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IR-2006-23, Feb. 3, 2006
WASHINGTON — The Internal Revenue Service will host a series of six tax forums across the nation this summer for the benefit of tax professionals, the IRS announced today.
The forums present the latest news and information from the IRS over three days of seminars. Representatives of the IRS, the American Association of Attorney-Certified Public Accountants, the American Bar Association, the American Institute of Certified Public Accountants, the National Association of Enrolled Agents, the National Association of Tax Professionals, the National Society of Accountants and the National Society of Tax Professionals will lead seminars and be available for discussion.
This will be the sixteenth year the forums have been a component of the IRS’ communication and outreach efforts.
In a survey of last year’s attendees, 98 percent were satisfied with the Nationwide Tax Forums. Attendees have also said that as a result of their participation they are able to respond to their clients’ needs in a more professional manner and can offer more technical expertise.
In addition to the seminars, the forums also feature a two-day expo with representatives from the IRS and tax, financial and business communities offering their products, services and expertise.Locations and Dates, CPE Credits, Registration
The locations and dates of the 2006 tax forums are:

Anaheim, Calif. –– June 27-29  


Chicago, Ill. –– July 11-13


Atlanta, Ga. –– July 25-27


Orlando, Fla. –– Aug. 1-3


Las Vegas, Nev. –– Aug. 22-24


New York, N.Y. –– Aug. 29-31

Enrolled agents and certified public accountants can earn up to 18 continuing education credits at each forum. CPAs licensed by boards not recognized by the National Association of State Boards of Accountancy and other tax professionals should consult their licensing organization regarding the applicability of these credits.
The fees for the 2006 forums are $159 per person per city for pre-registration and $299 for late or on-site registration. The pre-registration period will end two weeks prior to the start of each forum. Members of the above mentioned associations qualify for a discount. Please contact the associations directly for more details.
 
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Updated April 9, 2008, and previously Jan. 24, 2008 — Circular 230 was linked to the current version.
Updated March 31, 2006 — The deadline for submitting comments has been changed from April 7 to April 28, 2006; new links were added at the bottom.
IR-2006-22, Feb. 3, 2006
WASHINGTON — The Treasury Department and the Internal Revenue Service today issued a notice proposing amendments to Treasury Department Circular 230.
This provision governs tax professionals who practice before the IRS. Ensuring that tax professionals adhere to professional standards and follow the law is one of the top four enforcement goals for the IRS. This proposed revision of Circular 230 plays a critical part in achieving this goal.
The revisions to Circular 230 proposed today would modify:

the definition of practice, 


eligibility for enrollment, 


unenrolled practice, and


the rules concerning contingent fees, conflicts of interest, standards with respect to tax returns and documents, affidavits and other papers, sanctions, discovery, publicity, and appeals.

The proposed regulations also would replace certain terminology to conform to the terminology used in 18 U.S.C. 207, and 5 C.F.R. parts 2637 and 2641 (or superseding regulations). The proposed regulations do not address the standards for written tax advice that were the subject of final amendments to the regulations issued in December 2004 and modified in May 2005. 
Today’s announcement follows a thorough review of extensive public comments to a December 2002 advance notice of proposed rulemaking relating to the Office of Professional Responsibility, unenrolled practice, eligibility for enrollment, sanctions and disciplinary proceedings, contingent fees and confidentiality agreements.
A hearing on the proposed regulations is scheduled for Wednesday, June 21, 2006, at 10 a.m. in the IRS auditorium. The Treasury Department and the IRS are requesting comments on the proposed regulations by April 7, 2006. Comments may be submitted to: CC:PA:LPD:PR (REG-122380-02), Room 5203, Internal Revenue Service, P.O. Box 7604, Ben Franklin Station, Washington, DC 20044, or hand delivered Monday through Friday between the hours of 8 a.m. and 4 p.m. to: CC:PA:LPD:PR (REG-122380-02), Courier's Desk, Internal Revenue Service, 1111 Constitution Avenue, N.W., Washington, DC. Alternatively, taxpayers may submit comments electronically to the IRS Internet site.
Related Items:

February 2006 Plain Language Regulations


Circular 230PDF


Standards of Practice for Tax Professionals   

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IR-2006-50, March 31, 2006
Washington — The Internal Revenue Service announced today that taxpayers are continuing to e-file in greater numbers than ever before. As of March 24, 2006, the IRS had received more than 50 million tax returns through e-file, an increase of almost 3 percent compared to the same period last year.
“The increase in e-filing is really being driven by people using their home computers,” said IRS Commissioner Mark W. Everson. “E-file is the safe, accurate way for taxpayers to quickly finish their taxes and get a refund.”
So far this tax filing season, 68 percent of all returns have been e-filed, compared to 66 percent for the same period last year.
More than 14 million returns have been filed this tax season by people e-filing from the comfort of their own homes, up from just over 12 million for the same period last year. As of last Friday, 28 percent of e-filed returns were filed by people using their home computers, up from 25 percent of e-filed returns for the same period last year.
More people are choosing to have their tax refunds directly deposited than ever before. So far this year, the IRS has directly deposited more than 42 million refunds, or 69 percent of all refunds issued this tax filing season, up from 65 percent of the total for the same period last year.
People are also visiting the IRS Web site – IRS.gov – in record numbers. The IRS has recorded almost 90 million visits to IRS.gov this year, up from 84 million for the same period last year, an increase of 7.1 percent.
 

