Practice management

CERTAIN TAX RETURNS WILL HEAD TO DIFFERENT CENTERS: As taxpayers begin to prepare their tax returns, the Internal Revenue Service noted that some may be sending their returns to a different service center than last year. Those who received a tax instruction booklet from the IRS in the mail and use the labels included with the booklet can be assured that their tax returns will go to the correct address. Taxpayers who e-file are not affected by these changes.For tax year 2005, the mailing changes affect returns, with or without payments, from the District of Columbia and 11 states - Colorado, Delaware, Kansas, Maryland, Mississippi, Nebraska, New Mexico, Ohio, South Dakota, Virginia and West Virginia.

Every year, Congress and the Internal Revenue Service help us justify a tax preparer's worth to clients by throwing a few new curves into the tax return preparation process. The 2005 tax return filing season is no exception.This year Congress even threw a few curves at the IRS and commercial tax software creators by passing year-end tax legislation with an impact on 2005 returns after the IRS had already done much of the work on its tax forms for the filing season. Here are some items to watch out for as you work through the 2005 return filing season.

Investors are increasingly seeking creative transaction structures to cash in on the heated real estate market.A strategy that uses preconstruction contracts in Section 1031 like-kind exchanges is one way that is gaining acceptance among investors, especially in areas with heavy condominium development.

Unclaimed refunds totaling more than $2 billion are awaiting about 1.7 million people who failed to file a federal income tax return for 2002, the Internal Revenue Service said.

Expanding the tax types eligible for electronic payment, the Internal Revenue Service is now accepting card payments for certain balance-due business taxes through Official Payments Corp.

President Bush said that he wouldn't allow the elimination of the mortgage interest deduction as part of suggested changes to the tax code.

The Internal Revenue Service has simplified the process for business taxpayers to file for an extension.

Internal Revenue Service officials announced that their latest estimates of the tax gap for the 2001 tax year comes to $345 billion.

Turns out in between the normal gossip, my friends and family had somehow neglected to spread a juicy bit of exciting Ocean State news with me -- I'm talking of course about the flat tax proposal that came out of the Rhode Island House of Representatives in early February.

It's fair to say that CPAs have "gotten the memo" when it comes to the importance and value of marketing. Telling their story to those who need to hear it - and are in a position to respond - is a concept many now understand and even embrace.But in today's demanding marketplace, it's not enough to market an offering; you've got to manage it - from incubation through birth, innovation and beyond. Sharply designed brochures, hard-hitting direct mail and interactive Web sites simply won't get you where you want to go.

IRS OPENS 2006 FILING SEASON: The Internal Revenue Service sent out 17.7 million 1040 tax packages during the first week of January to taxpayers who have previously filed paper returns. The number of paper tax booklets being mailed to Americans continues to decline as more people opt for electronic filing.The IRS expects to process about 135 million individual tax returns in 2006 and to see continued growth for its e-filing service. The agency passed a milestone last year as more than half the nation's taxpayers filed their tax returns electronically.

More than half of all professional liability claims against accountants are tax-related, according to insurance industry executives. As accountants plunge ahead into their busy season, they should take note of their increasing exposure.Although audit malpractice claims are the highest in terms of severity, the most frequent claims are those for tax services, said Joe Wolfe, assistant vice president for risk control at CNA, in an interview last fall. CNA is the underwriter for the American Institute of CPAs' professional liability insurance program.

The Roth 401(k) contribution option, even with almost five years of advance warning, is taking a while to catch on.Reports are that fewer than 20 percent of eligible 401(k) plans now have them, with the rest sticking with tried-and-true pre-tax deferral contributions. If field data is accurate, however, this tepid reception is about to change. When employers, especially those also wearing the hat of the highly paid employee, begin to run the numbers, Roth 401(k) accounts are looking very attractive. This view is especially true following the recent release of favorable final regulations on Roth 401(k) contributions.

The Internal Revenue Service issued the 2006 "Dirty Dozen" -- the annual round-up of some of the most notorious tax scams.

The Internal Revenue Service announced new steps to improve the Questionable Refund Program and reduce the number of taxpayers subject to frozen refunds.

Citing rising costs in Medicaid and education which in turn led to higher spending levels and ultimately higher taxes, state taxpayer burdens rose more than 40 percent between 1994 and 2004.

The Internal Revenue Service requested a budget of $10.6 billion for the 2007 fiscal year, an increase of 1.4 percent from the current year's budget.

The Senate passed a bill containing $70 billion in tax cuts, part of a budget push Republicans are hoping will lead to an extension of President Bush's tax cuts.

The Internal Revenue Service will host a series of six tax forums across the nation this summer for tax professionals.

President Bush did not mention tax reform in his State of the Union Address, generally talking only about the importance of keeping the country competitive in the world marketplace by ensuring the economy continues to grow.