Tax practice

For at least the first few days of 2010, and probably longer, executors of the estates of people dying after Dec. 31, 2009, will be operating in a difficult environment after the Senate’s failure to extend the estate tax at its current rates.

A new report by the Treasury Department’s Inspector General for Tax Administration found that millions of people may have improperly received Individual Taxpayer Identification Numbers from the IRS that could be used to fraudulently claim tax refunds.

The Senate overcame a key procedural hurdle early Monday morning on the arduous journey to approving health care reform legislation with a 1:00 am vote approving an amendment by Senate Majority Leader Harry Reid, D-Nev., that made changes to secure the 60 votes needed to end a filibuster.

The House passed two bills earlier this month with provisions related to the use of Extensible Business Reporting Language, or XBRL, the interactive data-tagging technology that the SEC has begun requiring large public companies to use when filing their financial statements.

The House narrowly passed a jobs bill aimed at reducing unemployment, but the legislation’s prospects are uncertain in the Senate.

Economic uncertainty, coupled with the possibility of higher tax rates, has driven taxpayers to seek more face time with their accountants.

An income tax treaty between the United States and Italy has taken effect after a decade-long delay.

The IRS has chosen to use TaxWise software from CCH Small Firm Services at its tax assistance sites for the 15th consecutive year.

IMGCAP(1)]The IRS is conducting a sweep of real estate investors that challenges deductions investors have been taking as a routine part of business for years. The sweep is based on an IRS belief that there is a “compliance gap” in this area.

A biennial survey by the National Society of Accountants found that the cost of preparing an itemized Form 1040 with a Schedule A and a state tax return averages $229.

Senate Finance Committee Chairman Max Baucus, D-Mont., dropped efforts to temporarily extend the estate tax at its current level in the face of Republican opposition.

The Internal Revenue Service has issued proposed regulations under a new law that will require reporting of basis and other information by stock brokers and mutual fund companies for most stock purchased in 2011 and all stock purchased in 2012 and later years.

CCH has issued a Special Tax Briefing on the Tax Extenders Act of 2009 that was approved this month by the House.

The Worker, Homeownership and Business Assistance Act of 2009 has given hard-pressed businesses a generous pre-holiday gift in its extension and expansion of the enhanced five-year net operating loss carryback provision under Code Sec. 172. Many economists predict an eventual windfall to businesses far in excess of the $10.5 billion 10-year cost estimated by the Joint Committee on Taxation. Even so, the Joint Committee forecasts front-loaded benefits of over $33 billion in 2010. To maximize this windfall, however, each taxpayer must carefully evaluate how its own facts and circumstances relate to certain variables and recommended strategies.

RANGEL BILL CLAMPS DOWN ON UNREPORTED FOREIGN INCOME

The surge in projected government spending, coupled with diminishing sources of revenue, raises the probability that lawmakers may look toward a value-added tax to close the gap.

The House has approved a comprehensive financial reform bill, albeit with a number of key provisions weakened in recent days.

The past year saw a number of unusual sales and use tax laws enacted in a number of states.

Los Angeles attorney Matthew G. Krane has pleaded guilty to passport fraud and tax evasion after failing to report more than $35 million in income hidden overseas.

The prospect of the enactment of a value-added tax in the United States is getting closer – five years and counting, according to a Tax Governance Institute survey.