Tax planning

More than a couple of decades ago, a suburban daily newspaper publisher convened his editorial staff at a local restaurant to elicit ideas for selecting the best community to live in within the readership area.

Domestic partners in California must file their federal tax returns separately, despite a 2003 law that extended equal legal rights to registered same-sex couples in the state.

BNA has appointed David Schulbaum as its new director of marketing for the company's Tax Management Inc. subsidiary.

Tax protestor Irwin Schiff was sentenced to 163 months in prison -- including 151 months for tax fraud and an additional year for contempt of court -- the Department of Justice and the Internal Revenue Service announced. He was also ordered to pay more than $4.2 million in restitution.

The Tax Foundation has released the third edition of a s tudy breaking down business-friendly tax systems, from first to worst.

Internal Revenue Service officials released a report on the agency's examination of political activity by tax-exempt organizations during the 2004 election campaign.

H&R Block Inc. said that a miscalculation of its own state taxes will cost the company about $32 million in back taxes.

Observers predict that this year's e-filing season, which kicked off on January 13, will far outpace previous years in terms of the number of e-filed returns."We experienced a big surge compared to last year," said Jo Ann Cummings, product manager for CCH's Torrance, Calif.-based ProSystem fx Tax. "We e-filed over 3 million returns last year, and we expect a big increase in that."

Deepening congressional concern over identity theft is casting a spotlight on tax return preparers who share their clients' Social Security numbers with outside contractors.In a report to Congress focusing fresh attention on the tax-outsourcing issue, auditors from the Government Accountability Office warned that the sharing of personal financial information by tax preparers and other private-sector industries could leave Americans unnecessarily vulnerable to financial fraud.

CERTAIN TAX RETURNS WILL HEAD TO DIFFERENT CENTERS: As taxpayers begin to prepare their tax returns, the Internal Revenue Service noted that some may be sending their returns to a different service center than last year. Those who received a tax instruction booklet from the IRS in the mail and use the labels included with the booklet can be assured that their tax returns will go to the correct address. Taxpayers who e-file are not affected by these changes.For tax year 2005, the mailing changes affect returns, with or without payments, from the District of Columbia and 11 states - Colorado, Delaware, Kansas, Maryland, Mississippi, Nebraska, New Mexico, Ohio, South Dakota, Virginia and West Virginia.

A memo out of the Internal Revenue Service's Office of Chief Counsel makes the case that gender reassignment surgery cannot be deducted as a medical expense for tax purposes. The case, involving male-to-female gender reassignment surgery, is currently under consideration by the IRS Office of Appeals.The advice memorandum says that the taxpayer deducted an unspecified amount in expenses - including payments for various doctors, hormone treatments, psychotherapy, health insurance, transportation and lodging in connection with the surgery. Although the taxpayer appears to have offered extensive medical and legal documentation behind the decision to have the procedure, the chief counsel opinion offers legal support for the original IRS revenue agent defining the procedure as cosmetic.

Investors are increasingly seeking creative transaction structures to cash in on the heated real estate market.A strategy that uses preconstruction contracts in Section 1031 like-kind exchanges is one way that is gaining acceptance among investors, especially in areas with heavy condominium development.

Every year, Congress and the Internal Revenue Service help us justify a tax preparer's worth to clients by throwing a few new curves into the tax return preparation process. The 2005 tax return filing season is no exception.This year Congress even threw a few curves at the IRS and commercial tax software creators by passing year-end tax legislation with an impact on 2005 returns after the IRS had already done much of the work on its tax forms for the filing season. Here are some items to watch out for as you work through the 2005 return filing season.

Unclaimed refunds totaling more than $2 billion are awaiting about 1.7 million people who failed to file a federal income tax return for 2002, the Internal Revenue Service said.

Expanding the tax types eligible for electronic payment, the Internal Revenue Service is now accepting card payments for certain balance-due business taxes through Official Payments Corp.

President Bush said that he wouldn't allow the elimination of the mortgage interest deduction as part of suggested changes to the tax code.

Executives contemplating cross-border transactions in emerging markets view local legal, tax and accounting systems as the biggest challenges to completing a transaction, according to a poll conducted by Deloitte Financial Advisory Services LLP.

H.D. Vest Financial Services has issued an open invitation to tax professionals to attend its 20th annual Vest Fest conference in St. Louis.

California's Attorney General has filed a lawsuit against H&R Block in an attempt to halt the tax prep giant's loan program, which allows the company to take a percentage of clients' tax refunds in exchange for an advance.

The Internal Revenue Service has simplified the process for business taxpayers to file for an extension.