Tax planning

The American Jobs Creation Act of 2004 provides that the amount of a deduction for charitable donations after 2004 of qualified vehicles where the claimed value is more than $500 depends on the charity's use of the donated vehicle.Qualified vehicles include motor vehicles, boats and planes that aren't inventory or held for sale in the ordinary course of business. The Internal Revenue Service has issued Notice 2005-44 to provide detailed guidance on the charitable contribution rules that apply to qualified vehicles that are donated after 2004.

The Public Company Accounting Oversight Board has scheduled a meeting for Tuesday and will vote on finalizing two rules proposed in December and March. One rule deals with auditor independence and tax shelters, while the second concerns weak internal controls.

Taxpayers and tax professionals who filed for an extension can use e-file to file their 2004 tax returns, according to the Internal Revenue Service.

The government's Base Realignment and Closure Commission voted unanimously on Tuesday to review a Pentagon plan to move thousands of Defense Department finance and accounting jobs.

Already with a lengthy to-do list before adjourning for its August recess, reports have Congress moving to address the future of the estate tax soon.

A group of congressional representatives has asked the Internal Revenue Service to hold off on plans to shut down 68 of the agency's Taxpayer Assistance Centers.

Reports are that lobbyists for Accenture Ltd. will be successful in convincing congressional tax writers to make small changes in a technical corrections bill that would that ensure the consulting group is grandfathered in under a corporate tax bill originally passed in 2004.

The White House midyear budget says that an increase in tax revenues, mostly coming from relatively wealthy taxpayers, along with a good stock market performance, will drop the deficit to $333 billion this year.

Corporate officers or authorized agents can now sign employment tax forms by facsimile, including alternative signature methods such as computer software programs or mechanical devices.

The Financial Accounting Standards Board published a draft of a proposed interpretation, "Accounting for Uncertain Tax Positions," yesterday. The draft seeks to reduce the diversity in practices associated with recognition and measurement in the accounting for income taxes.

Avalara, a provider of Web-based sales tax solutions for the small and midsized business market, and Taxware, a provider of global transaction tax calculation and compliance software, have entered into a strategic partnership.

Fixing the controversial alternative minimum tax has been termed a priority for the President Bush's Tax Reform Panel, according to a key White House advisor.

The popularity of donating used cars to charity has increased in recent years, to the point of creating a subculture of companies that do nothing but collect and distribute old cars. Billboards, radio ads, flyers in the mail - they all attempt to encourage people to donate vehicles to charitable organizations in return for hefty tax deductions.

An initiative to breath life into the harmonization of corporate taxation rules across the European Union - which got a nudge from the European finance ministers' meeting in September - is now rumbling its way through the Brussels-based EU institutions.

* IRS CONTINUES CRACKDOWN ON FRIVOLOUS CASES: The Internal Revenue Service is reminding taxpayers that the agency isn't kidding around when it comes to frivolous cases aimed at delaying tax collections.

The decline in ethics that took place over the 1990s hurt not only the taxpayers who took positions they shouldn't have taken, but it also hurt responsible tax practitioners, who saw their business taken away by the more aggressive practices, according to Internal Revenue Service Commissioner Mark W. Everson.

National Taxpayer Advocate Nina E. Olson urged the Internal Revenue Service to focus more broadly on steps to increase voluntary compliance.

Some taxpayers apparently believe that the ability to claim a charitable deduction for donation of an automobile ended on Dec. 31, 2004. The advertisements on the radio would make one believe that nothing has changed, and that you can still claim a deduction for donated automobiles just as before Jan. 1.

Looking to accelerate its growth in the online and packaged software tax industry, H&R Block yesterday acquired San Diego-based TaxNet Inc., a provider of customized online tax services. Terms of the deal were not disclosed.

While the Internal Revenue Service is working overtime to send tax cheats to prison, officials at the tax service are discovering that a considerable portion of them are already behind bars.