DECISION TO CLOSE TACS BASED ON BAD INFO: The Treasury Inspector General for Tax Administration, J. Russell George, said that bad data is to blame for the Internal Revenue Service's never-realized plan to close 68 Taxpayer Assistance Centers across the country.Late last year, Congress stopped the IRS from reducing any taxpayer service functions or programs until TIGTA completed a study detailing the effect of the planned reductions on taxpayer compliance and assistance.
According to the report, in order to determine which of the 400 TACs to close, the IRS and an independent contractor used an industry-standard software package and developed a model weighing five criteria. The report says that while the model itself was sound, not all of the data used was accurate or the most current available. Also, some of the data was based on estimates and projections, instead of the actual data available.
The report, titled "The Taxpayer Assistance Center Closure Plan Was Based on Inaccurate Data," is available online at www.treas.gov/tigta/.
BUSINESSES PAID NEARLY $500B IN '05 STATE, LOCAL TAXES: Businesses paid $497 billion in state and local taxes for the 2005 fiscal year, about 44 percent of the total taxes collected by all state and local governments, according to the annual study prepared by the quantitative economics and statistics, or Quest, practice of Ernst & Young in conjunction with the Council on State Taxation. The study includes estimates of taxes paid by major industry groups. The share of taxes paid is determined by a state's overall tax system.
Quest practice national director Thomas Neubig said that corporate income and payroll taxes have increased sharply since 2002 - coinciding with the rebound in the economy - and that property taxes and sales tax on businesses still account for 60 percent of state and local business taxes.
Key findings of the study include:
* Over the last four years, state and local taxes on businesses rose faster than total state and local taxes. Businesses paid 48 percent of the increase from 2002 to 2005.
* Property taxes on business property were nearly $183 billion in 2005, accounting for 37 percent of total state and local business taxes.
* Corporate income tax represents only 8 percent of total state and local business taxes nationally, but has risen 44 percent since 2002.
* The composition of total state and local business taxes paid varies by industry, with manufacturing and transportation continuing to face significant property and sales taxes.
Council on State Taxation president and executive director Douglas L. Lindholm said that the hope is that the study can provide policymakers and the public with a factual basis to evaluate the current state and local business tax burden. A copy of the full study is available at www.ey.com/us/quest.
IRS INVITES TAXPAYERS TO APPLY FOR TAXPAYER PANEL: The Internal Revenue Service is inviting individuals to help improve the nation's tax agency by applying to be members of the Taxpayer Advocacy Panel. The panel provides a forum for citizens from each state to make suggestions regarding IRS decision-making. Taxpayer Advocacy Panel members:
* Provide opportunities for citizen input and make recommendations to the IRS and the Treasury on customer service;
* Identify and prioritize taxpayer issues;
* Report annually to the Treasury, the IRS and the National Taxpayer Advocate;
* Participate in meetings where taxpayers are invited to raise issues about their experiences with the IRS; and,
* Refer taxpayers who contact the panels to the IRS offices best able to address their issues.
"As the IRS continues to examine taxpayers' needs in the area of service, the Taxpayer Advocacy Panel has emerged as a vital source for gathering and providing information from the perspective of taxpayers," said National Taxpayer Advocate Nina Olson, in a statement.
To qualify as a TAP member, applicants must be U.S. citizens and be able to commit 300 to 500 hours during the year to the panel. In addition, they must be current with their tax obligations and pass a criminal background check.
The application is available at www.improveirs.org. Interested parties can apply online or call (888) 912-1227 for an application form. Forms must be received by April 28.
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