Tax research

With just about every politician in Washington in agreement that some permanent fix needs to be made to the alternative minimum tax, the Tax Policy Center has released a report outlining a number of possibilities.Created as a parallel tax structure in 1969 that was aimed at preventing the super-rich from using deductions and shelters to avoid paying taxes, inflation has turned the AMT into a different monster. The center’s report notes that fewer than 400,000 families were affected by the tax in 1985, this year, about 3.8 million households will see their tax bills rise by an average of $6,813.

A New Hampshire man has said that he will defend himself against capture on tax charges if necessary, according to U.S. marshals.The government said that they have no plan of escalating the situation, after a jury decided that Edward and Elaine Brown plotted to hide their income and avoid taxes on Elaine’s nearly $2 million income between 1996 and 2003. According to the jury, over the past decade, the couple also used more than $215,000 of postal money orders to pay for their hilltop compound and for Elaine Brown's dental offices.

The Internal Revenue Service has released a fact sheet explaining the 2006 alternative motor vehicle credit allowed for 44 automobiles certified as eligible.

When it comes to the foreign earned income exclusion, a federal appeals court has upheld a ruling that Antarctica does not qualify as a foreign country.The Seventh Circuit court affirmed a U.S. Tax Court decision that the 2001 earnings of a U.S. citizen living in Ross Island, Antarctica, are subject to federal taxes.

The Internal Revenue Service announced that both its e-file and Free File programs are now accepting taxpayer returns.The agency is continuing its push to have taxpayers elect to file their returns electronically, boasting that users who e-file and choose direct deposit can receive their refund in half the normal time. All return information in protected through encryption and taxpayers will receive acknowledgement within 48 hours that the IRS has accepted the return.

The U.S. Tax Court will now require the Internal Revenue Service to file an answer in all small tax cases.The amendments to the court’s rules will apply to all petitions filed after March 13. Small tax cases are currently defined as cases where the amount of deficiency does not exceed $50,000.

Last week, it was again time for National Taxpayer Advocate Nina Olson to roll out yet another congressionally-mandated report detailing 20 of the biggest problems facing taxpayers.What’s impressive is that, for yet another year, her beefs were so fresh.

At times, taxing authorities give out surprising beneficial rulings. The only problem is, you must ask for the ruling. For example, there was my October 24, 2006, WebCPA column about an advisory opinion issued by the New York State Department of Taxation and Finance.It answered the following question: Are you taxed as a New York resident if you move into a New York nursing home for care because you are incompetent and in need of constant medical supervision? According to the opinion, the individual, lacking intent to move, remained a resident of Florida despite the move to a New York nursing home for care.

Two accountants have entered guilty pleas in connection with the sale of legally-questionable tax shelters.

Wolters Kluwer business CCH announced that Mike Sabbatis has been named to the newly-created position of president for CCH Tax and Accounting U.S.

Business taxpayers in Illinois will be the first in the country able to pay state withholding and federal taxes at the same time, through a single system.

The Internal Revenue Service announced that it has reached an agreement with the Hollywood Foreign Press Association to settle the pesky problem that is the taxing of exborbitant celebrity gift baskets.

What kind of company processes payroll and credit card and check payments, and offers banking services and account aggregation? Increasingly, the answer is an accounting software company.

The Treasury Department and the Internal Revenue Service issued a notice providing extensive guidance on several Pension Protection Act rules relating to distributions from tax-qualified retirement plans. The guidance addresses many questions on the law’s provisions, including:

Sage Software has unveiled its annual tax update release for its Sage FAS Fixed Assets product line.

The Internal Revenue Service will begin processing both e-file and paper tax returns that include claims for the major “extender” provisions enacted by Congress on Feb. 3.

Joining an increasingly loud chorus, National Taxpayer Advocate Nina E. Olson released her annual report to Congress, designating the alternative minimum tax and the federal tax gap as the most serious problems facing taxpayers.Olson also reserved a healthy dose of the 80-page-report’s scorn for concerns about the Internal Revenue Service’s collection policies and the transparency of IRS information to the tax-paying public.

Partnership taxpayers can electronically file now use the modernized e-File platform when filing Form 1065, “U.S. Return of Partnership Income,” and Form 1065-B, “U.S. Return of Income for Electing Large Partnerships.”

Liberty Tax Service announced the acquisition of eSmartTax, the income tax preparation business of San Jose, Calif.-based C&S Technologies.

The Swedish Tax Authority is taking another route in its attempts to get a former member of ABBA to pay millions in allegedly undeclared royalties.According to published reports, tax officials want ABBA co-founder Bjorn Ulvaeus to pay $2.1 million for undeclared royalties from the music group’s hits. In May 2006 the authority claimed that Ulvaeus owed almost $13 million in back taxes, fees and interest on unpaid taxes related to contracts he signed before moving to England in 1984.