tax owed for 2006.
Tax

Steering Clients Towards New Hybrid-Vehicle Tax Credits

From The Tax Strategist, http://thetaxstrategist.netThe new hybrid-vehicle credit effectively replaces the clean-air deduction on the books the past several years. This deduction, set at $2,000 for 2005, was scheduled to be cut down to just $500 in 2006.Instead, the new hybrid credit lets you keep as much as $3,400 in your pocket. Advice: Make sure your clients understand all the tax ramifications.
Tax

Complex Rules Determine Who Will Pay Honolulu’s General Excise Tax Increase

When Hawaii’s state legislature decided to allow county governments on each of the four islands to vote separately on a .5 percent rate hike in the state’s general excise tax (GET), currently at 4 percent, to pay for the proposed mass transit system serving Honolulu, it was trying to avoid making taxpayers on all four islands pay the hike, according to Lowell L. Kalapa, president of the Tax Foundation of Hawaii .

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