Tax Strategies

The United States Tax Court has ruled on a case involving a taxpayer, David Billings, who asked to be relieved from liability for the tax owed on money his wife embezzled from his employer without his knowledge, and has decided in his favor.

This coming January officially marks the three-year countdown before the axe falls on the lower individual capital gains rates now in place.Since May 6, 2003, thanks to the Jobs and Growth Tax Relief Reconciliation Act of 2003, gain from the sale of most long-term capital assets is subject to a maximum tax rate of 15 percent (5 percent for individuals in the 10 percent or 15 percent tax bracket). Starting in 2011, however, these rates are scheduled to revert to their former pre-May 6, 2003, levels of 20 percent and 10 percent, respectively. Nevertheless, before the party ends, a 0 percent rate will replace the 5 percent rate for tax years beginning after Dec. 31, 2007.

Sabrix introduced a subscription-based, outsourced service that handles tax determination, return preparation and audit administration for sales and use taxes.

The Internal Revenue Service received a double barrel of criticism from Treasury Department watchdogs for not validating the amount of savings it claimed it would generate from various taxpayer service projects, and for laxness in security.

Fed up with his high semiannual property tax bills, landlord Cary Malchow lugged $12,656.07 in $1 bills and coins to the Delaware County, Ind., treasurer's office to watch employees there count it out.

Potential Republican presidential candidate Fred Thompson has written a letter indicating that he would be willing to support an overhaul of the Tax Code called the FairTax, which could replace the income tax system and all payroll taxes with a non-regressive national retail tax.

The Treasury Department and the Internal Revenue Service have issued notices warning about two kinds of transactions that could arouse their interest: "toggling" grantor trusts and contributions of a successor member interest in a limited liability company.

At least 61 percent of sole proprietor companies are underreporting their net business income, but a small proportion of them account for the bulk of understated taxes, according to a report by the Government Accountability Office.

The Internal Revenue Service and the Treasury Department's Office of Tax Policy have released a "priority guidance plan" for 2007-2008, outlining the 303 projects they plan to complete through June 2008.

An Atlanta federal court has permanently barred two Jackson Hewitt franchise employees from preparing taxes for others.