Top Tax Stories of 2014
December 26, 2014 2:00 PM
The Top Stories in Tax
Things never get boring in the world of tax. Tax preparers, tax practitioners and taxpayers may all have been hoping for a quiet 2014 after the tumult of 2013, but regulators and legislators werent complying.
Here are our editors picks for the most important stories of the year.
Corporate Inversions
A corporate tax strategy most of us had never heard of made big news over the summer, brought into the spotlight by Burger Kings move to acquire Canada-based Tim Hortons. The technique of acquiring a foreign company and then swapping the location of your corporate headquarters to avoid paying U.S. tax was promptly labeled unpatriotic by many, including President Obama, who blamed accountants for its use. Legislation was even proposed to punish corporate inverters, but surveys showed that businesses planned to continue using the strategy.
Ekkaphan Phantana-angkul/bert_phantana - Fotolia
Tax Reform Fizzles
Remember the big tax reform legislation of 2014? Neither do we. Although many hoped for it, and various senators and congressmen including outgoing House Ways & Means Chair Dave Camp proposed or promised to look into the subject, nothing much happened on this front.
A Taxpayer Bill of Rights
It was no surprise that National Taxpayer Advocate Nina Olson recommended that the IRS adopt an official Taxpayer Bill of Rights in her January report; she has recommended it before. What was a surprise is that in June that IRS actually did it. As rights go, theyre not quite constitutional but theyre better than nothing!
Andy Dean Photography/Andy Dean - Fotolia
The Final Chapter of Loving
In February, the IRS lost its appeal of 2013s Loving ruling that had struck down its proposed (and partially enacted) tax preparer registration program. By the time the window for filing a further appeal closed in May, it was clear that the service didnt intend to pursue the issue any further.
Micha Klootwijk/michaklootwijk - Fotolia
Or Is it?
Rather than appeal Loving again, the IRS instead launched its strictly voluntary Annual Filing Season Program, a voluntary program where tax preparers who meet certain continuing education requirements can get listed in an entirely voluntary directory of qualified tax preparers. The American Institute of CPAs promptly launched a lawsuit against the voluntary program, but their suit was dismissed.
By the way, its voluntary.
Pete Marovich/Bloomberg
The IRS Scandal Continues
After exploding all over 2013, the IRS scandal surrounding targeting of conservative political groups for extra scrutiny was the gift that kept on giving, particularly surrounding the figure of Lois Lerner (pictured), who ran the group that engaged in the targeting. Congress continued to put pressure on the IRS to get to the heart of the matter, but ludicrous (and to some, suspicious) tech issues made it difficult of the IRS to produce Lerners e-mail correspondence from a crucial period for any sort of investigation.
Sherry Yates/Sherry Young - Fotolia
The ACA Looms Large
Few things about the Affordable Care Act are very clear, but one thing that has come into focus over the course of 2014 is that its going to play an enormous role in the upcoming tax season. With taxpayers in general unaware of their responsibilities, much of the burden will fall on their tax preparers.
Image Source/Getty Images/Image Source
The Long Wait for Extenders
Despite constant warnings from IRS Commissioner John Koskinen, taxpayer groups and organizations representing tax preparers, Congress put off handling the annual crop of tax extenders until more or less the last minute. Everyone endured yet another year of uncertainty in tax policy until mid-December, when Congress retroactively reinstated the tax breaks -- for exactly two weeks, which means we get to go through the same thing next year.
A Wounded IRS
Our choice for the biggest story in tax is the damaged state of the IRS. Whether its the ongoing scandal over targeting conservative groups, the final demise of the services tax preparer registration program, or its shrinking budget, its clear that the tax collection agency is going through a tough patch and its not shy about letting everyone know, with Commissioner Koskinen warning anyone who will listen that the upcoming tax season will be difficult, since budget cuts will give it fewer resources to answer calls, process returns and otherwise fulfill its obligations.
