* SUPREME COURT REQUIRES TAX COURT TO INCLUDE TRIAL JUDGES' REPORTS ON APPEAL: The Supreme Court ruled in a 7-2 decision that the Tax Court may not exclude from the record on appeal Rule 183(b) reports submitted by special trial judges.The Tax Court's chief judge appoints special trial judges to hear certain cases, but the ultimate decision, when tax deficiencies are greater than $50,000, is reserved for the court itself. Tax Court Rule 183(b) directs the special trial judge to submit a report to the chief judge, who assigns the case to a judge of the court. The Tax Court judge is to give due regard to the report and presume that findings of fact contained in the report are correct. The Tax Court judge may then adopt the report "or may modify it or reject it in whole or in part."
After a rule revision in 1983, the reports were no longer included in the record or made public. The taxpayers in the case before the Supreme Court had failed in Tax Court, and believed that the decision - which said that it agreed with and adopted the opinion of the special trial judge - did not, in fact, comport with the report of the special trial judge.
The appeals court ruled against the taxpayers, holding that the report is protected as part of the court's confidential deliberative process.
The Supreme Court reversed, finding that the practice of not disclosing the special trial judge's original report "impedes fully informed appellate review," and ignores the principle that the officer who hears witnesses and sifts through evidence "will have a comprehensive view of the case that cannot be conveyed full-strength by a paper record."
* TAX REFORM PANEL FOCUSES ON BUSINESS: The President's Advisory Panel on Federal Tax Reform held its third meeting in Tampa in early March, with the objective of understanding how the existing tax system affects business taxpayers. "Small-business and self-employed taxpayers, in particular, are burdened by the complexity of our tax code and bear a substantial proportion of the estimated $125 billion in compliance costs," said panel chair Connie Mack. "As we will learn, it is these same small businesses that are a powerful engine driving our country - they employ over half of all private sector employees and generate 60 to 80 percent of new jobs."
Small-business owner David Hurley told the panel that the tax code places a tremendous burden on the nation's leading job creators. "If you are a big corporation with a compliance department or a tax attorney on staff to help navigate the various tax laws at the federal, state and local levels, then compliance issues aren't nearly as thorny as they are for small businesses," he said. "But if you are a small-business owner, in addition to dealing with compliance requirements, you might also be taking out the garbage, ordering inventory and hiring employees."
* IRS INTEREST RATES RISE FOR SECOND QUARTER: The interest rate for overpayments and underpayments will rise by 1 percent for the calendar quarter beginning April 1, 2005, according to the Internal Revenue Service.
The second quarter rate for noncorporate overpayments and underpayments is 6 percent.
The interest rate for corporate overpayments is 5 percent, or 3.5 percent for the portion of a corporate overpayment exceeding $10,000. The rate is 6 percent for corporate underpayments, or 8 percent for large corporate underpayments.
The interest rates are computed from the federal short-term rate based on daily compounding determined during January 2005.
* THOMSON ACQUIRES TAX PARTNERS: The Thomson Corp. has acquired Atlanta-based Tax Partners, a provider of sales and use tax compliance services, and will fold the concern under its RIA Compliance umbrella. RIA Compliance is a division of Thomson Tax & Accounting.
Terms were not disclosed.
"Adding Tax Partners to our offerings will provide Thomson Tax & Accounting with an important tax compliance service component, enabling us to offer an end-to-end solution to our clients," said Brian Peccarelli, executive vice president of Thomson Tax & Accounting Corporate Markets and general manager of RIA Compliance, in a statement.
In 2004, Tax Partners filed more than 540,000 tax returns and remitted $7.5 billion in taxes for clients.
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