etrent17/irs-articles huggingface dataset:
IR-2007-196, Dec. 5, 2007
 
WASHINGTON — Purchasers of certain large trucks, buses or other heavy vehicles running on alternative fuel can claim a credit of up $32,000, and purchasers of certain large hybrid trucks and other heavy hybrid vehicles can claim a credit of up to $12,000 if they qualify for the Alternative Motor Vehicle Credit.
Qualified Alternative Fuel Motor Vehicles (QAFMV) are powered solely by alternative fuels, such as compressed natural gas, liquefied natural gas, liquefied petroleum gas, hydrogen and any liquid at least 85 percent of the volume of which consists of methanol. Vehicles powered by a combination of an alternative fuel and a petroleum-based fuel may qualify for a reduced credit. Purchases of new vehicles with special equipment, as well as ones converted for alternative power, may qualify.
A credit also is available for certain new qualified heavy hybrid vehicles with a gross vehicle weight rating in excess of 8,500 pounds. A qualifying heavy hybrid motor vehicle draws propulsion energy from onboard sources of stored energy which are both an internal combustion or heat engine using consumable fuel, and a rechargeable energy storage system. This credit should be not confused with the alternative motor vehicle credit for qualified hybrid passenger automobiles and light trucks.
The list of vehicles is updated periodically
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IR-2006-18, Jan. 24, 2006
WASHINGTON — The IRS has issued a new publication today explaining changes to the tax law and relief provisions available to those affected by Hurricanes Katrina, Rita and Wilma.
Publication 4492, Information for Taxpayers Affected by Hurricanes Katrina, Rita, and Wilma, is available on IRS.gov and paper copies will be available in about two weeks.
This new publication will list the disaster areas for each hurricane and explain which areas are eligible for administrative relief from the IRS and which areas receive special tax breaks under recently enacted provisions of the tax law.
The publication provides information for individuals regarding how to claim unreimbursed losses, the tax favored use of retirement savings, and new rules regarding charitable giving.
The publication not only provides information useful to individuals but highlights the changes businesses need to know about, such as a special depreciation allowance for qualified Gulf Opportunity Zone property, an increase in the amount affected businesses can expense instead of depreciating and new net operating loss (NOL) rules for losses in the GO Zone.
Related Link:
Publication 4492, Information for Taxpayers Affected by Hurricanes Katrina, Rita, and Wilma (106.6K)PDF
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IR-2006-16, Jan. 18, 2006
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 2005, the mailing changes affect returns, with or without payments, from the District of Columbia and 11 states – Colorado, Delaware, Kansas, Maryland, Mississippi, Nebraska, New Mexico, Ohio, South Dakota, Virginia, and West Virginia.
Taxpayers should send:

Returns from Delaware and Virginia to the IRS Center in Atlanta, Georgia;


Returns from the District of Columbia and Maryland to the IRS Center in Andover, Massachusetts;


Returns from Ohio to the IRS Center in Kansas City, Missouri;


Returns from Kansas, Mississippi and West Virginia to the IRS Center in Austin, Texas;


Returns from Colorado, Nebraska, New Mexico, and South Dakota to the IRS Center in Fresno, California.

For taxpayers who file paper returns, the correct center addresses are on labels inside the tax packages. Taxpayers who do not receive a package should refer to the back cover of the instructions to Form 1040, 1040-A or 1040EZ.
Taxpayers who e-file will not be affected by these changes. For the first time ever, more than half of all individuals chose to e-file their federal tax returns in 2005. To find out more about IRS e-file, go to IRS.gov.
Related links: See the end of the Form 1040PDF, Form 1040A (obsolete), or Form 1040EZ (obsolete) instructions as appropriate.
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WASHINGTON — IRS Commissioner Mark W. Everson today announced that he has directed a review of the Questionable Refund Program, which will include notification procedures pertaining to frozen refunds.
"We will announce plans in the very near future to institute notification procedures as well as significant processing improvements to minimize the number of taxpayers whose refunds are frozen unnecessarily," Everson said in announcing the review.
 
The IRS noted that members of Congress and the National Taxpayer Advocate have raised legitimate issues regarding the length of delay and lack of notification for refund claims and have called for changes to the program.
“Claiming fraudulent refunds ultimately undermines the integrity of the tax system, but I believe that appropriate notification should be given when refunds have been frozen,” Everson said. “Honest taxpayers expecting a refund deserve to be treated fairly.”
The IRS established the Questionable Refund Program (QRP) to deal with the serious problem of refund fraud, which has increased significantly in recent years. The IRS estimates that fraudulent refund claims now exceed a half-billion dollars a year. Congress has held a number of hearings urging the IRS to devote additional resources and improve its detection and prevention of fraudulent refunds, particularly those involving prisoners.
The typical fraudulent refund claim involves false income and withholding. A significant portion includes false Earned Income Tax Credit claims of up to $4,400 per return.
According to the IRS, each year it receives more than 130 million individual income tax returns and issues over 100 million refunds totaling over $200 billion. The QRP holds for further scrutiny less than 1 percent of refund returns. Of the refund claims held beyond the normal refund cycle, about 200,000 or 0.2 percent of all refund claims are held longer than one week, and many refunds are held for a period of months or even years.
The IRS has often not sent notices to those taxpayers whose refunds are held because some of these returns are subject to additional criminal investigation.  Therefore, the taxpayers may be unaware that their refunds have been frozen.
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IR-2006-17, Jan. 19, 2006
WASHINGTON — The Internal Revenue Service announced the selection of seven new members for the Information Reporting Program Advisory Committee (IRPAC). The appointees will join eight returning members, who are in the second year of a three-year term.
The seven new members appointed to serve on the committee are:

