Tax Reform Debate Heats Up As Deficit Grows

  • May 2, 2011

The growing U.S. deficit and the increasing attention being paid to it by financial markets is creating what many see as the "perfect storm" that will drive the debate over tax reform. Whether "tax reform" will include tax increases --and whether "tax simplification" will include a flattening of existing tax rates through cutting back on deductions and credits to which many individuals and businesses have grown accustomed-- are questions that will soon be raised as Congress starts a tough fight over the FY 2012 federal budget.

Next Year’s Tax Return Starts with Good Recordkeeping

  • May 2, 2011

As the 2011 tax filing season comes to an end, now is a good time to begin thinking about next year's returns. While it may seem early to be preparing for 2012, taking some time now to review your recordkeeping will pay off when it comes time to file next year. Taxpayers are required to keep accurate, permanent books and records so as to be able to determine the various types of income, gains, losses, costs, expenses and other amounts that affect their income tax liability for the year.

Scope of Information Reporting Continues to Expand

  • May 2, 2011

Information reporting continues to expand as Congress seeks to close the tax gap: the estimated $350 billion difference between what taxpayers owe and what they pay. Despite the recent rollback of expanded information reporting for business payments and rental property expense payments, the trend is for more - not less - information reporting of various transactions to the IRS.

Congress Votes to Repeal 1099 Requirements

  • April 6, 2011

The Senate voted Tuesday to repeal the expanded 1099 information reporting requirements in last year’s health care reform and small business...

Repeal of Controversial Form 1099 Reporting

  • April 1, 2011

Momentum to repeal the controversial Form 1099 expanded business information reporting has slowed as the Senate debates how to pay for removal of the recently-enacted provision. The Senate recessed on March 18 for a one-week break with lawmakers still divided over offsets. There are two controversial reporting requirements that most business leaders want to see removed.

S Corp’s Associates Were Employees, Not Independent Contractors

  • April 1, 2011

Despite flexible pay and work arrangements, the Tax Court has found that the president, associate attorneys and law clerk of an S corporation doing business as a law firm were employees and not independent contractors for tax purposes (Donald G. Cave A Professional Law Corp., TC Memo. 2011-48). The court rejected the S corporation's claim that the individuals enjoyed sufficient control over their work to treat them as independent contractors.

IRS Revises Collection Financial Standards

  • April 1, 2011

The IRS has posted updated collection financial standards for use in calculating repayment of delinquent taxes on its web site. These national standards apply to food, clothing, health care and certain other expenses. Local standards apply to housing, utilities and transportation costs. The standards are effective March 1, 2011.

Estimated Tax: Getting it Right

  • April 1, 2011

Estimated tax is used to pay tax on income that is not subject to withholding or if not enough tax is being withheld from a person's salary, pension or other income. Income not subject to withholding can include dividends, capital gains, prizes, awards, interest, self-employment income, and alimony, among other income items. Generally, individuals who do not pay at least 90 percent of their tax through withholding must estimate their income tax liability and make equal quarterly payments of the "required annual payment" liability during the year.

FAQ: What Are My Chances of Being Audited?

  • April 1, 2011

Often, timing is everything or so the adage goes. From medicine to sports and cooking, timing can make all the difference in the outcome. What about with taxes? What are your chances of being audited? Does timing play a factor in raising or decreasing your risk of being audited by the IRS? For example, does the time when you file your income tax return affect the IRS's decision to audit you?