Tax

The Internal Revenue Service has rolled out its annual list of the 12 most blatant tax return scams. Topping the "Dirty Dozen" are fraudulent claims for the one-time Telephone Excise Tax refund. Also new to the list this year are abuses pertaining to:* Roth IRAs. Taxpayers should be wary of advisors who encourage them to shift under-valued property to these IRAs. In one variation, a promoter has the taxpayer move under-valued common stock into a Roth IRA, circumventing the annual maximum contribution limit and allowing otherwise taxable income to go untaxed.

The measures to close the tax gap offered by President Bush in his 2008 budget are somewhat modest, according to observers.The president's $2.9 trillion budget contains a number of legislative proposals to close the gap in four areas: by expanding information reporting, improving compliance by businesses, strengthening tax administration and expanding penalties.

Tax prep giant H&R Block Inc. announced that it has opened up shop in the online virtual universe known as Second Life.Second Life is entirely built and owned by its residents, who have created a 3-D world that includes homes, vehicles, nightclubs, stores, landscapes, clothing and games. Last month, the site passed the 4-million-account threshold, though many accounts are not active and some residents have multiple accounts.

A federal judge dismissed five counts of filing false tax returns, to go with four counts of money laundering, which had been levied against the self-proclaimed “Guru of Ganja.”Ed Rosenthal, a medical marijuana activist and columnist for High Times, had originally been arrested on three charges of growing pot. However, during his 2003 trial, he wasn’t allowed to cite in his defense the fact that the pot was for medical marijuana dispensaries -- a point which several jurors later said that the government should have allowed them to hear.

Edward A. Weinstein of New York will receive the New York State Society of CPAs’ Distinguished Service Award.

A ruling from the Internal Revenue Service -- that the workers who collect urine samples for drug testing are employees and not independent contractors -- could cost the NFL millions in benefits.

The Internal Revenue Service announced that through March 13, more than 2.6 million taxpayers have electronically filed their returns using the agency’s Free File program. TThough that’s about 4 percent drop from the number of returns filed during the same time last year.

Federal prosecutors have arrested a New York-based Internal Revenue Service agent on tax fraud charges, according to a published report.Harry Willner, 59, who has been an IRS agent for more than three decades, was charged with five counts of tax fraud on Monday. Federal prosecutors have accused him of cheating on his personal income taxes, as well as offering loopholes to other taxpayers.

The Canada Revenue Agency announced that Canadians should be able to resume e-filing their tax returns before the end of the week, after a computer glitch discovered last week put the processing of more than 1 million tax returns on hold.CRA Commissioner Michel Dorais said that the problem, a malfunctioning software patch, was not the work of hackers, or a computer virus, and did not threaten the security or privacy of taxpayer data. He said the agency’s services, including E-file, Netfile and a “My Account” feature should be back online no later than March 15. Dorais said that the data for any taxpayers who had already filed was still intact, and that the personalized account feature would allow taxpayers to track the progress made on their return.

A Goldman Sachs investment banker, who earned $115,000 in 2002, will not be able to take all of the $55,000 charitable contribution deduction she took for that tax year -- $49,000 of which she took for donations of used clothing to a thrift store.