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 . |
