Tax

The IRS hasn't focused on S corporation audits in 21 years, and needs to update its data so that it can tweak its audit machinery to select audits more effectively. Therefore, they plan to select 5,000 S corporations for random audits under the National Research Program.

The dominant players in application service provider tax prep technology continue to consolidate their positions. But there is still room for smaller ones to enter the market.

On a professional level, tax time for me means a series of futile attempts to contact CPAs and whole firms that have basically gone into hibernation until the tulips and crocus begin to bloom. Even the simplest request, such as confirming an address or partner count, is often met with a sweeping anathema from an otherwise sunny receptionist, who sounds more like an enraged stevedore who got his hand caught in a gaffing hook.

* IRS SUSPENDS PLAN TO CLOSE ASSISTANCE CENTERS: The Internal Revenue Service will scrap its plans to close 68 Taxpayer Assistance Centers after Congress insisted the agency further study the potential impact of the closures.

The AMT Credit Fairness Act has been introduced in the House with significant bipartisan sponsorship. The bill provides relief for incentive stock option alternative minimum tax victims by accelerating the refund of stranded ISO AMT overpayment credits that, under current law, would not be returned within the taxpayer's lifetime.

The Public Company Accounting Oversight Board adopted new ethics and independence rules for auditors that place clear limits on the ability of accounting firms to offer tax services to their audit clients.

A former accountant at bank HVB Group pleaded guilty in the first prosecution arising from a Senate investigation of tax shelters.

Negotiations are continuing between federal prosecutors and KPMG, and an indictment of the firm for its role in selling tax shelters appears to have been ruled out, according to published reports.

The Internal Revenue Service was recognized for its community-based partnerships linking low-income taxpayers with organizations that prepare tax returns for free, ensure they properly receive tax credits and assist them with ways to build financial savings.

The unexpected jump in tax receipts projected for the fiscal year ending in September provides additional momentum for real tax reform, according to observers.