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IR 2006-100, June 21, 2006
Washington – The Internal Revenue Service today announced the appointment of Christopher Wagner as Deputy Commissioner of the Tax Exempt and Government Entities (TE/GE) Division.  Prior to this assignment, Wagner was the Deputy National Taxpayer Advocate.
Wagner has held numerous positions in enforcement functions within IRS, including the former Examination Division and the current Small Business/Self Employed Division, where he was involved with both examination and collection programs.
“Chris has a wealth of experience in both tax enforcement and taxpayer service,” said IRS Commissioner Mark W. Everson. “He will be a valuable addition to the TE/GE leadership team.”
TE/GE's three major business units — Exempt Organizations (EO), Employee Plans (EP) and Government Entities (GE) — oversee a diverse range of customers, from small volunteer community organizations to sovereign Indian tribes to large pension funds.
While these entities are not subject to federal income tax, they nonetheless represent a significant aspect of tax administration, with approximately three million entities controlling more than $11 trillion in assets and paying over $300 billion in employment tax and income tax withholding.
IR-2006–99, June 21, 2006
     
WASHINGTON — The Internal Revenue Service selected Frank Y. Ng to fill the new position of Deputy Commissioner, Large and Mid-Size Business (International). Ng had been the acting Director, International, and prior to that he served as the Industry Director, Communications, Technology and Media in LMSB.

In his new position, Ng will have responsibilities for international service and compliance activities across the IRS and will serve as the U.S. Competent Authority responsible for tax treaty administration.  An important element of the new position is to provide additional focus on international issues involving tax compliance resulting from increasing globalization. The IRS has a number of activities underway in the international tax arena, including the Joint International Tax Shelter Information Centre (JITSIC), a cooperative effort between the U.S., Canada, the United Kingdom and Australia to combat abusive cross-border transactions.

“We’re strengthening our leadership of the international area,” IRS Commissioner Mark W. Everson said. “International taxes are growing in importance, and this position ensures this area is represented at the highest levels of the agency. Frank brings a strong set of skills to help lead this important sector of tax administration.”

“This move reflects the Commissioner’s personal focus and his direction to the organization to focus on international compliance strategies on a Service-wide basis,” Commissioner of LMSB, Deborah M. Nolan, said. “Frank’s appointment will enhance our ability to meet the formidable challenges that come with increased globalization.”

Ng has a long history of experience in the international arena and in LMSB. He served as Director and separately, as Deputy Director, Pre-filing and Technical Guidance, which is responsible for pre-filing services, abusive corporate tax shelters activities and the technical advisor programs. 
He also served as the IRS representative in Tokyo, a position responsible for all IRS tax administration matters in Japan, Korea and China, and he served as Chief, Tax Treaty Division, which is responsible for competent-authority double-taxation negotiations, tax treaty interpretation matters and the exchange of information programs.

Ng has a degree in accounting from Arizona State University and a Master of Public Administration from the University of Southern California. He is a recipient of the 2005 Presidential Rank Award for meritorious service.
IR-2006-98, June 21, 2006
WASHINGTON — The Internal Revenue Service has acknowledged the certification by Ford Motor Company that several of its 2007 vehicles qualify for the Alternative Motor Vehicle Credit created by the Energy Policy Act of 2005. The tax credit for hybrid vehicles applies to vehicles purchased on or after Jan. 1, 2006, and could 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:
 

Ford Escape Front WD Hybrid Model Year 2007 — $2,600


Ford Escape 4 WD Hybrid Model Year 2007 — $1,950


Mercury Mariner 4 WD Hybrid Model Year 2007 — $1,950
	 

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 Dec. 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.Related Item:

Hybrid Cars and Alternative Motor Vehicles

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IR-2006-97, June 19, 2006
WASHINGTON — The IRS issued guidance today to assist Hurricane Katrina, Rita and Wilma victims claiming casualty and theft losses on their individual income tax returns.
The guidance, outlined in Revenue Procedure 2006-32, provides information on several safe harbor methods that individual taxpayers may use in determining their casualty and theft loss deductions under section 165 of the Internal Revenue Code. The safe harbor methods apply to personal-use residential real property and certain personal belongings damaged or destroyed as a result of Hurricanes Katrina, Rita or Wilma.
The revenue procedure provides three safe harbor methods that individuals may use to determine the decrease in fair market value of personal-use residential real property. The revenue procedure also provides a fourth safe harbor method that individuals may use to determine the fair market value of certain personal belongings immediately before Hurricanes Katrina, Rita or Wilma.
These safe harbor methods provide individuals, who may have lost their records or otherwise are unable to determine proper values, with optional ways to determine the decrease in fair market value of personal use residential real property and the pre-hurricane value of certain personal belongings. However, individuals may use the methods of determining these values described in Publication 547, Casualties, Disasters, and Thefts, rather than a safe harbor method.
Related Items:

