Tax research

We are all creatures of habit, comfortable doing things the way we always have. It worked before so it must be the best way. That may be true, but if you explore a little you might find another way of doing things. If it tests successfully, then you will at least have an alternative, and maybe even a better and more efficient way. Let's look at three examples with regard to attracting new clients.

After three years bouncing between British courts, tennis player Andre Agassi lost a $52,000 tax dispute that will require other sports and entertainments stars from paying U.K. income tax on endorsement deals.

While the extension of the reduced rates on capital gains and dividends, alternative minimum tax relief, and the continuation of enhanced Section 179 expensing have received the most publicity, there are a host of other changes in the Tax Increase Prevention and Reconciliation Act of 2005.

In a political victory for Republicans, President Bush signed the sixth tax cut in the past six years yesterday, in a Rose Garden ceremony.

Hispanics are less likely than non-Hispanics to say that they owe money to the Internal Revenue Service for 2005 (14 percent versus 22 percent) and they are more likely than non-Hispanics to report having received a refund for 2004 (73 percent versus 62 percent), according to poll results released by Hispanic market research firm Encuesta Inc.

A federal judge has sentenced Richard Hatch, who won the first season of the CBS reality show "Survivor," to 51 months in prison for tax evasion.

The U.S. Supreme Court unanimously denied a taxpayer group's challenge to nearly $300 million in tax breaks given to a DaimlerChrysler AG plant in Toledo, Ohio.

The Internal Revenue Service said that it plans to revoke the tax-exempt status of the 41 credit counseling agencies it has audited as part of a crackdown on the industry's practices.

I have dealt with many tax acts in the 30-plus years that I have been in professional publishing. When I worked at a tax publisher, I know tax legislation meant an awful lot of work. In one way or another, I would be involved in assembling the Code-as-amended, analyzing the effective dates, excerpting legislative committee reports, and writing or reviewing analyses. Besides the work, the legislation would almost always seemed to come down at a bad time, usually at the end of the year as Congress was about to adjourn. It was a real pain.

Internet tax research is becoming platform "agnostic," as a researcher can access, link to and search multiple sources from a single platform.BNA's Tax Management Portfolios are available across a wide array of platforms, including CCH's Tax Research Network, RIA's Checkpoint, and LexisNexis. CCH's TRN allows a search not only of CCH proprietary material, but also of key industry Web sites and, using Google, the entire Internet. Checkpoint now includes access to BNA, Practitioners Publishing Co. and Warren Gorham & Lamont titles. The newly launched LexisNexis Tax Center integrates material from CCH, Kleinrock and Tax Analysts, as well as sister company Matthew Bender. And Intuit's Tax Almanac provides a sounding board for practitioners to pool their knowledge to solve specific tax problems.

The people behind the Transactional Records Access Clearinghouse are celebrating a recent court victory that reinstated the nonprofit organization's access to statistical data from the Internal Revenue Service.The U.S. District Court for the Western District of Washington handed down a decision in April stating that the IRS must comply with TRAC's request for data.

Tax research and software provider RIA has upgraded its proprietary Checkpoint service to include expansion of user access to BNA content, international standards and titles from sibling Thomson company PPC.The company, headquartered here, said that, as part of the upgrade, the service will now make available more than 90 PPC auditing, tax and accounting titles, including its Guide to Public Company Audits and 1040 Deskbook materials.

On the heels of last month's Government Accountability Office study on the errors committed by commercial chain tax preparers, the legislative push toward preparer registration and licensing appears to have gained considerable traction."With the bills introduced last year and this latest report, it looks like preparer registration is on its way," opined John Hewitt, chief executive of Virginia Beach, Va.-based Liberty Tax Service. "We're going to do that internally. We've already taken steps to implement our own certification program in advance of any legislation."

LEGISLATION PROPOSED TO BAN 'RETURN-FREE' SYSTEM: H.R. 5114, the Tax Return Choice Act of 2006, was introduced in the House and referred to the Ways and Means Committee. The bill, which has 88 Republican and 17 Democrat co-sponsors, would prohibit the Internal Revenue Service from completing individual tax returns other than through the programs already offered through the Free File Alliance, Taxpayer Assistance Centers, Tax Counseling for the Elderly, and Volunteer Income Tax Assistance programs.The bill reflects the efforts of a number of groups concerned that a return-free system similar to the one used in the U.K., Germany and Japan would be a step backward from voluntary compliance, and would raise taxes on those who used it. Under such a system, the tax agency computes final tax liability based on third-party data, such as W-2s and Form 1099s, and sends the taxpayer a written determination and a bill. The taxpayer can accept the calculations and pay the bill, or wait for a refund. The taxpayer can then make minor adjustments, or may disregard the determination and prepare a separate return.

A husband and wife have filed a case against Ernst & Young, blaming the firm for the loss of $40 million in a shelter deemed abusive by the Internal Revenue Service.The Florida couple, Rocco and Mary Abessinio, are seeking class-action status for the lawsuit, which was filed in federal court in Manhattan in April.

Online tax preparation services are using the Internal Revenue Service's Free File program to promote "get rich quick" schemes and overpriced refund anticipation loans to low-income taxpayers, some lawmakers have charged.In a sharply worded letter to IRS Commissioner Mark Everson, Senate Finance Committee chair Chuck Grassley, R-Iowa, placed much of the blame for these practices on the IRS officials who negotiated a new contract with 20 online tax prep companies to provide taxpayers with free electronic tax preparation and filing services during this tax season.

Almost nine full years have passed since the $250,000/$500,000 exclusion of gain on the sale of a principal residence first became available. Little did many of us imagine how much would change in nine years.While the basic sale-of-a-principal-residence provision has remained the same, except for some minor congressional tinkering, the world in which it lives has not. The real estate "boom," capital gains rate reduction, subsequent rulings and other developments have all played a part in making this a particularly dynamic area of tax planning. A review of recent trends and developments over the past year is especially illuminating.

Both houses of Congress reached final agreement on a $70 billion package of tax cuts that will be spread over the next five years.

The U.S. Treasury Department announced that President Bush has nominated Treasury official Eric Solomon to be the department's assistant secretary for tax policy, filling a post that has been vacant since February 2004.

New York's Attorney General accused higher-ups at H&R Block of being aware that the tax prep giant's Express IRA accounts would be money losers for many of the same clients the chain was targeting to buy the retirement plans.