Tax

The National Association for the Advancement of Colored People said that it is refusing to comply with an Internal Revenue Service request for documents that came as part of the agency's investigation into alleged improper political bias by the civil rights group.

The Joint Committee on Taxation has suggested over 60 options to close the $311 billion gap between taxes owed and collected. The report, requested by Sen. Chuck Grassley, R-Iowa, chairman of the Committee on Finance, and ranking member Sen. Max Baucus, D-Mont., consists of numerous revenue raisers, in addition to compliance provisions. The largest revenue raiser, to the tune of $164 billion, is a proposal to include in FICA wages salary reduction amounts used to provide benefits under a cafeteria plan or to provide qualified transportation fringe benefits. Proposals affecting individual income tax include a repeal of the exclusion for employer-provided care, making the dependent care credit the exclusive means for receiving tax benefits for dependent care expenses; a modification of the "kiddie tax" by increasing the age of children to which the kiddie tax provisions apply from under 14 to under 18; and a repeal of the deduction for interest on home equity indebtedness. "High-priced lobbyists won't be able to eat their eggs Benedict when they see this report," Grassley said. Grassley said that he was especially pleased to see the report's extensive discussion about possible changes in the law governing nonprofits and charitable donations. "These recommendations should help to remove the rose-colored glasses that a lot of people use to view tax-exempt organizations," he said.

The 2006 budget reportedly will not address the hot-burner issue of revamping or eliminating the controversial alternative minimum tax or other tax reforms, but will allow President Bush's recently appointed tax reform panel to tackle them. According to Tax Analysts, the bipartisan tax reform panel is expected instead to examine tax reform options that will make the code simpler and fairer. The panel is supposed to make recommendations to Treasury Secretary John Snow by July 31. In her recent report to Congress, National Taxpayer Advocate Nina Olson recommended the repeal of the AMT, which she described as the biggest problem of the Internal Revenue Code. However, costs to fix the AMT are estimated to be roughly $700 billion.

California is preparing to kick off its first tax amnesty program in two decades, in hopes of narrowing its whopping budget deficit.

The Treasury Department and the Internal Revenue Service have published a new revenue procedure that offers guidance on the like-kind exchange of a home.

CCH Tax and Accounting has unveiled a Web site for sales and use tax professionals.

The U.S. Supreme Court has ruled unanimously that the portion of a money judgment or settlement paid to a plaintiff's attorney under a contingent-fee agreement is income to the plaintiff.

A federal judge here has reportedly denied a request by BDO Seidman LLP to force a group of its former tax shelter clients to arbitrate their complaints out of court, according to a published report.

Turnaround specialist firm Alvarez & Marsal has expanded its tax advisory unit, adding eight managing directors in several of its regional locations, as well as unveiling an office here.

Tax law changes, expanded electronic services from the Internal Revenue Service, simplified tax filing rules for certain forms and an expected increase in total returns mark the start of the 2005 tax filing season.