Tax Strategies

The popularity of S corporations has skyrocketed, with the number of businesses opting for them rising from 725,000 in 1985 to more than 3 million, according to the most recent statistics.And that growth is well-deserved, according to Richard Thompson, of the CPA and business advisory firm Sikich LLP. "S corporations have become such an important business vehicle because taxpayers understand their extreme value," he said.

The recent release of the long-awaited final regs on nonqualified deferred compensation under Code Sec. 409A did not bring a much-hoped-for extension of the effective date for full implementation of the rules. The final regs - all 209 pages of them, and the 186 pages it took to explain the changes made or not made to the proposed regs - do not extend the transition relief for compliance beyond Dec. 31, 2007.That does not leave much time for compliance, let alone formulating tax strategies that take maximum advantage of the small leeway that the final regs provide to employers. Compensation plans drafted under the proposed regulations must be compared against the final regs. Decisions on whether a plan should be terminated must be made. Final plan designs must be drafted and adopted. And then an explanation of the terms of the compliant plan must be explained (and sold) to the key executives who the plan has been adopted to keep happy in the first place.

In a sweeping macro-view of major accounting issues poised to impact the profession, Financial Accounting Standards Board chairman Robert Herz said that the profession can get to a better reporting system, but it’s going to take some changes to get there.

The Internal Revenue Service says that the changes it made to its whistleblower provisions last year are already beginning to pay off.According to a published report, since the law was enacted in December, offering much higher rewards in cases involving major tax cheating, the IRS has received about 20 reward claims -- some involving hundreds of million of dollars in alleged fraud.

The 2008 Low Income Taxpayer Clinic grant application process is now open.

The 2007 tax filing season set a number of records at the Internal Revenue Service -- highlighted by the more than 76 million electronically filed individual tax returns and more than 140 million visits to the IRS Web site.

Rankings can be very subjective, but they are still captivating. Everyone has an opinion of what they think is the best movie or song. As a Baby Boomer, I remember for years listening to a local station’s Top 500 classic rock and roll rankings to see if “In the Still of The Night,” was still ranked No 1.

A federal court in Chicago has barred Neal and Royanne Reddy and their corporation, Royanne & Co. Inc., from preparing tax returns, the Justice Department announced.The court found that the Reddys, whose business offices are in Marseilles and Princeton, Ill., prepared more than 15,000 tax returns between 2002 and 2005.

Churches, charities and other tax-exempt organizations that paid the federal excise tax on long-distance or bundled telephone service qualify for this year’s one-time telephone excise tax refund, according to the Internal Revenue Service.

Like many of you who were once college freshman, I can vividly recall my first formalized session of “orientation,” those mandated get-togethers where a group of impressionable 17-and 18-year-olds receive a veritable laundry list from upperclassman and administrators of the do’s and don’ts in academe.