Tax practice

A representative from the Justice Department told a Senate panel that the agency is satisfied with the tactics used by prosecutors to pursue corporate criminals.

Using one of dozens of scenarios, undercover government auditors were mostly satisfied with the levels of assistance they received at several of the Internal Revenue Service's Taxpayer Assistance Centers.

The Internal Revenue Service announced a record settlement for a long-running a transfer pricing dispute with pharmaceutical giant Glaxo SmithKline Holdings Inc. and the company's subsidiaries.

As previously announced, the Internal Revenue Service will soon begin charging user fees for the residency certification letters commonly used to avoid foreign value added taxes.

After months of increasing reports of investigations by both the Securities and Exchange Commission and academics, Congress is now examining the sometimes-questionable timing of stock options granted to executives.

A report from the Treasury Inspector General for Tax Administration estimates that computer programming woes cost the country more than the $200- to $300-million range originally estimated by the Internal Revenue Service.

The reasoning might be sound in the latest recommendations brought forward by the Taxpayer Advocacy Panel , but huge questions remain over how any of the panel's latest handful of suggestions might actually be executed.

Pitney Bowes Inc., a manufacturer of postage meters, mailing systems and other equipment, agreed to a $1.1 billion tax settlement with the Internal Revenue Service.

IRS LAUNCHES ONLINE PAYMENT AGREEMENTS: Tax professionals will help launch a new system allowing many individuals who owe delinquent federal taxes to apply online for a payment agreement, the Internal Revenue Service announced.The IRS is implementing the new Online Payment Agreement application through national partnerships with the tax professional community. The application will eliminate the need to write or call the IRS toll-free number for assistance. The goal of the program is to provide an easier way for taxpayers to voluntarily resolve tax liabilities.

There have been three fundamental, evolutionary changes in the corporate tax function over the past 20 years with respect to its mission, its alignment with corporate strategy, and its influence on organizational behavior and resource allocation.The first, in the 1980s, focused on using technology applications to improve the efficiency and effectiveness of tax preparation, with cost reduction acting as the driver for improving business processes. The second, in the 1990s, involved value creation and developing holistic approaches to sustain tax minimization, which proved that the corporate tax function could positively affect the bottom line through effective tax planning.

Schedule M-3 is part of the effort by the Internal Revenue Service to get a better handle on abusive tax shelters and other aggressive tax techniques by getting sufficient detail on book/tax differences that it can guide IRS auditors to transactions in need of further examination.The IRS is sufficiently confident in its ability to track book/tax differences on Schedule M-3 that earlier this year it removed book/tax differences as a criteria required for reportable transactions. While the former Schedule M-1 required only 10 lines of information, Schedule M-3 expands that to 90 lines of information, with an emphasis on making a distinction between temporary and permanent book/tax differences.

The Internal Revenue Service announced that long-distance telephone customers will be able to seek refunds ranging from $30 to $60 on their 2006 tax refunds.

In an August letter, the Internal Revenue Service said that the NAACP did not violate its tax-exempt status when the civil rights group's chairman gave a speech criticizing President Bush.

The Government Accountability Office is urging the Internal Revenue Service to require more comprehensive reporting of data relating to donor-advised funds, in an effort to address tax compliance challenges.In its report, the GAO outlined a series of steps for the IRS in data collection regarding tax-exempt donor-advised funds including suggesting that the Service collect Form 990 data for, and provide guidance on calculating payout rates for donor-advised funds and supporting organizations, as well as urging Congress to provide the IRS with the authority to protect taxpayer identification numbers from public disclosure. The GAO also recommended that the IRS require more thorough reporting of supporting organizations' ID numbers of and report the TINs of recipients of large loans.In contrast to private foundations, donor-advised funds and supporting organizations give donors less control over how donations will be used, but provide more favorable tax deductions, lower administration costs, less oversight from the IRS and fewer reporting requirements.

Like most everyone else, Congress will return from its summer vacation in the coming week.

When I was child and invited to a birthday party, I almost always left with a bag of goodies, usually candy, maybe a lollipop, some chocolate bars, sour balls, and probably a piece of licorice.

In consideration of the continuing impact of Hurricane Katrina, the Internal Revenue Service has further postponed filing and payment requirements for businesses until Oct. 16, 2006, which is the same deadline established earlier for certain individual income tax return filers.The postponement now applies to individual, corporation, partnership, estate, trust, S corporation, generation-skipping, employment and certain excise tax returns with original or extended due dates that fall on or after Aug. 29, 2005, but before Oct. 16, 2006.

Larry R. Levitan, a longtime partner at Andersen Consulting and the inaugural chairman of the Internal Revenue Service's Oversight Board, died at his home here after a battle with cancer. He was 65.After his graduation from college, Levitan spent the ensuing 34 years with Andersen Consulting and consulted on telecommunications and utilities issues.

The Internal Revenue Service announced that a draft of Form 8888, "Direct Deposit of Refund," a new form for taxpayers who opt to split their refunds among accounts, is now available for public comment.

By now, readers of this space are well aware of my skepticism about the efficiency of any program that is government-run. No matter how well-intentioned, they never turn out quite the way they're presented to those charged with initial approval.