Tax research

The Treasury Department said it plans to start sending out more tax rebate checks as soon as it finishes mailing checks for regular tax refunds.

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.

Presidential hopeful Sen. Hillary Clinton, D-N.Y., has written to Internal Revenue Service Commissioner Douglas Shulman asking him to fix problems her constituents have reported with receiving the wrong amount on their tax rebates.

Investigators from the Treasury Department's watchdog agency, the Treasury Inspector General for Tax Administration, plan to discuss the impact of phishing schemes on tax professionals at a series of two-day IRS Tax Forums around the country.

A federal jury has convicted six defendants in a $60 million nationwide tax fraud conspiracy.

The House of Representatives has passed a bill containing a set of tax deductions and extensions, renewable energy incentives, and a provision equalizing the penalty standards for tax preparers and taxpayers.

The Internal Revenue Service said that it would mail out approximately 350,000 additional economic stimulus payments starting in early July, after discovering that some tax returns did not capture the information needed to generate the $300-per-child payments.

In a 7-2 vote, the U.S. Supreme Court ruled to uphold the tax exemptions that states and localities afford to their in-state municipal bonds.

The Internal Revenue Service is facing a troublesome manpower drain, as a whopping average of 16 percent of its total workforce is now leaving the agency each year.The soaring employee turnover rate has raised eyebrows and concerns among members of the IRS Oversight Board, which warned that the tax service is losing a distressingly large number of talented workers who “possess skills and institutional knowledge that are extremely difficult to replace.”

Despite the availability of free searches and materials over the Internet, proprietary online tax research platforms continue to grow.“We [do] use free services such as the IRS Web site and the various state Web sites, and they’re very helpful,” explained Jake M. Bodenheimer, manager in the tax department at Atlanta-based HLB Gross Collins. “And occasionally, I’ll Google something. But you have to have access to the services. If you depend solely on the free sites, you’ll miss something. There’s always something different. You pick up something from one service that you don’t get on the other, and merge the information. We have a complicated society with complicated laws.”

Coinciding with the end of tax season, House lawmakers last month passed a bill that promises to make tax preparation easier, while also repealing the Internal Revenue Service’s often controversial Private Debt Collection Program.By a margin of 238-179, the House approved the Taxpayer Assistance and Simplification Act of 2008, which repeals the outsourcing program. The program had come under heavy fire — particularly from Democrats — for spending $75 million to collect just $35 million for the IRS. Under the agreement, three private firms took a 24 percent cut of the taxes they collected.

IRS COMMITTEE SEEKS ADVISORSWashington, D.C. — The Internal Revenue Service is looking for new members to apply for its Information Reporting Program Advisory Committee, including tax preparers. The committee offers recommendations on information reporting and administration issues to the IRS.

While the Internal Revenue Service has had an informant program for years, only recently have legislation and administrative developments put significant teeth into it. Most notable are the mandatory monetary awards now required for significant information equal to between 10 percent and 30 percent of the tax, interest and penalties collected.“The new rules have the potential to bring billions of dollars into the Treasury,” predicted Sen. Charles Grassley, R-Iowa, on the passage of the enabling provision within the Tax Relief and Health Care Act of 2006. At least several law firms that specialize in Federal Claims Act litigation are now branching out into whistleblower representation, reporting several billion dollars in suits already pending.

The House Ways and Means Committee has passed a bill that contains a provision advocated by the American Institute of CPAs equalizing the tax return reporting standards.

The Internal Revenue Service has released a revenue procedure dealing with the tax effects on securitized mortgages that have been modified to avoid foreclosures.

The Senate Finance Committee has proposed a new tax bill that seeks to prevent the Alternative Minimum Tax from spreading to more taxpayers next tax season.The bill, sponsored by committee Chairman Max Baucus, D-Mont., and ranking member Chuck Grassley, R-Iowa, increases the AMT exemption amount to $46,200 for individuals and $69,950 for joint filers. It allows the use of personal credits to keep taxpayers who don’t currently pay the AMT from being snared by the tax.

Section 7216, a part of the Internal Revenue Code since 1971, imposes criminal penalties on tax return preparers who knowingly or recklessly make unauthorized disclosures or uses of information furnished in connection with the preparation of an income tax return.A violation of the section is not to be taken lightly — it comes with a penalty of up to a year’s imprisonment or a fine of not more than $1,000, or both.

The Internal Revenue Service has published the 2009 inflation-adjusted deduction limits for health savings accounts.

Authorities indicted a former UBS banker on charges of helping a real estate billionaire and other clients avoid taxes.

Rep. Charles Rangel, D-N.Y., chairman of the House Ways and Means Committee, has introduced a bill to extend tax credits and deductions that expired last year or would expire at the end of this year, including tax incentives for renewable energy.