IRS LAUNCHES ONLINE PAYMENT AGREEMENTS: Tax professionals will help launch a new system allowing many individuals who owe delinquent federal taxes to apply online for a payment agreement, the Internal Revenue Service announced.The IRS is implementing the new Online Payment Agreement application through national partnerships with the tax professional community. The application will eliminate the need to write or call the IRS toll-free number for assistance. The goal of the program is to provide an easier way for taxpayers to voluntarily resolve tax liabilities.
"This new system reduces taxpayer burden by providing the convenience of online service during extended hours and on weekends," said IRS Commissioner Mark W. Everson, in a statement. "Taxpayers can set up an agreement and arrange for payment options, including automatic payments, through direct debit or payroll deduction."
The IRS estimates that 90 percent of taxpayers who qualify for a payment agreement will be able to obtain one through OPA once the application is available to the general public later this year.
More information on the application is available at www.irs.gov/businesses/small/article/0, id=108347,00.html.
IRS CONDUCTING OWN STOCK-OPTIONS INVESTIGATIONS: The Internal Revenue Service is examining as many as 40 companies to investigate the appropriateness of deductions for backdated stock options, as well as the reporting of income by affected executives and the relevance of the laws governing incentive stock options.
According to published reports, in recent weeks, the agency has told its corporate auditors to start reviewing the tax returns of dozens of executives and companies that may have improperly reported stock-option grants. The preliminary investigations are expected to take months, and appear aimed at both companies that took improper tax deductions and executives who might have misreported income.
More than 80 companies, many of them tech businesses in Silicon Valley, are under investigation by the Securities and Exchange Commission for potential accounting and disclosure problems, while the Department of Justice has set up a special task force in northern California to examine potential criminal charges, and issued subpoenas to at least 35 companies. In late July, the SEC brought its first criminal charges against former executives of Brocade Communications.
IRS CREATES NEW TIP REPORTING PROGRAM: The Internal Revenue Service released formal guidance on its new tip reporting procedure, the Attributed Tip Income Program.
The Attributed Tip Income Program was designed with the ultimate goal of reducing recordkeeping burdens. The agency said that the additional program option has simple enrollment requirements and promotes reporting tips on federal income tax returns. As with other tip reporting programs, participation is voluntary.
Employers who participate in ATIP report the tip income of employees based on a formula that uses a percentage of gross receipts, which are generally attributed among employees based on the practices of the restaurant.
Among the employer and employee benefits of participating in ATIP:
* The IRS will not initiate an "employer-only" examination during the period the employer participates in ATIP; and,
* Enrollment and tip reporting is simplified: In many cases employers will not have to receive and process tip records from participating employees.
Likewise, employees also benefit from ATIP:
* Participating employees do not have to keep a daily tip log or other tip records;
* The IRS will not initiate a tip examination during the period the employer and employee participate in ATIP; and,
* The improved income reporting procedures could help employees qualify for loans or other financing.
ATIP is a three-year pilot program for food and beverage employers. Employers will participate on an annual basis, with the first period beginning Jan. 1, 2007.
More information on the program, and general requirements for participating restaurants, are available at www.irs.gov/pub/irs-drop/rp-06-30.pdf.
