Tax practice

The Internal Revenue Service said that economic stimulus payments directly deposited to individual retirement accounts and other tax-favored accounts may be withdrawn tax- and penalty-free.The relief is designed to help taxpayers who may have been unaware that by choosing direct deposit for their entire regular tax refund, they were also choosing to have their stimulus payment directly deposited as well. The tax relief is available for amounts withdrawn from tax-favored accounts that are less than or equal to a taxpayer’s directly deposited stimulus payment.

The number of tax evasion prosecutions fell 5.3 percent last year, continuing a steady decline for at least two decades, according to a new study.

The Internal Revenue Service won another tax shelter case, this one involving a sale-in/lease-out transaction.

The Internal Revenue Service reported that its e-file program set another record this tax season, with more than 86 million individual tax returns filed so far this year, a 12 percent increase over last year at this time.

The National Conference of CPA Practitioners held a quarterly meeting in Washington to meet with various senators and representatives as well as the Internal Revenue Service, and talk about tax policy.

The Internal Revenue Service's Spring 2008 Statistics of Income Bulletin is a bit of misnomer as it mainly covers income stats for 2006 and 2005, but the report does provide some interesting insights into income patterns and sources in recent years.

Under new regulations, taxpayers must consent to the disclosure or use of their tax information by return preparers. Stiff penalties can be imposed on the preparer who makes unauthorized disclosures.

The Senate has approved a bill offering more than $1.2 billion in tax relief to veterans and military families.

The Senate voted 82-13 to override President Bush's veto of the Farm Bill, which includes nearly $2 billion in tax relief.

Under new regulations, taxpayers must consent to the disclosure or use of their tax information by return preparers. Stiff penalties can be imposed on the preparer who makes unauthorized disclosures.

The Treasury Department said it plans to start sending out more tax rebate checks as soon as it finishes mailing checks for regular tax refunds.

Under new regulations, taxpayers must consent to the disclosure or use of their tax information by return preparers. Stiff penalties can be imposed on the preparer who makes unauthorized disclosures.

Presidential hopeful Sen. Hillary Clinton, D-N.Y., has written to Internal Revenue Service Commissioner Douglas Shulman asking him to fix problems her constituents have reported with receiving the wrong amount on their tax rebates.

The Internal Revenue Service said that it would mail out approximately 350,000 additional economic stimulus payments starting in early July, after discovering that some tax returns did not capture the information needed to generate the $300-per-child payments.

IRS COMMITTEE SEEKS ADVISORSWashington, D.C. — The Internal Revenue Service is looking for new members to apply for its Information Reporting Program Advisory Committee, including tax preparers. The committee offers recommendations on information reporting and administration issues to the IRS.

While the Internal Revenue Service has had an informant program for years, only recently have legislation and administrative developments put significant teeth into it. Most notable are the mandatory monetary awards now required for significant information equal to between 10 percent and 30 percent of the tax, interest and penalties collected.“The new rules have the potential to bring billions of dollars into the Treasury,” predicted Sen. Charles Grassley, R-Iowa, on the passage of the enabling provision within the Tax Relief and Health Care Act of 2006. At least several law firms that specialize in Federal Claims Act litigation are now branching out into whistleblower representation, reporting several billion dollars in suits already pending.

The Supreme Court has issued unanimous rulings in two tax cases, MeadWestvaco Corp. v. Illinois Department of Revenue and U.S. v. Clintwood Elkhorn Mining Co.In the MeadWestvaco case, the Supreme Court vacated and remanded the decision of the Illinois Appellate Court, which had allowed Illinois to tax a capital gain realized by Mead, an Ohio-based subsidiary of MeadWestvaco, when Mead sold its LexisNexis business division. Mead paid the tax and later sued in state court.

The Internal Revenue Service has released a revenue procedure dealing with the tax effects on securitized mortgages that have been modified to avoid foreclosures.

Section 7216, a part of the Internal Revenue Code since 1971, imposes criminal penalties on tax return preparers who knowingly or recklessly make unauthorized disclosures or uses of information furnished in connection with the preparation of an income tax return.A violation of the section is not to be taken lightly — it comes with a penalty of up to a year’s imprisonment or a fine of not more than $1,000, or both.

Rep. Charles Rangel, D-N.Y., chairman of the House Ways and Means Committee, has introduced a bill to extend tax credits and deductions that expired last year or would expire at the end of this year, including tax incentives for renewable energy.