Tax planning

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Improving taxpayer service, enhancing enforcement of the tax law, and modernizing the Internal Revenue Service through its people, processes and technology should be the tax administration's top priorities for 2005, according to the American Institute of CPAs.

As the year winds down, tax practitioners are encouraged by more than the usual holiday cheer as they foresee both a pain-free and a profitable tax season ahead.

As the renowned Baby Boomer generation inches its way into the retirement years, employers are beginning to consider how this vast purge of experienced workers is going to affect the workplace.

Tax reform under the second Bush administration will most likely take the form of piecemeal tax cuts, according to participants in a tax panel sponsored by the Council for Electronic Revenue Communication Advancement, a government-private industry trade association. President Bush has said that he would appoint a panel to recommend changes to the tax code that would make it simpler, fairer and less burdensome.

As part of efforts to tighten ethical standards for tax professionals and curb abusive tax shelters, the Treasury has issued final regulations amending Treasury Circular 230, which governs the practice of attorneys, accountants and other tax professionals before the Internal Revenue Service.

With tax day fast approaching, CPAs may be feeling stressed. However, they may be able to make their own lives, as well as those of their small business clients, a little less tense by encouraging those clients to consider certain business expenditures before the upcoming tax season, according to Hewlett Packard and H&R Block.

Mphasis, which provides information technology and business process outsourcing through its operations in India, has launched an application service provider model of its Virtual Tax Room, used in outsourcing tax return preparation.

Triggered by congressional concerns over the marketing of abusive tax shelters by some accounting firms, the Public Company Accounting Oversight Board has proposed new rules restricting the ability of accountants to provide tax services to audit clients.

The Internal Revenue Service has teamed with the Department of Housing and Urban Development in an effort to expand the agencies' outreach to low-income taxpayers.

The majority of tax professionals who enter the financial planning business do so by hooking up with an independent broker/dealer firm, according to a report by market research and consulting firm Tiburon Strategic Advisors.

The Internal Revenue Service is co-sponsoring a free Webcast aimed at helping tax and payroll professionals who prepare individual federal tax returns to get ready for the upcoming filing season.

Putting to rest rumors that he would replace John W. Snow as Treasury Secretary, President Bush has reportedly asked Snow to remain in his cabinet.

President Bush this week signed into law a less intrusive version of a sweeping $388 billion legislative package that covers the spending of early every federal agency.

Publisher Tax Analysts has tapped former Treasury official Pamela F. Olson and former Internal Revenue Service director Larry Langdon for seats on its board.

The Internal Revenue Service has issued final instructions for Schedule M-3, Net Income (Loss) Reconciliation for Corporations with Total Assets of $10 Million or More.

As White House administration officials hint that Treasury Secretary John W. Snow will depart his post sooner rather than later, media reports are already swirling about who will be his successor.

Interest rates for calculating the amount owed on refunds and deficiencies will remain unchanged for the calendar quarter beginning Jan. 1, 2005, the Internal Revenue Service said.

A mid-level House aide reportedly said that he was the one who added the controversial provision in last month's spending bill that would have given staffers on the House and Senate Appropriations Committees access to Americans' tax returns.