Tax research

The Internal Revenue Service plans to make it easier for financially troubled homeowners to avoid federal tax liens that block them from selling their homes or refinancing their mortgages.

The Internal Revenue Service has issued new guidance on implementing the recently amended tax return preparer penalty, which punishes tax preparers for taking "unreasonable positions" on tax liabilities.

Leaders of the House Ways and Means Committee wrote to President-elect Barack Obama asking him to end the Internal Revenue Service's private debt collection service.

If you haven’t already, you might shortly be asked, “What are the tax implications of riding a bicycle to work?” And your answer will be for taxable years beginning after December 31, 2008, under Section 132(f)(5)(F)(i) a ”qualified bicycle commuting reimbursement fringe benefit” will be considered a qualified transportation fringe benefit.

The National Federation of Independent Business, a small business advocacy group based here, is calling on Congress to pass a six-month payroll tax holiday as part of any economic stimulus package that would be considered in the upcoming weeks.

In a review of Internal Revenue Service efforts to determine whether charitable and non-profit organizations are being used to divert funds to support terrorist activities, the Treasury Inspector General for Tax Administration suggested a number of steps the Criminal Investigation Division could take to improve counterterrorism efforts.

While staffing, training, new software applications and the latest tax law changes are at the top of every practitioner's to-do list for the tax filing season that looms ahead, the overriding concern this year is the economic crisis and the changes facing both themselves and their clients.

CCH SFS BUYS INTELLITAX

The Internal Revenue Service announced that the interest rates for the calendar quarter beginning Jan. 1, 2009, will drop by one percentage point. The new rates, as laid out in Revenue Ruling 2008-54 will be: -- 5 percent for overpayments (4 percent in the case of a corporation);-- 5 percent for underpayments;-- 7 percent for large corporate underpayments; and,-- 2.5 percent for the portion of a corporate overpayment exceeding $10,000.Under the Internal Revenue Code, the rate of interest is determined on a quarterly basis, based on the federal short-term rate. The most recent rates were computed from the federal short-term rate during October 2008 to take effect Nov. 1, 2008, based on daily compounding.

A completely revised Form 990 will require an overhaul of internal policies and procedures for most tax-exempt organizations, according to Joyce Underwood, director of nonprofit taxation at BDO Seidman's Institute for Nonprofit Excellence.

Once again this year, the headline for the Alternative Minimum Tax is another one-year fix with no permanent solution. The Emergency Economic Stabilization Act of 2008 raised the AMT exemption amount for 2008 to $69,950 for joint filers and $46,200 for single filers. This represents another inflation-adjusted extension of the exemption amount designed to preserve the status quo and keep an additional 21 million taxpayers from being subject to the AMT in 2008. And, once again, without further action, the AMT exemption amount reverts to its pre-2001 level in 2009 unless further congressional action is taken.

H&R Block said it would offer the ability to electronically file up to five federal tax returns in its TaxCut software next tax season, as Intuit also offered the ability for TurboTax users to prepare and print multiple returns at no extra cost along with free e-filing of up to five federal returns.

The Internal Revenue Service should strengthen its approach to evaluating a pilot project for matching federal and state taxpayer information before it extends the tax compliance project to 45 states next year, recommended a new report from the Government Accountability Office.

IRS Commissioner Douglas Shulman said the agency would begin ramping up enforcement against tax abuses such as the avoidance of withholding taxes, especially on dividends.

Accounting firms are increasingly going paperless as they prepare for next tax season, relying more on scanners and workflow technology, according to a new survey.

Sen. Charles Grassley, R-Iowa, has written to congressional leaders criticizing a provision in the automobile industry bailout bill that provides government guarantees to mass transit agencies that have taken advantage of an outlawed tax shelter.

The United States and Liechtenstein have signed an agreement to exchange tax information, including details on the holdings of citizens who are sheltering money in the foreign bank accounts, but only when the U.S. already knows the names of the tax evaders.

Two California residents have been indicted for filing over $2 million in false tax refund claims using the names and Social Security numbers of dead people, with help from a CPA.

The Teamsters Union has written to the Internal Revenue Service taking issue with proposed regulations that would change the public approval requirements for tax-exempt private activity bonds and potentially undermine the public approval process.

Online payroll service PayCycle unveiled the latest version of its software, with improved set-up and export features.