Tax

Aside from identifying a number of nuances in last year’s tax law changes and interpreting the effects of congressional leadership turnover, a new tax guide should help midsized business owners monitor a series of federal tax trends for 2007.Published by national CPA firm RSM McGladrey, the “2006 Tax Planning Guide” includes a Top 10 list of tax-planning strategies for midsized companies and issues owners should watch for on the horizon.

There’s no question that the Free File program, the Internal Revenue Service’s partnership with the manufacturers of tax prep software, is a win-win deal on many fronts for both parties.In exchange for the manufacturers in the Free File Coalition making free filing offers to taxpayers on the basis of such factors as income (in 2007, taxpayers making less than $52,000 a year get access), the IRS has agreed not to offer taxpayers its own free alternative. The program, which includes participation from electronic prep heavyweights Intuit and H&R Block, is now in its fifth year.

Got a question for the Internal Revenue Service that needs answering? Why not ask your local stakeholder liaison? Who’s that? They are IRS employees who are attempting to establish a relationship with those representing small business and self-employed taxpayers. The liaisons provide very specific information about the policies, practices, and procedures followed by the IRS.Take for example the Issue Management Resolution System (IMRS), a stakeholder liaison initiative intended to capture, develop, resolve, and respond to significant national and local stakeholder issues. Under the program, practititioners’ notify IRS of concerns about IRS policies, practices, and procedures, and IRS researches the issues to bring about resolution.

The Washington headquarters of the Internal Revenue Service reopened to the agency’s employees last week, following some $25 million in repairs made necessary after massive June flooding.

In a letter released last week, the Internal Revenue Service said that a publicly-traded acquiring corporation can deduct amounts it paid to settle a class action securities litigation lawsuit against the target entity that was triggered by misstatements in the entity’s reported earnings.The ruling is directed only to the taxpayer requesting it and may not be used or cited as precedent.

With Democrats scheduled to take charge of both Houses of Congress in 2007, most of the Bush administration's top tax priorities figure to be shuttled to the legislative back burner for the next two years.But there is at least one island of common ground that has both sides of the aisle and the accounting profession clinging to hope that the next Congress may finally find the political will to resolve a looming nightmare for many Americans - the alternative minimum tax.

As the year winds down and holiday anticipation builds, tax professionals are performing their annual rituals of getting ready for tax return season by checking supplies, test-driving software, training additional staff and packaging year-end planning tips for their clients."It's never too late for tax planning," said New York-based CPA Marc Albaum. "You've got until the ball drops to take action, and if you do it later than that, then you've got an early start for 2008."

GAO GIVES GOOD MARKS TO IRS APPEALS OFFICE: The Government Accountability Office offered some recommendations aimed at upping efficiency, but said that the Internal Revenue Service Office of Appeals has been doing a good job handling its process for collection due process appeals.Under the IRS Restructuring and Reform Act of 1998, taxpayers facing liens or levies can request a collection due process appeal hearing with the IRS office. By 2005, those cases represented about a quarter of the office's workload.

As evidence of the recent merger mania within the tax prep arena, customers from five different vendors were represented at last month's CCH and Creative Solutions user conferences, which were held in Boca Raton and Orlando, Fla., respectively.Both CCH and CSI have made recent purchases of other vendors - Creative Solutions merging Dunphy Systems into its user base, and CCH purchasing ATX Kleinrock and TaxWise as continuing entities.

Action star Wesley Snipes, who in October, was charged with fraudulently claiming tax refunds of nearly $12 million, has surrendered to authorities here.