Tax

A new report from the Treasury provides a detailed analysis of what effects proposals to permanently extend the tax cuts enacted in 2001 and 2003 might have on the country's economy.

States and cities could lose billions annually under a congressional bill that would require businesses to have employed at least one employee in a state for 21 days, or have leased or bought property, before having to pay the state's business taxes.

Former California gubernatorial candidate George "Nick" Jesson has pleaded guilty to state tax evasion charges and will begin serving a 27-month term in prison concurrently with his sentence for federal tax evasion charges.

Australia's Tax Office is investigating Paul Hogan, star of the "Crocodile Dundee" films, on suspicion of funneling millions in royalties from his films into illegal tax havens.

Reading about former California gubernatorial candidate George "Nick" Jesson, who recently finished pleading guilty to state and federal tax evasion charges, reminded me of conversation I'd had with a friend a couple of weeks back.

Reality television victor Richard Hatch has been sent to an Oklahoma federal prison to serve a 51-month sentence for failing to pay taxes on the more than $1 million he took away from the first season of CBS's "Survivor."

While most taxpayers and their accountants complain about the increasingly complex Tax Code, some of the nation's biggest corporations welcome complexity as an opportunity to "game the system."At least that's the latest grumbling from Capitol Hill, where members of the Senate Finance Committee are voicing fresh concerns over the widening "corporate tax gap."

Cono R. Namorato was appointed to head the Internal Revenue Service Office of Professional Responsibility in December 2003.The OPR investigates allegations of misconduct or negligence against tax practitioners, and enforces the standards of practice for those who represent taxpayers before the IRS. As director of the OPR, Namorato oversaw the service's increasing efforts to achieve compliance nationwide among tax practitioners with newly enhanced standards of conduct, and he also served as senior advisor to the Commissioner of Internal Revenue on complex enforcement matters.

In late May, the Internal Revenue Service produced interim guidance in the form of Notice 2006-9, describing the new credit for qualified hybrid vehicles. Spawned by the Energy Policy Act of 2005, the credit replaces the $2,000 clean-fuel vehicle deduction that was available in previous years.A hybrid vehicle is defined as a vehicle that must have both an internal combustion or heat engine and a rechargeable energy storage system. There are also emission requirements for the vehicles. Only new hybrid vehicles purchased on or after Jan. 1, 2006, qualify for the credit, which is based on a two-pronged system that incorporates calculations based on the weight and the estimated lifetime fuel savings of the vehicle.

Using cash in a like-kind exchange is similar to passing around the proverbial "hot potato" - you don't want to be the one holding the potato, i.e., the cash, at the end of the transaction. If you do so in a like-kind exchange, you are probably holding "boot" (non-qualifying property), which is taxable to the extent of any gain otherwise locked up in the relinquished property (i.e., the difference between its fair market value and basis).Sometimes, strategies that involve the use of cash to facilitate like-kind exchanges under Code Section 1031 begin to seem like shell games, in which labels matter a great deal. In the end, however, the only labels that have been successfully applied are those that have made sense within the basic framework of Section 1031.