Rev. Proc. 2006-32PDF


Publication 547PDF


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

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IR-2006-96, June 19, 2006
WASHINGTON — The Internal Revenue Service is providing additional time to file 2004 and 2005 individual income tax returns through Oct. 16, 2006 for certain affected taxpayers hit hardest by Hurricane Katrina.
Earlier this year, the IRS granted a postponement through Aug. 28, 2006, for certain time-sensitive acts for Katrina victims in the most severely damaged parishes and counties of Louisiana and Mississippi. The IRS is now granting additional time through Oct. 16, 2006, for these affected taxpayers to file certain individual income tax returns. The additional time to file individual income tax returns applies only for affected taxpayers in 31 Louisiana parishes, 49 Mississippi counties and 11 Alabama counties.
Specifically, the IRS is granting additional time through Oct. 16, 2006, for affected taxpayers to file the following individual income tax returns:

2004 individual income tax returns, originally due on April 15, 2005, for which taxpayers obtained an extension of time to file until Oct. 15, 2005, and for which the previous grant of disaster relief postponed the due date to Aug. 28, 2006.
	 


2005 individual income tax returns, originally due on April 15, 2006, for which the previous grant of disaster relief postponed the due date to Aug. 28, 2006.
	 

This additional postponement of time is not available for any other time-sensitive acts besides these two types of returns.
To ensure that they receive the relief to which they are entitled, affected taxpayers should mark "Hurricane Katrina" in red ink on the top of their returns. In addition, affected taxpayers may identify themselves as eligible for relief by calling the IRS Disaster Hotline at (866) 562-5227.
Legal guidance is available in IRS Notice 2006-56. A full listing of the affected counties is also described in news release IR-2006-30 and in Notice 2006-20.
Related Items:

Notice 2006-56PDF


IR-2006-30


Notice 2006-20PDF


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

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IR-2006-95, June 14, 2006

WASHINGTON — The Internal Revenue Service will survey nearly 50,000 people  this month to help the agency improve the way it provides taxpayer services.

An Opinion Survey of Taxpayer Resources and Services will be sent to 40,000 taxpayers as part of the Taxpayer Assistance Blueprint (TAB), a multi-year effort by the IRS to review its customer service operations and craft plans for continued improvements. Another survey of 10,000 taxpayers will help the IRS determine the effectiveness of its forms and publications.

“At the IRS, we are committed to providing a balanced program of quality service and equitable enforcement of the law. We strive to provide efficient and effective taxpayer services within available resources. This Blueprint will provide a solid foundation on which to base decisions about our taxpayer services portfolio,” said IRS Commissioner Mark W. Everson.

The IRS, the National Taxpayer Advocate and the IRS Oversight Board are collaborating on the TAB Project, which is intended to address questions about the taxpayers’ service preferences and needs. The IRS currently delivers services to taxpayers either electronically, through third parties such as tax practitioners or volunteer preparers, by mail, by telephone or through face-to-face assistance.

Taxpayers chosen at random will be asked 25 questions about how they use IRS services and how they would like to use IRS services. The questionnaire will be mailed to the taxpayers by an IRS-approved contractor. The survey to taxpayers does not ask for any financial or personal information nor should any be divulged. Individual responses will remain confidential.

Recognizing the importance of the clarity and effectiveness of forms, publications, and instructions to the delivery of quality taxpayer service, Media & Publications is at the same time surveying approximately 10,000 individual and business taxpayers, tax preparers and community-based partners to obtain their perspective on this aspect of IRS service.

The Media & Publications External Customer Satisfaction Survey will measure how satisfied respondents are with the information they get from the IRS and how well it equips them to understand and meet their obligations under federal tax laws. Questions will address the content, usefulness, format, graphics and delivery of IRS forms and publications. Customers will have the option of taking the survey by telephone or via the internet.
 
