Practice management

With 2008 little more than two months away, tax practitioners finally have their clients' attention on the need for year-end tax planning.As in prior years, year-end 2007 presents unique tax planning challenges, as well as traditional opportunities. Especially this year, sunset provisions, phase-ins and phase-outs, and inflation adjustments, as well as retroactive and prospective legislative changes and deadlines set in final regulations, all contribute to chasing a moving target.

You may well ask, where did I find a title like this? I doubt that you have ever wondered what Sir Isaac Newton has to do with running a CPA firm - or, for that matter, any business.While everyone knows Newton as the discoverer of gravity, it's really his three laws concerning the behavior of moving objectives that are meaningful today. Even though these laws were defined 320 years ago, they can help explain the behavior of some of your partners today. His laws of motion apply to physical entities operating in space, and describe how these entities interact. However, they can just as easily be applied to human entities interacting in an environment of workplace change.

The Internal Revenue Service reiterated its demand for casinos and other poker tournament sponsors to begin reporting winnings of more than $5,000 after March 4, 2008.

The Internal Revenue Service position on Circular 230 monetary penalties has generated concern and comments from the American Institute of CPAs, while the American Bar Association Tax Section intends to submit its own comments on the matter.The penalties were announced in Notice 2007-39 earlier this year to implement Section 822 of the American Jobs Creation Act of 2004, which expanded the sanctions that the IRS can impose for certain prohibited conduct to include monetary penalties.

The Internal Revenue Service said that personal exemptions and standard deductions would rise and tax brackets would widen as it adjusted a variety of tax provisions for 2008 to keep pace with inflation.

The Internal Revenue Service said that Form 1120-A, U.S. Corporation Short-Form Income Tax Return, is now obsolete.

Automatic Data Processing's Small Business Services division released an online payroll system aimed at accountants who service small businesses.

It finally happened: The first Baby Boomer applied for Social Security this week. Kathleen Casey-Kirschling, a former teacher who was born at one second after midnight on Jan. 1, 1946, applied for Social Security benefits over the Internet, starting what is likely to be an avalanche of applications for retirement benefits.

The House of Representatives has approved a bill that would ban private tax collections, but the bill's prospects remain uncertain in the Senate.

The Internal Revenue Service is not doing a good job of managing its paper case files, according to a newly released report.

A high-ranking Treasury Department official has warned of the costs of tax-exempt bond financing for projects such as sports stadiums.

Republican presidential candidates debated their tax-lowering credentials at an event sponsored by CNBC, MSNBC and The Wall Street Journal on Tuesday evening.

The Internal Revenue Service has given businesses a simpler process for requesting relief for late elections.

The push to raise taxes on hedge funds, private equity firms and their managers seems to have stalled for this year in Congress.

The House of Representatives has passed a bill that would provide relief to homeowners facing the threat of taxes on their foreclosed homes in the midst of the subprime mortgage meltdown.

Here's the situation: Your client needs to upgrade their accounting software from an out-of-the-box program to a more sophisticated, customized system. You know it and your client is avoiding it. What should you do?You might have to get a little creative.

GOVERNMENT OWES $45M IN EMPLOYMENT TAXESWASHINGTON, D.C. - The federal government is itself a tax delinquent, owing approximately $45 million in employment taxes, according to a report from a Treasury Department watchdog.

The many practitioners who conduct valuations in the normal course of their practices will shortly be required to follow, for the first time, detailed standards, because the Consulting Services Executive Committee of the American Institute of CPAs has issued a comprehensive professional statement of standards - Statement on Standards for Valuation Services No. 1, Valuation of a Business, Business Ownership Interest, Security or Intangible Asset."The AICPA developed the valuation standard to improve the consistency and quality of practice among its members who perform engagements that estimate values for various reasons," said AICPA president and CEO Barry Melancon, in a statement. "Congress, government agencies and accounting regulators have recently focused their attention on appraisal issues - such activity shows the importance of valuation to the business community and individuals. The standard promotes greater transparency and provides our members with a set of guidelines in the unique context of a CPA practice."

The deadline for compliance with final Section 409A regulations, scheduled for Dec. 31, 2007, should be extended for a year, according to 92 of the largest law firms in the nation.The new regulations, finalized in April, require deferred-compensation plans to be amended to comply with the Internal Revenue Code.

The last few months have seen the problems in sub-prime lending start to have a national and even international impact on the credit and stock markets.The combination of expanded sub-prime lending programs with mortgage rates that adjust upward after two to five years, reduced or eliminated down-payment requirements, and a housing market that has seen real estate prices actually decline in many markets, has left many marginal borrowers unable to pay higher monthly mortgage payments, unable to refinance to more traditional mortgages, and unable to sell homes at a price sufficient to cover the mortgage obligation.