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Arguably, my least favorite phrase in the English language is, “Some assembly required.”

Fewer taxpayers took advantage of the Internal Revenue Service's free electronic tax-filing service in 2007 than in previous years, according to a new audit report by the Treasury Inspector General for Tax Administration. In 2005, a record 5.12 million taxpayers used the Free File Program. That number fell to 3.9 million in 2006, in large part due to a new requirement that limited eligibility for the program to taxpayers with an adjusted gross income of about $50,000 a year or less. In testimony before the House Ways and Means Committee's Oversight Subcommittee last year, Inspector General J. Russell George expressed concern about the eligibility limitations, which he said, could contribute to a significant slowing of the growth in electronic filing. Although no further adjustments were made to the program in 2007, as of April 14, auditors found that only 3.3 million taxpayers filed returns using the free service -- a decline of 4.7 percent below the same period last year. "It is imperative that the IRS carefully examine the reasons this free service is not being used by more taxpayers," George said. "The IRS must review its marketing strategy to better target taxpayers who file paper returns even though they are eligible for this program. Equally important, the IRS must ensure that the software it promotes on its Web site provides taxpayers with accurately calculated tax returns," he said. The decline in the Free File Program comes at a time when the IRS is under pressure to increase the number of taxpayers who file electronically. In 1998, Congress established a goal for the IRS to have 80 percent of all federal tax and information returns filed electronically by the end of 2007. The Free File Program was one of several initiatives designed to help meet that goal, which is unlikely to be fulfilled this year.

By a margin of 240-179, House lawmakers approved funding for the Internal Revenue Service for fiscal 2008 and in the process eliminated a provision that would have capped spending on the service's private debt collection program at $1 million. The program, which has divided Congress along party lines, allows the IRS to contract with private debt agencies to collect delinquent taxes. Having a $1 million limit would have ended the program. Currently the IRS has contracted with two private agencies, but is looking to expand the program this year according to reports.

Accounting Today is again issuing a call for nominations for its annual Top 100 Most Influential People in Accounting list. The list profiles the wide range of figures who wield influence over the profession, from accounting firm executives to state and federal regulators, thought leaders, academics, consultants and grass roots activists. To cast the widest possible net, Accounting Today will accept nominations by e-mail at daniel.hood@sourcemedia.com. Respondents are asked to include a brief description of the candidate's influence on the accounting profession, and, if possible, contact information. Self-nominations will be accepted. Nominations will be accepted until July 13. The often-controversial list will be published in September.

The IRS has publicized a new draft version of Form 1118, "Foreign Tax Credit - Corporations," used by U.S. corporations to compute the foreign tax credit for taxes paid or accrued to foreign countries or U.S. possessions. "They adjusted the form to accommodate changes made by the 2004 American Jobs Creation Act," said Selva Ozelli, a New York-based CPA and international tax attorney. Under the act, the number of separate foreign income categories has been reduced from eight to two, and U.S. source income is re-characterized as foreign source income in cases where a taxpayer's foreign tax credit limitation has been reduced in an earlier year due to an overall domestic loss. "The most important change is that they've added a column to help taxpayers determine U.S. income that could be recharacterized due to recapture of overall domestic losses," said Ozelli. "This column will also help them in tracking their balances of overall domestic losses," she said.

The nation's technology companies continue to struggle with the challenges of accounting for stock options, in particular, the guidelines of Financial Accounting Statement 123(R), Share-Based Payment, according to a survey conducted by Grant Thornton of tech company executives. Some 85 percent of those participating in the GT poll said that the overall process of option valuation is significantly more complex than it was before Statement 123(R), while 76 percent indicated that they are outsourcing option valuation as a result of the accounting rule. Roughly 60 percent of those surveyed said their company's compensation committee have become more involved in designing comp programs as a result of 123(R). Grant Thornton surveyed more than 100 technology company executives in the poll.

Two interesting pieces of information have popped up by two highly reputable sources, one dealing with tips on choosing a financial planner and the other showing survey results of the five most frequent mistakes made when selecting such an advisor.

Accounting firm roll-up concern CBiz Inc. agreed to sell its New York office to regional firm Marcum & Kliegman, a deal that includes two partners and 15 professionals. Terms were not disclosed. M&K chief executive Jeffrey Weiner told WebCPA that following the close of the deal, the CBiz office and personnel will be consolidated into M&K's New York City venue. M&K also has offices on Long Island and in Connecticut. He estimated the deal would close sometime in September. "They were looking to sell it and we were the best bidder," Weiner said. "The addition [of CBiz] just augments what we do already." Executives of CBiz did not return calls by presstime. CBiz and its audit and attest arm, Mayer Hoffmann McCann, ranked No. 8 on Accounting Today's 2007 Top 100 Firms list with revenues of $466.8 million. Marcum & Kliegman ranked No. 25 with revenues of $85 million.

Former Securities and Exchange Chairman Richard Breeden, whose hedge fund holds roughly 2 percent of the shares of H&R Block, is seeking a seat on the board of the tax-prep giant. Breeden, who now heads Breeden Capital Management LLC, will be on the company's proxy ballot along with two others during a September election. Block has an 11-member board. In the wake of posting a year-end loss of $434 million, investor pressure has mounted to force management to sell the company.

Propelled by revenue increases in its payroll and human resources units, payroll and benefits outsourcing provider Paychex Inc. posted a 12 percent climb in fourth-quarter profits, to $137.2 million, versus the year-ago period. For the year, the company, headquartered here, said net income rose 14 percent, to about $532 million, compared with its 2006 fiscal year end. Fourth-quarter revenues spiked 11 percent to $487.3 million, while year-end revenues grew 13 percent, to $1.9 billion. The company reported that over the year, payroll service revenue rose 9 percent to $1.4 billion, while revenue from its Human Resource Services arm grew 22 percent to $396.2 million. The company also recorded an expense of $13 million related to a licensing dispute.