Tax practice

It didn't take long for the Internal Revenue Service to move forward in combating one of the major complaints outlined in the Jan. 10 report from the national taxpayer advocate.

A memo out of the Internal Revenue Service's Office of Chief Counsel makes the case that gender reassignment surgery cannot be deducted as a medical expense for tax purposes.

Tax fraud promoter Paul D. Harris was sentenced in U.S. District Court in Denver to five-and-one-half years in prison, followed by three years of supervised release, the Department of Justice and Internal Revenue Service said.

As taxpayers begin to prepare their tax returns, the Internal Revenue Service noted that some may be sending their returns to a different service center than last year.

The Internal Revenue Service announced the opening of Free File, the free tax preparation and free electronic filing initiative now in its fourth year. More than 70 percent of the nation's taxpayers -- over 92 million people -- qualify for Free File this year.

I discovered the most amazing thing this week -- a report on a federal agency that was actually readable.

The Internal Revenue Service has revoked the tax-exempt status of more than 30 credit-counseling firms, which collectively account for more than half of the industry's revenue.

Taxpayers can file their 2005 tax returns electronically beginning Jan. 13 as the Internal Revenue Service's E-file program opens for its 20th tax season.

Four additional professional tax organizations have agreed to partner with the Internal Revenue Service to provide assistance to taxpayers at local disaster recovery centers established by the Federal Emergency Management Agency, the IRS announced.

National Taxpayer Advocate Nina E. Olson released her latest report to Congress, again stressing the need for legislators to make simplification of the tax system a reality.

It was just two months ago that Internal Revenue Service Commissioner Mark W. Everson touted his agency's enforcement results for the 2005 fiscal year.

Corporate tax payments hitting an all-time high last month helped offset record federal spending.

The Internal Revenue Service sent out 17.7 million 1040 tax packages during the first of January to taxpayers who have previously filed paper returns. The number of paper tax booklets being mailed to Americans continues to decline as more people opt for electronic filing.

TAX OVERHAUL MAY BE ANOTHER YEAR AWAY: Reports from inside the White House are that President Bush's administration may wait until 2007 to begin pushing a proposal to overhaul the tax code.A proposal was originally planned as a key part of President Bush's second-term agenda, but Republican sources have said that any push would have problems gaining traction in a mid-term election cycle. The Treasury is currently reviewing the recommendations issued by the President's Advisory Panel for Tax Reform before submitting a plan to the president.

As the Internal Revenue Service moves towards its goal of 80 percent e-filing for individuals, it is placing more emphasis on the e-filing of corporate returns.In 2005, over 200,000 corporations voluntarily e-filed, and beginning in 2006, many corporations will be required to file electronically. Recently issued regulations require corporations with assets of $50 million or more that file over 250 returns each year to file Forms 1120 and 1120S electronically, starting with tax periods ending on or after Dec. 31, 2005.

The start of a New Year is a traditional time to take stock of the events of the past year to better prepare for what's coming. Taking inventory as it relates to tax law can produce many dividends.2005 proved to be no exception in getting prepared for 2006. Looking forward to 2006, here is a "Top 10" list of 2005 tax events that will have an impact on what will happen to many taxpayers in 2006.

In violation of a longstanding court order, the Internal Revenue Service has stopped providing detailed statistics about how the agency enforces the nation's tax laws, according to a motion filed in the United States District Court for the Western District of Washington.The legal challenge was brought by Susan B. Long, a professor of management information and decision sciences at Syracuse University's Martin J.Whitman School of Management.

Treasury Secretary John Snow predicted that Congress would probably extend a number of tax cuts when it returns in session, according to reports.

The Treasury Department and the Internal Revenue Service have issued final regulations regarding Sections 401(k) and 401(m) related to designated Roth IRA contributions.

Lois G. Lerner has been named director of the Exempt Organizations Division of the Internal Revenue Service. In this position, she will be responsible for administering and enforcing the tax laws that apply to more than 1.8 million organizations recognized by the IRS as exempt from tax.