etrent17/irs-articles huggingface dataset:
This news release has been superseded by IR-2007-15, dated Jan. 24
IR-2006-170, Nov. 8, 2006
 
WASHINGTON — Individuals in six eastern states and the District of Columbia will have an extra day until April 17, 2007, to file their 2006 returns and pay any taxes due according to the Internal Revenue Service.
In formal guidance (Notice 2006-103) released today, the IRS said that these taxpayers served by the Andover, Mass., IRS processing center will receive an additional day to file and pay because April 16, 2007, is Patriot’s Day, a state holiday in Massachusetts. Thus, the April 17, 2007, deadline will apply to individuals in Maine, Maryland, Massachusetts, New Hampshire, New York, Vermont and the District of Columbia. To avoid confusion, all individuals in these states will get the extra day, even though in some cases, they are instructed to send payments or returns to locations outside Massachusetts. Accordingly, the April 17 deadline will apply to any of the following:

2006 federal individual income tax returns, whether filed electronically or on paper;
	 


Requests for an automatic six-month tax-filing extension, whether submitted electronically or on Form 4868;
	 


Tax year 2006 balance due payments, whether made electronically (direct debit or credit card) or by check;
	 


Individual estimated tax payments for the first quarter of 2007, whether made electronically or by check; and
	 


Individual refund claims for tax year 2003, where the regular three-year statute of limitations is expiring.

By law, filing and payment deadlines that fall on a Saturday, Sunday or legal holiday are timely satisfied if met on the next business day. Thus, since April 15 is a Sunday in 2007, taxpayers in most of the country will have until Monday, April 16, 2007, to file and pay. But Maine and Massachusetts observe the third Monday of April as Patriot’s Day, which in 2007, falls on April 16. Earlier this year, taxpayers were similarly affected when April 15 fell on Saturday and Patriot’s Day was the following Monday (April 17, 2006).
Notice 2006-103 will appear in Internal Revenue Bulletin 2006-47, dated Nov. 20, 2006.
Related Item: Notice 2006-103PDF
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IR-2006-169, Nov. 6, 2006

WASHINGTON — The Internal Revenue Service today announced the selection of five new members for the Electronic Tax Administration Advisory Committee (ETAAC). The Treasury Department and the IRS Commissioner have approved the new members to serve a three-year term beginning November 2006 and ending November 2009.

The group serves as a public forum for discussion of electronic tax administration issues and supports the goal of increasing electronic interactions between tax professionals and the IRS.

 “ETAAC supports the goal of electronic tax administration by recommending policies and strategies to encourage taxpayers to e-file their tax returns and to communicate electronically with the IRS. The members’ advice is critical to our continued progress,” said Bert DuMars, director of IRS Electronic Tax Administration.

These new members will replace the recently retired members to ensure continuity of the committee. The new members are:

• Chris Beach of Cameron Park, Calif. Beach is the Director of Filing Methods Bureau for the State of California, Franchise Tax Board. He provides oversight for the department’s tax forms and electronic filing programs and is involved in policy, legislative, and budget processes impacting the department’s e-file, e-payment, and tax forms functions.

• Sharon S. Gray of Rockville, Md. Gray is Director of Balance Consulting, LLC, where she provides consulting to bank clientele. Balance Consulting, LLC, is a leader in tax reporting compliance education and consulting on specialized compliance issues.

• Timothy S. Hubbs of Franklin, N.C. Hubbs is President and CEO of Drake Enterprises, Limited, a software provider to tax preparers for preparation and e-filing of tax returns. In 2006, Drake customers transmitted over 6.8 million Federal returns and over 5.4 million state returns.

• Joan R. Ruff of Mission Woods, Kan. Ruff, Assistant Vice President of Knowledge Development for H & R Block, leads and manages the development of tax knowledge for US Tax Services and its tax professionals. She designs and develops tax and operational training for over 80,000 tax professions.

• Marquetta White of Mesa. Ariz. White, Assistant Director of Taxpayer Services for the Arizona Department of Revenue, manages the e-file program. She has worked cooperatively with IRS in several areas including supporting VITA, promoting Free File, and accepting the Federal ERO registration to reduce burden on e-filing tax preparers.

Robert Meighan of Bluffton, S.C. has agreed to serve as the chairman of Electronic Tax Administration Advisory Committee (ETAAC) for 2007. Meighan is vice president of the Consumer Tax Group (Turbo Tax) at Intuit and has been a member of ETAAC since September 2005. He has more than 25 years in the tax preparation industry both as a CPA and as a customer advocate at TurboTax.

ETAAC was created in 1998 as part of the IRS Restructuring and Reform Act. Each June, ETAAC submits an annual report to Congress on the progress of the IRS’ electronic tax initiatives.
IR-2006-168, Nov. 1, 2006
WASHINGTON — The Internal Revenue Service today issued the 2007 optional standard mileage rates used to calculate the deductible costs of operating an automobile for business, charitable, medical or moving purposes.
Beginning Jan. 1, 2007, the standard mileage rates for the use of a car (including vans, pickups or panel trucks) will be:

48.5 cents per mile for business miles driven;


20 cents per mile driven for medical or moving purposes; and


14 cents per mile driven in service to a charitable organization.

