Practice Management

Let me ask you three questions about your firm. But before you and others in your firm answer, let’s set some ground rules. One is that the answer to each question, in writing, can be no longer than a paragraph. Two, once you have composed your answers, please sleep on it, and see if you want to make any changes. Most importantly, think in terms of the big “firm” picture when answering the following three questions.

The Internal Revenue Service's Business Systems Modernization, a $200 million-plus effort to upgrade the service's systems and processes, is moving ahead, but several of the project's milestones have been riddled by completion delays and cost overruns, the Government Accountability Office said. Specifically, the GAO cited the Customer Account Data Engine -- the new taxpayer information database -- as exceeding its planned schedule by 66 percent and experiencing a 15 percent cost increase; a companion project to the CADE incurred a 153 percent cost overrun; and the modernized e-file program experienced a 41 percent schedule delay.

The Internal Revenue Service has issued guidance for the proper pooling treatment of automobiles, light-duty trucks, and crossover vehicles that have the characteristics of trucks and cars under the dollar-value, last-in, first-out inventory method. To address the distinctions between cars and light-duty trucks, and in response to an Industry Issue Resolution Program request submitted by Miller Chevalier Chartered and the National Auto Dealership Association, the Treasury Department and the Internal Revenue Service issued Revenue Procedure 2008-23. Light-duty trucks are trucks with a gross vehicle weight of 14,000 pounds or less. Effective for tax years ending on or after Dec. 31, 2007, the revenue procedure provides a safe harbor pooling method, the Vehicle-Pool Method, for resellers of cars and light-duty trucks. The Vehicle-Pool Method allows a reseller to establish a new vehicle pool for inventories of new vehicles including new cars, new light-duty trucks, and new crossover vehicles including SUVs, minivans and other similar vehicles and a used vehicle pool for inventories of used vehicles. Revenue Procedure 2008-23 also provides the procedures for a reseller subject to the LIFO pooling requirements to obtain automatic consent to change to the Vehicle-Pool Method.

The House Ways and Means Oversight Subcommittee plans to hold a hearing on the 2008 tax-filing season, Internal Revenue Service operations, fiscal year 2009 budget proposals and the IRS National Taxpayer Advocate's annual report.

The Internal Revenue Service has opened its IRS Free File program to individuals who do not normally file tax returns so they can receive economic stimulus payments.

Democratic lawmakers in the New York State Assembly are reportedly considering the idea of levying an extra 1 percent income tax on everyone with income over $1 million in order to balance the state's budget and help fund transportation costs, but the proposal is likely to run into opposition from the governor and the State Senate.

The Internal Revenue Service has issued final regulations for tax deductions on domestic film productions, while revising the definition of the types of films that qualify for the deduction.

The House Subcommittee on Select Revenue Measures held a hearing to examine whether there is a need for a more uniform treatment of various derivative structures.

The Internal Revenue Service said it won't challenge the accuracy of income tax returns filed by eligible individuals who claim just $1.00 in adjusted gross income in order to receive an economic stimulus payment.

Financial services firm Gilman Ciocia is capitalizing on two perennials for this time of year - tax season and Major League Baseball spring training - to offer free tax prep services to attendees at several upcoming spring training games in Florida.