Tax practice

The 11th meeting of the President's Advisory Panel on Federal Tax Reform will be held on Sept. 8 in Washington.

The U.S. Treasury Department and Internal Revenue Service announced proposed regulations that provide further guidance to Section 482, which determines taxable income in connection with cost-sharing arrangements affecting intellectual property.

A Council On State Taxation representative told the National Conference of State Legislatures they should expect a hearing before the Senate Finance Committee this fall.

A recent report from Government Accountability Office says that the Internal Revenue Service needs to establish a more "results-oriented approach" to reducing the tax gap -- the difference between taxes owed and taxes paid in the country.

* IRS SUSPENDS PLAN TO CLOSE ASSISTANCE CENTERS: The Internal Revenue Service will scrap its plans to close 68 Taxpayer Assistance Centers after Congress insisted the agency further study the potential impact of the closures.

The AMT Credit Fairness Act has been introduced in the House with significant bipartisan sponsorship. The bill provides relief for incentive stock option alternative minimum tax victims by accelerating the refund of stranded ISO AMT overpayment credits that, under current law, would not be returned within the taxpayer's lifetime.

IRAs, 401(k)s and similar retirement savings vehicles have experienced phenomenal growth over the past several years, both in terms of the number of participants and in the sheer dollar value of those accounts. Unfortunately, the opportunities to run afoul of the qualified withdrawal rules also have grown. These missteps by account owners have not gone unnoticed by either the Internal Revenue Service or the courts.

Studies conducted by the Treasury Inspector General for Tax Administration over the past two tax filing seasons criticize the Internal Revenue Service's use of training programs.

The Internal Revenue Service was recognized for its community-based partnerships linking low-income taxpayers with organizations that prepare tax returns for free, ensure they properly receive tax credits and assist them with ways to build financial savings.

National Taxpayer Advocate Nina E. Olson urged the Internal Revenue Service to focus more broadly on steps to increase voluntary compliance.

Executive compensation has been under scrutiny on several fronts in recent years.

* STRONG RESPONSE TO STOCK OPTION, SON OF BOSS INITIATIVES: The executive stock option settlement initiative launched in February has received a strong turnout, according to the Internal Revenue Service. The initiative provided corporate executives and their companies with a means to resolve an abusive tax transaction involving the transfer of stock options to family-controlled partnerships.

A federal judge has filed paperwork alerting the Internal Revenue Service that he plans to halt their experiment in outsourcing debt collection, siding with a Texas company that claimed they had been unfairly excluded from the bidding process.

The Electronic Tax Administration Advisory Committee, the consortium that is charged with advising the Internal Revenue Service on its e-filing strategy, is exhorting the service to accelerate its previously announced plans to update its e-filing process.

A judge has ordered the Internal Revenue Service to pay more than $250,000 after determining an IRS agent disclosed confidential information during a criminal investigation.

Although the White House said it reviewed tax returns for Supreme Court nominee John G. Roberts Jr., it has stopped short of allowing investigators from the Senate Judiciary Committee to review the returns as part of the confirmation process.

Lawmakers reached an agreement, putting together $14.5 billion in energy tax breaks as part of a major energy bill years in the making. Both the House and Senate are expected to approve the bill this week.

The announcement that the Internal Revenue Service plans to audit 5,000 S corporations has drawn fire from the National Federation of Independent Business, a small-business advocacy group with over 600,000 members.

The Internal Revenue Service has begun a study to assess the reporting compliance of S corporations. The study, carried out under the National Research Program, will examine 5,000 randomly selected S corporation returns from tax years 2003 and 2004. Created in 2000, the NRP is a comprehensive effort by the IRS to measure payment, filing and reporting compliance for different types of taxes and various sets of taxpayers.

Amidst the controversy surrounding the Internal Revenue Service's recommendation to shutter nearly 70 Taxpayer Assistance Centers, the Treasury Inspector General for Tax Administration said it would monitor the services' proposal and urged it to organize TAC data.