Chandra Bhansali, President and co-founder, AccountantsWorld.com, Hauppauge, N.Y.
	 


Karen Botvin, Senior Manager, Vanguard Group, Inc., Investor Tax Services, Malvern, Pa.
	 


Holly Carlin, owner, Holly A. Carlin, CPA, Inc., Park City, Utah.
	 


Erica Dinner, Assistant Director, Tax Information Reporting, Hartford Life Insurance Company, Simsbury, Conn.
	 


Edward Jennings, Corporate Tax Manager, University of Michigan, Ann Arbor, Mich.
	 


Samuel Kerch, Controller/Senior Tax Research Analyst, Symmetry Software, Scottsdale, Ariz.
	 


Alice Faye Touchet, Principal, Faye Touchet, EA, Lafayette, La.
	 

IRPAC was established in 1991 to focus on information reporting issues. The committee’s purpose is to provide an organized public forum for discussion of relevant tax administration issues between IRS officials and representatives of the public. Committee members provide recommendations and suggestions on a broad range of issues intended to improve the information reporting program and achieve equitable treatment of all taxpayers.
Related Item:
Information Reporting Program Advisory Committee (IRPAC) Facts
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IR-2006-15, Jan. 18, 2006
WASHINGTON — The Internal Revenue Service and its private-sector partners today announced the opening of Free File, the free tax preparation and free electronic filing initiative that marks its fourth year. More than 70 percent of the nation’s taxpayers – more than 92 million people - qualify for Free File this year.
A new agreement between the IRS and the Free File Alliance, the consortium of tax preparation software companies, means enhanced services and more information for taxpayers who use the free services. Taxpayers must access Free File through IRS.gov.
“This unique private-public partnership provides free tax software and free electronic filing. It’s targeted to middle- and low-income taxpayers who can most benefit from this program,” said IRS Commissioner Mark W. Everson. ”Free File is another example of the IRS’ effort to bring new and innovative services to taxpayers. Taxpayers should review the numerous Free File offerings and see which one works best for them.”
Free File Alliance Executive Director Tim Hugo stated, "In addition to providing free federal tax preparation services to millions of low and moderate income Americans, the Free File Alliance is proving to be the model for public-private partnerships in the United States."
Among the services and improvements this year:
 
