Tax strategies

The Internal Revenue Service announced that the commissioners of the Australian, Canadian, U.K., and U.S. tax administrations will open a second office of the Joint International Tax Shelter Information Center in London this fall.The commissioners have said that exchanging information in real-time is making a significant difference to the complex task of tracking tax avoidance and abusive cross-border transactions. In recent months, center members have identified and challenged the following fraudulent arrangements:

National Taxpayer Advocate Nina E. Olson announced that the Internal Revenue Service has awarded almost $8 million in matching grants to Low-Income Taxpayer Clinics for the 2007 grant cycle.

Federal prosecutors won’t pursue the Texas law firm of Sidley Austin LLP for its part in signing off on sketchy tax shelter structures.

There’s no real question that something needs to be done about the fate of the alternative minimum tax.

A federal court in Portland, Ore., sentenced a former Oregon chemical company executive to serve 18 months in prison and pay a $50,000 criminal fine following his conviction on two counts of filing false federal income tax returns.Trevor Smith, the former vice president of sales for Raisio Western North America, was convicted in March on charges of filing false returns for the 1999 and 2000 tax years. While employed at Raisio, federal prosecutors said that Smith received approximately $350,000 in kickback payments from the former general manager of Georgia-based Chemical Products Technologies. Those payments were related to Raisio’s purchases of a pulping additive used to increase pulp yield, and were not claimed by Smith on his returns.

The New York State Society of CPAs has installed David A. Lifson as its new president, while the Virginia Society of CPAs has selected Monique T. Valentine as chair of its board of directors for the upcoming year.

The Supreme Court has ruled that only the U.S. Tax Court can review refusals by the Internal Revenue Service to reduce interest payments on people who underpay their taxes.

Internet tax research, once a novelty, is now the standard, with a number of publishers offering publications that are only available online."We still subscribe to some paper products, but using the Web-based versions is much more efficient," said Cindy Hockenberry, tax information analyst at the Appleton, Wis.-based National Association of Tax Professionals. "The transition in going from paper to online was not as difficult as we anticipated. Books are still useful where you know where a topic is that you researched before, but the search engines on the different platforms make up for that. And it's incredibly helpful to have immediate access to all the cross references that you might not have thought about."

GAO TO IRS: FORGET SOFTWARE DEVELOPMENTThe Government Accountability Office said that the Internal Revenue Service doesn't appear to be in a position to develop its own software for tax preparation anytime soon.

H&R Block Inc. announced that its new bank opened more than 2 million prepaid card bank accounts by the end of the 2007 tax season, doubling the company’s original projection.

The Internal Revenue Service is reportedly after Golden State Warriors owner Chris Cohan for some $160 million in back taxes.Cohan, a former cable television mogul, has been legally fighting with the agency for years over the 1998 sale of his former company, Sonic Communications.

The popularity of S corporations has skyrocketed, with the number of businesses opting for them rising from 725,000 in 1985 to more than 3 million, according to the most recent statistics.And that growth is well-deserved, according to Richard Thompson, of the CPA and business advisory firm Sikich LLP. "S corporations have become such an important business vehicle because taxpayers understand their extreme value," he said.

The recent release of the long-awaited final regs on nonqualified deferred compensation under Code Sec. 409A did not bring a much-hoped-for extension of the effective date for full implementation of the rules. The final regs - all 209 pages of them, and the 186 pages it took to explain the changes made or not made to the proposed regs - do not extend the transition relief for compliance beyond Dec. 31, 2007.That does not leave much time for compliance, let alone formulating tax strategies that take maximum advantage of the small leeway that the final regs provide to employers. Compensation plans drafted under the proposed regulations must be compared against the final regs. Decisions on whether a plan should be terminated must be made. Final plan designs must be drafted and adopted. And then an explanation of the terms of the compliant plan must be explained (and sold) to the key executives who the plan has been adopted to keep happy in the first place.

In a sweeping macro-view of major accounting issues poised to impact the profession, Financial Accounting Standards Board chairman Robert Herz said that the profession can get to a better reporting system, but it’s going to take some changes to get there.

The Internal Revenue Service says that the changes it made to its whistleblower provisions last year are already beginning to pay off.According to a published report, since the law was enacted in December, offering much higher rewards in cases involving major tax cheating, the IRS has received about 20 reward claims -- some involving hundreds of million of dollars in alleged fraud.

The 2008 Low Income Taxpayer Clinic grant application process is now open.

The 2007 tax filing season set a number of records at the Internal Revenue Service -- highlighted by the more than 76 million electronically filed individual tax returns and more than 140 million visits to the IRS Web site.

Rankings can be very subjective, but they are still captivating. Everyone has an opinion of what they think is the best movie or song. As a Baby Boomer, I remember for years listening to a local station’s Top 500 classic rock and roll rankings to see if “In the Still of The Night,” was still ranked No 1.

A federal court in Chicago has barred Neal and Royanne Reddy and their corporation, Royanne & Co. Inc., from preparing tax returns, the Justice Department announced.The court found that the Reddys, whose business offices are in Marseilles and Princeton, Ill., prepared more than 15,000 tax returns between 2002 and 2005.

Churches, charities and other tax-exempt organizations that paid the federal excise tax on long-distance or bundled telephone service qualify for this year’s one-time telephone excise tax refund, according to the Internal Revenue Service.