Tax research

In its latest attempt to become a player in the accounting software space, Microsoft had released a free stripped-down version of its software -- targeting small businesses that are late adopters and rely on pencil and paper or Excel for their bookkeeping needs.

A federal report says that the Internal Revenue Service needs to put a better system in place to evaluate the results of the private debt collection program it implemented this fall.The Government Accountability Office looked at a trio of issues, including whether the IRS addressed critical success factors before limited implementation, whether the IRS will assess lessons learned before fuller implementation, and finally, whether the IRS’s planned study will help determine if using private contractors is the best use of federal funds.

The Internal Revenue Service is pushing back the printing schedule for a number of its tax products, including several versions of the 1040 and 1099 forms.Earlier this month, the IRS warned the Senate Finance Committee tax staff that delays in enacting a number of expiring tax breaks could have an adverse impact on tax administration -- affecting outside contracts with vendors to get the forms and instructions printed, and possibly eventually having a negative impact on collections.

Nearing the November elections, Intuit Inc. has given $1 million to a California political action committee called the Alliance for California's Tomorrow.The group has already spent $66,000 supporting the campaign of Republican Tony Strickland for state controller, according to the Los Angeles Times.

Robert Wayne Hallock was convicted by a federal judge today of tax evasion for attempting to hide from the government over $1 million obtained by selling fraudulent certificates of deposit, the Justice Department and Internal Revenue Service jointly announced.According to the indictment, in February 1997, Hallock, formerly a partner at the law firm of Kirkland & Ellis LLP in Chicago, sold a fraudulent CD from which he received approximately $1.8 million dollars. In an attempt to hide that income from the government, Hallock funneled it through a Florida bank account in the name of Himmel & Grund, LLC and hired an associate to use the from that bank account to purchase hundreds of thousands of dollars in cashier’s checks that Hallock used to spend on personal expenditures.

In a press conference timed to coincide with the 20th anniversary of President Reagan’s signing the last major tax reform act into law, former Sen. Bill Bradley, D-N.J., and Sen. Ron Wyden, D-Ore., issued a call for another tax reform push.Wyden has introduced his Fair Flat Tax Act in the Senate, which includes provisions to lower tax rates and broaden the overall tax base. The legislation would allow taxpayers to file their returns on a simplified, single-page 1040 form; collapse individual tax brackets from the current six down to just three; and set a single, flat corporate rate. The bill would also end the alternative minimum tax and contains a unique provision to provide a refundable 10-percent tax credit for every taxpayer’s state and local taxes -- a benefit for taxpayers who don’t itemize.

I always believed that New York had a deserved reputation of aggressively going after individuals regarding whether they have New York residency with regard to collection of its income and estate taxes.

Beginning in January, Link2Gov will be able to process credit card payments related to federal business tax Forms 941 and 940 for an expanded number of filing years -- 1997 through present balance due.

Let me preface my weekly missive with the admission that I’m a Wesley Snipes groupie.

Surfing champion Sunny Garcia was sentenced to three months in federal prison for failing to pay taxes on more than $417,000 in prize money.

The Treasury Department and the Internal Revenue Service issued proposed regulations addressing the tax treatment of an exchange of property for an annuity contract.

The chairman of the Joint Economic Committee is asking the Internal Revenue Service to refrain from taxing online gamers.

The New Jersey Supreme Court ruled that companies operating in the state may not use out-of-state subsidiaries to hold their intellectual property and subsequently shield profits from the state’s corporate income tax.The judgment, which applies only to New Jersey, means that companies will no longer be able to use a shelter strategy to transfer property such as trademarks or patents to subsidiaries in low- or no-tax states. Companies have generally paid the subsidiary for the use of brands or other proprietary property and then deducted those payments from their state income taxes. The income collected by the subsidiary is than taxed at a lower rate, or not at all.

White men can’t jump, and movie actor Wesley Snipes apparently can’t fill out his tax returns properly, according to a recently unsealed indictment from the Internal Revenue Service.The eight-count indictment charges Snipes and two Florida men with conspiracy to defraud the IRS and presenting a fraudulent claim for payment. Snipes is facing six counts of failing to file income tax returns between 1999 and 2004.

Individuals who owe delinquent federal income taxes will now be able to apply online for a payment agreement, the Internal Revenue Service announced.

H&R Block Inc., best known for its tax preparation services, is expanding into banking.The company, based here, announced at its annual meeting in mid-September that it will begin offering bank accounts to customers to facilitate direct deposit of tax refunds.

The tax prep software industry is both expanding and contracting, as Wolters Kluwer and Thomson continue their acquisitions, while new entrants surface with online and application service provider offerings.Thomson's Creative Solutions purchased Dunphy Systems in May, with the intention of converting existing Dunphy customers to Creative Solutions. CCH, on the other hand, announced its acquisition of Rockville, Md.-based ATX/Kleinrock in August, but will keep it as a distinct product line. CCH followed this move with an announcement in September that it would acquire Rome, Ga.-based TaxWise. It likewise will keep TaxWise as a separate product line, according to CCH president and chief executive Kevin Robert.

SURVEYED TACS ARE RIGHT 75 PERCENT OF THE TIME: Using one of dozens of scenarios, undercover government auditors were mostly satisfied with the levels of assistance that they received at several of the Internal Revenue Service's Taxpayer Assistance Centers. A report from the office of the Treasury Inspector General for Tax Administration details the results of auditor visits to more than 70 TACs during the 2006 filing season. Using 47 standard scenarios, the auditors made anonymous visits to 50 TACs asking 200 tax law questions. Later, an additional 10 scenarios relating to the Katrina Emergency Tax Relief Act of 2005 were developed and another 20 visits to additional TACs were made to ask 80 questions.The report found that TAC workers:

A professional tax preparer has received a prison sentence of 10 years and five months for her role in a scheme that allowed businesses to claim false business deductions on their income taxes.

A Senate panel’s review of interactions between imprisoned former lobbyist Jack Abramoff and a number of tax-exempt organizations had lead the committee to question the groups’ tax status and a portion of the federal Tax Code dealing with unrelated business income taxes.