IRS Digital Dispatch Feb. 6, 2004


J

John H. Fisher

IRS Digital Dispatch

Feb. 6, 2004

In this Issue:

1. IRS Budget Request for Fiscal Year 2005 reaches $10.7 Billion

2. Check Carefully Before Applying for Offers in Compromise

3. IRS Warns Taxpayers About Return Preparer Fraud

4. February 10 Tax Talk Today Will Focus on Tax Shelter Enforcement

5. IRS Provides Express Enrollment for Electronic Federal Tax Payment
System (EFTPS)

6. Tax Preparers Shed Light on IRS e-file in Latest ERO Spotlight

7. Recent Technical Guidance

* * * * *

1. IRS Budget Request for Fiscal Year 2005 reaches $10.7 Billion

The IRS Budget request for FY 2005 is $10.674 billion, $490 million more
than the FY 2004 Consolidated Appropriations amount of $10.185 Billon.
Most of this increase, $300 million, will be used across appropriations to
substantially restore an enforcement presence to the IRS. See:
http://www.irs.gov/pub/irs-utl/budget-brief-05.pdf

2. Check Carefully Before Applying for Offers in Compromise

The Internal Revenue Service today issued a consumer alert advising
taxpayers to beware of claims by promoters that tax debts can be settled
for pennies on the dollar through the Offer in Compromise Program. Some
promoters are inappropriately advising indebted taxpayers to file an Offer
in Compromise (OIC) application with the IRS. This bad advice costs
taxpayers money and time. See:
http://www.irs.gov/newsroom/article/0,,id=120169,00.html

3. IRS Warns Taxpayers About Return Preparer Fraud

The IRS is warning taxpayers about return preparer fraud involving the
preparation and filing of false income tax returns by preparers who claim
inflated personal or business expenses, false deductions, unallowable
credits or excessive exemptions on returns prepared for their clients.
See: http://www.irs.gov/newsroom/article/0,,id=120198,00.html

4. February 10 Tax Talk Today Will Focus on Tax Shelter Enforcement

The Tax Talk Today live web cast on February 10 will help tax
professionals explain why their clients should avoid schemes and scams
that could lead to civil and/or criminal investigations. Kathy
Petronchak, acting director, Pre-Filing and Technical Guidance in the
Large and Mid-Size Business (LMSB) Division, will detail the new
disclosure regulations relating to reportable transactions and what must
be disclosed when filing the 2003 tax return. Steve Burgess, director,
Abusive Tax Avoidance Transactions in the Small Business/Self-Employed
(SB/SE) Division will focus on the IRS Abusive Schemes Lead Development
Center (LDC) and what the IRS does with the information collected on
abusive tax avoidance transactions. The practitioner member of the panel
will explain why buying into an abusive tax avoidance scheme can be very
costly. This program is recommended for practitioners whose practice
includes tax planning and preparation for high income individuals and
small businesses.

During the live program (2:00 p.m.-3:00 p.m. ET), you will be able to
e-mail, phone and fax your questions directly to the panelists. See:
http://www.taxtalktoday.tv/viewpage.cfm?pgname=8.71
Tax professionals can earn one CPE credit from each program; for details
See: http://www.taxtalktoday.tv/index.cfm?pgname=20.0.

5. IRS Provides Express Enrollment for Electronic Federal Tax Payment
System (EFTPS)

The Internal Revenue Service has launched a new program for new business
taxpayers designed to boost electronic payment of taxes. This development
offers some taxpayers new, quicker access to an electronic payment system.
Go to: http://www.irs.gov/businesses/small/article/0,,id=102669,00.html.

6. Tax Preparers Shed Light on IRS e-file in Latest ERO Spotlight

Tax professionals talk about the pros and cons of e-filing in this month's
ERO Spotlight. The featured ERO is Mary Lou Cassell, an income tax
preparer in San Diego, Calif. She says e-file gives her a competitive
edge over tax preparers who do not file electronically.(ERO stands for
Electronic Return Originator, a tax professional who can e-file for
clients.) To learn more about Mary Lou and other EROs, and to access a
host of online resources on e-file, e-pay and e-services, See:
http://www.erospotlight.com.

7. Recent Technical Guidance

Notice 2004-11 describes a pilot program for large and mid-size businesses
to enter into research credit recordkeeping agreements. See:
http://www.irs.gov/pub/irs-drop/n-04-11.pdf

Notice 2004-14 contains the weighted average interest rate update for plan
years beginning in February 2004. See:
http://www.irs.gov/pub/irs-drop/n-04-14.pdf

Revenue Ruling 2004-17 holds that, regarding expenses of environmental
remediation, taxpayers may not claim treatment under IRC 1341 for such
expenses. See: http://www.irs.gov/pub/irs-drop/rr-04-17.pdf

Revenue Ruling 2004-18 holds that, regarding expenses of environmental
remediation, such expenses are subject to inclusion in inventory costs
under IRC 263A. See: http://www.irs.gov/pub/irs-drop/rr-04-18.pdf

* * * * *
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"Jack" - John H. Fisher - (e-mail address removed)
Philadelphia, Pa - Atlantic City, NJ - West Wildwood, NJ
My Newsgroups & Boards at: http://members.aol.com/TaxService/index.html

Where Ignorance is bliss, 'tis folly to be wise!=:)
 
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