Tax

With the repeal of the federal estate tax set for 2010 and its reinstatement scheduled just one year later, estate tax planning has become more complicated than ever. Wealthy clients need to incorporate flexibility into their current plans while taking advantage of favorable planning opportunities.

The U.S. Treasury Department said that it plans to begin negotiating a protocol with the government of Switzerland to exchange more tax information, opening a window on formerly secret Swiss bank accounts.

The Internal Revenue Service has suspended an enrolled agent from practicing before the agency after his clients complained that he did little to help them settle their tax disputes.

Like many good ideas, Weiser's Buddy System started over drinks.

An early-season surge in tax filing - attributed by most observers to the declining economy - has thus far characterized this year's filing season.

Washington, D.C.-With millions of Americans needing help to survive the recession, job losses and home foreclosure, Congress is urging the Internal Revenue Service to cut some slack for taxpayers who are "struggling to stay afloat while their debts increase."At new hearings into whether IRS practices and policies are causing unwarranted pain for those suffering through the economic downturn, House Ways and Means Oversight Subcommittee Chairman John Lewis, D-Ga., called on the tax service to let people know what steps to take if they owe taxes and want to pay, but cannot.

Many are surprised to learn that while it sometimes appears that the Internal Revenue Code reaches into every aspect of our lives, it lacks focus in addressing the complex tax consequences that face the unfortunate victims of Ponzi schemes.Of course, if the reports are true, there may have never before been a Ponzi scheme like Bernard Madoff's, so it is time to take a fresh look at things.

MORE TAXPAYERS TO FILE ONLINENew York - Approximately 40 percent of online households plan to file their federal taxes via the Internet this year, up from under 34 percent four years ago, according to a report by researchers at the Conference Board and TNS, which surveyed 10,000 households and found that consumers' concerns about conducting financial transactions online have been easing over the last few years.

The $787 billion American Recovery and Reinvestment Act of 2009 (P.L. 111-5, Feb. 17, 2009) provides almost $300 billion in tax relief. As a stimulus package, the bill makes available over $280 billion in tax relief in the short term in 2009 and 2010. For business, over $75 million in tax benefits are provided for 2009 and 2010. Although most of that is accelerated depreciation, which, over a 10-year period when tax bills are "scored," almost evens out, the immediate benefits to business taxpayers are substantial. What's more, to avoid discouraging taxpayers from making investments and purchases before the act was passed, most of the tax incentives are retroactive to Jan. 1, 2009.While some of the business benefits can help businesses of any size, the act targets significant benefits at small businesses in particular. This is consistent with the Obama administration's view that small business is the principal engine for jobs growth. Notably, the act seeks to encourage spending for major purchases of capital equipment by extending enhanced small-business expensing and 50 percent first-year bonus depreciation. Small businesses that are incurring losses now but made profits within the last five years can take advantage of enhanced net operating loss carrybacks. S corporations and owners of qualified small-business stock also received benefits that can reduce their taxes.

Despite all the tax changes in the past year to stimulate the economy, the Internal Revenue Service appears to be weathering the tax season well so far.