Tax planning

It isn't the acts of a single executive, or the misses of a particular audit team, that most concern Public Company Accounting Oversight Board member Charles Niemeier when he reflects back on the corporate scandals that resulted in the passage of the Sarbanes-Oxley Act.

Using one of dozens of scenarios, undercover government auditors were mostly satisfied with the levels of assistance they received at several of the Internal Revenue Service's Taxpayer Assistance Centers.

Elaborating on his company's plans to enter the banking business, H&R Block chief executive Mark Ernst said that both the rates and fees the company charges customers for its refund-anticipations loans will be dramatically reduced by the time the 2007 tax season arrives.

In what the federal government is calling the largest personal income tax evasion case ever, a telecommunications entrepreneur pleaded guilty to two counts of federal tax evasion and one count of defrauding the District of Columbia.

For the first time in its history, the U.S. Tax Court will allow a taxpayer to proceed with their petition anonymously.

As previously announced, the Internal Revenue Service will soon begin charging user fees for the residency certification letters commonly used to avoid foreign value added taxes.

After a five-year effort, the American Society of Appraisers is taking credit for some of the provisions contained in the Pension Protection Act of 2006.

A case questioning the legality of a Kentucky law that exempts the interest on most municipal bonds from being taxed by the state -- when the investor is a resident of the state -- could have far-ranging effects for the $2.3 trillion municipal-bond market.

A report from the Treasury Inspector General for Tax Administration estimates that computer programming woes cost the country more than the $200- to $300-million range originally estimated by the Internal Revenue Service.

The lead singer of the Isley Brothers, Ronald Isley, has been sentenced to three years and a month in prison for tax evasion charges.

Pitney Bowes Inc., a manufacturer of postage meters, mailing systems and other equipment, agreed to a $1.1 billion tax settlement with the Internal Revenue Service.

A complete overhaul of the federal income tax system - one of the top legislative priorities for President George W. Bush last year - appears to have slipped off of the administration's radar screen altogether in 2006, congressional leaders charged.The latest indication that White House interest in tax reform has cooled during the past year: Top Treasury Department officials declined to testify at a recent round of Senate Finance Committee hearings to discuss the issue.

In spite of efforts by the Internal Revenue Service to improve taxpayer compliance, the rate at which taxpayers pay their taxes voluntarily and on time has ranged from roughly 81 percent to about 84 percent over the past three decades, according to Michael Brostek, the director of tax issues for the Strategic Issues Team at the Government Accountability Office.The tax gap, measured by figures from the National Research Program's audit data from 2001 to 2004, is the difference between the amounts taxpayers pay voluntarily and on time, and what they should pay under the law.

While audits of high-income taxpayers have increased, the actual impact on compliance may be limited, according to a recent report from the Treasury Inspector General for Tax Administration.The inspector general found that while the Internal Revenue Service has increased its audits, the bulk of those have been conducted as correspondence examinations, which limit the issues that the agency can address compared with a face-to-face examination. The TIGTA report also said that the end compliance result could also be limited, because more than half of all wealthy taxpayer assessments are not collected in a timely manner.

IRS LAUNCHES ONLINE PAYMENT AGREEMENTS: Tax professionals will help launch a new system allowing many individuals who owe delinquent federal taxes to apply online for a payment agreement, the Internal Revenue Service announced.The IRS is implementing the new Online Payment Agreement application through national partnerships with the tax professional community. The application will eliminate the need to write or call the IRS toll-free number for assistance. The goal of the program is to provide an easier way for taxpayers to voluntarily resolve tax liabilities.

There have been three fundamental, evolutionary changes in the corporate tax function over the past 20 years with respect to its mission, its alignment with corporate strategy, and its influence on organizational behavior and resource allocation.The first, in the 1980s, focused on using technology applications to improve the efficiency and effectiveness of tax preparation, with cost reduction acting as the driver for improving business processes. The second, in the 1990s, involved value creation and developing holistic approaches to sustain tax minimization, which proved that the corporate tax function could positively affect the bottom line through effective tax planning.

A new report from the Treasury provides a detailed analysis of what effects proposals to permanently extend the tax cuts enacted in 2001 and 2003 might have on the country's economy.Among the cuts set to expire at the end of 2010 are:

Schedule M-3 is part of the effort by the Internal Revenue Service to get a better handle on abusive tax shelters and other aggressive tax techniques by getting sufficient detail on book/tax differences that it can guide IRS auditors to transactions in need of further examination.The IRS is sufficiently confident in its ability to track book/tax differences on Schedule M-3 that earlier this year it removed book/tax differences as a criteria required for reportable transactions. While the former Schedule M-1 required only 10 lines of information, Schedule M-3 expands that to 90 lines of information, with an emphasis on making a distinction between temporary and permanent book/tax differences.

The Internal Revenue Service announced that long-distance telephone customers will be able to seek refunds ranging from $30 to $60 on their 2006 tax refunds.

In an August letter, the Internal Revenue Service said that the NAACP did not violate its tax-exempt status when the civil rights group's chairman gave a speech criticizing President Bush.