Tax

Unclaimed refunds totaling more than $2 billion are awaiting about 1.7 million people who failed to file an income tax return for 2001, according to the Internal Revenue Service. However, in order to collect the money, a return must be filed with the IRS no later than April 15, 2005. The IRS estimates that half of those who could claim refunds would receive more than $484. In some cases, individuals had taxes withheld from their wages or made payments against their taxes out of self-employed earnings, but had too little income to require filing a tax return. Some taxpayers may also be eligible for the refundable Earned Income Tax Credit. "The window is closing for 2001 refunds," IRS Commissioner Mark W. Everson said. "As soon as you send us your tax return, you'll get your money. But if you don't file, you won't get anything." In cases where a return was not filed, the law provides most taxpayers with a three-year window of opportunity to claim a refund. If no return is filed to claim the refund within three years, the money becomes the property of the U.S. Treasury. For 2001 returns, the window closes on April 15, 2005. The law requires that the return be properly addressed, postmarked and mailed by that date. There is no penalty assessed by the IRS for filing a late return qualifying for a refund.

Super-regional CPA and consulting firm Virchow Krause has named Richard Shapland as director of international tax services, effective immediately. Shapland, who will be based in Chicago, comes aboard at Virchow Krause after serving as managing director of international taxes for Big Four firm Ernst & Young. At VK, Shapland will be responsible for all international and cross-border tax issues. International tax services is part of VK's International Services Group, a global services umbrella that provides revenue enhancement programs, marketing and business development, global project management, management consulting, compliance support, and strategic-sourcing programs. The firm ranked No. 18 on Accounting Today's 2004 Top 100 Firms list with revenues of $104.1 million.

The Public Company Accounting Oversight Board's plan to place new restrictions on the ability of accountants to offer tax services to their audit clients doesn't go far enough to restore investor confidence in financial reporting, critics of the accounting profession warned.

Tax prep conglomerate H&R Block and the Association of Community Organizations for Reform Now have teamed up in a partnership to help boost awareness of the Earned Income Tax Credit and to reduce filing costs for low-income taxpayers.

Although nearly 65 percent of Earned Income Tax Credit returns are prepared by paid preparers, the error rate is roughly the same as when the return is prepared by the individual, according to Internal Revenue Service spokesperson Nancy Mathis.

Long-awaited final Circular 230 regulations, issued Dec. 17, 2004, govern the latest set of standards on attorneys, accountants and other professionals providing not only tax shelter opinions but also tax advice in general. It is how these standards relate to general tax advice that concerns the vast majority of tax practitioners. These regs are part of a multi-pronged effort on the part of the Internal Revenue Service to deter the involvement of promoters, advisors and investors in abusive transactions.

IRS UPDATES SALES TAX TABLE PUBLICATION: The Internal Revenue Service has updated for three states the tables that taxpayers can use to determine whether they'll benefit from deducting sales tax rather than state and local income taxes. The agency updated the optional sales tax tables in Publication 600 for Arkansas, California and Virginia. The tables, which give taxpayers a sales tax deduction amount as an alternative to saving receipts throughout the year and tabulating the amount actually paid, were updated to reflect sales tax changes made by the three states during 2004; the original tables were based on the states' sales tax rates as of Jan. 1, 2004.

Regional powerhouse J.H. Cohn has expanded its New York tax practice with the addition of tax consulting firm Becker & Co. LLC.

Just in time for consideration by President Bush's new bipartisan panel on tax reform, National Taxpayer Advocate Nina Olson told Congress that the complexity of the Internal Revenue Code is the most serious problem facing both taxpayers and the Internal Revenue Service.

President George W. Bush has named two former senators to lead a new nine-member bipartisan panel charged with arriving at options to reform the tax code.