Tax planning

The 2005 tax return season wound down with a larger-than-expected late surge of filers to make up for the slow start, according to preparers.

Baseball season got underway this spring with a new frustration for ball players.

As of this writing, bankruptcy reform legislation had passed the Senate and was expected to move quickly through the House and be signed by President Bush. The Bankruptcy Abuse and Prevention and Consumer Protection Act of 2005 may already be law as you read this column.

A district court judge has sentenced four defendants to prison terms ranging from eight to 20 years in what the Justice Department says is one of the "most far-ranging tax schemes ever prosecuted."

Complexity is eroding voluntary compliance with U.S. tax laws, a member of the American Institute of CPAs Tax Executive Committee told the House of Representatives Small Business Committee this week.

The Internal Revenue Service, in partnership with stakeholder groups, has set up a new Web-based list of frequently asked questions aimed at helping corporate taxpayers understand the requirements of the new Schedule M-3.

Tax and accounting software provider Creative Solutions Inc. has acquired the tax software line of Cincinnati-based Accountware for undisclosed terms.

SurePrep, known for its outsourcing services, has developed a tax preparation workflow system to help firms maintain greater control over tax preparation decisions while reducing review and correction time. SurePrep Express is a Web-based system that categorizes scanned source documents to ease processing and data entry.

The implementing states of the Streamlined Sales and Use Tax Agreement voted to create an associate membership, keeping the agreement on track toward its Oct. 1, 2005, interstate effective date.

The Internal Revenue Service is seeking applications to fill seven vacancies on the Electronic Tax Administration Advisory Committee, a 14-member panel that provides a public forum for discussion of electronic tax administration issues in support of the goal of paperlessly filing tax and information returns.

The president and vice president 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.

Tax preparation and related fees from H&R Block Inc.'s U.S. retail operations increased 6.4 percent to $1.9 billion through March 31, 2005, the tax prep giant reported.

President Bush has signed into law H.R. 1134, exempting qualified disaster mitigation payments from tax.

Washington - The call for the nation's tax preparers to be more closely monitored for proficiency has been echoed by the National Taxpayer Advocate, as well as by a number of tax professional membership associations.

Apparently, there's a good reason the regular 1040 is referred to as the "long" form -- it takes the average taxpayer more than a full day to prepare the form with three common schedules, according to an annual study of tax complexity.

The Internal Revenue Service needs to remedy serious weaknesses over taxpayer and Bank Secrecy Act data that leave its systems vulnerable, according to a report released by the Government Accountability Office.

Employees at the Greenwood, Ind., office of the Internal Revenue Service were more than a little surprised a few weeks ago when a disgruntled man pointed a gun at a revenue officer saying, "You can't do this. You can't take my money like this."No one was injured and the man was arrested, but it leads one to wonder about a system that brings out such a violent response from someone who clearly wasn't satisfied with his tax situation.

Washington - A ruling by the Tax Court has underscored the way the alternative minimum tax penalizes holders of incentive stock options when the stock loses value after the option is exercised.

With the April 15 tax filing deadline looming, the Internal Revenue Service says that e-filing, direct deposit and e-payment programs continue to move at record paces so far this year.

-- Tax audits by the Internal Revenue Service on companies in the financial sector are undertaken far less frequently than those in other sectors such as manufacturing, agriculture and mining, according to a report from Syracuse University's Transactional Records Access Clearinghouse. The financial services sector -- which includes banks, insurance companies and brokerage firms -- received less than one-fifth of the audit frequency of other sectors during the years 2002 to 2004. The TRAC study examined the audit rates of companies in a number of sectors, each of which had at least $250 million in assets. "The very low attention being given to the financial sector by the IRS is particularly surprising in light of the leading role this industry plays in the country's economy, including the level of income subject to federal corporate income taxes," the report stated. However, the IRS contended that the TRAC data was flawed due to the fact that an audit of a financial concern would be reported as a manufacturing sector audit if the branch conducting the examination did not have a financial industry specialist on staff.