Tax practice

As of this writing, the American Jobs Creation Act of 2004 has just passed Congress and is awaiting President Bush's expected signature. With 580 amendments to the Internal Revenue Code affecting 274 sections, including 34 brand-new sections, there is much for tax practitioners to ponder in this legislation.

UNDER FSC/ETI BILL, SUV WRITE-OFFS WILL GO: When President Bush signs the FSC/ETI bill, the days of small business owners and professionals such as doctors and lawyers expensing luxury SUVs are over.

The International Accounting Standards Board and the Accounting Standards Board of Japan announced that they have started talks about a joint project to minimize differences between international financial reporting standards and Japanese accounting standards.

As worldwide legislative and regulatory changes make tax risk planning a top priority, many companies are aligning their tax strategies with their organization's overall enterprise risk profile, according to a survey of corporate tax directors by Ernst & Young.

A Connecticut district judge ruled against the Internal Revenue Service and ordered the agency to refund more than $62 million to a General Electric subsidiary stemming from a transaction that the IRS said was a sham.

The Internal Revenue Service is co-sponsoring a Webcast to help tax practitioners and payroll professionals prepare year-end filings.

More than 60 charities, churches and other tax-exempt groups have been contacted by the Internal Revenue Service about alleged improper political activities, the agency disclosed.

The National Association for the Advancement of Colored People is reportedly under investigation by the Internal Revenue Service for violating the terms of its tax-exempt status in a probe that the group's chairman says stems from comments he made that were critical of President Bush.

The Internal Revenue Service warned consumers against bogus claims by promoters that tax debts can be settled for "pennies on the dollar" through the Offer in Compromise Program.

Liberty Tax Service marked a milestone this week as the company officially welcomed its thousandth Liberty franchise entity. In the last two tax seasons, Liberty Tax Service has doubled the number of tax returns prepared in outlets throughout the U.S. and Canada. Less than 50 franchise companies have more than 1,000 franchisees on Entrepreneur magazine's list of top 500 franchise organizations in the world. "This year has been an exhilarating time of record growth in many areas for Liberty Tax. As we hit the mark of 1,000 franchisees in our operating system, we continue our quest and drive to be the No. 1 tax company in the industry," said John Hewitt, chief executive and founder of Liberty Tax Service. For the fourth consecutive year, Accounting Today named Hewitt one of the Top 100 Most Influential People in the tax industry. This year, Entrepreneur magazine ranked Liberty Tax Service as the ninth fastest growing franchise opportunity, one of the top 20 low-investment opportunities, and No. 28 on its overall list of best franchises. In March, Accounting Today magazine ranked Liberty among the fastest growing on its list of the Top 100 Tax & Accounting Firms.

The Internal Revenue Service has issued Notice 2004-71, providing procedures for persons required to prepare Form 1099-DIV and other information reporting with respect to dividends from foreign corporations and for individuals receiving such forms.

CHANGE BOOSTS SMALL BUSINESSES ELIGIBLE FOR SCHEDULE C-EZ: In a move aimed at reducing the paperwork burden for small businesses, the Internal Revenue Service said that it would boost the number of small businesses eligible to file a simplified expense form. The IRS will double the business expense threshold to $5,000 from $2,500 for filing the Form 1040, Schedule C-EZ.

Tax practitioners should be pleased that recent improvements have enabled the Internal Revenue Service to handle appeals more efficiently and in a more timely fashion than in the past.

Year-end tax planning generally never turns out to be the same routine each year. Either the client's circumstances change, or the tax law changes. For 2004, one of the major unexpected developments is the eleventh-hour passage of the Working Families Tax Relief Act of 2004.

A week after the release of a scathing report by its federal regulator, mortgage giant Fannie Mae agreed to major changes in its accounting, internal controls and management practices.

President Bush on Friday quietly signed the American Jobs Creation Act of 2004 into law, while flying on Air Force One to a campaign appearance in Pennsylvania.

The Internal Revenue Service Appeals Division has tightened the guidelines under which it will settle cases with taxpayers that participated in certain abusive transactions, the agency advised this week.

Singer and songwriter Ronald Isley has been indicted on tax evasion charges for failing to report income that he received from performances and royalties as a member of the renowned Isley Brothers.

The Internal Revenue Service and the Virgin Islands Bureau of Internal Revenue said that they've established a new partnership to work together on common tax enforcement issues.

The Internal Revenue Service is reminding tax-exempt political organizations that filing deadlines are approaching for disclosure statements prior to the Nov. 2 election date. Information on 2004 political contributions and expenditures will be available for public inspection on the IRS Web site.Certain political organizations that are tax exempt under Section 527 of the Internal Revenue Code are required to file Form 8872, Report of Contributions and Expenditures. Organizations have the option of filing either monthly or quarterly.For quarterly filers, the third quarter report were due Oct. 15. Organizations filing monthly reports must submit their September information by Oct. 20. A pre-election report for both quarterly and monthly filers is due Oct. 21, or Oct. 18 if the report is sent by registered or certified mail.The October filings are the last reports that will be available to the public prior to the Nov. 2 election. A post-election report will be due on Dec. 2.