Practice Management

In response to requests from tax practitioners and professional organizations for clarification, the Internal Revenue Service and the Treasury Department issued revisions to the new Circular 230 standards -- rules related to written tax advice issued last December.

Tax and legal publisher BNA Inc. has appointed long-time executive Darren McKewen as group publisher of tax and accounting at Tax Management Inc.

Jackson Hewitt Tax Service said that its network of offices prepared 3.3 million tax returns for fiscal 2005, up 5.9 percent over last year.

TAX CUTS SAVED BUSH, CHENEY $110K: President George W. Bush and Vice President Dick Cheney saved a combined $110,182 in taxes last year under the income tax cuts passed by their administration, according to an analysis of the 2004 tax returns released by the White House.President and Mrs. Bush reported total income of $784,219 on their tax return and paid $207,307 in income tax - $28,846 (12 percent) less than they would have under the pre-Bush tax law, according to a report by Citizens for Tax Justice, a Washington-based research and advocacy organization.

A spinoff or other distribution by a company of subsidiary stock is not always tax free, due to the anti-Morris Trust rules under Code Sec. 355(e).The code requires that a distributing parent corporation recognize gain on an otherwise tax-free spinoff of its controlled subsidiary's stock, if this is done "as part of a plan (or series of related transactions)" to have one or more persons acquire a 50 percent or greater interest in either the parent or the controlled corporation.

The co-directors of a data research center have filed a federal Freedom of Information Act lawsuit against the Internal Revenue Service, claiming that the agency is illegally withholding information about its operations.

The recent Internal Revenue Service report indicating that it collected $3.2 billion from 1,165 taxpayers from the "Son of Boss" tax shelter scheme may just be the tip of the iceberg when it comes to filling government coffers. Hundreds of individuals and corporations are still fighting in court, while most likely thousands of other tax shelter participants who have yet to be investigated should consider stepping forward, rather than waiting to be targeted.While usually poker-faced, the IRS this time around seems publicly pleased with what it has achieved, and the odds are good that we will see more of these kinds of settlement offers to help clean up a number of other popular abusive tax shelters. As numerous stories reported, the IRS recently announced a settlement initiative for executives who transferred millions of dollars of compensatory stock options to trusts and other vehicles owned by family members and then claimed that the exercise of those options and sale of the stock was not taxable to them.

Marking its second deal in a month, top-ranked firm Armanino McKenna acquired Cupertino, Calif.-based ValueNomics Research Inc. in late April, boosting its business valuation and litigation support practice, and strengthening its presence in Silicon Valley and San Diego.

The Internal Revenue Service has named Janice J. Lambert as its chief financial officer.

Members of the President's Advisory Panel on Federal Tax Reform are set to discuss "return-free" filing, among other things, at their next meeting, slated for May 17.