Tax research

Creative Solutions, a unit of Thomson Tax & Accounting, has acquired the assets of Dunphy Systems, a Columbus, Ohio-based publisher and marketer of tax software.

National Taxpayer Advocate Nina E. Olson announced that the 2007 Low Income Taxpayer Clinic grant application process is now open. The grant program is in its eighth year and continues to expand.

Organizations that provide seller-funded down-payment assistance to home buyers do not qualify as tax-exempt charities, the Internal Revenue Service said in a ruling last week.

Charles W. McClure, a Colorado tax preparer, pleaded guilty to p reparing a false income tax return and will face up to a three-year jail term, a $100,000 fine and restitution of up to $12,516.

With the House Ways and Means Committee due to hold hearings on corporate tax reform next week, the Tax Foundation recently released a comparison of the U.S. corporate tax system to other countries around the world.

Both houses of Congress appear to have reached a deal on a $70 billion package of tax cuts, according to published reports.

The Taxpayer Advocacy Panel, a volunteer group that works to improve customer service and satisfaction at the Internal Revenue Service, has released its 2005 Annual Report.

As quickly as the idea was proposed, the prospect of $ 100 gas-rebate checks for taxpayers was taken off the Senate table.

Another federal regulator has publicly floated the idea of the government requiring the release of tax information from public companies.

Aspen developer George Gradow, who made his money in mobile homes, was sentenced to 15 months after pleading guilty to tax fraud and obstructing an Internal Revenue Service audit.

Following a damning government report, lawmakers opened fire on the nation's commercial tax preparers, charging that the current "tax preparation system is severely breaking down," and that "bad practices seem to be pervasive and systematic in the industry."The sharpest criticism levelled against the paid preparer companies came from the one lawmaker that tax services can't afford to alienate - Senate Finance Committee chair Chuck Grassley, R-Iowa.

Intuit Inc. has sued H&R Block Inc. for copyright infringement, alleging that Block's television spots echoed Intuit's promotions for its market-leading TurboTax software.Intuit sought a court order to stop the H&R Block ads airing in Oregon and Florida.

DECISION TO CLOSE TACS BASED ON BAD INFO: The Treasury Inspector General for Tax Administration, J. Russell George, said that bad data is to blame for the Internal Revenue Service's never-realized plan to close 68 Taxpayer Assistance Centers across the country.Late last year, Congress stopped the IRS from reducing any taxpayer service functions or programs until TIGTA completed a study detailing the effect of the planned reductions on taxpayer compliance and assistance.

In an attempt to head off politicians' talk about taxing the recent high earnings of oil companies, President Bush said last week that the industry should be allowed to reinvest its profits into energy research.

Bjorn Ulvaeus, one quarter of super group Abba, is facing charges from regulators that he failed to pay more than $11.5 million in taxes on song royalties.

The Internal Revenue Service has shifted its enforcement priorities from tax shelters to high-impact tax cheats -- including attorneys and CPAs.

When criticism of the Internal Revenue Service's revision of its more-than-30-year-old preparer disclosure rules first surfaced, it came as an attack from consumer groups outraged that rules were being eased to permit the marketing of taxpayer information.However, contrary to press reports, the IRS said that the proposed rules actually tighten existing requirements regarding the customer consent that a return preparer must obtain to disclose the customer's tax return information to third parties. In fact, explained IRS Commissioner Mark Everson, "For over 30 years, under the law, return preparers have been able to disclose tax return information with the consent of taxpayers."

Code Section 7216 governs the disclosure and use of tax return information by tax return preparers. Late last year, in Notice 2005-93, the Internal Revenue Service issued a proposed revenue procedure purportedly to update the disclosure rules to account for changes in return filing, particularly to account for the growing use of electronic filing and electronic signatures and the foreign outsourcing of tax preparation work.The proposals have set off some apparently unexpected protests from several consumer protection groups, basically concerned that the proposals make it too easy for taxpayers to unknowingly grant permission for disclosure of their tax information.

The Internal Revenue Service has released updated draft instructions for the new Schedule M-3, filed by large and midsized corporations, and which should be rolled out for the 2006 tax year.

KPMG moved a bit closer to putting another piece of its tax shelter troubles in the past, filing court papers that more than 200 investors have agreed to a settlement in a class-action lawsuit against the accounting firm and law firm Sidley Austin Brown & Wood LLP.