Tax planning

Tax research and products provider RIA, a Thomson business, has upgraded its proprietary Checkpoint service, adding a research tool that can be used for tax and auditing simultaneously.The "bridge" comes in the form of RIA sister company PPC's e-Practice Aids, Microsoft Word and Excel versions of all of the editable practice aids in the related PPC Guide, including those from WG&L, and materials from the Securities and Exchange Commission.PPC's e-Practice Aids work with paperless engagement software or with Word and Excel."One thing we heard from our customers, tax people were saying 'There was a reason we work in taxes, because we didn't want to do auditing'" said Ron Burkett, RIA's director of product management, in response to Sarbanes-Oxley. "It helps them bridge over to something they may not be that familiar with."Checkpoint is featuring a series of other enhancements as well, including a customized home page capability, which allows users to customize their research platform by selecting from a list of predefined views including accounting and auditing; corporate finance; tax; and estate and retirement planning, and decide their significance. In addition, users can create their own home page by selecting the content panes based on content they subscribe to that best fits their research needs. For more information about Checkpoint, visit http://ria.thomson.com or call (800)-950-1216.

Five Treasury nominees were sworn in this week, including a new assistant secretary for tax policy, whose appointment has been held up by a senator for nearly five full months.Last week, Sen. Max Baucus, D-Mont., the ranking member of the Senate Finance Committee, agreed to release his block on Eric Solomon’s nomination. After approving the appointment of Treasury Secretary Henry Paulson in July, Baucus said that he would refuse to allow the committee to vote on any other nominations until he was satisfied with the agency’s plans to close the tax gap -- the difference between taxes paid and taxes owed in the country, which his estimates put at some $300 billion annually.

The Internal Revenue Service announced that it will now sell individual income tax return statistics by zip code -- charging $25 per state, or $500 for the entire nation.In previous years, the data, based on addresses shown on the returns when filed with IRS, had been made available for free. Zip code tables for both the 2002 and 2004 tax years are available for purchase.

The Treasury Inspector General for Tax Administration has released a report to Congress, outlining a trio of priority objectives for the upcoming year. The report highlights the office’s audit and investigative work conducted between April 1 and Sept. 30 of this year. During those six months, TIGTA reports that it has completed 118 audits, and in the process, identifying more than $258 million in total cost savings and $1.4 billion in increased or protected revenue.

Retroactive beneficial tax legislation, such as the just-passed “Tax Relief and Health Care Act,” is always welcome.The legislation, which President Bush is expected to sign shortly, contains numerous tax provisions, including a slew of tax benefit extenders, energy tax incentives, health savings account changes, tax administration modifications and technical corrections to earlier tax legislation.

A New York judge has dismissed a lawsuit against H&R Block Inc. brought in March by New York Attorney General Eliot Spitzer.Spitzer, now New York’s governor-elect, has said he will likely re-file the suit before the end of the year. The original lawsuit accused Block and its subsidiary, H&R Block Financial Advisors Inc., of fraudulently marketing retirement savings accounts to customers and drew a flurry of publicity. Two months later, Spitzer amended the lawsuit, accusing Block of punishing employees who refused to sell the accounts.

Aside from identifying a number of nuances in last year’s tax law changes and interpreting the effects of congressional leadership turnover, a new tax guide should help midsized business owners monitor a series of federal tax trends for 2007.Published by national CPA firm RSM McGladrey, the “2006 Tax Planning Guide” includes a Top 10 list of tax-planning strategies for midsized companies and issues owners should watch for on the horizon.

There’s no question that the Free File program, the Internal Revenue Service’s partnership with the manufacturers of tax prep software, is a win-win deal on many fronts for both parties.In exchange for the manufacturers in the Free File Coalition making free filing offers to taxpayers on the basis of such factors as income (in 2007, taxpayers making less than $52,000 a year get access), the IRS has agreed not to offer taxpayers its own free alternative. The program, which includes participation from electronic prep heavyweights Intuit and H&R Block, is now in its fifth year.

