Practice Management

As part of cost-cutting measures, the Internal Revenue Service is forging ahead with plans to close some of its Taxpayer Assistance Centers, which provide walk-in service for taxpayers on tax law, tax return preparation and account inquiry resolution via face-to-face meetings with IRS employees.

The Internal Revenue Service is accepting applications for an annual grant program for matching funds to develop, expand or continue low income taxpayer clinics.

The Internal Revenue Service's Advisory Committee on Tax Exempt and Government Entities will hold a public meeting next month during which it will present its recommendations to the IRS Commissioner and senior leadership of the agency's tax exempt and government entities division.

While the Internal Revenue Service has made progress in improving taxpayer service, tax law enforcement and Business Systems Modernization areas, serious ongoing issues have kept the latter two areas on the Government Accountability Office's high-risk list, the watchdog agency said.

The Treasury Department and the IRS issued new rules related to Flexible Spending Arrangements -- which allow employees to pays for uncovered or unreimbursed medical costs with pre-tax funds -- in an effort to ease the year-end spending rush prompted by the current FSA deadline.

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.