Practice Management

IRS SELECTS FIRMS FOR COLLECTION EFFORT: The Internal Revenue Service awarded contracts to a trio of firms to participate in the first phase of its private debt collection initiative. A total of 33 firms took part in the bidding process.The selected firms are The CBE Group Inc., of Waterloo, Iowa; Linebarger Goggan Blair & Sampson LLP, of Austin, Texas; and Pioneer Credit Recovery Inc., of Arcade, N.Y.

An Ohio CPA can thank his inability to properly separate his accounting business from his financial planning business for a win in U.S. Tax Court that saved him thousands in additional tax."It was an uphill battle against overwhelming odds, but victory always makes it worthwhile," said Ron Lykins, a metropolitan Columbus, Ohio, CPA.

The new domestic production activities deduction (a.k.a., the manufacturing deduction) has generated many unresolved questions. In fact, the problem areas are so significant that individuals and businesses have reported delayed filing of 2005 returns until they get more guidance from the Internal Revenue Service.To say that proper application of the deduction is a "hot" issue may be an understatement, considering the IRS's own estimates of its impact. In requesting comments on the most recent version of Form 8903, Domestic Production Activities Deduction, the IRS estimated that over 17 million individuals and businesses will be affected, and that each taxpayer will average 31 hours and 54 minutes on the form.

Camarillo-based Farber & Hass LLP has merged with Granada Hills-based Hurley & Co. CPAs to solidify both firms' Securities and Exchange Commission audit practice.The new entity will be called Farber Hass Hurley & McEwen LLP. Terms were not disclosed. Both of the combined firms' office locations will remain open.

The Internal Revenue Service's 2005 IRS Data Book is now available on the agency's Web site.One of the agency's priorities, an increase in enforcement, is documented in this year's book. During the 2005 fiscal year, the IRS completed more than 1.2 million audits of individuals, up almost 21 percent from the previous year's figure of just over a million.

Tax prep giant H&R Block Inc. announced that its first-quarter tax preparation and related fees rose 3.7 percent from a year earlier, to a total of $1.98 billion.

The Internal Revenue Service announced that its special enrollment examination could be converted to a computer-based test as soon as this fall.

A court order will allow the Internal Revenue Service to ask PayPal, a money transfer service owned by eBay Inc., to turn over information on customers who might be evading taxes.

Tax Freedom Day will fall on April 26 this year, according to the Tax Foundation's annual calculation using the latest government data on income and taxes.

Securities and Exchange Commission Chairman Christopher Cox announced that Wall Street fund lawyer Andrew "Buddy" Donohue will join the agency as the next director of the Division of Investment Management.