Tax Strategies

As the Senate approved a measure with $60 billion in tax cuts, the House will consider its own measure containing $56.6 billion in cuts. Both plans are spread over the next five years.

Although President Bush's tax reform advisory group recommended against shifting the U.S. to a European-style value added tax or a national sales tax system, congressional advocates of consumption taxes haven't given up the fight.

The Senate will debate a tax bill that would cut taxes by about $61 billion over the next five years, and would include a $5 billion tax next year for the nation's biggest oil companies.

Citing a lack of Republican support, Senate Finance Committee Chairman Charles Grassley, R-Iowa, yanked a near-$70 billion tax bill prior to a committee vote -- a measure that would have extended 15 percent rates on capital gains and dividends for five years.

The Internal Revenue Service has issued Notice 2005-88, which explains steps that large corporations and tax-exempt organizations can take to seek waivers from electronic filing requirements.

The heads of the nation's five major oil companies testified about their $30 billion in third-quarter profits before a joint session of the Senate's Energy and Natural Resources Committee and Commerce Committee.

Taxpayers will be able to request an automatic, six-month filing extension for most common individual and business returns, according to new regulations released by the Treasury Department and the Internal Revenue Service.

Senate Finance Committee Chairman Charles Grassley, R-Iowa, announced a plan to cut taxes by nearly $70 billion by 2010.

The current business and regulatory climate has fueled so much demand for accountants across the board that it will make seasonal staffing during tax time more difficult than ever, according to industry observers."Demand is even higher than last year, with more needs and less people available," said John Grammer, CPA, regional managing director of Spherion's professional services division in New York. "Firms are calling up and wanting to increase our fees, hoping if they pay us more we'll send qualified people to them rather than somewhere else. But besides being unethical, even if you pay me double it won't make any difference as to how many qualified candidates I can get."

States have taken two different paths in response to falling revenue from corporate tax collections.On the one hand, some states have focused on lowering corporate taxes or at least changing them to make themselves more attractive for investment. At least five states have debated bills to reduce corporate tax rates in 2005, while dozens of others have introduced bills that shift corporate taxes away from the property and employees of corporations, and onto the customers of corporations.