Tax strategies

The Internal Revenue Service reminds tax professionals that there are IRS tools to help them prepare accurate EITC claims. Tax professionals prepared 71 percent of the 21.1 million EITC claims for tax year 2004.

A jury found Richard Hatch, who won $1 million on the first season of the CBS reality show "Survivor," guilty on three counts of tax evasion for failing to pay taxes on his winnings and other income.

CCH and H&R Block's Specialty Tax Services Division announced a partnership to offer a domestic service solution for accounting professionals who need to outsource some or all of their work during the busy tax and extension seasons.

With the State of the Union address just a week away, advisors to President Bush said that new tax breaks for health care costs are being considered.

It didn't take long for the Internal Revenue Service to move forward in combating one of the major complaints outlined in the Jan. 10 report from the national taxpayer advocate.

A memo out of the Internal Revenue Service's Office of Chief Counsel makes the case that gender reassignment surgery cannot be deducted as a medical expense for tax purposes.

Tax fraud promoter Paul D. Harris was sentenced in U.S. District Court in Denver to five-and-one-half years in prison, followed by three years of supervised release, the Department of Justice and Internal Revenue Service said.

As taxpayers begin to prepare their tax returns, the Internal Revenue Service noted that some may be sending their returns to a different service center than last year.

The Internal Revenue Service announced the opening of Free File, the free tax preparation and free electronic filing initiative now in its fourth year. More than 70 percent of the nation's taxpayers -- over 92 million people -- qualify for Free File this year.

An accountant for "Survivor" winner Richard Hatch testified that she told the reality TV star not to file a tax return omitting the $1 million prize he won from the show.

I discovered the most amazing thing this week -- a report on a federal agency that was actually readable.

Taxpayers can file their 2005 tax returns electronically beginning Jan. 13 as the Internal Revenue Service's E-file program opens for its 20th tax season.

Four additional professional tax organizations have agreed to partner with the Internal Revenue Service to provide assistance to taxpayers at local disaster recovery centers established by the Federal Emergency Management Agency, the IRS announced.

National Taxpayer Advocate Nina E. Olson released her latest report to Congress, again stressing the need for legislators to make simplification of the tax system a reality.

Corporate tax payments hitting an all-time high last month helped offset record federal spending.

The Internal Revenue Service sent out 17.7 million 1040 tax packages during the first of January to taxpayers who have previously filed paper returns. The number of paper tax booklets being mailed to Americans continues to decline as more people opt for electronic filing.

Practitioners who have been adding tax planning services to their basic preparation are taking an additional step to extend their practice into year-round financial planning."There's a natural progression from tax preparation into financial planning," said Stephen Parezo, media manager at Fiducial.

The House of Representatives passed the final piece of $95 billion in tax cuts in early December, in a vote split mostly along party lines.The most recent bill approved $56 billion in tax cuts over the next five years, including a two-year, $20 billion extension of President Bush's 2001 tax cut for stock dividends and capital gains.

TAX OVERHAUL MAY BE ANOTHER YEAR AWAY: Reports from inside the White House are that President Bush's administration may wait until 2007 to begin pushing a proposal to overhaul the tax code.A proposal was originally planned as a key part of President Bush's second-term agenda, but Republican sources have said that any push would have problems gaining traction in a mid-term election cycle. The Treasury is currently reviewing the recommendations issued by the President's Advisory Panel for Tax Reform before submitting a plan to the president.

As the Internal Revenue Service moves towards its goal of 80 percent e-filing for individuals, it is placing more emphasis on the e-filing of corporate returns.In 2005, over 200,000 corporations voluntarily e-filed, and beginning in 2006, many corporations will be required to file electronically. Recently issued regulations require corporations with assets of $50 million or more that file over 250 returns each year to file Forms 1120 and 1120S electronically, starting with tax periods ending on or after Dec. 31, 2005.