REGULATIONS ISSUED ON PRACTICING BEFORE IRS
Washington, D.C. - The Internal Revenue Service has issued regulations governing practice before the agency.
The final regulations under Circular 230 cover matters such as enrollment procedures, practice by former government employees and their associates, contingent fees, conflicting interests, penalties, and suspension. For example, a practitioner is required to obtain written consent to representation from each affected client in order to represent conflicting interests.
The regulations have been modified to provide that failure to sign a return is not considered "disreputable conduct" if the failure is due to reasonable cause and not to willful neglect. In addition, the regulations adopt amendments authorizing the imposition of a monetary penalty in addition to, or in lieu of, any other sanction.
The Treasury Department has also proposed a separate set of regulations (Reg-138637-07) that would toughen the standards for advising clients and preparing returns.
TAX PENALTIES NOT KEEPING UP WITH INFLATION
Washington, D.C. - The Internal Revenue Service may start adjusting tax penalties for inflation to make sure the penalties retain their bite. A recent report from the Government Accountability Office found that inflation has significantly decreased the real value of some civil tax penalties that have fixed dollar amounts. The GAO said that the decline in value could weaken the deterrent effect of the penalties and result in inconsistent treatment of taxpayers over time.
ACCOUNTANTS GAIN ON AUDIT COMMITTEES
Chicago - Accountants are garnering more power and seats on corporate board audit committees, but their numbers still remain relatively low, according to a newly released report.
The number of accountants sitting on audit committees doubled from 6 percent to 12 percent between 2002 and 2006, said a report from the Huron Consulting Group. In 2006, 23 percent of all audit committee chairs were listed as accountants, up from less than 10 percent in 2002. The report was based on a sample of 670 audit committee members at 164 public companies.
The number of audit committees with at least one accountant rose from 21 percent in 2002 to 40 percent in 2006. Nevertheless, 98 of the 164 companies in the sample did not have any accountants on their audit committees. And only 22 percent of the designated financial experts on the committees had biographies indicating that they had accounting backgrounds in 2006. That represented a slight decline from 2005.