The new rate for business miles compares to a rate of 44.5 cents per mile for 2006.  The new rate for medical and moving purposes compares to 18 cents in 2006. The primary reasons for the higher rates were higher prices for vehicles and fuel during the year ending in October.
 
The standard mileage rates for business, medical and moving purposes are based on an annual study of the fixed and variable costs of operating an automobile. Runzheimer International, an independent contractor, conducted the study for the IRS.
The mileage rate for charitable miles is set by statute.
A taxpayer may not use the business standard mileage rate for a vehicle after using any depreciation method under the Modified Accelerated Cost Recovery System (MACRS), after claiming a Section 179 deduction for that vehicle, for any vehicle used for hire or for more than four vehicles used simultaneously.  Revenue Procedure 2006-49 contains additional information on these standard mileage rates.
Related Items:

Revenue Procedure 2006-49PDF
 
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IR-2006-167, Nov. 1, 2006
WASHINGTON — The Treasury Department and the Internal Revenue Service today issued updated regulations reflecting changes to the requirements for disclosure of reportable transactions by taxpayers and material advisors and reflecting changes to the requirements for list maintenance by material advisors made by the American Jobs Creation Act of 2004.
The American Jobs Creation Act enacted updated rules requiring material advisors to file returns disclosing reportable transactions and to maintain investor lists.  The Act also updated the penalties that can be imposed on material advisors who fail to comply with these obligations.  The Treasury Department and the Internal Revenue Service previously issued interim guidance on these updated rules and on the parallel set of rules regarding taxpayer disclosure of reportable transactions.  In drafting the new regulations, consideration was given to comments received in response to the interim guidance.
 
With one limited exception, the new regulations have been issued in proposed form to permit taxpayers and material advisors to comment on them before they become effective.  In removing the book-tax difference category of reportable transactions and adding a new category for “transactions of interest,” the new regulations reflect the flexibility of the reportable transaction rules.  The Treasury Department and the Internal Revenue Service request comments on the proposed regulations.  In particular, comments are requested on how the regulations can be targeted to capture useful information about potentially abusive transactions while minimizing the burden imposed on taxpayers and material advisors.
“These regulations reflect our continued interest in transparency and disclosure of reportable transactions," said IRS Commissioner Mark W. Everson.  "We are continuing to use all the tools at our disposal to prevent abusive tax avoidance transactions, ensuring that we receive timely information on potentially abusive transactions while not imposing an undue burden on taxpayers and their advisors.”
 
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This news release supersedes News Release IR-2006-176, dated Nov. 13, 2006.
IR-2006-196, Dec. 28, 2006
WASHINGTON – Beginning Jan. 1, 2007, the Internal Revenue Service will implement revised user fees for installment agreements. For eligible individuals with income at or below certain levels, the fee for entering new agreements will not increase but remain at the 2006 level.
The Office of Management and Budget has directed federal agencies to charge user fees reflecting the full cost of goods or services that convey special benefits to recipients beyond those accruing to the general public. The installment agreement user fees have not been increased since first implemented in 1995. Increases in labor and other costs of processing have increased the cost of processing installment agreements.  
User fees for entering into a non-direct debit installment agreement will increase from $43 to $105, and the fee for direct debit installment agreements will increase from $43 to $52.
Taxpayers with income at or below established levels, based on the Department of Health and Human Services poverty guidelines, can apply and be qualified to pay a reduced user fee of $43 for establishing new agreements including direct debit installments. Information about requesting the reduced user fee will be included in installment agreement acceptance letters sent to individuals.
The fee for restructured or reinstated agreements will increase from $24 to $45 regardless of income level.
Related Item: Final Regulations on User Fees for Processing Installment Agreements 
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IR-2006-194, Dec. 22, 2006
WASHINGTON — The Internal Revenue Service announced that purchasers of qualified Ford Motor Company vehicles may continue to claim the Alternative Motor Vehicle Credit. The announcement comes after the IRS concluded its third quarterly review of the number of hybrid vehicles sold.
Ford sold 4,626 qualifying vehicles to retail dealers during the quarter ending September 30, 2006. The credit amount and make and model of qualified vehicles sold are:

Ford Escape 2WD, Model Years 2005, 2006 and 2007 — $2,600


Ford Escape 4WD, Model Years 2005, 2006 and 2007 — $1,950


Mercury Mariner 4WD, Model Years 2006 and 2007 — $1,950

This brings the total number of Ford qualifying hybrids reported to date to 16,511. Purchasers of Ford’s qualified vehicles may continue to rely on the previously issued IRS certifications concerning the vehicles’ qualification for the credit. However, those seeking the credit may want to buy early because the full credit is only available for a limited time.
Taxpayers may claim the full amount of the allowable credit up to the end of the first calendar quarter after the quarter in which the manufacturer records its sale of the 60,000th vehicle. For the second and third calendar quarters after the quarter in which the 60,000th vehicle is sold, taxpayers may claim 50 percent of the credit. For the fourth and fifth calendar quarters, taxpayers may claim 25 percent of the credit.  No credit is allowed after the fifth quarter.
Link:

Hybrid Cars and Alternative Motor Vehicles

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IR-2006-193, Dec. 21, 2006
WASHINGTON — The Internal Revenue Service today announced it is lifting a moratorium on determination letter applications for conversions from traditional defined benefit pension plans to so-called cash balance plans.
In Notice 2007-6, the IRS also provides interim guidance on provisions of the Pension Protection Act of 2006 involving cash balance plans, and the agency is requesting public comments on several issues addressed in the notice.  The notice will appear in Internal Revenue Bulletin 2007-3, dated Jan. 16, 2007.
In 1999, the IRS announced a suspension of the processing of determination letter applications by employers seeking to convert their existing defined benefit plans to cash balance plans.  The IRS said it was doing so, pending study on issues raised in such conversions, including the impact on older employees.  With the passage of the Pension Protection Act and today’s notice, the IRS can now resume processing the backlog of approximately 1,200 cases subject to the moratorium.  The IRS hopes to resolve a significant majority of these cases by the end of 2007.
The IRS is seeking public comment on a number of rules which were included in the Pension Protection Act of 2006 for the first time.  Many of these involve safe harbor provisions for all cash balance plans.  But the notice says the IRS will not review any of the pending cases for age discrimination issues.  The IRS said this is consistent with its past practice and with the Pension Protection Act, which did not address the issue of age discrimination on pre-June 30, 2005, conversions.
See Related Item:
Notice 2007-06PDF
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IR-2006-190, Dec. 12, 2006
WASHINGTON — The Internal Revenue Service today announced there will be no change in the interest rates for the calendar quarter beginning January 1, 2007.  The interest rates are as follows: 
 
•  eight (8) percent for overpayments [seven (7) percent in the case of a corporation];
  •  eight (8) percent for underpayments;
  •  ten (10) percent for large corporate underpayments; and
•  five and one-half (5.5) percent for the portion of a corporate overpayment exceeding $10,000.
Under the Internal Revenue Code, the rate of interest is determined on a quarterly basis.  For taxpayers other than corporations, the overpayment and underpayment rate is the federal short-term rate plus 3 percentage points.  Generally, in the case of a corporation, the underpayment rate is the federal short-term rate plus 3 percentage points and the overpayment rate is the federal short-term rate plus 2 percentage points.  The rate for large corporate underpayments is the federal short-term rate plus 5 percentage points.  The rate on the portion of a corporate overpayment of tax exceeding $10,000 for a taxable period is the federal short-term rate plus one-half (0.5) of a percentage point.
The interest rates announced today are computed from the federal short-term rate based on daily compounding determined during October 2006.
Rev. Rul. 2006-63, announcing the new rates of interest, is attached and will appear in Internal Revenue Bulletin No. 2006-52, dated December 26, 2006.
Related Item:

Rev. Rule 2006-63PDF

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IR-2006-189, December 7, 2006
 
WASHINGTON— With the reopening of the Internal Revenue Service’s headquarters building, the temporary procedures for submitting certain requests and submissions will no longer be in effect. As of December 11, taxpayers should make their submissions as they normally did before the IRS building at 1111 Constitution Ave. temporarily closed due to a flood.
Beginning on December 11, taxpayers should follow the normal instructions contained in Revenue Procedures 2005-68 and 2006-1 for expedited letter ruling requests for reorganizations and section 355 distributions. See Revenue Procedures 2005-68 and 2006-1.
Taxpayers are reminded to fax an extra copy of their requests to (202) 622-7707, as indicated in section 7.02(4) of Rev. Proc. 2006-1. The temporary procedure and the temporary fax and telephone numbers provided in IR-2006-123 should not be used.
During a short transition period, taxpayers should be aware not to fax any expedited requests from December 7th through December 11th. Telephone and fax communications will only be interrupted during this transition period.
Normal procedures also will begin Dec. 11 for all other submissions as described in Revenue Procedure 2006-1, including all submissions related to changes in accounting method or period or a § 301.9100 request for an extension of time on a request for change in accounting method or period. This announcement supersedes the temporary procedures described in IR-2006-123 and IR-2006-140.
When hand delivering documents, taxpayers should take into account the fact that the temporary courier desk at Crystal Mall #4 in Crystal City, Va., will close at 2 p.m. on Friday, Dec. 8.
 
