As the year winds down, tax professionals are gearing up for the coming season by checking supplies, test-driving software, training additional staff, and packaging year-end planning tips to their clients."It's never too late for tax planning," said New York City-based CPA Marc Albaum. "You've got till the ball drops to take action, and if you do it later than that, then you've got an early start for 2006."

The Internal Revenue Service recently estimated that the 2001 tax gap ranged from $312 billion to $353 billion. Although the IRS said that it would eventually recoup some of that shortfall, it still leaves a huge net tax gap that the IRS sets at between $257 billion and $298 billion.Previous estimates of the tax gap relied on research conducted for tax years 1988 and earlier. The National Research Program, which examined 2001 returns, was completed in the fall of 2004, and provided the data that the IRS now uses to project estimates of the tax gap. The study found that underreporting of income is the largest component of the tax gap, accounting for more than 80 percent of the total. Non-filing and underpayment account for about 10 percent each.

Until now, individual taxpayers who were unable to meet the April 15 tax return filing deadline could file a Form 4868 and receive an automatic four-month filing extension until August 15. And if August 15 didn't provide enough time to get the tax return completed, taxpayers could provide a good reason for the delay on a Form 2688 and request another extension for two months until October 15.Effective for tax returns due after Jan. 1, 2006, the kinder, gentler, more cost-effective Internal Revenue Service has done away with the second extension request and changed the initial automatic extension period from four months to six. Not only will this action remove the need for taxpayers to come up with a reason for requesting the extra two months to file tax returns, it will cut back on lots of paperwork and processing time.

The Justice Department has filed to stop Ohio twin brothers Joseph and Edward Flickinger from promoting alleged tax fraud schemes.The suit also asks the court to permanently bar the Flickinger brothers from preparing federal income tax returns for others.

The Ohio Department of Taxation will begin accepting tax amnesty applications on Dec. 15.

A new study out of think tank the Center on Budget and Policy Priorities says that despite recent revenue growth and budget surpluses in some states, most states continue to feel the after-effects of a recession that hit in 2000.

An European Union court ruled that British retailer Marks & Spencer PLC can deduct losses from other countries on its tax bill if the company can't claim the losses in those countries.