Tax planning

With the rising deficits and a series of tax reductions enacted in the first term of the Bush administration, many tax practitioners are starting to feel that the tax situation for their clients is never going to get much better than it is right now.

The Internal Revenue Service has been shifting its priorities from taxpayer service to enforcement and its management of the Business Systems Modernization program - an ongoing umbrella program of upgrades - from contractors to IRS staff.

As part of cost-cutting measures and a move toward online services, the Internal Revenue Service will no longer mail out its compilation of federal tax forms and instructions for tax professionals, known as Package X.

Intuit has launched an online tax research Web site called TaxAlmanac, in which it is enabling practitioners to post questions and answers.

An Illinois district judge denied approval of a settlement that would have ended litigation against tax prep giant H&R Block related to refund anticipation loans, the company disclosed.

The passage of H.R. 3, the Safe, Accountable, Flexible and Efficient Transportation Act of 2005, will effectively destroy the Internal Revenue Service's offer-in-compromise program, according to the American Association of Attorney-CPAs.

As part of cost-cutting measures, the Internal Revenue Service is forging ahead with plans to close some of its Taxpayer Assistance Centers, which provide walk-in service for taxpayers on tax law, tax return preparation and account inquiry resolution via face-to-face meetings with IRS employees.

The Internal Revenue Service is accepting applications for an annual grant program for matching funds to develop, expand or continue low income taxpayer clinics.

A bipartisan coalition of members of the U.S. Senate Finance Committee, including chairman Charles Grassley, R-Iowa; ranking member Max Baucus, D-Mont.; Ron Wyden, D-Ore.; and Jon Kyl, R-Ariz., have introduced legislation to repeal the alternative minimum tax.

The president's panel studying tax overhaul options isn't expected to recommend major changes to the estate tax, according to published reports.

Legislators and the public should be aware that carry-over basis problems of estate tax repeal could be a nightmare, according to the American Association of Attorney-CPAs.

While the Internal Revenue Service has made progress in improving taxpayer service, tax law enforcement and Business Systems Modernization areas, serious ongoing issues have kept the latter two areas on the Government Accountability Office's high-risk list, the watchdog agency said.

Accounting software maker Intuit has put its Information Technology Solutions business, which sells Track-It! software, on the sale block.

Avalara, a Web-service based sales tax software provider, revealed their latest sales tax software - AvaTax On-Demand.

In response to requests from tax practitioners and professional organizations for clarification, the Internal Revenue Service and the Treasury Department issued revisions to the new Circular 230 standards -- rules related to written tax advice issued last December.

Tax and legal publisher BNA Inc. has appointed long-time executive Darren McKewen as group publisher of tax and accounting at Tax Management Inc.

Jackson Hewitt Tax Service said that its network of offices prepared 3.3 million tax returns for fiscal 2005, up 5.9 percent over last year.

The perception that Web-based tax research is a mature market hasn't slowed the furious pace at which publishers have added to their Internet products.For Heather Depe, CPA, of Minneapolis-based Simma Flottemesch & Orenstein Ltd., Internet tax research presents tremendous advantages. "I use it almost exclusively in my research," she said.

TAX CUTS SAVED BUSH, CHENEY $110K: President George W. Bush and Vice President Dick Cheney saved a combined $110,182 in taxes last year under the income tax cuts passed by their administration, according to an analysis of the 2004 tax returns released by the White House.President and Mrs. Bush reported total income of $784,219 on their tax return and paid $207,307 in income tax - $28,846 (12 percent) less than they would have under the pre-Bush tax law, according to a report by Citizens for Tax Justice, a Washington-based research and advocacy organization.

The Internal Revenue Service has named Janice J. Lambert as its chief financial officer.