Tax research

For the 2005 fiscal year, just 30 out of the country's more than 180,000 millionaires received a face-to-face audit from the Internal Revenue Service, according to Syracuse University's Transactional Records Access Clearinghouse.

For the past couple of weeks, I've kept running across blog entries referencing a cool graphical representation of how the federal government allocates tax dollars. I finally decided to check out the chart, which has been years in the making.

On-demand sales tax calculation services provider Avalara has launched AvaRates Now -- a free, map-enhanced tool that provides accurate rates for any North American location in real-time.

Businesses paid $497 billion in state and local taxes for the 2005 fiscal year, about 44 percent of the total taxes collected by all state and local governments, according to the annual study prepared by the Quantitative Economics and Statistics practice of Ernst & Young in conjunction with the Council On State Taxation.

The Treasury Inspector General for Tax Administration, J. Russell George, said bad data is to blame for the Internal Revenue Services' never-realized plan to close 68 Taxpayer Assistance Centers across the country.

The Internal Revenue Service is inviting individuals to help improve the nation's tax agency by applying to be members of the Taxpayer Advocacy Panel. The panel provides a forum for citizens from each state to make suggestions regarding IRS decision-making.

A complaint has been lodged with the Government Accountability Office that could again stall the Internal Revenue Service's plan to subcontract cases to private debt collection firms.

Roy Martin Jr. is president and chief executive of Thomson Tax & Accounting, a subsidiary of The Thomson Corp. and a provider of information and workflow solutions to accounting, tax and corporate finance professionals.

The Internal Revenue Service is considering a proposal to loosen the privacy standards of federal income tax returns. The change could allow accountants and other tax return preparers to sell information from individual returns to marketers and data brokers, according to published reports.

Congress has begun to focus in on reforms for the nation's health care tax policy -- a move that could impact hundreds of billions of dollars a year in cherished tax breaks for individuals and employers.

The Internal Revenue Service's 2005 IRS Data Book is now available at the agency's Web site.

The Internal Revenue Service has issued guidance describing 26 frivolous arguments that taxpayers should avoid when filing their returns.

California's attorney general has filed a lawsuit against H&R Block in an attempt to halt the tax prep giant's loan program, which allows the company to take a percentage of clients' tax refunds in exchange for an advance.Attorney General Bill Lockyer filed suit in San Francisco Superior Court, noting that more than 1.5 million Californians have received tax refund loans through Block since 2001. A number of other suits have been filed around the country against Block, saying that the loan practice is unfair, especially because many low-income filers accept the offer.

IRS REQUESTS $10.6B BUDGET FOR 2007: The Internal Revenue Service requested a budget of $10.6 billion for the 2007 fiscal year, an increase of 1.4 percent from the current year's budget. Nearly $10.6 billion would come from direct appropriations through the Treasury Department. An additional $135 million would come from the IRS's new user fee revenue, for a total operating level of $10.7 billion.Among the IRS operations receiving more funding would be enforcement activities and taxpayer services. Enforcement has proposed funding at nearly $7 billion, a 2 percent increase from the 2006 enacted levels; taxpayer services has proposed funding at more than $3.5 billion, a 1.4 percent increase from 2006.

There's a new area of controversy at the Internal Revenue Service, and it surrounds the recently released 2005 annual report from the Taxpayer Advocate Service -the independent organization within the IRS designated as the liaison between the IRS and taxpayers with problems.While the Taxpayer Advocate is required to identify at least 20 serious problems in her annual report, particular attention has been given to one topic in this year's report: the IRS's Criminal Investigation Questionable Refund Program.

While the Roth 401(k) plan option was enacted back in 2001 and has been available since January 1 of this year, advice over whether to jump on the Roth 401(k) bandwagon remains hard to give.Detailed rules on contributions, operations and distributions for Roth 401(k) plans have been slow in coming. Proposed reliance regulations on contributions weren't released until this past December; reliance regs on distributions weren't out until January.

Oracle, a high-volume provider of business software, based here, has validated the integration between compliance software Taxware Enterprise Version 4.3 and Oracle's PeopleSoft Enterprise Version 8.9.Taxware's software, a sales and use tax and value-added tax calculation application, now integrates with Oracle's PeopleSoft Enterprise Financial Management, including payables, and Supply Chain Management components, including order management, billing and purchasing.

Congress is currently at work on legislation that includes, among other things, a two-year extension of dividend and capital gains tax cuts that were scheduled to expire at the end of 2008, and a one-year extension of alternative minimum tax relief.Without this relief, the AMT would cause higher taxes starting in 2006 for an estimated 16 million additional taxpayers to whom it was not intended to apply. Perhaps not surprisingly, House Republicans have sought to finalize the dividend and capital gains extension first, even though the AMT problem is much more immediate.

New York's Attorney General filed a $250 million fraud suit against H&R Block Inc., accusing the tax prep giant of steering hundreds of thousands of clients to investment retirement accounts with costs higher than what they would earn back.

Internal Revenue Service Commissioner Mark Everson said that lawmakers should consider making corporate tax returns part of the public record in a speech at the National Press Club in Washington.