 
Related Item:
Revenue Procedures 2005-68PDF
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IR-2006-186, December 1, 2006
WASHINGTON — The Internal Revenue Service announced today new guidelines for taxpayers to follow to substantiate donations to charities that were made by payroll deductions.
"This makes it easier for businesses and individuals to support worthwhile charities without fear of losing the deduction," said IRS Commissioner Mark W. Everson.
Notice 2006-110PDF explains how a taxpayer who makes charitable contributions by payroll deductions can meet the new recordkeeping requirements.  The taxpayer should retain a pay stub, Form W-2, or other document furnished by the employer that shows the total amount withheld for payment to charity, along with the pledge card that shows the name of the charity.
The recently enacted Pension Protection Act of 2006 changed the recordkeeping requirements for taxpayers claiming deductions for cash contributions to charities, including contributions made by payroll deductions.  For calendar year taxpayers, the new rules apply to contributions made beginning in 2007.
For federal workers, the notice specifically provides that a pledge card with the name of a Combined Federal Campaign will meet the new requirements.

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IR-2005-10, Jan.19, 2005
WASHINGTON – The Treasury Department and the Internal Revenue Service today issued interim guidance on two new penalty provisions enacted as part of the American Jobs Creation Act of 2004.
The American Jobs Creation Act creates a new penalty for the failure to disclose information about “reportable transactions,” which are transactions that the Treasury Department and IRS have determined to be potentially abusive. Notice 2005-11 provides interim guidance regarding application of this penalty to taxpayers who are required to disclose reportable transactions.
"Up to this point, there were no monetary penalties for failing, when required, to disclose these transactions,” said IRS Commissioner Mark W. Everson. “This provision puts teeth in the regulatory scheme."
In addition, the Act creates a new penalty if a taxpayer understates its tax liability relating to a reportable transaction. A higher penalty will apply if a taxpayer does not adequately disclose the facts of the reportable transaction. If the taxpayer discloses the transaction, the penalty may be avoided if the taxpayer had reasonable cause and acted in good faith. Notice 2005-12 provides interim guidance to taxpayers regarding these provisions, including when a taxpayer may rely on the advice of a tax advisor to establish reasonable cause and good faith.
Both Notice 2005-11 and Notice 2005-12 invite comments from the public regarding rules and standards under these new provisions.
Related Items:

Notice 2005-11 (PDF 66KPDF)


Notice 2005-12 (PDF 80KPDF)

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IR-2005-6, Jan. 10, 2005
WASHINGTON — The Internal Revenue Service alerted taxpayers who itemize deductions that they may claim on their 2004 tax returns charitable donations made during Jan. 2005 for relief of the victims of the Indian Ocean Tsunami.
The new law enacted on Jan. 7 allows these donations to be deducted as if they were made on Dec. 31, 2004.
“There are no extra forms to fill out or any additional burdens for taxpayers,” said IRS Commissioner Mark W. Everson. “As long as you send your check by the end of the month, the donation will be treated just like it was still 2004.”
The new law only allows for cash contributions. The contributions must be made specifically for the relief of victims in areas affected by the Dec. 26, 2004, tsunami in the Indian Ocean. The new law gives taxpayers the option of deducting the contributions on either their 2004 or 2005 returns, but not both.
The IRS advises taxpayers to be sure their contributions go to qualified charities. Taxpayers who have a specific charity in mind can make sure that it is a qualified charity by doing a search on IRS.gov.  Some organizations, such as churches or governments, may be qualified even though they are not listed on IRS.gov.  Donors can find out more about organizations helping the victims of the tsunami from agencies such as USAID and USA Freedom Corp.
The IRS reminds donors that contributions to foreign organizations generally are not deductible.
IRS Publication 526, Charitable Contributions, provides information on making contributions to charities. Publication 3833, Disaster Relief: Providing Assistance through Charitable Organizations, explains how the public can use charitable organizations to help victims of disasters, and how new organizations can obtain tax-exempt status. Both publications are available on IRS.gov.
 
When donors make contributions to assist the victims of the tsunami, they should notate their records to that effect.  Donors may want to notate the memo field of checks they send that it is a contribution to help tsunami victims.
Related Items:

IRS Charity Search


USAID Tsunami Relief


USA Freedom Corps

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IR-2005-4, Jan. 10, 2005
WASHINGTON — The Internal Revenue Service today announced the availability of the revised Schedules K-1 for this year’s filing season. The schedules have been simplified to reduce common errors and the burden associated with preparation and filing requirements.
Income, deductions and credits from partnerships, S corporations and trusts are reported to investors on Schedules K-1. The new partnership and S-corporation Schedules K-1 are available for the 2004 tax year and the trust Schedule K-1 will be available for tax year 2005.
The redesigned schedules feature an improved layout similar to that of Form W-2 as well as streamlined instructions. The schedules are also scannable, eliminating the risk of transcription errors.
“We’ve modeled this on the well-understood Form W-2,” IRS Commissioner Mark W. Everson said. “We believe this will be easier for taxpayers to follow.”
The Office of Taxpayer Burden Reduction led a collaborative effort in the redesign of the Schedules K-1, featuring a team of IRS subject matter experts who took input from external stakeholders in the tax professional community. The revisions also incorporate information gathered from public comments and feedback from focus group participants.
Approximately 25 million Schedules K-1 are filed each year with the highest number filed by partnerships.
“The revisions to Schedules K-1 will reduce taxpayer or practitioner preparation time, increase quality and improve reporting accuracy,” said Larry Gray, Governmental Affairs Liaison for the National Association of Tax Professionals. “The Schedules K-1 are now laid-out similar to a Form W-2. For example, a code for each amount to be reported in Box 13 ‘Other Deductions’ is listed on page two of Schedule K-1 (Form 1065) and is similar to the coding system used for Box 12 on Form W-2. By using the code information the taxpayer or practitioner will know specifically where to correctly report the amount on the taxpayer’s Form 1040.”
Links:

