Tax Strategies

Bestselling financial writer Wade Cook was slapped with an 88-month jail term for defrauding the Internal Revenue Service.

House lawmakers passed a $16 billion energy tax bill that does away with tax breaks for oil and gas companies and shifts the incentives to alternative energy, despite the threat of a veto from President Bush.

The Internal Revenue Service said that owners of thousands of Ford, Toyota and Lexus hybrid vehicles can continue to claim the Alternative Motor Vehicle Credit, but the phase-out period for claiming the credit has already begun for Toyota and Lexus owners because of strong sales of the company's hybrids.

Sixty percent of Internal Revenue Service employees were duped into giving control of their passwords to unauthorized callers, according to an inspection report that found lingering problems with computer security years after they were supposed to have been corrected.

The Internal Revenue Service has released drafts of the updated income tax forms for corporations and partnerships, and is asking for comments before it finalizes the changes for tax year 2008 and beyond.

The Collection Financial Standards, the measures used by the Internal Revenue Service in negotiating installment agreements and offers in compromise, have been stuck in a time warp, according to observers."They haven't been updated since January 2006," observed New York-based attorney and CPA Michael Breslin, managing partner of FullServe Group LLC. "It has affected our ability to negotiate and it mandates higher amounts that are not fair. These numbers are based on 2005 figures and they were issued in early 2006."

Conceding that a full-blown repeal of the alternative minimum tax may now be near-impossible, representatives of the nation's enrolled agents urged Congress to place new restrictions on the type of tax preparers authorized to prepare AMT returns."Repealing the full AMT would be a huge step in the simplification of the Tax Code, but one that may no longer be in the cards," EA Frank Degen told the Senate Finance Committee on behalf of the National Association of Enrolled Agents. "Practically, we admit that full repeal of the AMT may be a bridge too far for Congress to cross."

PRIVATE COLLECTION PROGRAM SURVIVES HOUSE VOTEBy a margin of 240-179, House lawmakers approved funding for the Internal Revenue

It is always difficult to get the Supreme Court to review a case, but this seems especially true for tax cases. The recent court term just ended proved to be no exception. Of several cases practitioners were hoping that the court would accept, only one received a grant of certiorari in the closing days of the term.It is the decisions for which the court grants certiorari where the fight, and the hope, goes on. It is, however, in the cases with respect to which certiorari is denied where taxpayers must finally face the facts or explore other remedies.

Connecticut Governor Jodi Rell vetoed a bill that would have allowed Connecticut to set its own accounting standards."I have serious concerns about the potential fiscal impact this bill may have," said Rell. "The plain language of this bill would allow the comptroller to issue financial statements in whatever standards she prescribed."