TAX CRIME ENFORCEMENT AND CONVICTIONS ON THE RISE

Washington, D.C. -- The Internal Revenue Service has significantly increased its enforcement actions against tax criminals and its rate of convicting them, according to a report from the IRS's Criminal Investigation unit. The CI unit increased by 12.5 percent the number of investigations it initiated in the fiscal year ending Sept. 30, 2013, compared to the prior year, and increased prosecution recommendations by nearly 18 percent. CI initiated 5,314 cases and recommended 4,364 cases for prosecution. These increases occurred at a time when agent resources decreased more than 5 percent, largely due to budget cuts at the agency.

Meanwhile, convictions rose more than 25 percent compared to the prior year. The conviction rate for fiscal 2013 was 93 percent. In stepping up the fight against identity theft, CI initiated over 1,400 investigations, according to the report, and recommended prosecution of over 1,250 people who were involved in identity theft crimes during fiscal year 2013.

 

TAX LAWSUITS ON THE DECLINE

Syracuse, N.Y. -- The number of tax lawsuits filed has declined nearly 10 percent in the past year, and is down more than 30 percent from five years ago, according to a new report from Syracuse University's Transactional Records Access Clearinghouse. The report found that a total of 68 new tax lawsuits were filed in January. The U.S. government was the plaintiff in nearly 72 percent of these lawsuits. In the remaining 28 percent, the government was named as a defendant.

The Central District of California -- with eight civil filings -- was the most active in January. The Western District of Texas, Northern District of California and Middle District of Florida all tied for second place. The federal judicial district that showed the greatest growth in tax lawsuits compared to one year ago - 200 percent -- was the Southern District of California. Compared to five years ago, the district with the biggest growth -- 300 percent -- was the Middle District of Florida.

 

IRS REVISES GUIDANCE ON E-SIGNATURES

Washington, D.C. -- The Internal Revenue Service has revised its guidance on electronic signatures, with updated information on the currently acceptable electronic signature methods, identity verification requirements and electronic record requirements.

Publication 1345, Handbook for Authorized IRS e-file Providers of Individual Income Tax Returns, has been revised with new electronic signature guidance for both the IRS e-file signature authorization forms, 8878 and 8879.

The IRS noted that electronic signatures are optional, and that taxpayers can therefore continue to sign these forms with a handwritten signature.

 

NEW VEHICLE DEPRECIATION DEDUCTION LIMITS SET

Washington, D.C. -- The IRS has unveiled new depreciation deduction limitations for passenger automobiles (including trucks and vans) first placed in service during 2014, as well as the amount to be included in income by lessees of passenger automobiles that were first leased during calendar year 2014.

These limitations and income inclusion amounts, updated annually to reflect automobile price inflation adjustments required by Sec. 280F(d)(7) of the Tax Code, are in Rev. Proc. 2014-21.

The procedure provides:

  • Limitations on depreciation deductions for use by owners of passenger cars that the taxpayer first placed in service during calendar 2014, including separate tables of limitations on depreciation deductions for trucks and vans; and,
  • The amounts that must be included in income by lessees of passenger automobiles first leased by the taxpayer during calendar 2014, again with a separate table of inclusion amounts for lessees of trucks and vans.

 
IRS FINALIZES INSTRUCTIONS FOR NIIT FORM

Washington, D.C. -- The Internal Revenue Service has released the long-awaited final instructions for the 3.8 percent Net Investment Income Tax that was included as part of the Affordable Care Act. The tax took effect on Jan. 1, 2013, and applies at a rate of 3.8 percent to certain net investment income of individuals, estates and trusts that have income above the statutory threshold amounts of $250,000 for married filing jointly tax returns, $125,000 for married filing separately tax returns, and $200,000 for single taxpayers.

While the form itself is only one page, the instructions are at least 20 pages long and include worksheets for computing net gains and losses, deduction recoveries, the application of itemized deduction limitations, and modified adjusted gross income. It also provides details on special computational rules for electing small-business trusts, bankruptcy estates, rental activities and a safe harbor for real estate professionals.

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