Schedule K-1, Partner's Shares of Income, Deductions, Credits, Etc. (Form 1065) (99K)PDF


Instructions for Form 1065 (83K)PDF


Schedule K-1, Shareholder’s Share of Income, Deductions Credits, Etc. (Form 1120S) (89K)PDF


Instructions for Form 1120S (68K)PDF

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IR-2005-3, Jan. 7, 2005
WASHINGTON — The Internal Revenue Service today announced a liberalization of the rule for interest owed on additional taxes voluntarily reported by taxpayers.
Section 6404(g) suspends interest accrual for individuals on taxes due if the IRS does not notify a taxpayer of the potential liability within 18 months after the filing of the return. This interest suspension then continues until 21 days after the IRS notifies the taxpayer of additional taxes due.
Previously, this rule was applied only where the additional taxes were found by the IRS. Today, Revenue Ruling 2005-4 extends the scope of section 6404(g) to additional taxes voluntarily reported by taxpayers on amended returns or in correspondence to the IRS. Further, to allow taxpayers to benefit from these expanded rules for earlier years, the ruling applies to amended returns or correspondence submitted for tax years ending after July 22, 1998, the date section 6404(g) was enacted.
Taxpayers who are due an interest adjustment under the new rule need not take any action as the IRS will automatically identify them. If the taxpayer’s account is paid in full, the IRS will issue a refund to the taxpayer for the interest. If the account shows a balance due, the IRS will reduce the amount due by the interest adjustment.
"This puts taxpayers who come forward voluntarily on the same footing as those we have pursued, which is only fair," IRS Commissioner Mark W. Everson said. "But it's important to note the suspension rules are different for people who have entered into designated abusive transactions."
 
The 2004 American Jobs Creation Act eliminated any interest suspension for transactions that have been designated as potentially abusive. The provision became effective Oct. 3, 2004.
Links: Revenue Ruling 2005-4 (17KPDF)
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IR-2005-2, Jan. 4, 2005
WASHINGTON — The Internal Revenue Service announced today that it has updated the optional sales tax tables in Publication 600 for Arkansas, California and Virginia.
The optional sales tax tables were updated to reflect sales tax changes made by the three states during 2004; the original tables were based on the states’ sales tax rates as of January 1, 2004.
The IRS made the update before any of the tables were mailed to taxpayers in Arkansas, California or Virginia. The IRS has updated the tables on IRS.gov., and next week the IRS will mail the updated Publication 600 to taxpayers in the three affected states.
The impact of the table change is relatively small. The sales tax figures were adjusted by a small amount. In addition, these states have income taxes, so most taxpayers residing in these states will not use the sales tax tables but will claim a state income tax deduction instead.
The American Jobs Creation Act of 2004 authorized the sales tax deduction as an option for those who itemize deductions, letting them choose between deductions for state and local income or sales taxes. Taxpayers will indicate by a checkbox on line 5 of Schedule A which type of tax they’re claiming. The law provides this choice for Tax Years 2004 and 2005 only.
The tables give taxpayers a sales tax deduction amount as an alternative to saving their receipts throughout the year and tabulating the amount actually paid. Taxpayers use their income level and number of exemptions to find the sales tax amount for their state. The table instructions explain how to add an amount for local sales taxes if appropriate.
Taxpayers also may add to the table amount any sales taxes paid on:

A motor vehicle, but only up to the amount of tax paid at the general sales tax rate; and


An aircraft, boat, home (including mobile or prefabricated), or home building materials, if the tax rate is the same as the general sales tax rate.

