Practice Management

Lawmakers reached an agreement, putting together $14.5 billion in energy tax breaks as part of a major energy bill years in the making. Both the House and Senate are expected to approve the bill this week.

The announcement that the Internal Revenue Service plans to audit 5,000 S corporations has drawn fire from the National Federation of Independent Business, a small-business advocacy group with over 600,000 members.

The Internal Revenue Service has begun a study to assess the reporting compliance of S corporations. The study, carried out under the National Research Program, will examine 5,000 randomly selected S corporation returns from tax years 2003 and 2004. Created in 2000, the NRP is a comprehensive effort by the IRS to measure payment, filing and reporting compliance for different types of taxes and various sets of taxpayers.

Much has changed at J.H. Cohn from its start 85 years ago in Newark, N.J., to its current status as one of the largest independent accounting firms in the country with offices in New York, New Jersey, California and the Cayman Islands.

Amidst the controversy surrounding the Internal Revenue Service's recommendation to shutter nearly 70 Taxpayer Assistance Centers, the Treasury Inspector General for Tax Administration said it would monitor the services' proposal and urged it to organize TAC data.

Connecticut's Kostin, Ruffkess & Company LLC, a business advisory and accounting firm, will merge with Springfield, Mass.- based CPA firm Themistos & Dane, in September.

Risk consulting and internal audit services provider Protiviti Inc. acquired Philadelphia-based Lender Advisory Services, a unit of national CPA firm RSM McGladrey.

* TAX REFORM PANEL GETS TWO-MONTH REPRIEVE: The President's Advisory Panel on Tax Reform will get an additional two months to complete its work. The White House amended the executive order creating the panel to give the group until Sept. 30, 2005, to complete its work. The original deadline was July 31, 2005.The panel will present Treasury Secretary John Snow with a report that includes revenue-neutral policy options for reforming the Internal Revenue Code. Those options are supposed to simplify federal tax laws to reduce the costs and the administrative burden of compliance, and to include at least one option that uses the federal income tax as the base for its recommended reforms.

Middle-class taxpayers who sell their first investment property are shocked when they find that a major portion of their gain on the sale is due on the alternative minimum tax.That's because most of them don't bother consulting with their accountant ahead of time, according to Stephen Wayner, vice president of Miami-based Bayview Financial Services.

Chief Counsel Advice 2000524001 recently reminded self-employed individuals of a fine point that some apparently have been missing lately. The earned income (net earnings) limitation for above-the-line medical premium deductions must be applied on a business-by-business basis for sole proprietors.This is not welcome news for the many individuals who cobble together a variety of jobs, none of which is a principal source of income but which, together, had been assumed to form a tax-advantaged way to cover a family's health insurance costs.