 


2005


2006


Percent Change


Total Receipts


73,762,000


73,438,000


-0.4


Total Processed


69,605,000


69,196,000


-0.6


 


 


 


 


E-filing Receipts


 


 


 


TOTAL


49,021,000


50,296,000


2.6


Tax Professionals


34,369,000


36,269,000


  5.5


Self-prepared


12,011,000


14,027,000


16.8


Telefile


2,641,000


NA


NA


 


 


 


 


Web Usage


 


 


 


Visits to IRS.gov


83,898,013


89,864,558


7.1


 


 


 


 


Total Refunds


 


 


 


Number


61,290,000


61,660,000


  0.6


Amount


$138,587 billion


$144.513 billion


4.3


Average


$2,261


$2,344


3.6


 


 


 


 


Direct Deposit Refunds


 


 


 


 


 


 


 


Number


40,118,000


42,252,000


5.3


Amount


$104.243 billion


113.414 billion


8.8


Average


$2,598


$2,684


3.3

 
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IR-2006-48 , March 23, 2006
WASHINGTON — The Internal Revenue Service is inviting civic-minded individuals to help improve the nation’s tax agency by applying to be members of the Taxpayer Advocacy Panel. The panel provides a forum for citizens from each state to make suggestions regarding IRS decision making.
Taxpayer Advocacy Panel (TAP) members:

Provide opportunities for citizen input and make recommendations to the IRS and Treasury on customer-service issues.


Identify and prioritize taxpayer issues.


Report annually to Treasury, the IRS and the National Taxpayer Advocate.


Participate in meetings where taxpayers are invited to raise issues about their experiences with the IRS.


Refer taxpayers who contact the panels to the IRS offices best able to address their issues.

“As the IRS continues to examine taxpayers’ needs in the area of service, the Taxpayer Advocacy Panel has emerged as a vital source for gathering and providing information from the perspective of taxpayers,” stated Nina E. Olson, National Taxpayer Advocate. “TAP’s role will ultimately aid taxpayers by supplying them with the top quality service that they deserve."
To qualify as a TAP member, applicants must be U.S. citizens and be able to commit 300 to 500 hours during the year to the panel. In addition, they must be current with their tax obligations and pass a criminal background check.
The application is available on the Taxpayer Advocacy Panel's Web site. Interested parties may apply on-line or download the form and mail it to:



Milwaukee TAP Office,
Stop 1006MIL,
310 West Wisconsin Avenue,
Milwaukee, WI 53203-2221.



Those without access to a computer may call 1-888-912-1227 for an application form.
Applications must be received by the TAP Office by April 28, 2006.
Related Item:

Taxpayer Advocate Service

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IR-2006-47, March 22, 2006
WASHINGTON — The Internal Revenue Service announced today that taxpayers are continuing to e-file from home computers at a record pace, up almost 17 percent from the same period last year.
“People using tax preparation software is driving the increase in e-filing,” said IRS Commissioner Mark W. Everson. “Taxpayers can rely on e-file as a safe, accurate way to quickly finish their taxes and get a refund.”
So far this tax filing season, 70 percent of all returns have been e-filed, compared to 68 percent for the same period last year. As of last Friday, 28 percent of e-filed returns were filed by people using their home computers, up from 25 percent of e-filed returns for the same period last year.
More than 13 million returns have been filed this tax season by people e-filing from the comfort of their own homes, up from just over 11 million for the same period last year.
Also, more people are choosing to have their tax refunds directly deposited than ever before. So far this year, the IRS has directly deposited almost 40 million refunds, or 70 percent of all refunds issued this tax filing season, up from 67 percent of the total for the same period last year.
People are also visiting the IRS Web site – IRS.gov – in record numbers. The IRS has recorded almost 84 million unique visits to IRS.gov this year, up from 80 million for the same period last year, an increase of 6.5 percent.
2006 Filing Season Statistics
Cumulative through the weeks ending 3/18/05 and 3/17/06
Individual Income Tax Returns
 
 

2005


2006


Percent Change


Total Receipts


67,377,000


67,077,000


-0.4


Total Processed


63,455,000


62,726,000


-1.1


 


 


 


 


E-filing Receipts


 


 


 


TOTAL


45,936,000


46,874,000


2.0


Tax Professionals


32,064,000


33,664,000


  5.0


Self-prepared


11,329,000


13,210,000


16.6


Telefile


2,543,000


NA


NA


 


 


 


 


Web Usage


 


 


 


Unique Visits to IRS.gov


78,512,013


83,586,558


6.5


 


 


 


 


Total Refunds


 


 


 


Number


56,279,000


56,320,000


  0.1


Amount


$128,820 billion


133.993 billion


4.0


Average


$2,289


$2,379


4.0


 