While this deduction will mainly benefit taxpayers with a state or local sales tax but no income tax – in Alaska, Florida, Nevada, South Dakota, Texas, Washington and Wyoming – it may give a larger deduction to any taxpayer who paid more in sales taxes than income taxes. For example, a person may have bought a new car, boosting the sales tax total, or claimed tax credits, lowering the state income tax paid.
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IR-2005-18, Feb. 23, 2005
WASHINGTON –– The Internal Revenue Service today unveiled the redesign of the employment tax return Form 941, Employer’s Quarterly Federal Tax Return. The simplified form should help businesses, tax practitioners and payroll companies avoid common errors as well as reduce the burden associated with completing and filing Form 941.
The redesigned form features an improved layout, plain language instructions, simplified deposit reporting and paid preparer identification. The form is also scannable, which the IRS expects will reduce transcription errors.
“Where we can, the IRS wants to simplify its forms,” said IRS Commissioner Mark W. Everson. “The new Form 941 will help achieve that.”
More than 23 million of these forms are filed annually by 6.6 million employers.
The Form 941 is used to report wages, tips and other compensation paid, as well as Social Security, Medicare and income taxes collected.
The Office of Taxpayer Burden Reduction led an IRS team in the redesign. External stakeholders from the payroll tax community provided input. The revision also reflects information gathered from the public and feedback from focus group participants.
“The new 941 is much easier on the eye and much more user-friendly,” said Scott Mezistrano, senior manager of government relations for the American Payroll Association. “With the shading, bigger boxes and improved instructions right on the form, you know exactly what you are supposed to report and where to put it. IRS did a very thorough job of reviewing every line on the 941 and considering how it could be made more clear.”
The form is available on IRS.gov. Printed copies of the form and instructions are also available by calling the IRS at 1-800-829-3676.
Related links:
• Form 941, Employer’s Quarterly Federal Tax ReturnPDF
• Instructions for Form 941PDF
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IR-2005-16, Feb.11, 2005
WASHINGTON — As taxpayers begin to prepare their tax returns, the Internal Revenue Service notes that some may be sending their returns to a different service center than last year. Those who received a tax instruction booklet from the IRS in the mail and use the labels included with the booklet can be assured that their tax returns will go to the correct address. Taxpayers who e-file are not affected by these changes.
For tax year 2004, the mailing changes affect returns, with or without payments, from Connecticut and Virginia and for returns with payments from Arizona and Utah.
Taxpayers should send:

Returns from Connecticut to the IRS in Kansas City, Mo.


Returns from Virginia without payments to the IRS in Fresno, Calif., and


Returns from Arizona, Utah and Virginia with payments to the IRS in Fresno, Calif.

For taxpayers who file paper returns, the correct center addresses are on the envelopes in the tax packages. Taxpayers who do not receive a package should refer to the back cover of the Form 1040, 1040-A or 1040EZ instructions.
Taxpayers who e-file will not be affected by these changes. Almost half of all individuals chose to e-file their federal tax returns in 2004.
Related Items:

Where to file list for taxpayers



e-file for individual taxpayers


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IR-2005-15, Feb. 10, 2005
The Competent Authorities of the United States and New Zealand have entered into a mutual agreement to clarify the entitlement of members of certain fiscally transparent entities to benefits under the Convention between the United States of America and New Zealand for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with Respect to Taxes on Income, signed on July 23, 1982, and as amended by Protocol signed on July 23, 1982, and as implemented in New Zealand by The Double Taxation Relief (United States of America) Order 1983 signed on July 23 1983.
It has come to the attention of the Competent Authorities that a resident of a Contracting State may derive income from the other Contracting State through an entity that is organized in, and treated as fiscally transparent by, the first Contracting State, but that is not treated as fiscally transparent by the other Contracting State.
Consistent with the approach taken in Article 4 (Residence) of the Convention, and pursuant to the authority of Article 24 (Mutual Agreement Procedure) of the Convention, the Competent Authorities agree that, in applying the Convention, income paid to and through such an entity is considered to be derived by a resident of the Contracting State to the extent of the share the resident has in the income.
For example, if a resident of the United States is a partner or member of an entity created or organized in the United States, under the law of the United States or any state of the United States, and the entity is treated for United States federal tax purposes as a partnership or is disregarded as an entity separate from its owner (e.g., a limited partnership; or a Limited Liability Company, including one owned by a single member), the resident of the United States would be afforded the benefits of the treaty on the income that the resident derives from New Zealand through the entity, even if under its domestic law New Zealand does not treat the entity as fiscally transparent. Consistent with Article 4 (1)(b) of the New Zealand/US treaty, the benefits extend to the income received by the fiscally transparent entity only to the extent of the resident’s share of that income.
Links:

