Tax practice

A domestic focus of President Bush’s State of the Union address was a proposal aimed at expanding access to affordable health insurance that faces a tough political road to becoming reality.

The federal government will run a deficit of $172 billion in fiscal 2007, the Congressional Budget Office said yesterday.The projected deficit will drop to $98 billion in 2008 and flatten out by 2012/ The deficit for the 2006 fiscal year, which ended Sept. 30, was $248 billion.

Thanks to a seldom-observed holiday, the Internal Revenue Service announced that taxpayers will have until April 17, to file their 2006 returns and pay any taxes due.

In response to requests from Congress, the Government Accountability Office has released a new report outlining a trio of approaches that would reduce the tax gap.

Officials in Kansas City, Mo., told a local paper that more than two dozen computer tapes containing confidential taxpayer information are missing.

The Internal Revenue Service has launched a new Internet-based version of its popular Exempt Organizations Workshop covering tax compliance issues confronted by small and midsized tax-exempt organizations, including charities and churches.

More than a dozen senators have signed on to sponsor a bill that would stop the Internal Revenue Service from using private debt collectors to collect unpaid taxes.

With just about every politician in Washington in agreement that some permanent fix needs to be made to the alternative minimum tax, the Tax Policy Center has released a report outlining a number of possibilities.Created as a parallel tax structure in 1969 that was aimed at preventing the super-rich from using deductions and shelters to avoid paying taxes, inflation has turned the AMT into a different monster. The center’s report notes that fewer than 400,000 families were affected by the tax in 1985, this year, about 3.8 million households will see their tax bills rise by an average of $6,813.

My first experience with the minimum wage was in 1972 as a movie usher for the old Century Theater chain on Long Island.

The Internal Revenue Service has released a fact sheet explaining the 2006 alternative motor vehicle credit allowed for 44 automobiles certified as eligible.

On a voice vote, the Senate Finance Committee approved a bill that would curb one element -- deferred compensation -- of the sometimes exorbitant pay packages awarded to corporate executives.The committee agreed to change rules that allow some executives to collect millions of dollars in tax-deferred accounts. According to congressional estimates, limiting that perk would raise upwards of $800 million over the next decade.

When it comes to the foreign earned income exclusion, a federal appeals court has upheld a ruling that Antarctica does not qualify as a foreign country.The Seventh Circuit court affirmed a U.S. Tax Court decision that the 2001 earnings of a U.S. citizen living in Ross Island, Antarctica, are subject to federal taxes.

The Internal Revenue Service announced that both its e-file and Free File programs are now accepting taxpayer returns.The agency is continuing its push to have taxpayers elect to file their returns electronically, boasting that users who e-file and choose direct deposit can receive their refund in half the normal time. All return information in protected through encryption and taxpayers will receive acknowledgement within 48 hours that the IRS has accepted the return.

The U.S. Tax Court will now require the Internal Revenue Service to file an answer in all small tax cases.The amendments to the court’s rules will apply to all petitions filed after March 13. Small tax cases are currently defined as cases where the amount of deficiency does not exceed $50,000.

Last week, it was again time for National Taxpayer Advocate Nina Olson to roll out yet another congressionally-mandated report detailing 20 of the biggest problems facing taxpayers.What’s impressive is that, for yet another year, her beefs were so fresh.

Business taxpayers in Illinois will be the first in the country able to pay state withholding and federal taxes at the same time, through a single system.

The Internal Revenue Service will begin processing both e-file and paper tax returns that include claims for the major “extender” provisions enacted by Congress on Feb. 3.

Joining an increasingly loud chorus, National Taxpayer Advocate Nina E. Olson released her annual report to Congress, designating the alternative minimum tax and the federal tax gap as the most serious problems facing taxpayers.Olson also reserved a healthy dose of the 80-page-report’s scorn for concerns about the Internal Revenue Service’s collection policies and the transparency of IRS information to the tax-paying public.

Partnership taxpayers can electronically file now use the modernized e-File platform when filing Form 1065, “U.S. Return of Partnership Income,” and Form 1065-B, “U.S. Return of Income for Electing Large Partnerships.”

Liberty Tax Service announced the acquisition of eSmartTax, the income tax preparation business of San Jose, Calif.-based C&S Technologies.