Tax Strategies

The Internal Revenue Service and Treasury Department announced the release of proposed regulations that would disallow foreign tax credits for foreign taxes purportedly paid in connection with certain artificially engineered, highly structured transactions.

The Sarbanes-Oxley Act brought the tax manager into the financial statement reporting process as never before. As SOX Section 404 internal control certifications were made with respect to each input into the financial statements, it became clear that one of the weakest areas for SOX 404 compliance was accounting for income taxes.Under FASB Statement No. 109, Accounting for Income Taxes, the process of providing for deferred income taxes had become so subjective and subject to differing interpretations that certification of the results was difficult, and comparability across financial statements appeared to be lacking.

Despite continued controversy over whether the use of private debt collectors is a direction the Internal Revenue Service should be moving in, a new federal report gave high marks to the first phase of the agency’s pilot program.

Dallas-based law firm Jenkens & Gilchrist Corp. will pay $76 million to the Internal Revenue Service to settle charges over its aggressive marketing of questionably legal tax shelters to wealthy individuals.

After seven years of prosecutorial pursuit, telecommunications mogul Walter C. Anderson was sentenced to serve nine years in prison for failing to pay more than $200 million in taxes. He will receive credit for the two years he has already served.Anderson, 53, was also ordered to pay about $23 million to District of Columbia tax collectors, but a federal judge ruled that he won’t have to pay the Internal Revenue Service restitution ranging from $100 million to $175 million, because prosecutors listed the wrong statute in Anderson’s plea agreement. Judge Paul Friedman said he could have ordered Anderson to repay the money as part of his probation, but prosecutors has also omitted any discussion of probation from Anderson's paperwork.

The Government Accountability Office says that the Taxpayer Advocate Service needs to be collecting better data on the type of cases it handles, as well as how those cases are actually being handled.The office was originally asked to examine why the advocate service has experienced an increased caseload since 2004, how well the service has conducted its activities in terms of measures such as customer satisfaction and quality, and finally, how well the service measures and reports its advocacy efforts.

The Internal Revenue Service is alerting taxpayers about common mistakes made by individuals while preparing their federal income tax returns.

The Justice Department said that a California marketer has pleaded guilty to a conspiracy charge of defrauding the United States for his involvement in a tax fraud scheme.Todd Eugene Strand of Murrieta, Calif., pleaded guilty today in a Kansas City federal court this week. According to the government’s indictment, between June 1997 and April 2002, Strand and a trio of co-defendants -- Daniel Joel Gleason, Michael Craig Cooper and Jesse Ayala Cota -- operated a scheme to defraud the Internal Revenue Service and taxpayers.

Link2Gov Corp. announced that its Pay1040.com service, now in its fifth year of contracted electronic payment processing for the Internal Revenue Service, is experiencing a 63 percent year-over-year increase in the dollars being processed for federal tax payments.

Avalara, a provider of Internet-based sales tax compliance services for small and midsized businesses, announced that it has more than 10,000 registered users -- doubling the company’s year-ago figure.