Tax Strategies

The Federation of Tax Administrators has named a new executive director, James R. Eads Jr., the former public affairs director for state tax consulting firm Ryan & Co.

A company may take a position on its tax return in good faith, but due to the complexities of tax law, it’s never a sure thing that it will be sustained.The now two-year-old FASB Interpretation No. 48, Accounting for Uncertainty in Income Taxes, or FIN 48, establishes a “more-likely-than-not” threshold for the reporting of uncertain tax positions on financial statements. Under the rule, an uncertain tax position may not be recognized on the financial statement unless it is more likely than not that it will be sustained on its technical merits, and then it is measured at the largest amount of benefit that is greater than 50 percent likely to be realized upon ultimate settlement.

National Taxpayer Advocate Nina E. Olson’s list of objectives — detailed in the first of her two annual required reports to Congress — zeroes in on the problems that she intends to focus on during the fiscal year ahead.At least one of the objectives — which focuses on the liabilities of incentive stock options under the Alternative Minimum Tax — has a good chance of being resolved, according to Tim Carlson, president of the Coalition for Tax Fairness and pro bono attorney for a number of victims of the anomaly. “Pending legislation will fix it, and it has support from both sides of the aisle,” he said.

With volatile economic times threatening, flexibility in all aspects of financial affairs, including charitable giving, is more desirable than ever. While there is an increased need for charitable donations, there are also fewer resources among potential donors. One charitable giving vehicle that has grown popular over the past ten years because of its efficiencies is the charitable remainder trust.A CRT can provide a new income stream for the donor and a benefit to charity — a classic win-win situation. CRTs should continue to have viability for present-day donors, especially those who maximize the flexibility that the rules allow. In pushing CRTs to their legal limit, however, taxpayers also must heed restrictions that, if not followed, can result in disastrous tax consequences.

An audit of the Internal Revenue Service's program for examining and penalizing tax return preparers by the Treasury Department's inspector general could not be completed because the IRS was unable to provide most of the documents.

The Internal Revenue Service needs to do a better job of managing its sales of seized property, recommends a report by the Treasury Department's inspector general.

An Ernst & Young partner has teamed up with a movie studio accountant to produce an online comic book based on the TV series and recent movie Get Smart that provides an overview of tax deductions for the film and TV industry.

“Technology is making it possible for smaller accounting firms to make sure their clients don’t get in trouble over payment of sales and use taxes. How have most firms handled this in the past?” was the speaker’s question. “They didn’t,” was the answer from attendees at MD Biz, Maryland Business & Accounting Expo, who were probably more interested in continuing education credits than the speaker’s comments (mine).

The National Football League is asking for an exception to new Form 990 rules that require tax-exempt organizations to disclose the names and salaries of any executives who earn more than $150,000 per year.

The Internal Revenue Service has introduced a free e-mail service to provide tax information to small business owners and the self-employed.