Practice management

The Internal Revenue Service has announced five director-level appointments in its Large and Mid-Size Business Division, which serves corporations, Subchapter S corporations and partnerships with assets greater than $10 million.New directors were named for four of the LMSB's five industries, as well as for the LMSB's pre-filing and technical guidance unit. Among the changes:

The selection by an entity of its company structure, its fiscal year and its method of accounting are the three main mechanisms that a company can employ in performing substantial tax planning, according to Nicholas Crocetti, CPA, a partner in CBiz Accounting Tax & Advisory."The concept of an accounting method is much broader than what many people believe," he said. "Most companies employ a number of accounting methods. First, they have an overall method of accounting - for example, the cash method, accrual or some form of hybrid method. Additionally, companies need accounting methods for every timing item they encounter in their business, such as how to account for inventory, bad debts, vacation pay and self-insured medical expenses."

As part of the recently signed pension bill, the Treasury Department and the Internal Revenue Service will have to better define what constitutes "good" condition for donations of clothing or household items.The IRS can deny deductions for donated items such as furniture, appliances, linens or electronics if the items aren't in appropriate condition.

A representative from the Justice Department told a Senate panel that the agency is satisfied with the tactics used by prosecutors to pursue corporate criminals.

Continuing with a push to help its own customers grow their business, Intuit Inc. will include a number of Google Inc. services aimed at boosting the online profile of small businesses in its QuickBooks 2007 product line.

Using one of dozens of scenarios, undercover government auditors were mostly satisfied with the levels of assistance they received at several of the Internal Revenue Service's Taxpayer Assistance Centers.

The Internal Revenue Service announced a record settlement for a long-running a transfer pricing dispute with pharmaceutical giant Glaxo SmithKline Holdings Inc. and the company's subsidiaries.

As previously announced, the Internal Revenue Service will soon begin charging user fees for the residency certification letters commonly used to avoid foreign value added taxes.

After months of increasing reports of investigations by both the Securities and Exchange Commission and academics, Congress is now examining the sometimes-questionable timing of stock options granted to executives.

A report from the Treasury Inspector General for Tax Administration estimates that computer programming woes cost the country more than the $200- to $300-million range originally estimated by the Internal Revenue Service.

The reasoning might be sound in the latest recommendations brought forward by the Taxpayer Advocacy Panel , but huge questions remain over how any of the panel's latest handful of suggestions might actually be executed.

Pitney Bowes Inc., a manufacturer of postage meters, mailing systems and other equipment, agreed to a $1.1 billion tax settlement with the Internal Revenue Service.

Recently, we asked marketers nationwide to share their firms' evaluation forms; we were surprised to learn that many respondents do not have a formal evaluation process similar to those that are conducted for their CPA staff.Instead, they said that they summarize their efforts, and offer a report card to firm management. Unfortunately, these subjective reporting efforts frequently feel inadequate, because they are created without much partner support or understanding of the marketing process, its value and its results.

Who needs risk management? All firms do.The passage of the Sarbanes-Oxley Act of 2002 has resulted in significant legal and regulatory changes affecting auditors of publicly traded companies. Given the current litigious climate, the inherent danger of auditing nano- and small-cap firms, and most firms doing larger and larger engagements, risk management may soon become one of the top five issues in managing an accounting practice.

IRS LAUNCHES ONLINE PAYMENT AGREEMENTS: Tax professionals will help launch a new system allowing many individuals who owe delinquent federal taxes to apply online for a payment agreement, the Internal Revenue Service announced.The IRS is implementing the new Online Payment Agreement application through national partnerships with the tax professional community. The application will eliminate the need to write or call the IRS toll-free number for assistance. The goal of the program is to provide an easier way for taxpayers to voluntarily resolve tax liabilities.

There have been three fundamental, evolutionary changes in the corporate tax function over the past 20 years with respect to its mission, its alignment with corporate strategy, and its influence on organizational behavior and resource allocation.The first, in the 1980s, focused on using technology applications to improve the efficiency and effectiveness of tax preparation, with cost reduction acting as the driver for improving business processes. The second, in the 1990s, involved value creation and developing holistic approaches to sustain tax minimization, which proved that the corporate tax function could positively affect the bottom line through effective tax planning.

Schedule M-3 is part of the effort by the Internal Revenue Service to get a better handle on abusive tax shelters and other aggressive tax techniques by getting sufficient detail on book/tax differences that it can guide IRS auditors to transactions in need of further examination.The IRS is sufficiently confident in its ability to track book/tax differences on Schedule M-3 that earlier this year it removed book/tax differences as a criteria required for reportable transactions. While the former Schedule M-1 required only 10 lines of information, Schedule M-3 expands that to 90 lines of information, with an emphasis on making a distinction between temporary and permanent book/tax differences.

The Internal Revenue Service announced that long-distance telephone customers will be able to seek refunds ranging from $30 to $60 on their 2006 tax refunds.

In an August letter, the Internal Revenue Service said that the NAACP did not violate its tax-exempt status when the civil rights group's chairman gave a speech criticizing President Bush.

The Government Accountability Office is urging the Internal Revenue Service to require more comprehensive reporting of data relating to donor-advised funds, in an effort to address tax compliance challenges.In its report, the GAO outlined a series of steps for the IRS in data collection regarding tax-exempt donor-advised funds including suggesting that the Service collect Form 990 data for, and provide guidance on calculating payout rates for donor-advised funds and supporting organizations, as well as urging Congress to provide the IRS with the authority to protect taxpayer identification numbers from public disclosure. The GAO also recommended that the IRS require more thorough reporting of supporting organizations' ID numbers of and report the TINs of recipients of large loans.In contrast to private foundations, donor-advised funds and supporting organizations give donors less control over how donations will be used, but provide more favorable tax deductions, lower administration costs, less oversight from the IRS and fewer reporting requirements.