The 3 million taxpayers who used to file their income tax return through TeleFile, an option no longer available, automatically qualify for Free File this year;
Seventy percent of the nation’s taxpayers – those with an adjusted gross income of $50,000 or less – will be eligible, but each company sets its own criteria;
Alliance members who offer refund anticipation loans (RALs) must disclose fees and interest rates upfront and must make clear that RALS are loans, not tax refunds. Taxpayers also must consent to receive additional information about ancillary financial products;
Alliance members will provide additional tax forms such as Form 4868 that allows for automatic extensions of time to file;
Alliance members’ Web sites will display whether state online tax preparation and filing services are available and the associated fees, if any.
For 2006, taxpayers with access to a computer and the Internet may check on IRS.gov to determine if they will qualify for Free File. The Free File Alliance selects its own membership, but all members must meet the IRS’ high standards for security and privacy. The IRS does not endorse any Free File Alliance company or product. The IRS also will manage the content of the Free File pages accessible on IRS.gov. Taxpayers do not have to purchase any product in order to qualify for the free services.
More than 5.14 million taxpayers used Free File last year, almost a 47 percent increase over the 3.5 million users in 2004. Free File debuted in 2003 with nearly 2.8 million users.
Related Item:
Free File Home
IR-2006-14, Jan. 17, 2006
Washington — Following new tax law legislation enacted late in the year, the Internal Revenue Service announced today that e-file availability for a small number of 2005 tax forms will be delayed until later this month.
The late tax law changes mean that 13 forms will not be available for e-file until the end of January. None of the most commonly used forms are affected by the delay, and 114 other forms remain available for e-filing.
Based on last year’s January filings, a few hundred thousand taxpayers could be affected by the delay, with the largest group involving people filing Form 8863, “Education Credits.”
Affected taxpayers who e-file should wait until the end of January to submit their returns. They will be unable to file electronically these forms in the interim.
Affected taxpayers can still file on paper from copies of the forms posted on the IRS.gov website, but the agency noted that waiting to e-file until the end of the month will still generally result in a faster refund because of the faster processing times for electronic returns.
The IRS anticipates that all of the forms and related computer-programming changes will be complete by the end of January. Most taxpayers do not receive their Forms W-2 and 1099 until late January. In all, the IRS expects about 135 million returns to be filed this year.
Disaster-Related Forms:
Form 982, Reduction of Tax Attributes Due to Discharge of Indebtedness (and Section 1082 Basis Adjustments)
Form 8606, Nondeductible IRAs
Form 8863, Education Credits (Hope and Lifetime Learning Credits)
Form 8915, Qualified Hurricane Retirement Plan Distributions and Repayments
Form 3468, Investment Credit
Form 3800, General Business Credit
Form 5884-A, Credits for Employers Affected by Hurricane Katrina, Rita, or Wilma
General Tax Forms:
Form 8379, Injured Spouse Allocation
Form 8611, Recapture of Low Income Housing Credit
Form 8864, Biodiesel and Renewable Diesel Fuels Credit
Form 8896, Low Sulfur Diesel Fuel Production Credit
Form 8271, Investor Reporting of Tax Shelter Registration Number
Form 8886, Reportable Transaction Disclosure Statement
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IR-2006-12, Jan. 13, 2006
WASHINGTON — Today the IRS and Treasury have provided guidance on a process that manufacturers can use to certify the amount of credit the purchaser of a hybrid or lean burn vehicle can claim. Taxpayers who are purchasing these vehicles will be able to rely on the manufacturer’s certification when they claim the credit on their tax return.
The tax credit for hybrid vehicles, which was enacted by the Energy Policy Act of 2005, may be as much as $3,400 for those who purchase the most fuel-efficient vehicles. Hybrid vehicles have drive trains powered by both an internal combustion engine and a rechargeable battery. Many currently available hybrid vehicles will qualify for the tax credit. The guidance also provides a similar certification process for advanced lean burn technology vehicles.
Since taxpayers may claim the full amount of the allowable credit only up to the end of the first calendar quarter after the quarter in which the manufacturer records its sale of the 60,000th hybrid and advanced lean-burn technology motor vehicle, consumers seeking the credit may want to buy early in the year.
The Energy Policy Act also provides tax credits for motor vehicles that are not covered by today’s guidance. The other vehicles eligible for credits are fuel cell vehicles, alternative fuel vehicles, and hybrid heavy trucks. The IRS will issue guidance providing certification procedures for these vehicles in the near future.
Related Link: Notice 2006-09PDF
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IR-2006-13, Jan. 13, 2006
WASHINGTON — Internal Revenue Service officials today reminded taxpayers that they have until Jan. 23, 2006 to file an election to take part in the global settlement program. There will be no deadline extension.
“This is a last-chance opportunity for taxpayers to put these deals behind them,” said IRS Commissioner Mark W. Everson. “A recent tax law change involving interest calculation gives taxpayers an even bigger incentive to come forward.”
The settlement program covers 21 transactions consisting of both listed and non-listed transactions. With the exception of applicable penalties, which vary depending on the level of abusiveness, the settlement terms are identical for all 21 transactions. Details on the covered transactions as well as the settlement terms can be found in Announcement 2005-80PDF and FS-2005-17.
This settlement initiative allows taxpayers the opportunity to quickly and efficiently close out a wide range of abusive transactions. Those taxpayers, who may be tempted to bypass the settlement program, should weigh their options carefully.
“Appeals will carefully consider both the issue merits and the penalty,” said Dave Robison, Chief of Appeals. “But, taxpayers should not expect to receive a better offer in Appeals than the initiative terms and they may, in fact, see a less favorable outcome.”
The recently passed provision in the Gulf Opportunity Zone Act of 2005 modified the rules for calculating interest on tax deficiencies of individual taxpayers. Congress changed the law to assess interest continuously on additional taxes involving abusive tax shelter transactions starting with the filing of the tax return up to the time the taxes are settled and paid. Before the Act, interest was generally suspended for the period beginning 18 months after the filing of the tax return until Oct. 3, 2004.
The new law, however, carves out from this added interest charge any transaction that taxpayers choose to close out as a part of the global settlement initiative. This incentive is a onetime exception and will be available only for those that come forward with their election by Jan. 23, 2006 and subsequently resolve the issue by a closing agreement with the IRS. Taxpayers who bypass the settlement initiative and go to Appeals will not qualify for this exception but will incur the full interest charge on their tax deficiencies.Links:

IRS Launches Abusive Transaction Settlement Initiative


California Franchise Tax BoardPDF


New Tax Law Affects Settlement Initiative


Announcement 2005-80PDF


FS-2005-17


Announcement 2005-80, Transaction-Specific Settlement ProvisionsPDF

General FAQs for Announcement 2005-80, (13 pages, 126 kb)PDF (PM Update, 1/20/06)
Specific Transaction FAQs for Announcement 2005-80, (Items added, 1/18/06)