 


 


 


Direct Deposit Refunds


 


 


 


 


 


 


 


Number


37,949,000


39,765,000


4.8


Amount


$99.208 billion


107.529 billion


8.4


Average


$2,614


$2,704


3.4


 


 


 


 

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IR-2006-46, March 17, 2006
WASHINGTON — The Internal Revenue Service announced today that the 2005 IRS Data Book is available at IRS.gov. The publication contains tables detailing, among other subjects, the amount of revenue collected, the number of audits (examinations) conducted, and the number of refunds issued between October 1, 2004, and September 30, 2005 – Fiscal Year 2005.
The increase in enforcement by the IRS is documented in this year’s Data Book. During Fiscal Year 2005 the IRS completed more than 1.215 million audits of individuals, up almost 21 percent from last year’s figure of 1.008 million.
The Data Book provides state-by-state statistics on areas such as electronic filing, which accounted for more than half of all individual income tax returns last year.
Tables in the Data Book include information about returns filed, tax collections and refunds, examination coverage, appeals, criminal investigations, employee plans and exempt organizations, taxpayer assistance, information reporting, and administrative costs and personnel summaries.
Published copies of the Fiscal Year 2005 IRS Data Book, Publication 55B, will be available by mid-April 2006 from the U.S. Government Printing Office. To obtain a copy, write to the Superintendent of Documents, P.O. Box 371954, Pittsburgh, PA 15250-7954, or call (202) 512 1800 for voicemail or (202) 512-2250 to fax your request.
Related Link: Fiscal Year 2005 IRS Data Book
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IR-2006-45, March 16, 2006
WASHINGTON — The Internal Revenue Service today issued updated guidance describing and rebutting frivolous arguments taxpayers should avoid when filing their tax returns.
“Taxpayers need to avoid being taken in by groundless theories suggesting that they don’t have to pay taxes or file returns,” said IRS Commissioner Mark W. Everson. “The truth about these frivolous arguments is simple: They don’t work.”
IRS Notice 2006-31 describes 26 frivolous arguments that taxpayers should avoid when filing their returns. Five revenue rulings issued in conjunction with the notice address specific frivolous claims often made to the IRS. These include false arguments that taxpayers can attribute income and expenses to a purported trust to avoid federal income tax liability, that a general “Native American treaty” exists allegedly providing tax-exempt status, and that only federal employees and persons residing in Washington, D.C. or federal territories and enclaves are subject to federal tax.  The revenue rulings emphasize the adverse consequences to taxpayers who fail to file returns or fail to pay taxes based on an erroneous belief in any of these frivolous arguments.
In addition, in the next few days, the IRS plans to update “The Truth About Frivolous Arguments,” a 65-page document addressing false arguments about the legality of not paying taxes or filing returns.  The updated document includes citations from numerous cases decided by the courts in 2005 and 2006 and responds to 40 frivolous contentions.  This past year, the courts have not only rebuked these arguments numerous times, but also have imposed thousands of dollars in fines on taxpayers or their representatives for pursuing frivolous cases.
"Our rulings on frivolous arguments emphasize that the IRS and the courts reject these arguments about the validity of the income tax and ‘too good to be true’ schemes to eliminate tax liability," said IRS Chief Counsel Donald L. Korb.
The IRS continues to investigate promoters of frivolous arguments and to refer cases to the Department of Justice for criminal prosecution. In addition to tax and interest, taxpayers who file frivolous income tax returns face a $500 penalty, and may be subject to civil penalties of 20 or 75 percent of the underpaid tax. Those who pursue frivolous tax cases in court may face an additional penalty of up to $25,000.
Links:

Notice 2006-31 (115KBPDF)


Revenue Rule 2006-17 (53KBPDF)


Revenue Rule 2006-18 (56KBPDF)


Revenue Rule 2006-19 (59KBPDF)


Revenue Rule 2006-20 (53KBPDF)


Revenue Rule 2006-21 (56KBPDF)


IRS Announces “Dirty Dozen” Tax Scams for 2006

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Washington — The Internal Revenue Service announced today that taxpayers are continuing to e-file at a record pace. The biggest increase is in returns e-filed from home computers, up almost 17 percent over last year’s figure.
“Each year, we are seeing more taxpayers choosing e-file, with the highest growth belonging to those who file from a home computer,” said IRS Commissioner Mark W. Everson. “E-file is a safe, accurate way to quickly finish your taxes and get your refund.”
Of the 60.7 million returns filed so far this year 71.5 percent were e-filed, compared to 69.7 percent for the same period last year. While this percentage will decline as the April filing deadline approaches, the IRS expects that e-filed returns will make up more than half of all returns filed.
The IRS also released statistics from this year’s Free File program, which are part of the self-prepared e-file category. About 2.65 million taxpayers used Free File through March 9. While this number dropped from 3.33 million returns filed during the comparable period last year, overall returns e-filed from home computers increased by nearly 17 percent.
“This is the first year of a new agreement with the Free File Alliance, and more than 70 percent of the nation’s taxpayers qualify for free electronic filing,” said Bert Dumars, Director of Electronic Tax Administration. “While the Free File numbers are down slightly, this remains an important e-file option that taxpayers should consider as the April filing deadline approaches.”
The agreement is between the IRS and the Free File Alliance, a consortium of tax preparation software companies that provide the service. Taxpayers must access Free File through IRS.gov.
Record numbers of individuals are choosing to have their refunds directly deposited into bank accounts. Out of 50.7 million refunds issued so far this year, 37 million have been directly deposited, which is 73.1 percent of the total, compared to 69.8 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 paper returns. Even paper filers can get the benefits 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.

