Tax

In an early spurt of spring cleaning, I came across an ancient, yellowed clipping from the New York Post. Although there was no date on it, it is clearly from 1986, the year the Bears won the Super Bowl and Ronald Reagan got his tax reform. It tells the story of then-Treasury Secretary James Baker, who in his enthusiasm for both rap music and a simpler tax code, broke out into rhyming couplets during a rally to tout tax reform. His poetic achievement was based loosely on the Chicago Bears’ “Super Bowl Shuffle,” which members of the team recorded en route to their victory in Super Bowl XX, and which reached No. 41 on the Billboard charts before actually landing a Grammy nomination.

The U.S. Tax Court found that a non-CPA tax preparation and bookkeeping business is an accounting service and subject to the 35 percent tax applicable to qualified personal service corporations.A Las Vegas firm had argued that because it was not a public accounting firm, its employees didn’t perform services that required them to be CPAs and because state law doesn’t state that accounting services can only be performed by CPAs, it shouldn’t be defined as a provider of accounting services as outlined under Section 448(d)(2) of the tax code.

The Thomson Corp. announced that it has acquired CrossBorder Solutions, a tax software company whose products are used for the planning and compliance needs of corporations.

The American Institute of CPAs has asked Congress to restrict the issuance of patents for tax strategies.

An Internal Revenue Service pilot project is asking the very tax lawyers and accountants who create shelters and take advantage of tax code loopholes to assist in drafting new tax rules, according to published reports.According to a recent New York Times article, its becoming increasingly common for the federal government to ask outsiders to do more of the work in drafting such rules -- a practice that critics say could create a conflict of interest if those outsiders have their own clients’ interests to consider.

U.S. marshals arrested a Battle Creek, Mich., man for refusing to release the names of the clients that he provided with income tax advice.Charles Conces, who was a candidate for Michigan Attorney General last year, was arrested earlier this month for civil contempt after he failed to comply with a Feb. 8 court order. The order had also compelled Conces to disclose the identities of the people who are responsible for his Web site, as well as any documents that he drafted, or assisted in drafting -- all of which Conces refused to do.

The U.S. Tax Court handed down bad news to a California group this week, agreeing with the Internal Revenue Service that Families Against Government Slavery shouldn’t be granted tax-exempt status as an educational organization.According to court documents, the group began organizing in 2003, and had as its mission the goal of educating the public about the alleged slavery and entrapment of Hollywood celebrities by government officials. The group’s activities consisted largely of public demonstrations made solely by its founder.

Halfway through the filing season, the Internal Revenue Service said that 35.6 million taxpayers had chosen to have their refunds -- totaling more than $100 billion -- deposited directly into a savings or checking account this year.

There is no question that most people appear quite serious about preparing an estate plan that can get passed along to future generations. The intention is all there but too many people still seem to find ways to mess it up entirely.

The U.S. Tax Court ruled this week that the three-year statute of limitations on the Internal Revenue Service attempting to collect on a tax return can be extended indefinitely, even when it was the taxpayer’s preparer who was responsible for committing a fraud.Under Section 6501(c)(1) of the tax code, when a fraudulent return is filed with the intent to evade tax, the tax may be assessed, or a proceeding in court for collection of such tax may be begun without assessment, at any time.