Practice management

The Internal Revenue Service is not doing enough to match incorrect or missing identification numbers on income and wage statements with existing tax accounts, potentially costing the U.S. Treasury billions in lost revenue, charged a Treasury Department watchdog.

Computer Sciences Corp. said it would restate its fiscal 2007 results after examining the impact of FASB Interpretation No. 48, or FIN 48, and discovering accounting errors for fiscal 1997 through 2007.

Of the roughly one hundred thousand cases a year that go before the Internal Revenue Service Appeals Division, more than 80 percent get resolved without going to litigation. That by itself is a good reason for tax professionals to utilize the appeals process, according to Sarah Ingram, chief at the IRS Appeals unit."We see large taxpayers, small taxpayers, individuals. We see large-dollar figures, any topic under the sun," she said. "Almost half of those cases come from the Collection Division, including either collection due process or offers-in-compromise kinds of activities."

IRS APPOINTS NEW COMMISSIONER

With the Tax Code constantly in a state of flux with new tax laws, not to mention delayed effective dates on tax provisions, sunsetting provisions, and phase-ins and phase-outs, every year offers some new wrinkles for tax professionals to worry about.The 2007 tax year is no exception.

The Senate Finance Committee continued its examination of whether to raise taxes on the earnings of managers of private equity firms and hedge funds by looking at the impact of carried interest taxation on pension funds.

Two upstate New York CPA firms are merging, with the Rochester-based firm of Bernardi & Russo joining forces with Buffalo-based Freed, Maxick & Battaglia.

Small businesses added 44,000 jobs in the United States in August, according to a new report, but large companies shed 6,000 jobs last month, bringing the total number of new jobs to 38,000.

The House Ways and Means Committee held hearings on proposals to raise taxes on managers of private equity firms and hedge funds, and to combat the expanding impact of the alternative minimum tax, as well as listening to testimony about the impact of the Bush tax cuts.

CPA firms saw big gains in both income and fees last year, thanks to the demand for Sarbanes-Oxley compliance services, according to a newly released survey.

Relatively few taxpayers are making use of the Advanced Earned Income Tax Credit, but many of those who do receive the AEITC do not comply with the requirements of the program, according to a government report.

President Bush made several proposals late last week to relieve homeowners from the burden of the imploding mortgage market, just in time to grab Congress's attention as it returns this week from summer recess.

The federal government is itself a tax delinquent, owing approximately $45 million in employment taxes, according to a report from a Treasury Department watchdog.

House Ways and Means Committee Chairman Charles Rangel, D-N.Y., plans to hold a hearing on fairness and equity in the Tax Code.

It’s nice to see that CPAs and their firms are doing very well. According to the just-released 2007 Rosenberg MAP Survey, firms with net fees over $2 million enjoyed annual net fee growth of 11.4 percent in 2006, compared to 9.7 percent in 2005. The average income for partners in these firms, according to the survey, is $350,000.

Two high-ranking senators are calling for the Government Accountability Office to investigate the growing problem of tax fraud related to identity theft and how it contributes to the tax gap.

The Internal Revenue Service introduced a Voluntary Closing Agreement Program that will help financial firms avoid harsh penalties for violating federal tax laws on arbitrage investment restrictions for municipal bonds.

Three accounting firms are expanding their presence in California and Florida.

The Internal Revenue Service appointed four people to high-ranking positions at the agency.

Rep. John Dingell, D-Mich., said he plans to issue a proposal when Congress returns from recess that would impose stiff new taxes on gasoline and end the mortgage interest tax deduction on "McMansions," or homes greater than 3,000 square feet, as a way to discourage over-consumption of fuel.