* REFORM PANEL RULES OUT NATIONAL SALES TAX: The President's Advisory Panel on Federal Tax Reform ruled out a proposed national retail sales tax, and said that it would instead suggest changes to the current Internal Revenue Code framework, such as slashing benefits for mortgages and health care. The nine-member panel said that curbing benefits would help achieve the panel's original goal of simplifying the current tax code, while at the same time funding the cost of repealing the controversial alternative minimum tax.While agreeing that a national retail tax would boost revenue, the panel said that a hybrid tax would raise issues of "simplicity and fairness."
At press time, the panel, which since its creation has held 11 meetings, was scheduled to deliver its recommendations to the Bush Administration on November 1.
* SAGE SOFTWARE OFFERS YEAR-END TAX PRINTING: Sage Software will offer year-end tax printing services through Sage Compliance Services to support the year-end W-2 processing needs of small and midsized businesses.
Offered within the framework of Sage Online Services, Sage Compliance Services offers employer tax compliance, automating payroll tax payments and filing, wage attachments and garnishments, and W-2 processing for employers.
Beginning in early November, companies can register for year-end tax printing services and then upload W-2 data via a secure Web site in January 2006. Customers can choose between W-2 delivery back to their corporate location or directly to employees. Either way, copies of the W-2 forms are forwarded to the employer on CD, and Sage Compliance Services electronically files information directly to the Social Security Administration. Through Sage Compliance Services, Sage Software also offers a year-end tax system for larger companies that want to automate the wage reporting process, but still handle W-2s internally. The licensed system is installed at a customer's site and enables them to archive, print, edit, issue and re-issue tax forms such as W-2s, W-3s, W-3cs, and 941cs, as well as a variety of 1099 forms.
* ADELPHIA FOUNDER FACES TAX EVASION CHARGES: Adelphia Communications Corp. founder John Rigas and his son, Timothy, were indicted by federal prosecutors on charges of engaging in a $300 million tax evasion scheme. Both men were found guilty of fraud earlier this year in connection with an accounting scandal at the bankrupt cable company. Prosecutors have said that the Rigases took $1.85 billion from Adelphia for their personal use and then manipulated the cable company's books - the changes resulted in the alleged failure to report more than $1.9 billion in income on federal tax returns. Both are charged with one count of conspiracy, as well as separate counts of tax evasion for the 1998, 1999 and 2000 fiscal years, and face up to 20 years in prison on all of the counts. In June, Rigas, 80, was sentenced to 15 years in federal prison, while former finance chief Timothy, 49, received 20 years. Both are appealing.
In April, Deloitte agreed to pay $50 million in a settlement over its role as Adelphia's auditor, while Adelphia paid $715 million under a deal to avoid criminal charges for accounting fraud. Adelphia entered Chapter 11 bankruptcy in 2002 after reports surfaced that the Rigases, the founders of the company, had taken millions out of the company for personal expenses.
* FORMER AMBASSADOR FACES TAX CHARGE: The Internal Revenue Service has accused former U.S. Ambassador to Ireland Richard Egan of setting up a $62 million illegal tax shelter as soon as he moved to Dublin, a charge that Egan denies. Following an investigation, the IRS claims that Egan set up an economic sham involving another businessman that used a complex system to sell each other's stock in order to dodge tax payments. Egan, the billionaire co-founder of technology company EMC Corp., has started legal action against the IRS, claiming that the investment deal was perfectly legal.
Egan said that he set up the transaction after he resigned from the EMC board in September 2001, before taking the ambassadorial post, and was looking for ways to sell stock without possibly negatively affecting EMC's stock price. He said that an unnamed international accounting firm urged him to use a European-style options scheme.
Egan was appointed ambassador to Ireland by President George W. Bush, and resigned after 15 months.
