Tax

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.

The U.S. House of Representatives passed a Treasury appropriations bill last week to provide the Internal Revenue Service with $10.5 billion in fiscal year 2006. The Senate has yet to take up consideration of the bill.

Senators Connie Mack and John Breaux, chairman and vice-chairman of the President's Advisory Panel on Federal Tax Reform, respectively, announced that the panel's 10th meeting will be held on Wednesday, July 20. The meeting will be held at the Renaissance Hotel here. The panel has held nine meetings in which witnesses testified about problems with the current tax system and various options for reform. At this meeting, panel members will discuss issues associated with reform, but there will not be any testimony presented. The President's Advisory Panel on Federal Tax Reform was established by President Bush in January and charged with recommending reforms to the tax code that would make the U.S. tax system simpler, fairer and more growth-oriented. The panel's final recommendations are due by Sept. 30, 2005.