The Internal Revenue Service has expanded the number of tax professionals who can use its suite of e-Services incentive products. Effective immediately, tax professionals who e-file any combination of five or more accepted individual and business tax returns in a calendar year can use these e-Services products: disclosure authorization, electronic account resolution and transcript delivery. These three products increase tax filing efficiency and save time and resources for tax practitioners. When launched in the summer of 2004, the e-Services incentive products were reserved for those who e-filed 100 or more individual returns. "These services make it easier for taxpayers to deal with the IRS and obtain information to help their clients," said IRS Commissioner Mark W. Everson. Other e-Services products available to all tax professionals include: e-Services registration, preparer tax identification numbers, IRS e-file applications, and taxpayer identification number matching.

The President's Advisory Panel on Federal Tax Reform will hold its fifth meeting on March 23 in New Orleans. The focus will be on additional perspectives about the fairness of the tax code and how the tax system affects families. The first panel will discuss, "What Is Fairness and How Can it Be Measured?" Panel members include Bob Greenstein, founder and executive director of the Center on Budget and Policy Priorities, and William W. Beach, director of the Center for Data Analysis of The Heritage Foundation. The topic for the second panel is "Low-Income Taxpayers." Its members include Hilary Hoynes, professor of economics at the University of California at Davis: Mark Moreau, co-director of Southeast Louisiana Legal Services; and David Marzahl, executive director of the Center for Economic Progress. The third panel, "Tax Treatment of Families," will include presentations by Eugene Steuerle, senior fellow at the Urban Institute; Mark Pauly, a professor at the Wharton School of the University of Pennsylvania; and James Alm, a professor at the Andrew Young School of Public Policy of Georgia State University.

The Treasury Inspector General for Tax Administration said that while security has improved for information technology systems at the Internal Revenue Service, IRS employees remain a vulnerable target for hackers. As proof, of the 100 IRS managers called by TIGTA employees -- who claimed to be IT helpdesk personnel hoping to fix a problem -- 35 surrendered their login names and actually changed their passwords to those suggested by TIGTA personnel. The TIGTA said that the breach of security could signal an opportunity for hackers or former IRS employees. The TIGTA recommended that the IRS's Office of Mission Assurance and Security Services issue periodic reminders to IRS employees about susceptibility to the hacker threat. On a brighter note, however, the recent test results showed a 50 percent improvement versus a similar test conducted in 2001.

The Internal Revenue Service has clarified in Rev. Rul. 2005-11 that interest paid on a loan that is refinanced more than once will retain its status as qualified housing interest, to the extent that the amount of the loan is not increased. That interest is deductible for alternative minimum tax purposes. Any other interest on amounts borrowed that are not used to acquire, construct or substantially improve any property that was a principal residence or qualified residence may not be deducted for AMT purposes, the service said. Revised instructions to Form 6251, which include a worksheet to help taxpayers determine the correct home mortgage interest adjustment, will be posted on the IRS Web site, www.irs.gov

Electronic filing continues to show a strong increase, with e-filed tax returns running more than 6 percent ahead of last year, according to the Internal Revenue Service. Out of 61 million returns filed as of March 11, 42.7 million, or nearly 70 percent, were e-filed -- up from 65 percent the previous year. While this percentage is expected decline as April 15 approaches, the IRS expects for the first time to have more than half of all individual tax returns filed electronically. Out of tax returns e-filed so far, the biggest increase is among those who prepare their own returns on a home computer -- 10.6 million returns, up more than 14 percent over results from the same period last year. The jump in computer use coincides with another strong year from the Free File program. The IRS and a consortium of tax software manufacturers offer free services through Free File, which is available at www.irs.gov. More than 3.33 million returns came in through Free File through March 9, which is a 44 percent increase from 2.32 million returns for the same period last year.

Internal Revenue Service Commissioner Mark W. Everson praised the agency's improvement in taxpayer service and its renewed emphasis on enforcement of the tax laws. In a speech at the National Press Club, Everson noted that the playing field is no longer tilted toward tax evaders, with only the amount of tax owed at risk. "Now they might have to pay the entire tax, interest and a stiff penalty," he said. "A taxpayer might have to wrestle with questions like, 'How much am I going to have to pay the lawyers and expert witnesses to litigate this thing?' And going to court is a public matter. Damage to one's reputation is a potential factor." Everson said that as the tax reform process unfolds, he doesn't expect to offer support for, or to oppose, any particular policy options. However, he offered these pointers to consider when reforming the code: _ Construct a tax system that recognizes the dynamic of an evolving economy; _ Assess policy options for their potential impact on attitudes towards compliance; _ Any new system should be administratively feasible; _ When looking at policy options, don't compare a sub-optimized existing system to a perfect, theoretical system; and, _ Recognize that transition to a new code must be properly planned and managed, or it may take decades to recover.

In an effort to minimize disputes regarding whether a truck body satisfies the weight-based exclusion provided in Section 4051(a)(2), the Internal Revenue Service, in Rev. Proc. 2005-19, has established four truck body safe harbors. Section 4051(a)(2) provides an exclusion from the tax imposed by Section 4051(a)(1) for truck chassis and bodies suitable for use with a vehicle that has a gross vehicle weight of 33,000 pounds or less. Similarly, Section 4051(a)(3) provides an exclusion for truck trailer and semi-trailer chassis and bodies suitable for use with a trailer or semi-trailer that has a GVW of 26,000 pounds or less. The IRS announced that it will not challenge a seller's determination that any of the following classifications of truck body types meet the "suitable for use" standard and sales thereof are excluded from the retail excise tax pursuant to Section 4051(a)(2): 1. Platform truck bodies 21 feet or less in length; 2. Dry freight and refrigerated truck van bodies 24 feet or less in length; 3. Dump truck bodies with load capacities of eight cubic yards or less; or 4. Refuse packer truck bodies with load capacities of 20 cubic yards or less. Other body types may also still satisfy the "suitable for use" standard if the seller can establish that, pursuant to Reg. 145.4051-1(a)(4), the truck body has practical and commercial fitness for use with a vehicle having a GVW of 33,000 pounds or less. Rev. Proc. 2005-19 is effective for sales on or after April 4, 2005. In the case of sales before April 4, 2005, the IRS won't challenge sellers who take positions consistent with the revenue procedure's safe harbors.