Tax practice

The Senate Finance Committee continued its examination of whether to raise taxes on the earnings of managers of private equity firms and hedge funds by looking at the impact of carried interest taxation on pension funds.

The House Ways and Means Committee held hearings on proposals to raise taxes on managers of private equity firms and hedge funds, and to combat the expanding impact of the alternative minimum tax, as well as listening to testimony about the impact of the Bush tax cuts.

Relatively few taxpayers are making use of the Advanced Earned Income Tax Credit, but many of those who do receive the AEITC do not comply with the requirements of the program, according to a government report.

President Bush made several proposals late last week to relieve homeowners from the burden of the imploding mortgage market, just in time to grab Congress's attention as it returns this week from summer recess.

The federal government is itself a tax delinquent, owing approximately $45 million in employment taxes, according to a report from a Treasury Department watchdog.

House Ways and Means Committee Chairman Charles Rangel, D-N.Y., plans to hold a hearing on fairness and equity in the Tax Code.

Two high-ranking senators are calling for the Government Accountability Office to investigate the growing problem of tax fraud related to identity theft and how it contributes to the tax gap.

The Internal Revenue Service introduced a Voluntary Closing Agreement Program that will help financial firms avoid harsh penalties for violating federal tax laws on arbitrage investment restrictions for municipal bonds.

The Internal Revenue Service appointed four people to high-ranking positions at the agency.

Rep. John Dingell, D-Mich., said he plans to issue a proposal when Congress returns from recess that would impose stiff new taxes on gasoline and end the mortgage interest tax deduction on "McMansions," or homes greater than 3,000 square feet, as a way to discourage over-consumption of fuel.

The Internal Revenue Service has problems with its tax return preparation assistance, but still offers helpful advice with tax laws, said a report issued by a Treasury Department watchdog group.

Sen. Charles Schumer, D-N.Y., has written letters to the Big Four accounting firms asking what they are doing to let their financial institution clients know about waivers on mortgage accounting standards that could let borrowers refinance their loans.

The Internal Revenue Service is encouraging more midsized companies to file their corporate returns electronically as the Sept. 17 deadline approaches for calendar-year filers who asked for extensions.

More than 8 million people file tax returns each year who don’t need to do so, imposing heavy costs on the Internal Revenue Service, according to a new report from a Treasury Department watchdog.

Tax information publisher BNA introduced the BNA Tax and Accounting Center, an online service that unites all of the company’s tax and accounting information in one place.

The Taxpayer Advocacy Panel has issued a report calling on the Internal Revenue Service to improve its services and customer satisfaction as well as reduce the burden on taxpayers.

Congress hopes to partially remedy the tax gap by making tax preparers more responsible for the positions their clients take on returns.Because paid preparers prepare over 62 percent of all individual income tax returns, they are a critical quality control for tax administration by helping to prevent noncompliance, according to an April report released by the Government Accountability Office.

IRS SIMPLIFIES E-SIGNATURESWASHINGTON, D.C. - The Internal Revenue Service said that it plans to simplify the signature process for electronically filed individual tax returns by allowing tax practitioners to avoid the need to send a paper signature document in support of their clients' e-filed returns.

The United States Tax Court has ruled on a case involving a taxpayer, David Billings, who asked to be relieved from liability for the tax owed on money his wife embezzled from his employer without his knowledge, and has decided in his favor.

This coming January officially marks the three-year countdown before the axe falls on the lower individual capital gains rates now in place.Since May 6, 2003, thanks to the Jobs and Growth Tax Relief Reconciliation Act of 2003, gain from the sale of most long-term capital assets is subject to a maximum tax rate of 15 percent (5 percent for individuals in the 10 percent or 15 percent tax bracket). Starting in 2011, however, these rates are scheduled to revert to their former pre-May 6, 2003, levels of 20 percent and 10 percent, respectively. Nevertheless, before the party ends, a 0 percent rate will replace the 5 percent rate for tax years beginning after Dec. 31, 2007.