Tax Strategies

The Internal Revenue Service is not doing enough to match incorrect or missing identification numbers on income and wage statements with existing tax accounts, charged the Treasury Inspector General for Tax AdministrationThe TIGTA noted that in tax year 2004 alone, the IRS received about 3.8 million income statements reporting approximately $150 billion in earnings that could not be matched to a filed tax return because of missing or erroneous ID numbers. Compared to 2001, that represented a 63 percent increase.

In a vote that may have a wide-ranging effect on the accounting profession, House lawmakers voted 220-175 to overhaul patent rules and place a ban on tax-planning-method patents.HR 1908, the Patent Reform Act of 2007, primarily contains provisions that would make it harder to get patents and harder for companies to be sued for patent infringement. However, it also contains a provision that would protect accounting firms from lawsuits over tax-planning methods.

The deadline for compliance with final Section 409A regulations, scheduled for Dec. 31, 2007, should be extended for a year, according to 92 of the largest law firms in the nation.The new regulations, finalized in April, require deferred-compensation plans to be amended to comply with the Internal Revenue Code.

The last few months have seen the problems in sub-prime lending start to have a national and even international impact on the credit and stock markets.The combination of expanded sub-prime lending programs with mortgage rates that adjust upward after two to five years, reduced or eliminated down-payment requirements, and a housing market that has seen real estate prices actually decline in many markets, has left many marginal borrowers unable to pay higher monthly mortgage payments, unable to refinance to more traditional mortgages, and unable to sell homes at a price sufficient to cover the mortgage obligation.

The Internal Revenue Service has seen a 60 percent increase so far this year in electronic filing of tax returns by small businesses and large corporations.

Three Democratic congressmen have announced plans to draft legislation that would impose a war surtax to pay for operations in Iraq as a way to demonstrate their opposition to the war.

Tax technology vendor Vertex said it planned a major hiring initiative that would double the size of its consulting group over the next six months.

A report by the Treasury Department's inspector general raised concerns about the screening done by the Internal Revenue Service of electronic filing providers.

CCH has introduced CorpSystem, a new line of software for corporate professionals who do tax and accounting work.

Sen. Carl Levin, D-Mich., has proposed a bill that would change the tax treatment of corporate stock option deductions.