Tax Notes


The IRS launched an amnesty program in January for taxpayers who, by means of offshore credit card accounts, evaded taxation of reportable income ( www.irs.gov/pub/irs-drop/rp-03-11.pdf ). Under the offshore voluntary compliance program, such taxpayers are responsible for back taxes, interest and certain accuracy or delinquency penalties. They also must identify the promoters of the offshore financial schemes. But those participating in the program do not have to pay additional penalties they might otherwise face. The last day a taxpayer can apply is April 15.

A new IRS unit assumed responsibility in January for oversight of tax professionals ( www.irs.gov/newsroom/article/0,,id=105533,00.html ). The Office of Professional Responsibility has more than twice the staff of its predecessor—the Office of the Director of Practice—and licenses enrolled agents (EAs). In addition, it investigates allegations of misconduct and negligence by accountants, attorneys and other professionals, including EAs, who represent taxpayers before the commission.

The AICPA tax division’s international tax technical resource panel submitted several tax simplification suggestions to the Senate Finance Committee in January ( www.cpa2biz.com/resourcecenters/tax/international/tax_simplification.htm ). Its recommendations included providing a 10-year foreign tax credit carryforward, repealing the alternative minimum tax limitation on use of the foreign tax credit, modifying the interest expense allocation rules and recharacterizing overall domestic losses.

The National Taxpayer Advocate’s annual report to Congress, issued in January, identified impediments to service and compliance, as well as the issues most frequently litigated ( www.irs.gov/pub/irs-utl/nta_2002_annual_rpt.pdf ). It said navigating the IRS bureaucracy was the most serious tax-related problem facing individuals and business owners. Tardy processing of offers in compromise ranked second, and 7 of the top 23 difficulties involved the earned income credit. The document contained several recommendations for legislation to address issues troublesome to taxpayers, including how to challenge IRS adjustments for tax-return computation errors and the taxation of children’s income. According to the report, the most litigated issues in 2002 were nonfiling or underreporting of income and taxpayers’ rights in collection due-process hearings.

For single-click access to further coverage of the tax stories listed here, visit the Journal of Accountancy Web site at www.aicpa.org/pubs/jofa/joahome.htm .

NEWS

IRS sets start date for tax season

The IRS announced that tax season will start in late January and that it will issue refunds to taxpayers despite the partial shutdown of the federal government.

PODCAST

Why CPAs can’t wait on automation tools

What do accounting firms waiting on others to develop AI, automation, and data analytics tools have in common with a baseball fan sitting in a stadium filling with water at an exponential rate? The answer could determine your firm’s fate.