Tax practice

Representatives of the McCain and Obama camps sparred politely at a Presidential Tax Forum sponsored by the New York State Society of CPAs.

The financial rescue plan approved by Congress last week included many extensions of expiring tax credits and deductions that helped it win passage in the House, but it also left out some tax issues that will surely be bones of contention for the next Congress.

The passage of the financial rescue plan by Congress last week depended in part on the insertion of a provision on reevaluating the fair value accounting standards, which could come back to bite the same lobbyists who urged its inclusion.

The Internal Revenue Service said that certain lean-burn technology vehicles now qualify for the alternative motor vehicle tax credit.

New data from the Internal Revenue Service suggests that American corporations controlled by foreigners are now responsible for a larger share of total U.S. corporate assets and earnings than ever before - despite a U.S. corporate tax rate that is among the highest in the world.The most recently released IRS Statistics of Income bulletin revealed that the total receipts of foreign-controlled domestic corporations in 2005 reached $3.5 trillion, which is $450 billion more than in 2004, twice the 1996 level and almost 90 times the level reported in 1971.

JUDGE DECLINES TO DISMISS JACKSON HEWITT SUITNew York - A federal judge has turned down Jackson Hewitt's request to have a class-action lawsuit dismissed against the company and some of its franchises.

The Internal Revenue Service has been working for a couple of years on revisions to Form 990 (Return of Organization Exempt From Tax), which has not had a major update in 30 years. With the recent release of revised draft instructions, the IRS is close to finalizing the process. The new Form 990 will generally be required for 2008 returns.Although issued as draft instructions, the IRS has indicated that the Form 990 instructions should be thought of as final instructions. They were hurried out to try to get the information in the hands of tax professionals and tax-exempt organizations as soon as possible to prepare for the new requirements. The final instructions are only expected to differ from these draft instructions if there has been a significant error or omission.

A Las Vegas man who worked as a real estate broker in Nevada since the late 1970s has pleaded guilty to felony tax evasion and impersonating an IRS agent.

The lead defendant in a nationwide $60 million tax fraud conspiracy was sentenced to more than 18 years in prison.

Nearly a third of the income tax returns prepared by volunteer preparers for an IRS program were incorrect, according to a report by the Treasury Department's inspector general.

The Treasury's financial rescue plan includes a tax change that would allow banks to treat Fannie Mae and Freddie Mac preferred stock as ordinary losses.

The House approved the $700 billion financial industry rescue package by a 263-171 margin on Friday, after defeating it on Monday.

After failing to clear a House vote on Monday, the $700 billion rescue plan for Wall Street passed the Senate by a comfortable margin of 74-25 and now awaits a House vote, which could come Friday.

Congress should consider making all taxpayers reporting rental real estate activity subject to the same information reporting requirements as other taxpayers with a trade or business, according to the Government Accountability Office.

The Senate voted to reaffirm the Securities and Exchange Commission's authority to suspend mark-to-market accounting as part of its approval of the financial rescue plan, as fair value measurement comes under fire from banking groups.

While the Treasury bailout seems to be heading toward another vote this week, the state of the alternative minimum tax patch and the various tax extenders now seems in doubt.

The Internal Revenue Service has released Notice 2008-82, which protects reservists from losing funds in their health Flexible Spending Arrangement accounts after being called to active duty.

The Treasury Department said it has opened its Temporary Guarantee Program for Money Market Funds, whereupon the Treasury will guarantee the share price of any publicly offered eligible money market mutual fund – both retail and institutional – that applies, and pays a fee, to participate in the program.

Senate leaders were expected to vote Wednesday evening on their version of the $700 billion financial bailout package after compromising on a series of tax breaks and increasing the limit on insured bank deposits.

A majority of tax and financial executives favor the research and development tax credit simplification proposed by the Senate, according to a survey by Grant Thornton.