Tax

The Public Company Accounting Oversight Board's plan to place new restrictions on the ability of accountants to offer tax services to their audit clients doesn't go far enough to restore investor confidence in financial reporting, critics of the accounting profession warned.

Tax prep conglomerate H&R Block and the Association of Community Organizations for Reform Now have teamed up in a partnership to help boost awareness of the Earned Income Tax Credit and to reduce filing costs for low-income taxpayers.

Although nearly 65 percent of Earned Income Tax Credit returns are prepared by paid preparers, the error rate is roughly the same as when the return is prepared by the individual, according to Internal Revenue Service spokesperson Nancy Mathis.

Long-awaited final Circular 230 regulations, issued Dec. 17, 2004, govern the latest set of standards on attorneys, accountants and other professionals providing not only tax shelter opinions but also tax advice in general. It is how these standards relate to general tax advice that concerns the vast majority of tax practitioners. These regs are part of a multi-pronged effort on the part of the Internal Revenue Service to deter the involvement of promoters, advisors and investors in abusive transactions.

IRS UPDATES SALES TAX TABLE PUBLICATION: The Internal Revenue Service has updated for three states the tables that taxpayers can use to determine whether they'll benefit from deducting sales tax rather than state and local income taxes. The agency updated the optional sales tax tables in Publication 600 for Arkansas, California and Virginia. The tables, which give taxpayers a sales tax deduction amount as an alternative to saving receipts throughout the year and tabulating the amount actually paid, were updated to reflect sales tax changes made by the three states during 2004; the original tables were based on the states' sales tax rates as of Jan. 1, 2004.

Regional powerhouse J.H. Cohn has expanded its New York tax practice with the addition of tax consulting firm Becker & Co. LLC.

Just in time for consideration by President Bush's new bipartisan panel on tax reform, National Taxpayer Advocate Nina Olson told Congress that the complexity of the Internal Revenue Code is the most serious problem facing both taxpayers and the Internal Revenue Service.

President George W. Bush has named two former senators to lead a new nine-member bipartisan panel charged with arriving at options to reform the tax code.

In his State of the Union address this week, President Bush pushed his plan to overhaul Social Security and add optional private accounts for younger workers, as the White House unveiled some new details of how that plan would work.

The Internal Revenue Service has revised the form used by municipalities and other issuers of tax-exempt bonds to make arbitrage-related payments.