CONGRESS EYES INTERNET TAXESWASHINGTON, D.C. - Two bills circulating on Capitol Hill are looking at different ways to generate tax revenue from the Internet.
Recently, a number of state and local governments have resumed a lobbying push, asking Congress for the ability to impose sales taxes on purchases made over the Internet, along with the ability to charge monthly taxes on Internet connections.
Under current federal law, states and municipalities are typically barred from collecting both access and sales taxes. Proponents of the changes say that they could generate billions of dollars in new revenue from such taxes.
In late May, Sen. Michael Enzi, R-Wyo., introduced a bill that would create mandatory sales tax collection for Internet purchases, while a House hearing debated whether to allow a temporary ban on Internet access taxes to lapse when it expires on Nov. 1.
Lobbyists have argued that reduced sales tax revenue threatens budgets for local schools and police, and that all retailers should be required to play on a level field (though Enzi's bill would exempt small businesses with less than $5 million in out-of-state sales from paying taxes). But a major obstacle to the change would be reconciling the complexity of more than 7,500 different tax agencies that already have their own policies.
IRS ANNOUNCES '07 LITC GRANT RECIPIENTS
WASHINGTON, D.C. - National Taxpayer Advocate Nina E. Olson announced that the Internal Revenue Service has awarded almost $8 million in matching grants to Low-Income Taxpayer Clinics for the 2007 grant cycle.
LITCs are classified as organizations that provide representation for free (or for a nominal fee) to low-income taxpayers involved in tax disputes with the IRS, or that provide education on taxpayer rights and responsibilities to taxpayers who have limited English proficiency.
Under the LITC program, the IRS awards matching grants of up to $100,000 a year to qualifying organizations. For the 2007 grant cycle, the IRS awarded LITC grants to 154 organizations representing 49 states, plus the District of Columbia, Puerto Rico and Guam. (The LITC Program Office has already opened a supplemental period for accepting applications for the 2007 grant cycle for the state of Colorado, which currently has no LITCs.)
A list of organizations awarded a matching grant - along with the amounts awarded - is available at www.irs.gov/pub/newsroom/2007_low_income_taxpayer_clinics.doc.
More information about applying for a grant is available online at the Taxpayer Advocate Web site, at www.irs.gov/advocate/index.html.
CANADA TO APPOINT TAX OMBUDSMAN
TORONTO - The Canada Revenue Agency will appoint a new independent tax ombudsman by the fall - creating a post similar to the Internal Revenue Service's National Taxpayer Advocate for the first time.
The agency's announcement followed its unveiling of an improved Taxpayer Bill of Rights, as officials admitted that Canada's tax system has worked well for the government, but not always for taxpayers. The bill of rights was originally released in 1985, with six basic guarantees. However, Canada is the last G8 country to provide an independent body or officer to uphold those rights. The latest incarnation contains nine new rights, plus the original six, and five more specific to small businesses.
For more information, visit www.cra-arc.gc.ca.
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