Tax

Tuition paid for a school focused on treating learning disabilities can be classified as a medical expense, according to a private letter ruling from the Internal Revenue Service.Like other deductible medical expenses, the original ruling (PLR 2005-21003) found that the cost of tuition is deductible only to the extent that medical expenses for the year cumulatively exceed 7.5 percent of a taxpayer's adjusted gross income.

A federal court in Texas has rejected a tax shelter once sold by KPMG, in a significant win that continues to lay the legal foundation for the government’s case against 16 former employees of the accounting firm and two outside advisors.

Thomson Tax & Accounting, part of the Thomson Corp., announced that it has finalized the acquisition of Illinois-based Deloitte Tax LLP Sales & Use Outsourcing business.

It might not have generated quite the media hoopla of say, Groundhog Day, but yesterday marked the launch of the Earned Income Tax Credit Awareness Day.

On the precipice of tax season, the Internal Revenue Service is touting its 89 percent success rate last year when it came to prosecuting fraudulent preparers of tax returns.According to statistics released by the agency, the number of preparer fraud indictments increased to 135 in 2006, from 119 the previous year. Of the charges brought by the IRS, 89 percent resulting in an incarceration rate, a 3 percent increase over 2005. However, the number of fraud investigations initiated last year actually decreased to 197, down almost 20 percent from 2005's 248 investigations.

In an effort to explain by example, or at least by handpicked scenario, the Treasury Department has released more details outlining the possible application of President Bush’s plan for a standard health insurance deduction.

The odds are looking better for Senate approval of legislation to increase the minimum wage. But reconciling that bill with a House version -- containing no tax breaks for businesses -- figures to take some negotiating.Senate debate on the bill ended Tuesday with an 87-10 vote, and final Senate passage of the bill is expected this week.

To each his own. And all’s fair in love, war and “Behind Closed Doors Wednesdays.”Robert Flach, a Jersey City, N.J., accountant who holds a masters in taxation, has been in the business for 36 years since inheriting the tax prep business of his mentor. He already had a couple of returns completed when I talked to him earlier in the week, and expects to complete around 400 by the time the season is over.

The Internal Revenue Service has updated both its Form 940, “Employer's Annual Federal Unemployment Tax Return,” as well as online tools to help taxpayers determine whether they should deduct their state and local general sales taxes, or whether they might owe the alternative minimum tax.The IRS has redesigned Form 940 to be more user-friendly for the more than 1 million payroll professionals and business owners who file the form.

A new Web site from Link2Gov allows taxpayers to make federal balance-due tax payments via debit card, paying a fixed convenience fee of $2.95.