International Taxpayer - Competent Authority Assistance

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IR-2005-14, Feb. 10, 2005
WASHINGTON — The Internal Revenue Service has certified the model year 2005 Honda Insight, the Honda Civic Hybrid, and the Honda Accord Hybrid  as being eligible for the clean-fuel vehicle deduction.  This certification means that taxpayers who purchase one of these hybrid vehicles new may claim a tax deduction of up to $2,000 on Form 1040.
Under the recently signed Working Families Relief Act of 2004, the clean-burning fuel deduction is up to $2,000 for certified vehicles first put into service in 2004 and 2005.  The deduction will be limited to $500 for vehicles placed in service in 2006. No deduction will be allowed after 2006.
Federal Law allows individuals to claim a deduction for the incremental cost of buying a motor vehicle that is propelled by a clean-burning fuel.  By combining an electric motor with a gasoline-powered engine, these hybrid vehicles obtain greater fuel efficiency and produce fewer emissions than similar vehicles powered solely by conventional gasoline-powered engines.
This one-time deduction must be taken in the year the vehicle is originally used.  The taxpayer must be the original owner.  Individuals do not have to itemize deductions on their tax return to claim this deduction. This benefit can be taken as an adjustment to income on the Form 1040.
The amount of the deduction for the Insight, Civic Hybrid or Accord Hybrid  was set after the manufacturer, American Honda Motor Co. Inc., documented for the IRS the incremental cost related to the vehicle’s electric motor and related equipment.
The IRS has previously certified the Honda Insight for model years 2000-2004 and the Honda Civic Hybrid for model years 2003 and 2004.
Links:

Clean-Fuel Vehicle Deduction Available for Certain Models

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IR-2005-12, Feb. 1, 2005
WASHINGTON – The Internal Revenue Service today announced the release of a revised form used by municipalities and other issuers of tax-exempt bonds to make arbitrage related payments.
The revised Form 8038-T, Arbitrage Rebate, Yield Reduction and Penalty in Lieu of Arbitrage Rebate, will streamline the process for issuers and will help the IRS identify potentially abusive transactions.
Arbitrage is the profit that results from investing the proceeds of tax-exempt bonds in higher yielding taxable securities. Tax law generally requires a rebate of arbitrage profits to the U.S. Treasury.
“Taxpayers will have less paperwork with this new approach,” said IRS Commissioner Mark W. Everson. “The IRS will get new information that will help spot potentially abusive bond trends before they get out of hand.”
The new form reduces the number of items to be completed by 20 percent and includes instructions re-written in a more useful, plain-language manner. In addition, a new section requests information related to various items such as qualified administrative costs, guaranteed investment contracts and the amount of proceeds used to redeem bonds. These new items will assist in spotting potentially abusive bond issues.
“We are finding that certain patterns exist in a number of abusive arbitrage transactions,” said Mark Scott, Director of the IRS’s Tax Exempt Bond Division. “Some of the new information asked for on the form will assist us in identifying such transactions.”
The effort to revise Form 8038-T began by soliciting input from practitioners that use the form. Many of the comments received were incorporated in the revisions, including a change requested by several commentators related to the report number.  Other significant revisions include new sections for late payments and qualified zone academy bonds and elimination of a number of outdated questions related to seldom used elections.
The revised Form 8038-T is available online at IRS.gov. Printed copies of the form and instructions are available by calling the IRS toll-free at (800) 829-3676.
Links:

Form 8038-T (Arbitrage Rebate) (66K PDF)


Form 8038-T (Instructions) (29K PDF)

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IR-2005-39, March 30, 2005
WASHINGTON — The Internal Revenue Service announced today that e-file, direct deposit and e-payment programs are running at record paces so far this year.
Through March 25, 49 million tax returns were filed electronically, a 7 percent increase from last year. Overall, 66 percent of all returns were e-filed – up from 62 percent for the same period last year. While this percentage will decline as April 15 approaches, the IRS expects for the first time to have more than half of all individual tax returns filed electronically.
Also, 3.74 million returns have been filed through the Free File program so far this year – up 43.7 percent from the 2.6 million returns filed through the program at this time last year. The IRS and a consortium of tax software manufacturers offer free services through Free File, which is available at IRS.gov. Free file is in its third year.
“More and more taxpayers are turning to e-file and other electronic programs,” said IRS Commissioner Mark W. Everson. “This shapes up as a really strong year. Taxpayers who haven’t filed yet should check into e-file and Free File.”
Record numbers of individuals are paying their taxes with credit cards. So far this year, almost half a million taxpayers have paid their taxes with a credit card – up from 324,000 for the same time last year. So far, this year’s credit card payments total $269 million – up 46 percent from the total for the same period last year
Record numbers of individuals are choosing to have their refunds directly deposited into their bank accounts. So far this year, 64 percent of all refunds were paid through direct deposit compared to 60 percent for the same time last year.
Taxpayers who e-file and choose direct deposit get their refunds in half the time of those who file a paper return. Even paper filers, however, can get the benefit of direct deposit by choosing that option on their tax forms; they will get their refunds a week sooner than waiting for a paper check.

