Tax planning

The 2006 budget reportedly will not address the hot-burner issue of revamping or eliminating the controversial alternative minimum tax or other tax reforms, but will allow President Bush's recently appointed tax reform panel to tackle them. According to Tax Analysts, the bipartisan tax reform panel is expected instead to examine tax reform options that will make the code simpler and fairer. The panel is supposed to make recommendations to Treasury Secretary John Snow by July 31. In her recent report to Congress, National Taxpayer Advocate Nina Olson recommended the repeal of the AMT, which she described as the biggest problem of the Internal Revenue Code. However, costs to fix the AMT are estimated to be roughly $700 billion.

California is preparing to kick off its first tax amnesty program in two decades, in hopes of narrowing its whopping budget deficit.

The Treasury Department and the Internal Revenue Service have published a new revenue procedure that offers guidance on the like-kind exchange of a home.

CCH Tax and Accounting has unveiled a Web site for sales and use tax professionals.

The U.S. Supreme Court has ruled unanimously that the portion of a money judgment or settlement paid to a plaintiff's attorney under a contingent-fee agreement is income to the plaintiff.

A federal judge here has reportedly denied a request by BDO Seidman LLP to force a group of its former tax shelter clients to arbitrate their complaints out of court, according to a published report.

Turnaround specialist firm Alvarez & Marsal has expanded its tax advisory unit, adding eight managing directors in several of its regional locations, as well as unveiling an office here.

Tax law changes, expanded electronic services from the Internal Revenue Service, simplified tax filing rules for certain forms and an expected increase in total returns mark the start of the 2005 tax filing season.

New regulations to Circular 230 calling for "highest quality representation" may encourage malpractice litigation involving tax advisors, according to some observers.

The American Jobs Creation Act of 2004 permits taxpayers to deduct either their state and local income taxes or their state and local sales taxes as an itemized deduction for 2004 and 2005.

BLOCK FINANCIAL ADVISORS SETTLES WITH NASD: H&R Block Financial Advisors, the investment arm of the tax prep giant, agreed to pay a $500,000 fine and to return $325,000 in clients' mutual fund trading profits to settle charges brought against it by the National Association of Securities Dealers related to the market-timing of mutual fund shares by two of its former financial advisors. The company, which did not admit or deny the NASD's allegations, said that the settlement won't have a material effect on its operations.

The Internal Revenue Service has appointed 12 new members for the Internal Revenue Service Advisory Council, the group that serves as a forum for IRS officials and public representatives to discuss relevant and emerging tax issues.

A significant increase in sales prices for CPA firms in 2005 was one of several predictions made by a panel of experts at a recent accounting conference here.

Acorn, the Association of Community Organizations for Reform Now, will provide free tax preparation services for low- and moderate-income families in 45 cities nationwide from now through the end of tax season.

Taxpayers who misreported their income to snare unjustified Earned Income Tax Credits are draining $2 billion a year from the U.S. Treasury, auditors at the Government Accountability Office recently told Congress.

Thanks to the help of the Financial Accounting Standards Board, more American jobs may stay in America in the near future.

President George W. Bush said this week that he will appoint Jeffrey F. Kupfer, Treasury deputy chief of staff, to serve as executive director of his bipartisan Advisory Panel on Federal Tax Reform.

The Treasury Department and the Internal Revenue Service issued interim guidance on two new penalty provisions enacted as part of the American Jobs Creation Act of 2004.

Tax-prep conglomerate H&R Block and the Association of Community Organizations for Reform Now have teamed up in a partnership to help boost awareness of the Earned Income Tax credit and to reduce filing costs for low-income taxpayers. Block and Acorn will canvass some 65 cities in a door-to-door joint education effort aimed at low-income filers who may be eligible for the EITC. The effort will also highlight the costs and speed factors associated with refund options, and also work to hasten the elimination of costly fees connected with refund anticipation loans. Ironically, the Block-Acorn alliance comes exactly one year after Acorn held rallies at Block offices protesting what they perceived were aggressive sales of the company's RALs, which they claim unfairly targeted lower-income taxpayers.

Richard Hatch, the winner of the first season of the TV reality show "Survivor," has been charged with filing false tax returns by the Office of the U.S. Attorney for Rhode Island. The office alleged that Hatch had filed a false income tax return that omitted the more than $1 million in prize money that he received for winning the popular reality show. He also was charged with failing to report approximately $321,000 paid to him by a Boston radio station for co-hosting a program. The district attorney's office charged that, in November 2002, Hatch filed a false personal income tax return for the year 2000 and neglected to report the $1,010,000 paid to him by Survivor Entertainment Group, the production company of the reality show. Hatch reportedly was paid $10,000 for his appearance on the final episode of the first season, and $1,000,000 for winning the competition.