Tax practice

The unveiling of the Obama administration’s budget this week appeared to be only the opening act for what promises to be a long-running series of episodes involving spending, taxes, and cuts to favored and not-so-favored programs.

The Internal Revenue Service said Tuesday that it has begun processing the 1040 individual tax returns and itemized deductions that were delayed by the tax cuts extension legislation that Congress enacted in December, but there are still delays in processing some non-1040 business tax returns.

The average combined U.S. sales and use tax rate increased to a record high of 9.64 percent compared to the previous record of 8.63 percent in 2009, according to a new report.

Two Republican congressional leaders are asking the Internal Revenue Service about recent reports that it has been paying out billions of dollars for improper Earned Income Tax Credit claims.

Senate Finance Committee Chairman Max Baucus, D-Mont., and Sen. Chuck Grassley, R-Iowa, have introduced legislation that would permanently extend income tax relief for ranchers, farmers and other landowners who donate agricultural land for conservation.

The House Committee on Small Business held hearings on repealing the unpopular expansion of 1099 information reporting in the health care reform bill.

The White House released its budget proposal for fiscal year 2012 on Monday, with plans for eliminating capital gains taxes on small business investment, while also getting rid of tax breaks for the wealthy and for fossil fuels.

The Federal Deposit Insurance Corp. has told Republic Bancorp, the main refund anticipation loan provider for Jackson Hewitt and Liberty Tax Service, that the bank’s RALs are “unsafe and unsound” without a debt indicator from the Internal Revenue Service.

A tax preparer who led a tax fraud scheme that resulted in more than $28 million in fraudulent refunds was sentenced in Manhattan federal court to 72 months in prison for his role.

Congressmen Brad Sherman, D-Calif., and Michael Conaway, R-Texas, have formed a Bipartisan Congressional CPA Caucus that they plan to co-chair.

Tax strategy patents have been around for more than a decade, ever since a federal appeals court in 1998 validated business method patents, including tax strategies.

The Justice Department has filed six lawsuits in five states to stop tax return preparers from fraudulently claiming the First-Time Homebuyer Tax Credit and the Earned Income Tax Credit.

The city of San Francisco is reportedly considering offering Twitter massive tax breaks to keep the growing social media company from moving outside the city to nearby Brisbane.

The Internal Revenue Service has done a turnaround on the deductibility of breast pumps as medical expenses.

The Internal Revenue Service plans to begin accepting tax returns with itemized deductions and other delayed forms after 11:00 am next Monday.

The Internal Revenue Service has made little improvement in reducing improper Earned Income Tax Credit payments since 2002, when it was first required to report estimates of these payments to Congress, according to a new government report.

The Obama administration is expected to propose a way for states to raise more money in payroll taxes to pay for the cost of unemployment insurance.

A group of 10 Senate Democrats has written to Speaker of the House John Boehner and other House leaders asking them to reduce the budget deficit by eliminating unneeded subsidies and tax breaks for oil companies.

The Internal Revenue Service has begun a new voluntary disclosure program aimed at convincing more taxpayers to tell the U.S. government about any funds they have been hiding in foreign bank accounts.

The five states with the highest combined state and local tax rates are Tennessee at 9.44 percent, California at 9.08 percent, Arizona at 9.01 percent, Louisiana at 8.69 percent and Washington at 8.64 percent, according to a new report.