Practice Management

Koch Industries Inc. has filed a lawsuit, claiming that the Internal Revenue Service used improper accounting to calculate taxes for a 1998 New Mexico highway project.

Congress left town without passing a number of tax breaks that expired at the end of 2005 -- among them the option to deduct state and local sales taxes in place of state income tax, a deduction for college tuition and fees, the deduction for school teachers, and a research and development credit for business.Although the breaks themselves are not controversial, and leaders of the Senate Finance Committee pushed for their enactment before Congress adjourned, the breaks became mired in political infighting when they were attached to “trifecta” legislation that would have included an increase for the minimum wage and a slash in estate tax rates.

Los Angeles-based Information Technology Group Inc. has acquired Xcelerate LLC, a reseller of Sage Accpac ERP and Sage CRM software based in Chicago.

In the wake of yet another governmental gaffe involving the mishandling of private records -- the Commerce Department announced last month that it had lost about 4 percent of its laptops over the course of the last five years -- a federal report says that the Internal Revenue Service could do a better job with its own controls.

Mahoney Sabol & Co. has announced that it will merge with Middletown, Conn.-based firm Gomola & DiBella LLP. Financial terms were not disclosed and the combined firm will operate under the Mahoney Sabol name, and have a staff of more than 30 tax and accounting professionals. Gomola’s founder, Gary Gomola, has practiced in Middletown for more than 30 years and has expertise in business valuation, as well as in the areas of computer technology and the Internet. The merger became effective on Oct. 1 and will result in the Middletown offices of both firms being combined. Mahoney Sabol also has Connecticut offices in the towns of Glastonbury, Essex and Somers.

The chairman of the House Ways and Means Committee has asked for information on the NCAA’s finances -- suggesting in the process that he might next be questioning the association to justify its tax-exempt status. "Most of the activities undertaken by educational organizations clearly further their (tax) exempt purpose," Rep. Bill Thomas, R-Calif., wrote in a letter to NCAA president Myles Brand. "The exempt purpose of intercollegiate athletics, however, is less apparent, particularly in the context of major college football and men's basketball programs." Specifically, Thomas asked for information on the NCAA’s television contract, the salaries of coaches, school sports facilities and total annual revenues and expenditures for Division I-A football programs and Division I basketball programs. He requested a response by the end of this month. Since 2004, the Ways and Means committee of Representatives has been conducting a broad review of the tax-exempt sector -- already looking into the tax-exempt status of nonprofit hospitals and credit unions among others. The NCAA's projected 2006-07 budget anticipates nearly $563 million in revenue, most from its TV contracts. More than half that figure is distributed to member leagues and schools, through student-athlete welfare, academic-enhancement and other programs. The remainder is paid according to the success of schools in the annual NCAA men's basketball tournament. Thomas notes in his letter that the annual returns filed by the NCAA with the IRS states that the primary purpose of the NCAA is to "maintain intercollegiate athletics as an integral part of the educational program and the athlete as an integral part of the student body,” and goes on to obliquely question college athletics' connection to higher education.

The leaders of the Senate Finance Committee have asked the Government Accountability Office to take a closer look at the Pension Benefit Guaranty Corp., which insures the private pension plans for millions of workers.

Television viewers may know of The Amazing Kreskin, an entertainer who performs breathtaking mental feats that he says utilizes abilities we all have.

This week, the Tax Technical Corrections Act of 2006 was introduced in both houses of Congress. The legislation will essentially serve to cross the T’s and dot the I’s to several pieces of already-enacted legislation, clarifying definitions and refining certain timelines. Ways & Means Committee Chairman Bill Thomas, R-Calif., sponsored the bill in the House, while Finance Committee Chairman Charles Grassley, R-Iowa, and ranking member Max Baucus, D-Mont., did the same in the Senate. Among others, the bill would make changes to:

In an effort to bolster its automotive practice unit, global firm Grant Thornton LLP has acquired Restructuring & Performance Improvement Group from financial advisory firm Stout Risius Ross Inc.