PRIVATE COLLECTION PROGRAM SURVIVES HOUSE VOTEBy 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.
FORMER SEC CHAIR WANTS BLOCK BOARD SEAT
Former Securities and Exchange Commission 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.
In the wake of Block posting a year-end loss of $434 million, investor pressure has mounted to force management to sell it.
IRS PROPOSES REVISED FORM 1118
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."
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