2006 FILING SEASON STATISTICS
Cumulative through the weeks ending 3/11/05 and 3/10/06


Individual Income Tax Returns


 


2005


2006


%Change


Total Receipts


61,326,000   


60,657,000


-1.1


Total Processed


57,019,000


56,028,000


-1.7


E-Filing Receipts


Total


42,731,000


43,356,000


1.5


  Tax Professionals


29,708,000    


31,010,000


4.4


  Self Prepared


10,592,000


12,346,000


16.6


  Telefile


   2,303,000


NA


NA


Web Usage


Unique visits to IRS.gov


  72,637,000


77,080,000


6.1


Total Refunds


Number


50,948,000


50,656,000


- 0.6


Amount


$118.406 billion


$122.752 billion  


3.7


Average refund


    $2,324


   $2,423


4.3


Direct Deposit Refund


Number


35,549,000


37,031,000


4.2


Amount


$93.611 billion


$101.009 billion


7.9


Average refund


$2,633


$2,728


3.6

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IR-2006-43, March 13, 2006
WASHINGTON — The Internal Revenue Service announced today an agreement with two tax professional associations to assist taxpayers impacted by Hurricanes Katrina, Rita and Wilma.
Volunteers at IRS’ Volunteer Income Tax Assistance (VITA) and Tax Counseling for the Elderly (TCE) sites are now able to refer hurricane-affected taxpayers needing help with relatively complex tax issues to participating members of the American Institute of Certified Public Accountants (AICPA) or the American Association of Attorney-Certified Public Accountants (AAA-CPA) for free return preparation assistance.
VITA and TCE volunteers are generally not trained to compute Casualty Loss deductions or to complete amended returns for prior years. The volunteers can now refer low to moderate-income ($38,000 or less) taxpayers needing such assistance to the AICPA or AAA-CPA for free assistance. Previously, these and other tax professional associations provided such free assistance through official FEMA and other Disaster Recovery Centers. A number of tax professional organizations continue to provide such assistance through these sites.
Assistance from participating CPAs may be via telephone, mail, e-mail or in some cases, face-to-face.
Taxpayers wishing to take advantage of this free assistance need to first visit a VITA or TCE site. Convenient locations in communities across the country can be found by calling the IRS at 1-800-829-1040 or by calling AARP (the nation’s largest TCE sponsor) at 1-888-AARP NOW (1-888-227-7669).
“We are happy to partner with tax professional associations like the AICPA and AAA-CPA to help deliver the assistance these taxpayers need,” said IRS Director Customer Assistance, Relationships and Education Mark Pursley. “This tax assistance can truly make a difference in people’s lives.”
“Our members recognize that hurricane victims face many challenges. We hope that this service will help by giving the victims one less thing to worry about,” said Barry Melancon, AICPA President and CEO. “We are glad that our partnership with the IRS has been expanded to include a service that many CPAs see as a way to give back to their communities.”
“No matter where you live, technology gives CPAs across the nation the opportunity to volunteer right from our own desk,” said Charles R. Kowal, Partner and Director, Personal Financial Services, Ernst & Young LLP, one of the largest participants in the AICPA initiative. “Technology has made those in the Gulf Region our virtual neighbors, and it’s time to give our neighbors a helping hand.”Additional Links:
Help for Hurricane Victims
Hurricane News Releases and Legal Guidance
IR-2006-42, March 9, 2006
WASHINGTON — The Internal Revenue Service today awarded contracts to three firms to participate in the first phase of its private debt collection initiative.
The firms are:

The CBE Group Inc., Waterloo, Iowa.


Linebarger Goggan Blair & Sampson, LLP, Austin, Texas.


Pioneer Credit Recovery, Inc., Arcade, N.Y.

