Tax research

Payroll processor ADP has launched an online portal aimed at accountants who service small businesses, giving them free access to some information from BNA and CCH.

Despite the constitutional, judicial and legislative pronouncements affecting nexus, states vary widely on what level of activity renders a business liable to pay state tax.“There are plenty of gray areas, and on some issues a state will say it depends on the facts and circumstances,” said George Farrah, executive editor of state tax and accounting for BNA.

IRS ENFORCEMENT PAID OFF LAST YEARWashington, D.C. — The Internal Revenue Service stepped up its compliance activities last year and saw its revenues jump, according to a new report.

The huge farm bill working its way through the final stages of the House/Senate Conference Committee appears to have preserved at least a few tax provisions. In March, the conference committee had stripped out the tax provisions that had originated with the Senate Finance Committee. However, when it came time to count votes, negotiators decided that some of the tax provisions had to stay in.The farm bill can be looked at as a net tax increase, with the somewhat unusual feature for legislation in recent years of providing for more revenue-raising offsets than tax incentives. The negotiators have agreed on $1.4 billion in tax incentives and $10 billion in offsets. The figure of $1.4 billion is a significant reduction from the $2.4 billion in tax incentives originally proposed by the Senate Finance Committee.

The Internal Revenue Service said that economic stimulus payments directly deposited to individual retirement accounts and other tax-favored accounts may be withdrawn tax- and penalty-free.The relief is designed to help taxpayers who may have been unaware that by choosing direct deposit for their entire regular tax refund, they were also choosing to have their stimulus payment directly deposited as well. The tax relief is available for amounts withdrawn from tax-favored accounts that are less than or equal to a taxpayer’s directly deposited stimulus payment.

While late-year legislative changes again delayed filing for some taxpayers, the season proceeded relatively smoothly, according to veteran practitioners.“It was one of the smoothest ones I’ve had, and my colleagues say the same. In part it’s because the software is getting better,” said Holliston, Mass.-based preparer Larry Novick. “I did notice that a lot fewer of my clients claimed non-cash contributions, and the amount of collection plate contributions decreased substantially. Most of them had heard of the stricter substantiation rules.”

The number of tax evasion prosecutions fell 5.3 percent last year, continuing a steady decline for at least two decades, according to a new study.

The American Institute of CPAs has sent the Internal Revenue Service a spreadsheet-full of comments on the draft instructions for the revised Form 990 that will be used by tax-exempt organizations to file their returns next year.

The Internal Revenue Service won another tax shelter case, this one involving a sale-in/lease-out transaction.

The brother of the former manager of the Washington, D.C., tax office has pleaded guilty in a wide-ranging tax scandal.

The Internal Revenue Service reported that its e-file program set another record this tax season, with more than 86 million individual tax returns filed so far this year, a 12 percent increase over last year at this time.

A new initiative aims to create more diversity among corporate tax professionals.

Cindy McCain, wife of presidential hopeful Sen. John McCain, R-Ariz., has released the opening two pages of her 1040 return for 2006 after coming under pressure for refusing to provide details of the sources of her income.

The National Conference of CPA Practitioners held a quarterly meeting in Washington to meet with various senators and representatives as well as the Internal Revenue Service, and talk about tax policy.

The Internal Revenue Service's Spring 2008 Statistics of Income Bulletin is a bit of misnomer as it mainly covers income stats for 2006 and 2005, but the report does provide some interesting insights into income patterns and sources in recent years.

Under new regulations, taxpayers must consent to the disclosure or use of their tax information by return preparers. Stiff penalties can be imposed on the preparer who makes unauthorized disclosures.

The Senate has approved a bill offering more than $1.2 billion in tax relief to veterans and military families.

The Senate voted 82-13 to override President Bush's veto of the Farm Bill, which includes nearly $2 billion in tax relief.

Under new regulations, taxpayers must consent to the disclosure or use of their tax information by return preparers. Stiff penalties can be imposed on the preparer who makes unauthorized disclosures.

Actor Wesley Snipes will remain free on bond pending appeal of his conviction.