Practice Management

States and cities could lose billions annually under a congressional bill that would require businesses to have employed at least one employee in a state for 21 days, or have leased or bought property, before having to pay the state's business taxes.

Reading about former California gubernatorial candidate George "Nick" Jesson, who recently finished pleading guilty to state and federal tax evasion charges, reminded me of conversation I'd had with a friend a couple of weeks back.

MIS Group and ERG, two resellers of Sage Software headquartered in Dallas, have announced a merger.

If you are starting to sing the great 1970s song by the Bee Gees, then this article may be just what you need.The landscape that accountants and other professionals now traverse is filled with detours, dead ends and even landmines. And if anyone tells you that building a firm is easier today than before, have them spend a few days at your side.

* BILLS INTRODUCED TO FORM NEW TAX REFORM COMMISSION: In the wake of a failed effort to push through a permanent repeal of the estate tax, two Republican congressman have introduced companion bills to form a new "Securing America's Future Economy Commission."The 15-member commission would have the ability to reform tax policy and entitlement benefit programs, and function similarly to the military base closing commission - with proposed legislative packages receiving an up-or-down vote from Congress. The president or the budget committee of either house of Congress would be able to submit alternatives.

In late May, the Internal Revenue Service produced interim guidance in the form of Notice 2006-9, describing the new credit for qualified hybrid vehicles. Spawned by the Energy Policy Act of 2005, the credit replaces the $2,000 clean-fuel vehicle deduction that was available in previous years.A hybrid vehicle is defined as a vehicle that must have both an internal combustion or heat engine and a rechargeable energy storage system. There are also emission requirements for the vehicles. Only new hybrid vehicles purchased on or after Jan. 1, 2006, qualify for the credit, which is based on a two-pronged system that incorporates calculations based on the weight and the estimated lifetime fuel savings of the vehicle.

Using cash in a like-kind exchange is similar to passing around the proverbial "hot potato" - you don't want to be the one holding the potato, i.e., the cash, at the end of the transaction. If you do so in a like-kind exchange, you are probably holding "boot" (non-qualifying property), which is taxable to the extent of any gain otherwise locked up in the relinquished property (i.e., the difference between its fair market value and basis).Sometimes, strategies that involve the use of cash to facilitate like-kind exchanges under Code Section 1031 begin to seem like shell games, in which labels matter a great deal. In the end, however, the only labels that have been successfully applied are those that have made sense within the basic framework of Section 1031.

For the next few months, the Internal Revenue Service's Statistics of Income Division will be testing a prototype SOI Table Wizard.The tool will allow users to create their own custom tables from SOI tabulated data in the 1999 and 2000 Corporate Source Books. If adopted, data from other forms could eventually be added, and the IRS is asking users to provide feedback on the new feature. The agency also warned that there are some limitations in the tables.

The ranking minority member of the Senate Finance Committee threatened to place a "hold" on President Bush's nomination for the top Treasury tax official, unless the department agrees to provide a comprehensive plan to close the tax gap by the end of September.

Some federal tax breaks for energy efficient hybrids will start shrinking this fall.