A total of 33 firms took part in the competitive bidding process that resulted in today’s contract awards.
“The vast majority of states use private firms to help collect delinquent taxes. The new authority that Congress gave to the federal government allows us to use private firms as well,” said IRS Commissioner Mark W. Everson. “We have carefully considered all of the concerns expressed about this project, which involves work traditionally done by the government. As a result, we are putting tough safeguards in place to protect taxpayer rights and privacy. We will be closely monitoring contractor performance to make sure they’re following the law as well as our own internal standards.”
To assist the IRS in its collection of back taxes, the 2004 American Jobs Creation Act authorizes the IRS to hire private firms to collect federal tax debts. This particular portion of the law was carefully crafted and includes several limitations to ensure the private firms will be subject to the same stringent taxpayer protection and privacy rules that IRS employees work under. In addition, private firms cannot subcontract the work. The IRS expects to assign uncollected liabilities to the firms beginning this summer.
The IRS has also developed its own guidelines for the private firms, including background checks on all private firm personnel associated with the project as well as a mandatory, IRS-directed training program for company personnel.
Private firms will not be authorized to take enforcement actions such as liens, levies or seizures.  In addition, private firms will not be authorized to work on technical issues such as offers in compromise, bankruptcies, hardship issues or litigation.  Rather, the IRS will assign to the private firms cases in which the taxpayer has not disputed the liability. The private firms will contact taxpayers to make payment arrangements.
“Redirecting relatively simple cases to private firms will permit the IRS to focus its existing collection and enforcement personnel on more complex tax issues,” Everson said.
In the second phase of the private debt collection project, scheduled for 2008, the IRS intends to contract with up to 10 firms. Over the course of 10 years, the IRS expects the private firms to help it collect an additional $1.4 billion in outstanding taxes.
Link:

IRS Fact Sheet 2006-18: Safeguards Included in Private Debt Collection Initiative

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IR-2006-41, March 9, 2006
WASHINGTON — The Internal Revenue Service today announced there will be no change in the interest rates for the calendar quarter beginning April 1, 2006. The interest rates are as follows: 

seven (7) percent for overpayments [six (6) percent in the case of a corporation];
	 


seven (7) percent for underpayments;
	 


nine (9) percent for large corporate underpayments; and
	 


four and one-half (4.5) 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 January 2006.
Related Item:

Rev. Rul. 2006-12PDF

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IR-2006-40, March 8, 2006
WASHINGTON — The Internal Revenue Service today announced that more than 450 of the nation’s largest corporations have electronically filed taxes in advance of the March 15 filing date. Large corporate taxpayers, those with $50 million or more in assets that file at least 250 returns, are required to e-file this year.
“We are pleased that large corporations have started making the transition from filing paper to electronic tax returns,” said Deborah Nolan, Commissioner of the Large and Mid-Size Business Division (LMSB) of the Internal Revenue Service.  “We have worked closely with stakeholder groups representing corporations, tax professionals and the e-file software industry to develop e-file systems and processes that meet their needs.”
The IRS expects more than 10,000 large corporations to e-file by the extended filing date of Sept. 15, 2006. To complete this year’s taxes electronically, many corporations and tax-exempt organizations will purchase software or rely on a tax professional. A list of e-file software and service providers is available at IRS.gov.  Detailed e-filing guidance and instructions are also available on IRS.gov.
On the advice of stakeholders, the IRS has designed the corporate and tax-exempt organizations e-file program to be flexible to accommodate the various needs of large business and tax-exempt filers.  In some cases, the IRS will accept PDF files and even paper documents as part of an electronic return.  With this degree of flexibility, the agency does not expect to receive nor grant many waivers.
 
E-file has been available to corporations on a voluntary basis since 2004. In 2005, more than 200,000 corporations voluntarily filed their corporate income tax returns electronically, including about 1,200 corporations with assets exceeding $10 million.
Increasingly, businesses and exempt organizations are conducting most or all of their transactions with the IRS electronically, which benefits the filer and the IRS.  Filers benefit because of the increased accuracy of filed returns and the speed with which e-filed returns are processed.  The IRS values the increased efficiency in processing electronic returns and the reduction in rework resulting from paper returns.
Tax-exempt organizations with $100 million in assets that file at least 250 returns a year also are required to file electronically this year. The due date for most tax-exempt organizations is May 15.  The IRS received about 6,700 electronically filed information returns from tax-exempt organizations in 2005.
For tax years ending on or after Dec. 31, 2006, the electronic filing requirement will be expanded to include the tax year 2006 returns of corporations and tax-exempt organizations with $10 million or more in total assets who file 250 or more returns a year. In addition, private foundations and charitable trusts will be required to electronically file Form 990-PF, regardless of their asset size if they file 250 or more returns a year. Corporations and tax-exempt organizations not required to e-file are encouraged to do so voluntarily.
Related Item:

e-file for Large and Mid-Size Corporations

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IR-2006-39, March 7, 2006
WASHINGTON — In the first release of tax filing statistics this year, the Internal Revenue Service announced today that electronically filed returns have increased, led by a big increase in home computer use.
Through early March, more than 39.5 million taxpayers have e-filed this year. Home computer use is up 16.5 percent, with e-file by tax professionals up nearly 4 percent.
Out of 54 million tax returns filed so far this year, e-file represents 73 percent of the total returns. By comparison, 72 percent of returns were filed electronically for the comparable period last year.
“The home computer is increasingly replacing the paper tax form,” said IRS Commissioner Mark W. Everson. “Both individual taxpayers and tax professionals are turning to e-file more and more because it’s fast and accurate.”
Other new figures reflect that taxpayers are using other electronic options at record paces:

Since January, the IRS web site had 70.4 million visits, up almost 6 percent from last year. Last week alone, the site had more than 7.2 million visits, up nearly 9 percent from last year.
	 


