Tax planning

Although the continuing thirst of states for more dollars to fuel spending increases has led to a variety of efforts to augment tax revenue, they differ widely on what they consider sufficient contact with a business to give them the authority to tax it."Nexus" is the minimum amount of contact between a taxpayer and the state that would permit taxation by the state. It arises from the Constitution's due process clause, which requires a minimum connection between a state and an entity that it seeks to tax, and the Commerce Clause, which prohibits states from unduly burdening interstate commerce.

The U.S. Tax Court announced that Judge John O. Colvin has taken over as chief judge of the U.S. Tax Court as of June 1.

In an effort to encourage savings and more banking, the Internal Revenue Service is creating a program to allow taxpayers who use direct deposit to divide their refunds among as many as three financial accounts.

The Treasury Department and Internal Revenue Service issued final regulations for Section 199 of the tax code, which relates to domestic manufacturing deductions.

The Internal Revenue Service announced a major milestone in its corporate e-file program -- the successful e-filing of the nation's largest tax return from General Electric Corp. on May 18.

The Heroes Earned Retirement Opportunities Act has passed through Congress and is expected to be signed into law by President Bush. The bill would allow excluded combat pay to be treated as compensation under IRA contribution rules.

The founder of Colorado-based Octane International Ltd., a corporation whose primary business was raising money for the development of an alternative fuel additive called "vapor phase combustion," is facing indictment by a federal grand jury.

The Internal Revenue Service announced regulatory revisions that the agency hopes will remove impediments to e-file for corporations and shareholders.

Taxpayers will be able to apply for a refund of the federal excise tax on long-distance telephone service for the past three years.

The U.S. Department of the Treasury announced two initiatives aimed at simplifying the way small businesses, individual taxpayers and tax preparers file and pay their federal taxes.

We are all creatures of habit, comfortable doing things the way we always have. It worked before so it must be the best way. That may be true, but if you explore a little you might find another way of doing things. If it tests successfully, then you will at least have an alternative, and maybe even a better and more efficient way. Let's look at three examples with regard to attracting new clients.

After three years bouncing between British courts, tennis player Andre Agassi lost a $52,000 tax dispute that will require other sports and entertainments stars from paying U.K. income tax on endorsement deals.

While the extension of the reduced rates on capital gains and dividends, alternative minimum tax relief, and the continuation of enhanced Section 179 expensing have received the most publicity, there are a host of other changes in the Tax Increase Prevention and Reconciliation Act of 2005.

In a political victory for Republicans, President Bush signed the sixth tax cut in the past six years yesterday, in a Rose Garden ceremony.

Hispanics are less likely than non-Hispanics to say that they owe money to the Internal Revenue Service for 2005 (14 percent versus 22 percent) and they are more likely than non-Hispanics to report having received a refund for 2004 (73 percent versus 62 percent), according to poll results released by Hispanic market research firm Encuesta Inc.

A federal judge has sentenced Richard Hatch, who won the first season of the CBS reality show "Survivor," to 51 months in prison for tax evasion.

The U.S. Supreme Court unanimously denied a taxpayer group's challenge to nearly $300 million in tax breaks given to a DaimlerChrysler AG plant in Toledo, Ohio.

The Internal Revenue Service said that it plans to revoke the tax-exempt status of the 41 credit counseling agencies it has audited as part of a crackdown on the industry's practices.

I have dealt with many tax acts in the 30-plus years that I have been in professional publishing. When I worked at a tax publisher, I know tax legislation meant an awful lot of work. In one way or another, I would be involved in assembling the Code-as-amended, analyzing the effective dates, excerpting legislative committee reports, and writing or reviewing analyses. Besides the work, the legislation would almost always seemed to come down at a bad time, usually at the end of the year as Congress was about to adjourn. It was a real pain.

Internet tax research is becoming platform "agnostic," as a researcher can access, link to and search multiple sources from a single platform.BNA's Tax Management Portfolios are available across a wide array of platforms, including CCH's Tax Research Network, RIA's Checkpoint, and LexisNexis. CCH's TRN allows a search not only of CCH proprietary material, but also of key industry Web sites and, using Google, the entire Internet. Checkpoint now includes access to BNA, Practitioners Publishing Co. and Warren Gorham & Lamont titles. The newly launched LexisNexis Tax Center integrates material from CCH, Kleinrock and Tax Analysts, as well as sister company Matthew Bender. And Intuit's Tax Almanac provides a sounding board for practitioners to pool their knowledge to solve specific tax problems.