Form 13750, Election to Participate in Announcement 2005-80 Settlement Initiative (90kb)PDF


Form 13751, Waiver of Right to Consistent Agreement of Partnership Items (16kb)PDF
IR-2006-11, Jan. 12, 2006
WASHINGTON — The Internal Revenue Service today announced the availability of the revised Form 1041 Schedule K-1 for this year’s filing season. The schedule has been simplified to reduce common errors and the burden associated with preparation and filing requirements.
Income, deductions and credits from trusts and estates are reported to beneficiaries on Schedule K-1. The redesigned schedule is similar to the partnership and S-corporation Schedules K-1, which were changed last year. The new format features an improved layout similar to that of Form W-2, as well as streamlined instructions. It is also scannable, reducing the risk of transcription errors.
“We’ve modeled this on the well-understood Form W-2,” said Kevin Brown, Commissioner of the agency’s Small Business/Self-Employed Division. “We believe this will be easier for taxpayers to follow.”
The Office of Taxpayer Burden Reduction led a collaborative effort to redesign all of the Schedules K-1. A team of IRS subject matter experts combined input from external stakeholders in the tax professional community with information from public comments and feedback from focus group participants to develop the innovative new format.
Approximately 26 million Schedules K-1 are filed each year with 3.5 million being filed by estates and trusts. More than 99 million hours of taxpayer burden are saved by the three Schedule K-1 redesigns.
The schedule is available on IRS.gov. Printed copies are also available by calling the IRS at 1-800-829-3676.
Related links:

Schedule K-1, Beneficiary’s Share of Income Deductions, Credits, Etc., (Form 1041) and Instructions for Beneficiary Filing Form 1040 (175.2K)PDF


Schedule K-1, Partner's Share of Income, Deductions, Credits, Etc. (Form 1065) (202.6K)PDF


Partner’s Instructions for Schedule K-1 (Form 1065) (87.1K)PDF


Schedule K-1, Shareholder’s Share of Income, Deductions, Credits, Etc. (Form 1120S) (67.6K)PDF


Shareholder’s Instructions for Schedule K-1 (Form 1120S) (76.4K)PDF


IR-2005-4, Revised Schedules K-1 to Reduce Filing Complexity

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IR-2006-8, Jan. 9, 2006
WASHINGTON — The Internal Revenue Service is joining national television network Telemundo in a special one-hour tax program for Spanish-speaking taxpayers on Sunday, Jan. 15. The program, “Los Impuestos y Usted” (“Taxes and You”), will air at 3:30 p.m. Eastern and Pacific Time, and at 2:30 p.m. Central and Mountain Time.
“Los Impuestos y Usted” will focus on a variety of tax issues, ranging from the Earned Income Tax Credit (EITC) for low-income working taxpayers to electronic filing (IRS e-file) and from Free File to tips on choosing a tax preparer. IRS experts also will discuss taxpayers’ rights and how to obtain help with tax questions.
Mónica Noguera, host of Telemundo’s special programs, will present the IRS program, which features in-studio interviews with IRS tax experts.
In addition to the television broadcast, Telemundo has created an IRS resource center on its Telemundo.com Web site, under the program title “Los Impuestos y Usted.”  By using the Chat link on this page, users will be able to join an online Web Chat through which they can send tax questions to IRS experts. The IRS experts will answer the incoming questions live from 3:30 p.m. to 8:30 p.m. EST.
Information about the IRS is available in Spanish online at /espanol or toll-free by telephone at 1-800-829-1040, extension 8.
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IR-2006-7, Jan. 6, 2006
WASHINGTON — The Internal Revenue Service announced new rules effective Jan. 9, 2006 for people who participate in the Individual Taxpayer Identification Number (ITIN) Acceptance Agent program.
An Acceptance Agent is an individual, business or organization (college, financial institution, accounting firm, etc.) authorized by IRS to assist individuals in obtaining ITINs. Acceptance Agents review applicants' documentation, complete a certificate of accuracy, and forward the certificate and application to the IRS for processing.
The ITIN is for taxpayers who do not qualify for a Social Security Number but who still need the nine-digit identification number used by the IRS to process a Form 1040 and other tax schedules.
Revenue Procedure 2006-10, issued publicly last month, outlines the new rules and instructions for Acceptance Agents. The four major changes are:
Acceptance Agent applicants are required to submit to suitability checks.
Existing Acceptance Agent agreements will expire on Dec. 31, 2006; and Acceptance Agents must reapply to retain their approved status.
Acceptance Agent agreements must be renewed every fourth year.
Acceptance Agents may request their names be added to a publicly available list that will be published by the IRS.
These changes are part of an on-going IRS effort to ensure that ITINs are used strictly for tax administration purposes. In recent years, the IRS has made a number of revisions to the ITIN program such as requiring the ITIN application be accompanied by a completed tax form and streamlining the number of identification documents that Acceptance Agents can use to confirm the ITIN applicant’s identity.
Acceptance Agent applicants can download or print IRS Form 13551, Application to Participate in the IRS Acceptance Agent Program, available on IRS.gov. Revenue Procedure 2006-10, supersedes Rev. Proc. 96-52, 1996-2 C.B. 372, effective Jan. 9, 2006.
Links:
Revenue Procedure 2006-10PDF
Form 13551, Acceptance Agent applicationPDF
ITIN Frequently Asked Questions
IR-2006-6, Jan. 6, 2006
WASHINGTON — Internal Revenue Service and Treasury officials announced today the elimination of a class of reportable transactions involving significant book-tax differences. Officials took this action after a new return schedule for large businesses made separate reporting unnecessary, while continuing to ensure that these transactions will come to the attention of the IRS. 
Taxpayers are required to disclose to the IRS their participation in reportable transactions to the IRS. In certain cases, taxpayers’ advisors are also required to disclose their involvement with reportable transactions to the IRS and to keep lists of participants in those transactions. The reportable transaction rules aim to increase transparency by ensuring that the IRS learns of potentially abusive transactions before these transactions are uncovered in an examination.
Under existing rules, one of the six categories of reportable transactions involves transactions that have a greater than $10 million difference between financial reporting and tax reporting. In 2004, the IRS released Schedule M-3 to be used by corporations with total assets of $10 million or more that file Form 1120 corporate income tax returns. This new schedule provides detailed information to the IRS on transactions with significant book-tax differences. In December 2005, the IRS released draft versions of Schedule M-3 applicable to certain other entities with assets of $10 million or more. When finalized, these new versions of Schedule M-3 will be applicable for the 2006 tax year.
After a review comparing reportable transaction submissions and the information being provided on Schedule M-3, the IRS and Treasury Department have concluded that the book-tax difference category of reportable transactions is no longer necessary. Notice 2006-6, released today, eliminates the book-tax difference category of reportable transactions.
Regulations are currently being drafted to reflect recent statutory changes to the disclosure regime. In that context, the IRS and Treasury Department are working to make adjustments to the disclosure rules to ensure that they are properly targeted. The IRS and Treasury Department remain committed to making sure that the disclosure regime provides meaningful information without imposing undue burden. 
Links:

Notice 2006-6 (55KBPDF)

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IR-2006-4, Jan. 4, 2006
WASHINGTON –– The Internal Revenue Service today issued guidance that provides heavy equipment dealers with a safe harbor that allows them to approximate the cost of the equipment parts inventory using the replacement cost method of accounting.
The guidance was developed as part of the Industry Issue Resolution (IIR) program. The IIR program, launched by the IRS in 2001, tackles issues submitted by taxpayers, associations and other groups representing businesses. The objective is to work cooperatively to resolve frequently disputed or burdensome tax issues.
The IRS issued guidance on the safe harbor for heavy equipment dealers in Revenue Procedure 2006-14, which will be published in IRB 2006-4, dated Jan. 23, 2006.
The safe harbor applies to heavy equipment dealers that are engaged in the trade of selling heavy equipment parts at retail and are authorized under an agreement with one or more equipment manufacturers or distributors to sell, or sell and lease new heavy equipment. Under the replacement cost method, the dealer determines the costs of the heavy equipment parts in its inventory using a standard price list and must satisfy the book conformity requirement.
Dealers currently using the replacement cost method described in the revenue procedure may continue to use it without applying for a change in their accounting method. A dealer wishing to change to the replacement cost method may do so for a tax year ending on or after April 30, 2005, by filing Form 3115, “Application for Change in Accounting Method.” This is done by following the automatic change in accounting method provisions of Rev. Proc. 2002-9, 2002-3 IRB 327, with modifications.
The Revenue Procedure is generally effective for tax years ending on or after April 30, 2005.
Link:

Rev. Proc. 2006-14PDF

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IR-2006-2, January 3, 2006
WASHINGTON — The Internal Revenue Service today issued temporary and proposed regulations that will significantly reduce tax filing burden for nearly 950,000 small business owners. Beginning January 1, 2006, certain employment tax filers will be able to file the new Form 944 (Employer’s Annual Federal Tax Return) once a year rather than filing Form 941 (Employer’s Quarterly Federal Tax Return) four times a year.
The new Form 944 will reduce burden on eligible small employers who file quarterly returns with little or no employment tax due. Most employers who file Form 944 will be able to make a single payment with their annual return. 
Eligible employers are those with estimated annual employment tax liability of $1,000 or less.  The IRS will begin mailing notification letters between February 1 and February 15, 2006 to eligible small employers for calendar year 2006. Employers who do not receive a letter and believe they are eligible to file the new Form 944 can call the IRS at 1-800-829-0115 to find out if they qualify. Taxpayers should contact the IRS by April 1, 2006.
New employers who expect to owe $1,000 or less in total annual employment tax (approximately $4,000 or less in annual wages) also are eligible to file Form 944.  These employers can indicate their estimated tax amount when applying for their EIN (Employer’s Identification Number) on Form SS-4. The IRS will notify the employer to file either Form 944 or Form 941 in the same notice indicating the taxpayer’s new EIN.
”This is just one more burden reduction step the IRS is taking to make it easier for small business employers to comply with the tax laws. Replacing four quarterly forms with one annual form is a significant benefit for small business taxpayers,“ said the IRS’ Small Business/Self Employee Commissioner Kevin M. Brown.
The new Form 944 and instructions will be available on the IRS Web site at IRS.gov by January 31, 2006.    
The proposed regulations are open to public comment for 90 days after publication. A public hearing on the regulations has been scheduled for April 26, 2006 at 10 a.m.
Links:

Proposed Regulation (Reg. 148568-04) (99KBPDF)


Temporary Regulation (TD 9239) (199KBPDF)

Newswire Subscription
IR-2006-3, Jan. 4, 2006
WASHINGTON — The Internal Revenue Service is providing a new online tool to help individual taxpayers determine whether they are potentially subject to the alternative minimum tax (AMT).
The AMT Assistant helps taxpayers determine whether or not they may be subject to the AMT by automating the AMT Worksheet of the 1040 Instructions, called the “Worksheet to See if You Should Fill in Form 6251 – Line 45.” IRS estimates most taxpayers can make entries and get an answer in five to 10 minutes using the new application.       
Taxpayers who file paper returns will benefit the most from the AMT Assistant because e-file software generally computes AMT liability automatically. The AMT Assistant is another in a series of steps being taken by IRS to reduce taxpayer burden.
“The alternative minimum tax causes a lot of hair pulling for millions of taxpayers each year. This new tool will help people understand if they have to pay or not,” said Mark W. Everson, IRS Commissioner. “This is part of the IRS effort to improve customer service and reduce return preparation time for taxpayers.” 
The information provided is anonymous and will be used only for purposes of determining AMT liability. It will not be shared, stored or used in any other way, nor can it be used to identify the individual who enters it.
During the 2006 filing season, this new tool will be available on IRS.gov. Enter “AMT Assistant” in the Search box on the Web site, or use the link below.  Taxpayers must complete a draft 1040 through line 44 and have that form available to use the AMT Assistant. There is also an “Additional Resources” section, with helpful information and links.
Link:

AMT Assistant

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IR-2006-37, Feb. 27, 2006
WASHINGTON — Individuals in six eastern states and the District of Columbia will have an extra day, until April 18, 2006, to file returns and pay any taxes due, according to the Internal Revenue Service.
In formal guidance (Notice 2006-23) 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 17 is Patriot’s Day, a state holiday in Massachusetts. Thus, the April 18 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 18 deadline will apply to any of the following:

2005 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 2005 balance due payments, whether made electronically (direct debit or credit card) or by check;
	 


Individual estimated tax payments for the first quarter of 2006, whether made electronically or by check; and
	 


Individual refund claims for tax year 2002 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 Saturday this year, taxpayers in most of the country will have until Monday, April 17, to file and pay. But Maine and Massachusetts observe the third Monday of April as Patriot’s Day, which this year falls on April 17.
Related Items:

N-2006-23PDF, Patriots' Day Filings and Payments (PDF K)


IR-2006-31, IRS Has $2 Billion for People Who Have Not Filed a 2002 Tax Return

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IR-2006-35, Feb. 23, 2006
Washington — The Internal Revenue Service is clarifying the information reporting requirements for payments made to owners of tobacco quotas in exchange for the termination of the quotas.
For tax purposes, the termination of a tobacco quota is treated as a sale by the quota owner of an interest in land. In exchange for selling their quotas, owners may receive payments over a period of 10 years.  The United States Department of Agriculture reports the gross proceeds from the sale, including payments in later years, to the quota owner on Form 1099-S in the year in which the sale takes place.
Many quota owners have asked whether they must report the gross proceeds shown on Form 1099-S in the year in which the sale takes place, even though they will receive payments in later years.  The amount reported on the Form 1099-S is not necessarily the amount of taxable income the quota owner should report for the year in which the sale takes place.  As explained in Notice 2005-57, an owner may report income using the “installment method.” 
Under the installment method, a quota owner who receives termination payments over a number of years should report only the income received each year.  For example, if in 2005 a quota owner exchanged a quota for 10 annual payments of $10,000 (equal to gross proceeds of $100,000), then the quota owner would receive a Form 1099-S reporting gross proceeds of $100,000.  However, under the installment method the owner reports as income for 2005 only the gain attributable to the $10,000 annual payment received that year.
The IRS will issue technical guidance clarifying Q&A-9 of Notice 2005-57 to explain the interaction of the information reporting rules with the rules governing the quota owner’s computation of taxable income.
Related link: Notice 2005-57PDF
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IR-2006-34, Feb. 21, 2006
Washington — The Treasury Department and the IRS today have issued guidance (Notice 2006-26)PDF on the certification that homeowners may rely on when they claim credits for purchases that make their homes more efficient.
During 2006, individuals can make energy-conscious purchases that will provide tax benefits when filling out their tax returns next year. The credit will also be available for purchases in 2007. Manufacturers offering energy efficient items such as insulation or storm windows can assure their customers that their energy efficient items will qualify for the tax credit if certain energy efficiency requirements are met.
A recent tax law change provides a tax credit to improve the energy efficiency of existing homes. The law provides a 10 percent credit for buying qualified energy efficiency improvements. To qualify, a component must meet or exceed the criteria established by the 2000 International Energy Conservation Code (including supplements) and must be installed in the taxpayer’s main home in the United States.
The following items are eligible:

