Tax Strategies

The $787 billion American Recovery and Reinvestment Act of 2009 (P.L. 111-5, Feb. 17, 2009) provides almost $300 billion in tax relief. As a stimulus package, the bill makes available over $280 billion in tax relief in the short term in 2009 and 2010. For business, over $75 million in tax benefits are provided for 2009 and 2010. Although most of that is accelerated depreciation, which, over a 10-year period when tax bills are "scored," almost evens out, the immediate benefits to business taxpayers are substantial. What's more, to avoid discouraging taxpayers from making investments and purchases before the act was passed, most of the tax incentives are retroactive to Jan. 1, 2009.While some of the business benefits can help businesses of any size, the act targets significant benefits at small businesses in particular. This is consistent with the Obama administration's view that small business is the principal engine for jobs growth. Notably, the act seeks to encourage spending for major purchases of capital equipment by extending enhanced small-business expensing and 50 percent first-year bonus depreciation. Small businesses that are incurring losses now but made profits within the last five years can take advantage of enhanced net operating loss carrybacks. S corporations and owners of qualified small-business stock also received benefits that can reduce their taxes.

Despite all the tax changes in the past year to stimulate the economy, the Internal Revenue Service appears to be weathering the tax season well so far.

Joe the Plumber has made his next mission the abolition of the Internal Revenue Service.

As governments desperately seek all kinds of additional revenue, senior business professionals see the increased possibility of an audit by taxing authorities as the most significant tax risk facing their organizations today, according to a new survey.

Washington, D.C.-The Internal Revenue Service has decided not to renew its contracts with two private debt collection agencies.The IRS said that the decision came after an extensive review of the controversial program. A provision to end the private debt collection program was inserted into the omnibus spending bill that is currently before the Senate.

The Internal Revenue Service should determine whether using tax software creates any security and compliance risks, recommended the Government Accountability Office in a new report.

Two former KPMG managers received prison terms and multimillion-dollar fines in a long-running tax shelter case.

Victims of severe flooding in Minnesota and North Dakota have an extra 30 days, until May 15, to file their 2008 individual tax returns and pay any taxes due.

Both the House and Senate approved the Democrats’ version of a $3.5 trillion budget plan for fiscal year 2010, but without a single Republican vote.

Practical Accountant magazine has released its 16th annual survey of the top regional accounting firms across the U.S.