IRS PLANS TAX SHELTER CRACKDOWNWashington, D.C. — Internal Revenue Service Commissioner Douglas Shulman promised to continue enforcement efforts against tax shelters.

“In the first phase, the IRS aggressively rooted out abusive tax shelters and brought some significant cases,” said Shulman in recent remarks before the American Bar Association. “In the next phase, a number of taxpayers acknowledged that participating in these shelters was a mistake and settled. In this new phase, we have pursued those holdouts who chose not to settle, and the cases are working their way through the courts.”

Shulman also called for clearer tax guidance, and highlighted the redesigned Form 990 for nonprofits. “We have been focused on the continued evolution of Form 990 and its broad dissemination,” he said. “When this information is available in a standard, easily accessible format, the nonprofit sector can work more effectively, and the level of honest dialogue about the use of tax benefits to support societal goals will increase.”

TELEPHONE EXCISE TAX REFUNDS GO UNCLAIMED

Washington, D.C. — Much of the excess tax collected by the Internal Revenue Service from businesses for telephone excise taxes is not being claimed or refunded, according to a new report.

The Internal Revenue Service announced its decision to stop collecting the tax in 2006 after a series of lawsuits, and then implemented a program for taxpayers to receive refunds for the portion of their telephone excise taxes paid on long-distance or bundled telephone service billed after Feb. 28, 2003, and before Aug. 1, 2006, that did not meet the statutory taxability requirements.

The Treasury Inspector General for Tax Administration credited the IRS with successfully planning and implementing a refund program for businesses, but said that only 5.6 percent, or approximately 721,410, of the 12.8 million business taxpayers who had filed their returns made refund claims as of last November. Refunds associated with the claims totaled only $876.6 million, or 17.5 percent of the $5 billion collected.

The picture was different for individual taxpayers. In a September 2007 review of claims made by individuals, TIGTA found that many potentially erroneous claims went unchallenged by the IRS and resulted in excessive refunds.

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