Monday, November 26, 2007

States and IRS join forces to crack down on employment-tax violations

The IRS recently signed information-sharing agreements with agencies in 29 states as part of an increased effort to uncover employment-tax violations.

One of the major issues is whether companies are correctly classifying independent contractors. Unlike for employees, companies don't withhold Social Security, payroll taxes or other taxes from independent contractors' pay.

The states that have signed the agreement so far are: Arizona, Arkansas, California, Colorado, Connecticut, Hawaii, Idaho, Kentucky, Louisiana, Maine, Massachusetts, Michigan, Minnesota, Nebraska, New Hampshire, New Jersey, New York, North Dakota, Ohio, Oklahoma, Rhode Island, South Carolina, South Dakota, Texas, Utah, Vermont, Virginia, Washington and Wisconsin.

Wednesday, November 21, 2007

Bush nominates new IRS chief

President Bush will nominate Douglas Shulman, vice chairman of the Financial Industry Regulatory Authority, to be commissioner of the Internal Revenue Service, the White House announced.

Previously, he was vice president of Darby Overseas Investments and chief of staff of the National Commission on Restructuring the Internal Revenue Service.

Linda Stiff has been acting commissioner since April when Commissioner Mark Everson resigned to become president and chief executive officer of the American Red Cross.

Monday, November 12, 2007

Nonprofits must meet new tax filing requirements

New rules require even the tiniest nonprofit to file disclosure statements online with the Internal Revenue Service by May 1, 2008 or face losing their tax-exemption.

The rules introduce a category of Form 990 filing called the 990-N, which applies to organizations with annual revenues from $1 to $25,000.

Bob Ottenhof, chief executive of GuideStar (, which posts reports on charity finances, told the New York Times that, "Most nonprofits are complying with the rules. The problem is with those whose primary goal is not providing charity, but using charities for personal gain or to avoid taxes improperly.”