Insulation systems that reduce heat loss/gain


Exterior windows (including skylights)


Exterior doors


Metal roofs (meeting applicable Energy Star requirements).

In addition, the law provides a credit for costs relating to residential energy property expenses. To qualify as residential energy property, the property must meet certification requirements prescribed by the Secretary of the Treasury and must be installed in the taxpayer’s main home in the United States.
The following items are eligible: 

$50 for each advanced main air circulating fan


$150 for each qualified natural gas, propane, or oil furnace or hot water boiler


$300 for each item of qualified energy efficient property.

The maximum credit for all taxable years is $500 — no more than $200 of the credit can be attributable to expenses for windows.
Additionally, the new law makes a credit available to those who add qualified solar panels, solar water heating equipment, or a fuel cell power plant to their homes in the United States. In general, a qualified fuel cell power plant converts a fuel into electricity using electrochemical means, has an electricity-only generation efficiency of more than 30 percent and generates at least 0.5 kilowatts of electricity.
Taxpayers are allowed one credit equal to 30 percent of the qualified investment in a solar panel up to a maximum credit of $2,000, and another equivalent credit for investing in a solar water heating system. No part of either system can be used to heat a pool or hot tub.
Additionally, taxpayers are also allowed a 30 percent tax credit for the purchase of qualified fuel cell power plants. The credit may not exceed $500 for each .5 kilowatt of capacity.
These items must be placed in service after Dec. 31, 2005, and before Jan. 1, 2008.
IR-2006-33, Feb. 21, 2006
Washington — The Treasury Department and the IRS today issued guidance for two credits created by the Energy Policy Act of 2005 – the advanced coal project credit and the gasification project credit. Each credit will be allocated by the IRS among applicants certified by the Department of Energy (DOE).
The total amount of the coal project credit is $1.3 billion, of which $800 million will be allocated to integrated gasification combined cycle projects and $500 million will be allocated to other advanced coal projects. The taxpayer can claim a credit for 20 percent of the qualified investment in certified qualifying advanced coal projects using an integrated gasification combined cycle for the taxable year and a credit for 15 percent of the qualified investment in other certified qualifying advanced coal projects.
The total amount of the gasification project credit is $350 million. Gasification is any process that converts a solid or liquid product from coal, petroleum residue, biomass, or other materials that are recovered for their energy or feedstock value into a synthesis gas composed primarily of carbon monoxide and hydrogen for direct use or subsequent chemical or physical conversion. The taxpayer can claim an amount equal to 20 percent of the qualified investment for the taxable year in qualifying gasification projects.
Today’s guidance explains how to apply to the IRS for a share of the credit and how to apply to DOE to obtain the required certification.
Related links:

Notice 2006-24PDF provides guidance on the coal project program.


Notice 2006-25PDF provides guidance on the gasification project program.

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Updated Feb. 4, 2008 — Recent legislative changes have extended this credit to apply to new homes located in the United States whose construction is substantially completed after August 8, 2005, and which are purchased after December 31, 2005, and prior to January 1, 2009, for use as a residence.
IR-2006-32, Feb. 21, 2006
Washington — The Internal Revenue Service today provided guidance regarding the energy efficient homes credit available under the Energy Policy Act of 2005. Under the new provision, an eligible contractor who constructs a qualified new energy efficient home may qualify for a credit of up to $2,000. The credit is available for all new homes, including manufactured homes constructed in accordance with the Federal Manufactured Homes Construction and Safety Standards.
The home qualifies for the credit if:

It is located in the United States;


Its construction is substantially completed after August 8, 2005;


It meets the statutory energy saving requirements, and


It is acquired from the eligible contractor after December 31, 2005, and before January 1, 2008, for use as a residence.

In general, to meet the energy saving requirements, a home must be certified to provide a level of heating and cooling energy consumption that is at least 30 to 50 percent in the case of manufactured homes, and 50 percent for other homes below that of a comparable home constructed in accordance with the standards of the 2004 Supplement to the 2003 International Energy Conservation Code.  It must also have building envelope component improvements providing a level of heating and cooling energy consumption that is at least 10 percent below that of a comparable home.
Manufactured homes can also qualify for the credit by meeting Energy Star standards.

Site-built homes qualify for a $2,000 credit if they reduce energy consumption by 50 percent relative to the International Energy Conservation Code standard.


