INTUIT, BLOCK TO OFFER FREE 1040 E-FILING NEXT YEAR

Washington, D.C. - Intuit and H&R Block plan to provide free electronic filing in response to a request from Congress and the Internal Revenue Service.

Intuit will offer free filing for its TurboTax desktop software products for individuals for tax year 2008, while Block has decided that 100 percent of its tax products and services, including its TaxCut software, will include free federal e-filing.

Sen. Charles Schumer, D-N.Y., chair of the Joint Economic Committee, wrote to Intuit and other tax software vendors asking them to expand the availability of free e-filing. Currently Intuit and other members of the Free File Alliance provide free e-filing to taxpayers whose adjusted gross income was $54,000 or less.

IRS SETTLES WITH LAW FIRM

Washington, D.C. - The Internal Revenue Service has reached a settlement with the law firm of Arnold & Porter, which has paid an undisclosed penalty for promoting tax shelters.

The IRS said that the settlement relates to the firm's failure in 2000, 2001 and 2002 to comply with tax-shelter registration requirements, and its participation in organizing three types of listed tax-shelter transactions that it sold to high-net-worth individuals and corporations. The IRS said that the firm cooperated with its examination and has put in place a comprehensive compliance program.

Peter Cinquegrani, a former partner at the firm, also pleaded guilty in a federal district court in Manhattan to conspiring to commit tax fraud on behalf of his clients. He admitted that, along with employees of Ernst & Young, he created a tax shelter and a legal opinion to support it, according to Reuters. He also admitted to lying under oath when asked by the IRS about the tax shelter.

Arnold & Porter declined to disclose the amount of the penalty it paid, but in a statement said, "We have cooperated fully with the government. The firm previously entered a civil settlement with the Internal Revenue Service in connection with these transactions, and has resolved all related private civil claims." The firm said that it has also strengthened its internal tax compliance procedures.

RANGEL WON'T STEP DOWN AS TAX COMMITTEE CHAIR

Washington, D.C. - Rep. Charles Rangel, D-N.Y., has refused to resign his chairmanship of the tax-writing House Ways and Means Committee after revelations that he failed to pay taxes on rental income from a vacation villa in the Dominican Republic.

Rangel's lawyer admitted that the congressman probably owes nearly $10,000 in federal, state and local taxes, including about $5,000 to the Internal Revenue Service, on the nearly $75,000 in rental income he earned on the beachfront property since buying it in 1988. The income went directly to paying down his mortgage. Rangel insisted at a press conference that he was unaware that he needed to report the income and pay taxes on it. The managers of the resort where the property is located did not provide him with detailed statements, he claimed.

Rangel has asked the House Committee on Standards of Official Conduct to examine the matter. The committee is also looking into Rangel's rental of four rent-controlled apartments in his Harlem residence and his use of official stationery to solicit donations for a college center named in his honor.

Rangel said that he intends to stay where he is: "I really don't believe that making mistakes means you have to give up your career."

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