Tax planning

A federal judge has dropped the charges against 13 defendants in the KPMG tax shelter case.Judge Lewis A. Kaplan of the U.S. District Court in Manhattan blamed prosecutors for forcing the Big Four accounting firm to stop paying the legal fees of the 13 defendants and said their constitutional rights had been violated.

The Internal Revenue Service said it plans to simplify the signature process for electronically filed individual tax returns by allowing tax practitioners to avoid the need to send a paper signature document in support of their clients' e-filed returns.

The American Institute of CPAs wants Congress to modify a little-noticed provision in the recently passed Iraq war-funding bill that the institute fears may put tax preparers at odds with their clients.

The Internal Revenue Service said it has begun mailing educational letters this month to more than 650,000 small tax-exempt organizations to let them know they need to start submitting a new annual electronic notice known as an e-Postcard.Form 990-N, the electronic notice they have to send, is intended for tax-exempt organizations with gross receipts of $25,000 or less. Until the passage of the Pension Protection Act of 2006, charities of that size weren't required to submit either the Form 990 or 990-EZ.

CCH has integrated its CertiTax software and Sales Tax Load Utilities with Microsoft Dynamics GP 10.0.The company's CertiTax Plug-in for Dynamics GP 10.0 provides an interface from CertiTax, CCH's hosted sales tax calculation system, to the Dynamics GP 10.0 sales order process module.

Senate Finance Committee Chairman Max Baucus, (D-Mont.), and fellow committee member Chuck Grassley, (R-Iowa), are calling on the Internal Revenue Service to do a better job of publicizing the Saver's Credit to encourage more low-to-middle-income workers to save money for retirement.The credit applies to up to 50 percent of the first $2,000 of retirement contributions for families earning up to $50,000 a year. First created in 2001, the credit became permanent in the Pension Protection Act of 2006.

The Internal Revenue Service said it would add three more excise tax forms to the lineup of federal tax return forms and schedules that taxpayers can file electronically.The first form that will be available for e-filing is the 2290, Heavy Highway Vehicle Use Tax Return, debuting this summer. Form 720, Quarterly Federal Excise Tax Return, and Form 8849, Claim for Refund of Excise Taxes, will premiere later this year.

The IRS said it is reconsidering some of the private letter rulings its associate chief counsel’s office has issued regarding the gift tax consequences of trusts that employ distribution committees.The IRS’s chief counsel has discovered that some of the conclusions in the rulings may disagree with some prior revenue rules.

Intentional disregard of the law is the primary contributor to the tax collection gap experienced by the IRS, according to nearly half the CPAs surveyed in an online poll by the AICPA.

CCH said it will begin reselling tax exemption certificate management software and services from Imaging Science and Services Inc. on an exclusive basis worldwide.The products automate the organization of sales tax exemption and resale certificates. They include TeamsExpress on Demand, a hosted system for managing a database of tax documents, and LineLinkXL, a Microsoft Excel add-in.

Thomson Tax & Accounting released Version 8.0 of its ePropertyTax software, adding extra edit, query and data entry features to the Web-based system for commercial property taxpayers.The upgrade expands the mass-editing tool to help users copy, paste, import and export data throughout the system. Users can now customize queries in any data field to search for information.

I first came across the term a number of years ago when consultants stressed to me the importance of identifying where a business was in its life cycle. These consultants believed businesses and industries have a life cycle, and the key is identifying where the business is at that time. In the case of a business, its life cycle includes progressive identifiable stages, such as the “seed,” start-up, growth, established, etc.

Mahoney Cohen & Co. CPA PC has launched an international tax and consulting practice.

India’s Supreme Court found that Morgan Stanley did not have to pay tax in that country for income earned from its business process outsourcing unit, giving multinational companies a lift in their outsourcing arrangements.

Now that summer is here, tax preparers have time for trial runs of different software to see if there's a program that might be a better fit for their practices.Vendors, meanwhile, see this time as an opportunity to get a head start on the next filing season by offering special discounts and promotional pricing.

CONGRESS EYES INTERNET TAXESWASHINGTON, D.C. - Two bills circulating on Capitol Hill are looking at different ways to generate tax revenue from the Internet.

Blues singer Robert Cray is singing the blues about his accountants, and taking them to court. Cray filed a suit in Los Angeles Superior Court against Chapnick, Smuckler & Associates, and its principals Jerry Chapnick and Keith Smuckler, according to CBS. He accuses the firm of cheating him, his wife, and their company, charging them with fraud, negligence, and breach of contract and fiduciary duty. The Crays claim the firm did not inform them it was drawing up to $235,000 from their credit line. They say Chapnick, Smuckler also did not check on whether the Crays were entitled to a $55,000 refund in taxes they paid in the United Kingdom. In addition, the Crays blame the firm for a $2,000 penalty on unpaid property taxes. After they engaged the firm around the end of 2001, the Crays learned the firm was not licensed to operate in the state of California. They sacked the firm in August 2006.

The U.S. Department of Justice has filed suit against Mary Powell, a tax preparer in East St. Louis, Ill., and is seeking an injunction to shut down her service.

The IRS has certified that some models in Mazda’s 2008 line of hybrid cars qualify for the Alternative Motor Vehicle Credit.

Little Rock, Ark. - Arkansas accounting giant Moore Stephens Frost has acquired a North Carolina firm, Lynch and Howard.