So far this year, 33.9 million individual income tax refunds have been directly deposited into bank accounts. These deposits represent about 76 percent of all tax refunds, up from 73 percent for the same period last year.
	 


So far this year, 629,251 credit card payments have been made by individual taxpayers, up 41 percent compared to 448,547 for the same period last year. These payments represent $355 million, a 48 percent increase from $240 million during the same period last year.

2006 Filing Season Statistics
Cumulative Through the Weeks Ending 3/04/05 and 3/03/06
Individual Income Tax Returns
 

 


2005


2006


Percent Change


Total Receipts


54,566,000


53,947,000


-1.1


Total Processed


50,153,000


48,957,000


-2.4


 


 


 


 


E-filing Receipts


 


 


 


TOTAL


39,214,000


39,503,000


0.7


Tax Professionals


27,155,000


28,137,000


   3.6


Self-prepared


9,756,000


11,366,000


16.5


Telefile


2,303,000


N/A


---


 


 


 


 


Web Usage


 


 


 


Unique Visits to IRS.gov


66,468,998


70,435,197


6.0


 


 


 


 


Total Refunds


 


 


 


Number


44,931,000


44,544,000


- 0.9


Amount


$106,517 billion


110.465 billion


3.7


Average


$2,371


$2,480


4.6


 


 


 


 


Direct Deposit Refunds


 


 


 


 


 


 


 


Number


32,721,000


33,887,000


3.6


Amount


$86.969 billion


93.440 billion


7.4


Average


$2,658


$2,757


3.7


 


 


 


 

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IR-2006-38, March 2, 2006
WASHINGTON — Business taxpayers and associations may seek resolution of problematic tax issues through the Internal Revenue Service’s Industry Issue Resolution (IIR) Program. Submissions received by March 31, 2006, of business tax issues where the tax treatment is uncertain, frequently disputed or burdensome will be considered for IIR project selection and inclusion in the 2006-2007 Treasury and IRS Guidance Priority List.
The objective of the IIR program is to resolve business tax issues common to significant numbers of taxpayers through new guidance. In past years, issues have been submitted by associations and others representing both small and large business taxpayers, resulting in tax guidance that has affected thousands of business taxpayers engaged in a variety of industries. Recent results of the IIR program include:

Providing a safe harbor accounting method that heavy equipment dealers can use to more simply calculate heavy equipment parts inventories using standard price lists. (Rev Proc 2006-14)
	 


Allowing companies to reduce administrative burden by signing employment tax returns by facsimile. (Rev Proc 2005-39)

For each issue selected, an IIR team of IRS and Treasury personnel gather relevant facts from taxpayers or other interested parties affected by the issue. The goal is to recommend guidance to resolve the issue. This benefits both taxpayers and the IRS by saving time and expense that would otherwise be expended on resolving the issue through examinations.
The IRS reviews submissions semi-annually, after March 31 and August 31 of each year.
 
The IIR project submission procedures and selection criteria are described in Revenue Procedure 2003-36, available on the IIR program Web page.
Related Items:

IIR Program


Revenue Procedure 2006-14PDF

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IR-2006-71, April 28, 2006
WASHINGTON — The Internal Revenue Service today released updated draft instructions for Schedules M-3 for the 2006 tax year and an updated draft of the new Form 8916 that will be filed by certain insurance-related corporations to reconcile taxable income.
The draft instructions, dated April 25, 2006, are for Schedules M-3 that are filed with Forms 1120, 1120-L, 1120-PC, 1120S and 1065, and Form 8916.
“LMSB stakeholders have provided many constructive suggestions to make Schedule M-3 a more effective tool for taxpayer reconciliation of book to tax income,” said Deborah M. Nolan, IRS Large and Mid-Size Division Commissioner.  “Schedule M-3 improves transparency and disclosure, enabling IRS to better target and address areas of high risk and non-compliance.” 
One important instruction focuses on the Form 1065 Schedule M-3 requirement to disclose “reportable entity partners.”  Accordingly, partnerships must identify on the Schedule M-3 those partners that have themselves filed a Schedule M-3 that own or are deemed to own, directly or indirectly, a 50% or greater interest in the income, loss or capital of the partnership on any day of the partnership tax year on or after June 30, 2006.  This reporting requirement is also imposed on the partners and is detailed in the Schedule M-3 instructions for Form 1065, 1120, 1120-L, 1120-PC and 1120S.
A change relating to cost of goods sold is reflected in the draft instructions for Schedule M-3 for Forms 1065, 1120 and 1120S.  At the suggestion of stakeholders, a new required attachment will be used for cost of goods sold.
The updated draft of new Form 8916 released today expands upon the initial draft released on April 4, 2006, to provide clearer reconciliation by certain corporate groups that include an insurance company..
Looking ahead, IRS soon plans to introduce a new Form 1120-C that will replace Form 990-C filed by cooperative associations.  Form 1120-C will also be filed by subchapter T cooperatives that previously filed Form 1120.  In turn, these taxpayers will be required to file Schedule M-3 for Form 1120 if total assets at year end are $10 million or more.
The draft Schedules M-3, Form 8916 and instructions can be found in the business section of IRS.gov, on the corporations page. The Web site also offers interested taxpayers a subscription to the Schedule M-3 email news service so they can automatically receive future information about Schedule M-3.
IRS is seeking comments regarding the draft Schedules M-3, Form 8916 and instructions.  Comments should be submitted by June 1, 2006 to:
Judy McNamara
Internal Revenue Service
860 E. Algonquin Road
Schaumburg, IL 60173
Email address: SchM3@irs.gov (preferred)
Telephone number:  312-566-2001, Ext. 9380
 
