IRS REQUESTS $10.6B BUDGET FOR 2007: The Internal Revenue Service requested a budget of $10.6 billion for the 2007 fiscal year, an increase of 1.4 percent from the current year's budget. Nearly $10.6 billion would come from direct appropriations through the Treasury Department. An additional $135 million would come from the IRS's new user fee revenue, for a total operating level of $10.7 billion.Among the IRS operations receiving more funding would be enforcement activities and taxpayer services. Enforcement has proposed funding at nearly $7 billion, a 2 percent increase from the 2006 enacted levels; taxpayer services has proposed funding at more than $3.5 billion, a 1.4 percent increase from 2006.
"The proposed budget strikes a good balance between maintaining our commitment to taxpayer service and continuing to reinvigorate enforcement efforts," said IRS Commissioner Mark W. Everson, in a statement. "The proposal continues support for our priority technology modernization projects."
The budget proposal also requests legislative proposals to address the tax gap, including:
* Increasing information reporting on payment card transactions;
* Expanding information reporting on payments made by government to buy property and services;
* Amending collection-due procedures for employment tax liabilies; and,
* Requiring return preparers to identify themselves on non-income tax returns.
The IRS's full request is available at www.irs.gov/pub/irs-news/fy07budgetinbrief.pdf.
IRS ANNOUNCES 'DIRTY DOZEN' TAX SCAMS: The Internal Revenue Service issued the 2006 "Dirty Dozen" - the annual round-up of some of the most notorious tax scams. Two new schemes have worked their way onto the list this year. In recent months IRS personnel have noted the emergence of the two scams - "zero wages" and "Form 843 tax abatement" - in which filers use IRS forms to claim that their tax bills have been wrongly inflated. Also high on the list is "phishing," a favorite ploy of identity thieves. Over the past few years, the IRS has observed criminals working through the Internet, and even posing as representatives of the IRS itself, with the goal of tricking unsuspecting taxpayers into revealing private information that can be used to steal from their financial accounts.
Several of the usual suspects from last year remain on the list. For example, the IRS continues to see schemes designed to exploit charitable organizations. Some taxpayers, meanwhile, still use frivolous arguments to claim that they do not owe taxes, despite the fact that such reasoning has been thrown out of court time and again.
The IRS also urges people to avoid these other common schemes, referred to as:
* Zero return;
* Trust misuse;
* Frivolous arguments;
* Return preparer fraud;
* Suspect credit counseling agencies;
* Abuse of charitable organizations and deductions;
* Offshore transactions;
* Employment tax evasion; and,
* "No gain" deduction.
Two noteworthy scams have dropped off the list this year - "claim of right" and "corporation sole." IRS personnel have noticed less activity in these scams over the past year, following court cases against a number of promoters.
A full explanation of the scams, as well as information on how to report suspected tax fraud activity, is available at www.irs.gov/newsroom.
CCH ACQUIRES VERTEX'S PROPERTY TAX REFERENCE: CCH, a Wolters Kluwer business and a provider of tax and accounting information, software and services, has acquired the Property Tax Reference from Vertex Inc. Terms of the deal were not disclosed.
The reference offers extensive property tax information at the local level covering a wide array of jurisdictions. CCH will begin fulfilling orders and updates in February, and the product will now be called the CCH Property Tax Reference. Updated monthly, the CD-based guide provides a compilation of property tax facts, dates, filing requirements, administrators and record retention, as well as appeal and protest procedures.
