Tax practice

IRS OFFERS FORECLOSURE VICTIMS ADVICEWashington, D.C. - The Internal Revenue Service is reaching out to former homeowners who have suffered foreclosure and now are being hit with taxes on any money they were forgiven on their mortgages.

With 2008 little more than two months away, tax practitioners finally have their clients' attention on the need for year-end tax planning.As in prior years, year-end 2007 presents unique tax planning challenges, as well as traditional opportunities. Especially this year, sunset provisions, phase-ins and phase-outs, and inflation adjustments, as well as retroactive and prospective legislative changes and deadlines set in final regulations, all contribute to chasing a moving target.

The Internal Revenue Service reiterated its demand for casinos and other poker tournament sponsors to begin reporting winnings of more than $5,000 after March 4, 2008.

The Internal Revenue Service position on Circular 230 monetary penalties has generated concern and comments from the American Institute of CPAs, while the American Bar Association Tax Section intends to submit its own comments on the matter.The penalties were announced in Notice 2007-39 earlier this year to implement Section 822 of the American Jobs Creation Act of 2004, which expanded the sanctions that the IRS can impose for certain prohibited conduct to include monetary penalties.

The Internal Revenue Service said that personal exemptions and standard deductions would rise and tax brackets would widen as it adjusted a variety of tax provisions for 2008 to keep pace with inflation.

The Internal Revenue Service said that Form 1120-A, U.S. Corporation Short-Form Income Tax Return, is now obsolete.

The House of Representatives has approved a bill that would ban private tax collections, but the bill's prospects remain uncertain in the Senate.

The Internal Revenue Service is not doing a good job of managing its paper case files, according to a newly released report.

A high-ranking Treasury Department official has warned of the costs of tax-exempt bond financing for projects such as sports stadiums.

Republican presidential candidates debated their tax-lowering credentials at an event sponsored by CNBC, MSNBC and The Wall Street Journal on Tuesday evening.

The Internal Revenue Service has given businesses a simpler process for requesting relief for late elections.

The push to raise taxes on hedge funds, private equity firms and their managers seems to have stalled for this year in Congress.

The House of Representatives has passed a bill that would provide relief to homeowners facing the threat of taxes on their foreclosed homes in the midst of the subprime mortgage meltdown.

GOVERNMENT OWES $45M IN EMPLOYMENT TAXESWASHINGTON, D.C. - The federal government is itself a tax delinquent, owing approximately $45 million in employment taxes, according to a report from a Treasury Department watchdog.

The deadline for compliance with final Section 409A regulations, scheduled for Dec. 31, 2007, should be extended for a year, according to 92 of the largest law firms in the nation.The new regulations, finalized in April, require deferred-compensation plans to be amended to comply with the Internal Revenue Code.

The last few months have seen the problems in sub-prime lending start to have a national and even international impact on the credit and stock markets.The combination of expanded sub-prime lending programs with mortgage rates that adjust upward after two to five years, reduced or eliminated down-payment requirements, and a housing market that has seen real estate prices actually decline in many markets, has left many marginal borrowers unable to pay higher monthly mortgage payments, unable to refinance to more traditional mortgages, and unable to sell homes at a price sufficient to cover the mortgage obligation.

The Internal Revenue Service has seen a 60 percent increase so far this year in electronic filing of tax returns by small businesses and large corporations.

Three Democratic congressmen have announced plans to draft legislation that would impose a war surtax to pay for operations in Iraq as a way to demonstrate their opposition to the war.

Sen. Carl Levin, D-Mich., has proposed a bill that would change the tax treatment of corporate stock option deductions.

The Internal Revenue Service has issued a new set of allowable living expense standards that it will use to determine the ability of a taxpayer to pay a delinquent tax liability.