Links:

Information on Schedules M-3, including draft forms and instructions

 
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IR-2006–67, April 25, 2006    
 
WASHINGTON — The Internal Revenue Service has acknowledged the certification by Toyota Motor Sales U.S.A., Inc. that the Toyota Camry Hybrid and Lexus GS 450h Model Year 2007 vehicles qualify for the hybrid tax credit enacted by the Energy Policy Act of 2005.  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.
 
The hybrid vehicle certifications recently acknowledged by the IRS and their credit amounts are:

2007 Toyota Camry Hybrid  $ 2,600


2007 Lexus GS 450h  $ 1,550

Starting in 2006, this tax credit replaces the tax deduction of $2,000 which was previously allowed for taxpayers who purchased a new hybrid vehicle before December 31, 2005 for the clean-burning fuel deduction.  The tax credit requires a different certification. Many currently available hybrid vehicles may qualify for this new tax credit.
Consumers seeking the credit may want to buy early since 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.
More information on hybrid vehicles and other alternative motor vehicles can be found on the Internal Revenue Service’s web site at IRS.gov.  
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IR-2006-66, April 19, 2006
Washington — Taxpayers used the Internal Revenue Service Web site at record levels as the filing deadline approached earlier this week. On April 17, there were 3,385,936 visits to IRS.gov. This number beats the prior single-day record of 3,337,300 visits on April 15, 2005.
IRS.gov also set a new Web traffic record on April 17, 2006. It recorded 3,237 hits per second at 12:30 p.m. EDT. This figure surpasses the previous peak usage day on April 15, 2005, when the site experienced 2,638 hits per second.
The IRS Web site is one of the most heavily used sites on the Internet during the tax filing season. This week’s record usage follows a redesign of the Web site last fall that enhanced search capabilities and provided easier access to tools that help taxpayers and tax professionals. The American Customer Satisfaction Index level for the Web site has also increased this year.
“The record usage underscores that IRS.gov is an easy way to get tax information,” said IRS Commissioner Mark W. Everson. “We’ve made improvements to the Web site to provide better service for a growing number of taxpayers who use the Internet.”
The IRS reminds taxpayers that some of the Web site's most popular features remain available for people expecting a refund or who have filed an extension.
Taxpayers expecting a refund can easily check on its status by clicking “Where’s My Refund?" on IRS.gov. The feature had been used more than 24 million times from January 1 through mid-April. Taxpayers can securely access their personal refund information by entering their Social Security number, filing status and the exact amount of their refund. These shared secrets, which are data known only to the taxpayer and IRS, verify the person is authorized to access the account.
The Free File program remains available to everyone meeting the Free File criteria until Oct. 16.
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IR-2006-65, April 17, 2006
WASHINGTON — The Internal Revenue Service today announced Kathy Petronchak has been appointed to the position of Chief of Staff. Petronchak will replace the current Chief of Staff, Evelyn Petschek, effective June 7.
“Kathy Petronchak has held a variety of positions in both the field and at IRS headquarters –– most recently she played a central role in the tax shelter arena,” said IRS Commissioner Mark W. Everson. “Kathy has critical experience with complex, high-profile issues. She is an excellent fit for this demanding post.”
As Chief of Staff, Petronchak will assist the Commissioner in overseeing the performance of IRS operations and planning the strategic direction of IRS programs. She will also provide counsel to the Commissioner and other top IRS executives with regard to a wide variety of matters facing the agency.
Petronchak was appointed to her current position as Director, Pre-Filing and Technical Guidance for the Large and Mid-Size Business (LMSB) Division in June 2004. In that post she plans, develops, directs and implements tax shelter, pre-filing and technical field assistance programs. Petronchak also shares responsibility for coordinating the LMSB Division’s program activities with Legislative Affairs, Chief Counsel and Treasury. Her prior executive positions include Deputy Director, Pre-Filing and Technical Guidance, to which she was appointed in September 2002, and Director of Field Operations, to which she was appointed in December 1999.
Petronchak’s career began in 1979 as a revenue agent and included a series of increasingly responsible positions in the Richmond, Va., and Southern California districts: examination group manager; chief, quality review staff; chief, planning and special programs; and examination branch chief. Before entering the Executive Development Program, she served as the Assistant Chief for the Examination Division in the Los Angeles District.
Petronchak received a B.S. degree in accounting from Virginia Commonwealth University in 1979 and recently completed her MBA from the University of Texas.
Commissioner Everson thanked Petschek for her 13 years of service to the IRS.
"Evelyn has had a distinguished career, both in overseeing the Tax Exempt/Government Entities organization, and, for the last two years, being the guiding hand in my office,” Everson said. “I really appreciate her hard work and loyal service."
Petschek, who will retire in early June, has served as the Commissioner’s Chief of Staff for nearly two years. Prior to that, Petschek was Commissioner of the Tax Exempt/Government Entities Division. Her service at the IRS was recognized by a Distinguished Presidential Rank Award in 2004 and a Meritorious Presidential Rank Award in 1999.
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IR-2006-64, Apr. 14, 2006
WASHINGTON — Computer users are preparing and filing their income tax returns electronically in record numbers, according to the Internal Revenue Service.
As of Thursday, April 13, the IRS had received a total of 17,629,831 e-filed returns from computer users, surpassing last year’s yearlong total of 17,100,353 returns. Compared to the same period last year, on-line filing is up 15 percent.
“We are seeing the greatest growth for e-file among those filing from a home computer,” said IRS Commissioner Mark W. Everson. “We have already surpassed last year’s total, and people can e-file, with an extension, until Oct. 16.”
People still have time to electronically file their returns. Because the IRS confirms receipt of an electronically-filed return, e-filing can take the worry out of meeting next week’s tax-filing deadline. E-filers get their refunds in half the time, and people who owe money can choose to pay what they owe, electronically.
Those who need extra time can electronically request an automatic six-month tax-filing extension. The IRS will continue accepting e-filed 2005 returns until Oct. 16, 2006.
Information about no-cost and low-cost electronic filing services can be found on the e-file section of this Web site.
Related Items:

