Re-post from AccountingWEB.com: Collecting unpaid taxes four pennies at a time

The article below is reposted from AccountingWEB. It describes a collection effort by the IRS.

Aaron Zeff is the owner of Harv’s Metro Car Wash in Sacramento, California. Imagine his surprise when, one day last March, federal agents showed up at his business demanding payment of an amount owed from tax year 2006.

Just how much did Zeff need to cough up? Four pennies.

Check out the article for the entire story.
Collecting unpaid taxes four pennies at a time AccountingWEB.com

Update on the Estate Tax from the Tax Policy Blog

This is the latest on the estate tax from the Tax Foundation's Tax Policy Blog. The Obama proposal, included in the FY 2011 budget essentially makes the 2009 law permanent. This sets a top tax rate of 45% with a $3.5 million exemption for individuals and twice that for couples. There are also other proposals to establish top rates as high as 65% for some estates. Click the link below to read the article.

Harkin, Whitehouse and Sanders Are Pushing an Estate Tax Proposal That Might Be Called the Die Abroad Act

Update on the IRS' PTIN database

The TSCPA participated in a teleconference with the IRS on June 15, 2010. One of the topics was the new PTIN database. Information from that teleconference was reported on the TSCPA Federal Tax Policy Blog.

Here's is part of what the post describes.

The new online Preparer Tax Identification Number (PTIN) database, scheduled to open September 1, 2010 gives the Office of Professional Responsibilities (OPR) a much-improved vehicle for tracking paid preparers’ compliance with the filing and payments of personal, corporate and payroll tax returns.

Click on this link to read the entire post on the Federal Tax Policy Blog. New PTIN Database Tracks Paid Preparers’ Tax Obligations

TSCPA Federal Tax Policy Blog: IRS to Require PTIN Holders to Reregister with the New System this Fall

IRS to Require PTIN Holders to Reregister with the New System this Fall

The Texas Society of CPA's Federal Tax Policy Blog posted an article about the new PTIN registration requirements.

Beginning in September, the IRS will demand all paid tax return preparers to register with its new online system and obtain Preparer Tax Identification Numbers (PTINs). Preparers with current PTINs will be able to keep their assigned number, but will have to reregister and pay a user fee (amount TBD). PTIN holders may be subject to periodic checks for compliance with personal and business tax filing and payment obligations.

To read the entire post, click here.

House Passes Tax Extenders Bill

From the Journal of Accountancy:

Friday, the House of Representatives passed the American Jobs and Closing Tax Loopholes Act (HR 4213) by a vote of 215–204. The bill now goes to the Senate, which will not take it up for consideration until after it returns from its Memorial Day recess on June 7.

The bill as passed by the House extends a large number of expired tax provisions through 2010. These include the IRC § 41 research credit, the standard deduction for state and local property taxes, and the deduction for state and local sales tax.

To read the rest of the article, click on the link below.

House Passes Tax Extenders Bill

Tax Information for Members of the Armed Forces

Happy Memorial Day!

If you are a veteran or are on active duty, thank you! I thought I would take this opportunity to post the link to an IRS page dedicated to providing information to members of the armed forces. http://www.irs.gov/newsroom/article/0,,id=97273,00.html

Also here are links to Publication 3, Armed Forces' Tax Guide. There is an online version and a PDF.
Online: http://www.irs.gov/publications/p3/index.html
PDF:    http://www.irs.gov/pub/irs-pdf/p3.pdf

If you would like a paper copy of the document, contact the IRS by telephone. 1-800-829-3676

401k and IRA Rollovers Provide Tax-Free Business Start-Up Funding (Sounds like a good idea, but . . .)

Have you heard of Rollovers for Business Startups or ROBS? It sounds like a great idea, except for one small problem which I will get to in a minute. With ROBS, you use a 401(k) or IRA distribution to fund a new business and avoid taxes and penalties on 401(k) or IRA distributions. The idea is to form a new corporation, set up a new 401(k), rollover the funds into the new 401(k), and then use the funds to purchase stock in the new corporation.

Sounds like a great idea doesn’t it? Here is the small problem I mentioned earlier. The IRS is examining these plans, and in October 2008 even issued a memo saying that some of these plans may violate tax law. The plans may also violate some rules affecting pensions, so the IRS and Department of Labor are working together.

Read this article posted on the Tax Prof Blog for more details.

401k and IRA Rollovers Provide Tax-Free Business Start-Up Funding