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.
Monday, November 26, 2007
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.
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 (guidestar.org), 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.”
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 (guidestar.org), 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.”
Friday, October 12, 2007
Trial of former KPMG executives set to begin
The trial of three former KPMG executives and an attorney on tax fraud charges is scheduled to begin Oct. 23.
"A victory for the government could bolster its broad probe into abusive tax shelters," says The Wall Street Journal. "An acquittal may cause the government to re-think its strategy in future tax-shelter cases."
For background on the landmark case and a discussion of its impact, see the Journal.
"A victory for the government could bolster its broad probe into abusive tax shelters," says The Wall Street Journal. "An acquittal may cause the government to re-think its strategy in future tax-shelter cases."
For background on the landmark case and a discussion of its impact, see the Journal.
Monday, October 1, 2007
Senate committee reviews derivatives and hedge funds
The U.S. Senate Finance Committee is examining offshore hedge funds' use of derivatives as a way to avoid withholding taxes on U.S. stock dividends, The Wall Street Journal reported today.
The U.S. Treasury loses more than $1 billion in potential tax revenue each year through this practice, the Journal said. The finance committee review is part of an overall examination of the taxation of hedge funds and is in the preliminary stages.
The U.S. Treasury loses more than $1 billion in potential tax revenue each year through this practice, the Journal said. The finance committee review is part of an overall examination of the taxation of hedge funds and is in the preliminary stages.
Monday, September 17, 2007
Legality of derivatives for tax avoidance questioned
The Wall Street Journal provides an inside look in today' s paper at the evolution of derivatives as a way for hedge funds with off-shore operations to cut taxes, using the work of Lehman Brothers Holdings as a case study.
"Internal Lehman emails reviewed by the Journal reveal bankers searching for the line between smart tax planning and improper tax avoidance. In the end, according to the emails and to people familiar with Lehman's business, the bankers and their lawyers concluded that it was a business worth pursuing," the Wall Street Journal says.
The Journal reported in July that the Internal Revenue Service is seeking information from Lehman and Citigroup Inc. about certain trades. Other firms expect to receive similar inquiries.
"Internal Lehman emails reviewed by the Journal reveal bankers searching for the line between smart tax planning and improper tax avoidance. In the end, according to the emails and to people familiar with Lehman's business, the bankers and their lawyers concluded that it was a business worth pursuing," the Wall Street Journal says.
The Journal reported in July that the Internal Revenue Service is seeking information from Lehman and Citigroup Inc. about certain trades. Other firms expect to receive similar inquiries.
Tuesday, September 11, 2007
Senate investigators seek details on companies' tax-cutting transactions
The Senate's Permanent Committee on Investigations has sent letters to 30 companies seeking information on certain tax-cutting transactions and arrangements, The Wall Street Journal reported.
The investigation appears to have been sparked by disclosures required by a new accounting rule known as "FIN 28."
The Journal quoted one letter as requesting the companies to "describe any United States tax position or group of similar tax positions that represents 5 percent or more of your total [unrecognized tax benefit] for the period, including in the description of each whether the tax position involved foreign entities or jurisdictions."
Senate investigators also want to know what tax professionals and law firms were involved in tax-cutting transactions on which companies spent at least $1 million for legal fees or other costs.
The investigation appears to have been sparked by disclosures required by a new accounting rule known as "FIN 28."
The Journal quoted one letter as requesting the companies to "describe any United States tax position or group of similar tax positions that represents 5 percent or more of your total [unrecognized tax benefit] for the period, including in the description of each whether the tax position involved foreign entities or jurisdictions."
Senate investigators also want to know what tax professionals and law firms were involved in tax-cutting transactions on which companies spent at least $1 million for legal fees or other costs.
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