e-file


2005 Form 4868PDF, Application for Automatic Extension of Time to File U.S. Individual Income Tax Return (PDF 70.7K)

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IR-2006-63, April 14, 2006
WASHINGTON — Steven Musher has been appointed Internal Revenue Service Associate Chief Counsel, International, and Christopher Sterner has been appointed Division Counsel (Large and Mid-Size Business). The assignments are effective April 16, 2006.Steven Musher Named Associate Chief Counsel, International
Since November 2005, Musher served as Acting Associate Chief Counsel, International. Prior to that Musher served, starting 2001, as Deputy Associate Chief Counsel (International-Technical), overseeing the published guidance program. Musher began his tenure at the Office of Chief Counsel in 1994 as a Senior Technical Reviewer in the International Division where he later served as Branch Chief. Before joining the IRS, Musher worked in private practice.
“Steven’s promotion illustrates the agency’s commitment to promoting from within by giving young professionals opportunities to advance within the Service,” said IRS Chief Counsel Don Korb.
Mr. Musher received his B.A. degree from Yale University in 1975 and a J.D. from the University of Pennsylvania Law Center in 1978. He also received an L.L.M. from the Georgetown University Law Center in 1989.Christopher Sterner Named Division Counsel (Large and Mid-Size Business)
 “With 29 years experience in five IRS counsel field offices, Chris is eminently qualified to lead this important legal division. He has led Counsel’s efforts in the Son of Boss settlement initiative and subsequent trial strategy,” said Korb.
Sterner began his career with the Office of Chief Counsel in 1977 performing general litigation work in New York City. In 1978, he transferred to the Albany, NY, office where he was appointed a Special Litigation Assistant in 1988. Soon thereafter, Sterner assumed the position of Industry Counsel for the Data Processing Industry. In 1996, he transferred to the Richmond, VA, office as Assistant District Counsel. In 2000, he moved to Area 7 (San Francisco) as Area Counsel.
Mr. Sterner received a J.D. degree from the State University of New York School of Law at Buffalo in 1977 and a B.A. degree from the City University of New York in 1974. 
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IR-2006-62, April 14, 2006
WASHINGTON — The National Taxpayer Advocate, Nina E. Olson, announced that the Internal Revenue Service has awarded $8 million in matching grants to Low Income Taxpayer Clinics (LITCs) for the 2006 grant cycle (Jan. 1, 2006, through Dec. 31, 2006). LITCs are qualifying organizations that represent low income taxpayers involved in tax disputes with the IRS or that provide education on tax rights and responsibilities to taxpayers for whom English is a second language or who have limited English proficiency. For more details about the languages in addition to English served by LITCs, see Publication 4134, Low Income Taxpayer Clinic List.
The LITC grant program, now in its eighth year, encourages the creation and growth of Low Income Taxpayer Clinics across the nation. LITCs provide free or nominal cost assistance to taxpayers who otherwise may not be able to afford a tax professional.
Under the program, the IRS awards matching grants of up to $100,000 a year to organizations operating independent tax clinics. For the 2006 grant cycle, the IRS awarded LITC grants to 150 organizations representing 50 states plus the District of Columbia and Puerto Rico.
Questions about the LITC Program can be addressed to the LITC Program Office at (212) 298 -2227 (not a toll-free call) or by email at LITCProgramOffice@irs.gov.Related Link:

2006 LITC GrantsPDF (PDF 104K)


Pub. 4134PDF, Low Income Taxpayer Clinic List (PDF 138.8K) 

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