Got a question for the Internal Revenue Service that needs answering? Why not ask your local stakeholder liaison? Who’s that? They are IRS employees who are attempting to establish a relationship with those representing small business and self-employed taxpayers. The liaisons provide very specific information about the policies, practices, and procedures followed by the IRS.Take for example the Issue Management Resolution System (IMRS), a stakeholder liaison initiative intended to capture, develop, resolve, and respond to significant national and local stakeholder issues. Under the program, practititioners’ notify IRS of concerns about IRS policies, practices, and procedures, and IRS researches the issues to bring about resolution.

The Washington headquarters of the Internal Revenue Service reopened to the agency’s employees last week, following some $25 million in repairs made necessary after massive June flooding.

In a letter released last week, the Internal Revenue Service said that a publicly-traded acquiring corporation can deduct amounts it paid to settle a class action securities litigation lawsuit against the target entity that was triggered by misstatements in the entity’s reported earnings.The ruling is directed only to the taxpayer requesting it and may not be used or cited as precedent.

With Democrats scheduled to take charge of both Houses of Congress in 2007, most of the Bush administration's top tax priorities figure to be shuttled to the legislative back burner for the next two years.But there is at least one island of common ground that has both sides of the aisle and the accounting profession clinging to hope that the next Congress may finally find the political will to resolve a looming nightmare for many Americans - the alternative minimum tax.

As the year winds down and holiday anticipation builds, tax professionals are performing their annual rituals of getting ready for tax return season by checking supplies, test-driving software, training additional staff and packaging year-end planning tips for their clients."It's never too late for tax planning," said New York-based CPA Marc Albaum. "You've got until the ball drops to take action, and if you do it later than that, then you've got an early start for 2008."

GAO GIVES GOOD MARKS TO IRS APPEALS OFFICE: The Government Accountability Office offered some recommendations aimed at upping efficiency, but said that the Internal Revenue Service Office of Appeals has been doing a good job handling its process for collection due process appeals.Under the IRS Restructuring and Reform Act of 1998, taxpayers facing liens or levies can request a collection due process appeal hearing with the IRS office. By 2005, those cases represented about a quarter of the office's workload.

As evidence of the recent merger mania within the tax prep arena, customers from five different vendors were represented at last month's CCH and Creative Solutions user conferences, which were held in Boca Raton and Orlando, Fla., respectively.Both CCH and CSI have made recent purchases of other vendors - Creative Solutions merging Dunphy Systems into its user base, and CCH purchasing ATX Kleinrock and TaxWise as continuing entities.

Action star Wesley Snipes, who in October, was charged with fraudulently claiming tax refunds of nearly $12 million, has surrendered to authorities here.

The Tax Policy Center has released a series of data tables taking a look at the effect of the major tax changes enacted since 2001.For each table, the center compares the amount of tax owed under current law with the amount that would have been paid if the law had stayed the same as it was in 2000. Estimates are computed both for dollar-income classes (for example, $40,000 to $50,000) and for percentiles of income distribution (for example, middle quintile, which includes households in the middle 20 percent of the income distribution).

Senators Chuck Grassley, R-Iowa, and Max Baucus, D-Mont., struck an agreement with House lawmakers on bipartisan, bicameral legislation to extend expired and expiring tax, health, trade, and other provisions.

The 2006 elections saw the Democrats taking control of both the House and the Senate for the first time in 12 years. The shift in the House is probably the most significant.In the House, the majority party controls the agenda: what hearings are held, what legislation gets taken up by committees. The Democratic majority is a narrow one, just as the Republican majority had been a narrow one. Many of the newly elected Democrats were chosen to appeal to moderate voters, so it is far from clear that there has been a major shift in the view of House members on tax issues. Still, control of the agenda will tend to mean that Democratic proposals, rather than Republican proposals, will emerge from the House Ways and Means Committee.

Politicking is still causing a number of popular tax breaks to be held up in Congress.With the 109th Congress scheduled to wrap up its business at the end of next week, a number of expiring tax measures still have yet to be renewed.