Tax planning

Successful filing of electronic tax returns, as well as meeting the accounting requirements of FIN 48, are the biggest challenges facing corporate tax professionals in 2007, according to an informal survey by Thomson Tax & Accounting.

For a government agency with such a bad rap in popular culture, the Internal Revenue Service performed well in a recent survey asking taxpayers to comment on customer service levels.In October 2005, the IRS Oversight Board hired Roper Public Affairs to conduct a study of U.S. taxpayers to gain a better understanding of customer service needs and expectations; taxpayers' views of major customer service programs offered by the IRS and preferences for the various IRS service channels; and how the agency could better tailor its services to meet taxpayers' needs.

Cost segregation and 1031 like-kind exchanges are two of the most valuable tax planning strategies available to commercial real estate investors. Through proper planning, both tax-deferral techniques can be used on the same properties in order to obtain the maximum benefit.However, the combination of the two can present challenges. In order to use cost segregation and 1031 exchanges together successfully, the property owner's tax advisor must be well versed in both techniques, and understand how they apply to the individual investment strategy of the client.

The Internal Revenue Service said that early filings show some individual taxpayers have requested large and apparently improper amounts for the special telephone tax refund.“We are seeing some clear abuse involving overstated refund requests,” said IRS Commissioner Mark W. Everson, in a statement. “People requesting an inflated amount will likely see their refund frozen, may have their entire tax return audited and even face criminal prosecution where warranted.”

The Internal Revenue Service Oversight Board said that the agency still has a ways to go before fully reaching the vision outlined in the IRS Restructuring and Reform Act of 1998.

As someone who’s held a driver license since Richard Nixon was in the White House, it’s hard for me to drum up any sympathy for the big oil companies.

More new tax laws, continued new e-filing mandates, an expected increase in total returns, and a delay in processing are certain to mark the start of the 2007 tax filing season.Recent changes in the tax law, primarily those involving three tax deductions - for state and local sales tax, higher education tuition and fees, and educator expenses - mean that the Internal Revenue Service will not be able to process some individual returns until early February. "We will not be processing any returns, whether they are filed electronically or on paper, that contain the extended tax breaks until early February," confirmed IRS spokeswoman Nancy Mathis. "We estimate the number of returns affected by this delay is approximately 930,000 returns out of 136 million returns we expect to be filed."

Victims of the alternative minimum tax quirk that taxes nonexistent income of incentive stock options when the stock loses value received a welcome holiday gift from Congress.As one of its final actions before adjournment, the 109th Congress passed the Tax Relief and Health Care Act of 2006, one of the provisions of which includes a scaled-down version of legislation originally sponsored by Rep. Sam Johnson, R-Texas, to fix the problem at the intersection of the AMT and stock options. The new law provides relief to many victims by accelerating the refund of stranded ISO overpayment credits that, under previous law, would not be returned within the taxpayer's lifetime.

The Tax Relief and Health Care Act of 2006 passed Congress on Dec. 9, 2006, and was signed by President Bush on December 20. Most of the provisions are good news for taxpayers - extending popular tax breaks, many of which had expired at the end of 2005.Still, the timing could have been better.

CPA firms continue to experience strong growth, with 76 percent reporting an increase in firm size last year, according to benchmark data in the 2006 National Management of an Accounting Practice Survey.Despite that growth, the recently-released survey also confirmed that succession planning remains a stumbling block for many firms facing the imminent retirement of the Baby Boomer generation. The survey found that only 24 percent of firms have a succession plan and only 7 percent of firms have partner-in-training programs.

A federal court in Salt Lake City has sentenced a trio of men to more than 29 months in jail in connection with the promotion and sale of a tax and investment fraud scheme to more than 300 clients.All three defendants pleaded guilty to a felony charge of conspiracy to defraud the United States and to committing mail and wire fraud in connection with the promotion of the tax and investment fraud scheme.

The Texas State Board of Public Accountancy has stayed its license suspension of KPMG LLP in connection with the Big Four firm’s sales of questionable legal tax shelters.In a consent order approved by the board, KPMG’s license was suspended for five years -- although the stay order means that the firm will be placed on probation for the next three years.

A domestic focus of President Bush’s State of the Union address was a proposal aimed at expanding access to affordable health insurance that faces a tough political road to becoming reality.

Thanks to a seldom-observed holiday, the Internal Revenue Service announced that taxpayers will have until April 17, to file their 2006 returns and pay any taxes due.

Swiss finance officials are stepping up talk of raising taxes on the rich foreigners who use the country and its lax residency requirements as a tax haven.

In response to requests from Congress, the Government Accountability Office has released a new report outlining a trio of approaches that would reduce the tax gap.

Speaking at a New York State Society of CPAs conference earlier this week, Conrad Hewitt declined to speak in absolutes when it came to across-the-board implementation of the Sarbanes-Oxley Act’s infamous Section 404.The Securities and Exchange Commission chief accountant avoided absolutes when speaking on the question of compliance for micro-cap companies -- the first time that I’ve heard a federal regulator hedge their bets on implementation that’s currently planned for 2008. It would be far from the first deferral for companies will market capitalizations under $75 million -- but the first ray of hope for those small companies since the SEC declined to strongly move forward on a number of recommendations outlined last year by an advisory committee.

Officials in Kansas City, Mo., told a local paper that more than two dozen computer tapes containing confidential taxpayer information are missing.

The Internal Revenue Service has launched a new Internet-based version of its popular Exempt Organizations Workshop covering tax compliance issues confronted by small and midsized tax-exempt organizations, including charities and churches.

More than a dozen senators have signed on to sponsor a bill that would stop the Internal Revenue Service from using private debt collectors to collect unpaid taxes.