2005 FILING SEASON STATISTICS


Cumulative through the week ending 3/26/04 and 3/25/05

 

2004


2005


% Change


Individual Income Tax Returns:


Total Receipts


74,453,000


73,762,000


-0.9


Total Processed


69,480,000


69,605,000


0.2


E-filing Receipts:


TOTAL


45,800,000


49,021,000


  7.0


TeleFile (phone)


3,080,000


2,641,000


-14.4


Computer


42,720,000


46,380,000


  8.6


Tax Professionals


32,226,000


34,369,000


  6.6


Self-prepared


10,494,000


12,011,000


14.5
 


Total Refunds:


Number


62,801,000


62,239,000


-0.9


Amount


$132.682 billion


$138.902 billion


4.7


Average


$2,113


  $2,232


5.6


Direct Deposit Refunds:


Number


37,950,000


40,118,000


    5.7


Amount


   $93.728 billion      


  $104.243 billion


11.2


Average


$2,470 


$$2,598


  5.2

Links:

Electronic Payment Options

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IR-2005-36, March 23, 2005

WASHINGTON —The Internal Revenue Service announced today that more people have used Free File this year than for all of last year. As of March 16, 3.55 million tax returns have gone through Free File, up 44 percent compared to the same time last year and exceeding last year’s total of 3.51 million.
"This is another record-setting year for Free File," said IRS Commissioner Mark W. Everson. "The success of Free File reflects a broader increase in the overall e-file program. People like the ease and convenience of filing electronically."
Electronic filing continues to show a strong increase, with e-filed tax returns running almost 7 percent ahead of last year. The biggest increase is being seen in home computer use, which is up almost 15 percent.
The IRS and a consortium of tax software manufacturers offer free services through Free File, which is available at IRS.gov. Free File is in its third year.
People e-filed 45.9 million returns through March 18 – up almost 3 million over last year’s numbers.
Out of 67 million returns filed as of March 18, 68 percent of them were e-filed – up from 63 percent the previous year. While this percentage will decline as April 15 approaches, the IRS expects for the first time to have more than half of all individual tax returns filed electronically.
Record numbers of individuals are choosing to have their refunds directly deposited into their bank accounts. So far this year, 66 percent of all refunds are through direct deposit – up from 62 percent over the same period last year.
Taxpayers who e-file and choose direct deposit get their refunds in half the time of those who file a paper return. Even paper filers, however, can get the benefit of direct deposit by choosing that option on their tax forms; they will get their refunds a week sooner than waiting for a paper check.

2005 FILING SEASON STATISTICS


Cumulative through the week ending
3/19/04and 3/18/05

 


2004


2005


% Change


Individual Income Tax Returns


Total Receipts


68,183,000


67,377,000


-1.2


Total Processed


63,221,000


63,455,000


  0.4


E-filing Receipts:


TOTAL


43,049,000


45,936,000


  6.7


TeleFile (phone)


2,972,000


2,543,000


-14.4


Computer


40,077,000


43,393,000


  8.3


Tax Professionals


30,197,000


32,064,000


  6.2


Self-prepared


9,880,000


11,329,000


14.7


Tax Year 2004 Refunds Certified:


Number


57,516,000


57,158,000


-0.6


Amount


$122.373 billion


$129.116 billion


  5.5


Average


$2,128


$2,259


  6.2


Direct Deposit Refunds


Number


33,918,000


37,949,000


  5.7


Amount


$89.001 billion


$99.208 billion


11.5


Average


$2,478


$2,614


  5.5

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IR-2005-35, March 22, 2005

WASHINGTON — “Where’s My Refund?,” the popular Internet-based service used by taxpayers to check on their federal income tax refunds, now offers a safe and easy way to trace refund checks and update a flawed mailing address.
These enhancements allow taxpayers to start a trace for lost or missing refund checks and notify the Internal Revenue Service of an address change when a refund check goes undelivered.
“This new feature lets taxpayers take quick and easy steps to track down a lost refund,” said IRS Commissioner Mark W. Everson. “It can reduce headaches for nearly 88,000 taxpayers who wind up with undelivered refund checks each year.”
Taxpayers securely access their personal refund information through IRS.gov, the agency’s Web site. They enter their Social Security number, filing status and the exact amount of their refund. These shared secrets — data known only to the taxpayer and IRS — verify the person is authorized to access the account and make it possible to avoid delays in tracing refunds and changing an address.
Taxpayers used “Where’s My Refund?” nearly 24 million times last year and have used it more than 16 million times so far this year.
The new features offer step-by-step instructions to allow taxpayers to trace their lost checks and change or correct their mailing addresses when their refund checks have been returned to the IRS as undeliverable. When the taxpayer makes the change online, it automatically updates the IRS database and provides a date when the refund check should be received.
The new services are specialized so only those taxpayers who actually need the services will see them online. The refund trace can be started 28 days after the date the IRS says the refund check was mailed. Taxpayers who file married, filing joint tax returns must also complete and fax or mail a copy of Form 3911, Taxpayer Statement Regarding Refund. Signatures of both taxpayers must be on the form. The form is only required for those whose filing status is married, filing joint.

Taxpayers can avoid undelivered refund checks by having their refunds directly deposited into a personal checking or savings account. Direct deposit also guards against theft or lost refund checks. The option is available for both paper and electronically filed returns.
Almost 36 million taxpayers have used direct deposit for $94 billion in refunds this year. The number of direct deposit refunds is up nearly 12 percent from last year.
Link:  Where’s My Refund?
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