Tax research

The Public Company Accounting Oversight Board said it plans to hold a meeting to consider a new ethics and independence rule concerning communication with audit committees.

The House Ways and Means Committee voted along mainly party lines to repeal the ability of the Internal Revenue Service to enter into private debt collection contracts, with a vote of 23 to 18 on the Democratic-backed bill.Under current law, the IRS can use private debt collection companies to find and contact taxpayers who owe outstanding tax liabilities and arrange payment. The companies can keep up to 25 percent of the amount collected, and the IRS can retain another 25 percent for additional enforcement activities. The Tax Collection Responsibility Act of 2007 would repeal that authority, which critics fear could lead to abusive tax collection practices.

Former construction worker and Coast Guard employee Rhiannon O’Donnabhain is suing the Internal Revenue Service after she was disallowed from deducting $25,000 in medical expenses for her sex change operation.The IRS claims the operation was cosmetic surgery and not a medical necessity. In another case in 2005, the IRS Chief Counsel made a similar determination. However, the United States Tax Court has not ruled on any similar cases, and its decision could set a precedent.

The United States Tax Court has decided that wages earned in Antarctica are still subject to taxation.

A tax manager who left her firm in Hawaii and moved to South Carolina was the subject of a very interesting article in the July 2007 Boomer Bulletin from Boomer Consulting Inc. What was so interesting was that not much changed for the Hawaiian firm, as she continues to work for it remotely from South Carolina.

A federal judge has dropped the charges against 13 defendants in the KPMG tax shelter case.Judge Lewis A. Kaplan of the U.S. District Court in Manhattan blamed prosecutors for forcing the Big Four accounting firm to stop paying the legal fees of the 13 defendants and said their constitutional rights had been violated.

The Internal Revenue Service said it plans to simplify the signature process for electronically filed individual tax returns by allowing tax practitioners to avoid the need to send a paper signature document in support of their clients' e-filed returns.

The American Institute of CPAs wants Congress to modify a little-noticed provision in the recently passed Iraq war-funding bill that the institute fears may put tax preparers at odds with their clients.

The Internal Revenue Service said it has begun mailing educational letters this month to more than 650,000 small tax-exempt organizations to let them know they need to start submitting a new annual electronic notice known as an e-Postcard.Form 990-N, the electronic notice they have to send, is intended for tax-exempt organizations with gross receipts of $25,000 or less. Until the passage of the Pension Protection Act of 2006, charities of that size weren't required to submit either the Form 990 or 990-EZ.

CCH has integrated its CertiTax software and Sales Tax Load Utilities with Microsoft Dynamics GP 10.0.The company's CertiTax Plug-in for Dynamics GP 10.0 provides an interface from CertiTax, CCH's hosted sales tax calculation system, to the Dynamics GP 10.0 sales order process module.

Senate Finance Committee Chairman Max Baucus, (D-Mont.), and fellow committee member Chuck Grassley, (R-Iowa), are calling on the Internal Revenue Service to do a better job of publicizing the Saver's Credit to encourage more low-to-middle-income workers to save money for retirement.The credit applies to up to 50 percent of the first $2,000 of retirement contributions for families earning up to $50,000 a year. First created in 2001, the credit became permanent in the Pension Protection Act of 2006.

The Internal Revenue Service said it would add three more excise tax forms to the lineup of federal tax return forms and schedules that taxpayers can file electronically.The first form that will be available for e-filing is the 2290, Heavy Highway Vehicle Use Tax Return, debuting this summer. Form 720, Quarterly Federal Excise Tax Return, and Form 8849, Claim for Refund of Excise Taxes, will premiere later this year.

The IRS said it is reconsidering some of the private letter rulings its associate chief counsel’s office has issued regarding the gift tax consequences of trusts that employ distribution committees.The IRS’s chief counsel has discovered that some of the conclusions in the rulings may disagree with some prior revenue rules.

Intentional disregard of the law is the primary contributor to the tax collection gap experienced by the IRS, according to nearly half the CPAs surveyed in an online poll by the AICPA.

CCH said it will begin reselling tax exemption certificate management software and services from Imaging Science and Services Inc. on an exclusive basis worldwide.The products automate the organization of sales tax exemption and resale certificates. They include TeamsExpress on Demand, a hosted system for managing a database of tax documents, and LineLinkXL, a Microsoft Excel add-in.

Thomson Tax & Accounting released Version 8.0 of its ePropertyTax software, adding extra edit, query and data entry features to the Web-based system for commercial property taxpayers.The upgrade expands the mass-editing tool to help users copy, paste, import and export data throughout the system. Users can now customize queries in any data field to search for information.

I first came across the term a number of years ago when consultants stressed to me the importance of identifying where a business was in its life cycle. These consultants believed businesses and industries have a life cycle, and the key is identifying where the business is at that time. In the case of a business, its life cycle includes progressive identifiable stages, such as the “seed,” start-up, growth, established, etc.

Mahoney Cohen & Co. CPA PC has launched an international tax and consulting practice.

India’s Supreme Court found that Morgan Stanley did not have to pay tax in that country for income earned from its business process outsourcing unit, giving multinational companies a lift in their outsourcing arrangements.

Now that summer is here, tax preparers have time for trial runs of different software to see if there's a program that might be a better fit for their practices.Vendors, meanwhile, see this time as an opportunity to get a head start on the next filing season by offering special discounts and promotional pricing.