Manufactured homes qualify for a $1,000 or $2,000 credit depending on the level of energy savings achieved. The guidance provides information about the certification process that a builder must complete to qualify for the credit.  The guidance also provides for a public list of software programs that may be used in calculating energy consumption for purposes of obtaining a certification.

Related Items:

Notice 2006-27PDF provides guidances for the credit for building energy efficient homes other than manufactured homes.


Notice 2006-28PDF provides guidance for the credit for building energy efficient manufactured homes.

 
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IR-2006-27, Feb. 10, 2006
WASHINGTON — Victims of Hurricanes Katrina, Rita or Wilma wishing to claim disaster-related losses on their prior year federal income tax return will have until October 16, 2006, to make this choice, the Internal Revenue Service announced today.
Taxpayers suffering disaster-related losses in certain areas of Florida, Alabama, Mississippi, Louisiana and Texas due to the hurricanes can choose to claim those losses on their current or prior year return. The original deadline for choosing this option is the due date of the taxpayer’s current year return.
For example, individuals wishing to claim disaster-related losses on their 2004 federal income tax return instead of their 2005 return will have an extra six months, until October 16, 2006, to make this choice. The original deadline for individuals choosing this option was April 17, 2006.
To speed processing of these claims, taxpayers should write the name of the hurricane in red at the top of their return. Those who have already filed their prior year return can make this choice by filing an amended return (Form 1040X for individuals).
An explanation of the liberalized disaster loss rules and special instructions for claiming these losses can be found in Publication 4492, Information for Taxpayers Affected by Hurricanes Katrina, Rita, and Wilma. This publication, along with other disaster-related information, is available on IRS.gov or can be obtained by calling the special IRS disaster hotline toll-free at 1-866-562-5227.
Today’s announcement does not affect the regular tax-filing deadlines for either 2004 or 2005 federal income tax returns.
Technical guidance will be available soon in Notice 2006-17, which will appear in Internal Revenue Bulletin 2006-10.
Link:

Help for Hurricane Victims: Information on Tax Relief, Charitable Issues

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IR-2006-26, Feb. 8, 2006
Washington — The Internal Revenue Service has certified the model year 2006 Toyota Prius Hybrid for the clean fuel vehicle deduction.  This certification means that taxpayers who purchased a 2006 Toyota Prius new during calendar year 2005 may claim a tax deduction of up to $2,000 on line 36 of Form 1040.
The agency stresses that the $2,000 deduction is for tax years 2005 and earlier. Starting in 2006 the deduction is replaced with a credit, which will require a different certification. The tax credit for hybrid vehicles applies to vehicles purchased on or after January 1, 2006 and may be as much as $3,400 for those who purchase the most fuel-efficient vehicles.
For taxpayers filing their 2005 tax returns, however, the deduction must be taken in the year the vehicle was originally used and the taxpayer must be the original owner.  Since this benefit can be taken as an adjustment to income on Form 1040, individuals do not have to itemize deductions to claim this deduction.
 
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IR-2006-24, Feb. 6, 2006
WASHINGTON — The Internal Revenue Service today announced new steps to improve the Questionable Refund Program (QRP) and reduce the number of taxpayers subject to frozen refunds.
IRS Commissioner Mark W. Everson said the changes include notifying taxpayers when a tax refund has been frozen. Other new procedures will result in a more timely release of frozen tax refunds for those cases that do not warrant further review.
“The actions we’re announcing constitute significant improvements to an important program,” Everson said. “Going forward, we’re going to both improve our screening procedures and notify all taxpayers whose refunds are held. As Senate Finance Chairman Grassley stated when asking us to look at reforms for QRP, the IRS needs to respect the ‘necessary balance between taxpayer rights and enforcement of the law.’ We believe this approach strikes the right balance.”
Highlights of the changes:

Improvements to screening procedures. The IRS will improve and refine the accuracy of filters in the program to reduce the initial number of valid refund claims held.


Notification to taxpayers. The IRS will notify all taxpayers whose refunds are frozen.


Earlier release of refunds. The IRS will expedite the review of returns, resulting in an earlier release of refunds.

Notification procedures will be implemented this filing season. Improvements to the screening and review processes will be implemented as soon as possible in the coming months.  The IRS will also continue to identify and implement other areas for improvement.
The IRS announced the review last month after members of Congress and the National Taxpayer Advocate raised questions regarding the length of delay and lack of notification for refund claims. The IRS developed the new procedures in consultation with the National Taxpayer Advocate.
The IRS established the Questionable Refund Program to deal with the serious problem of refund fraud, which has increased significantly in recent years. The IRS estimates that fraudulent refund claims now exceed a half-billion dollars a year. Congress has held a number of hearings urging the IRS to devote additional resources and improve its detection and prevention of fraudulent refunds, particularly those involving prisoners.
Link:
Statement of Nina E. Olson, National Taxpayer Advocate, Regarding IRS News Release 2006-24