Both the TAB Opinion Survey of Taxpayer Resources and Services and the Media & Publications External Customer Satisfaction Survey are designed to provide IRS with greater and more accurate understanding of taxpayer service needs, preferences, and behavior. Both surveys will be repeated in future years, which will allow the IRS to continually refine and improve taxpayer services based on taxpayer preferences and needs.
IR-2006-91, June 7, 2006
WASHINGTON — The Internal Revenue Service announced that purchasers of Toyota Motor Sales USA qualified vehicles may continue to claim the Alternative Motor Vehicle Credit. The announcement comes after the IRS concluded its quarterly review of the number of hybrid vehicles sold.
The tax credit for hybrid vehicles applies to vehicles purchased on or after January 1, 2006, and it may be as much as $3,400 for those who purchase the most fuel-efficient vehicles.
The Quarterly Report of Qualified Vehicles for the Alternative Motor Vehicle Credit for the quarter ending March 31, 2006, shows that Toyota (which owns Lexus) sold 41,779 qualifying vehicles to retail dealers.
The make, model year and the corresponding allowable credit for qualified vehicles sold in the quarter are:
• Toyota Prius, 2005 and 2006 — $3,150
• Toyota Highlander Hybrid, 2006 — $2,600
• Lexus RX400h Hybrid, 2006 — $2,200
Consumers seeking the credit may want to buy early because the full credit is only available for a limited time. Taxpayers may claim the full amount of the allowable credit up to the end of the first calendar quarter after the quarter in which the manufacturer records its sale of the 60,000th vehicle. For the second and third calendar quarters after the quarter in which the 60,000th vehicle is sold, taxpayers may claim 50 percent of the credit. For the fourth and fifth calendar quarters, taxpayers may claim 25 percent of the credit. No credit is allowed after the fifth quarter.
More information on hybrid vehicles and other alternative motor vehicles can be found at: IRS.gov.
Links:

Information on Hybrid Vehicles Credit

 
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IR-2006-90, June 7, 2006
WASHINGTON — The Internal Revenue Service announced that purchasers of Ford Motor Company qualified vehicles may continue to claim the Alternative Motor Vehicle Credit. The announcement comes after the IRS concluded its quarterly review of the number of hybrid vehicles sold.
The tax credit for hybrid vehicles applies to vehicles purchased on or after January 1, 2006, and it may be as much as $3,400 for those who purchase the most fuel-efficient vehicles.
The Quarterly Report of Qualified Vehicles for the Alternative Motor Vehicle Credit for the quarter ending March 31, 2006, shows that Ford (which owns Mercury) sold 6,192 qualifying vehicles to retail dealers.
The make, model year and the corresponding allowable credit for qualified vehicles sold in the quarter are:

Ford Escape 2WD Hybrid, 2006 — $2,600


Ford Escape 4WD Hybrid, 2006 — $1,950


Mercury Mariner 4WD Hybrid, 2006 — $1,950

Consumers seeking the credit may want to buy early because the full credit is only available for a limited time. Taxpayers may claim the full amount of the allowable credit up to the end of the first calendar quarter after the quarter in which the manufacturer records its sale of the 60,000th vehicle. For the second and third calendar quarters after the quarter in which the 60,000th vehicle is sold, taxpayers may claim 50 percent of the credit. For the fourth and fifth calendar quarters, taxpayers may claim 25 percent of the credit. No credit is allowed after the fifth quarter.
More information on hybrid vehicles and other alternative motor vehicles can be found at: IRS.gov.
Related Item:
Hybrid Cars and Alternative Motor Vehicles
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IR-2006-89, June 5, 2006
WASHINGTON — The Internal Revenue Service today announced there will be an increase in the interest rates for the calendar quarter beginning July 1, 2006.  Each of these interest rates increases by a single interest point over the rate in the second quarter. The interest rates are as follows:  
 

eight (8) percent for overpayments [seven (7) percent in the case of a corporation];


eight (8) percent for underpayments;


ten (10) percent for large corporate underpayments; and


five and one-half (5.5) percent for the portion of a corporate overpayment exceeding $10,000.

Under the Internal Revenue Code, the rate of interest is determined on a quarterly basis.  For taxpayers other than corporations, the overpayment and underpayment rate is the federal short-term rate plus 3 percentage points.  Generally, in the case of a corporation, the underpayment rate is the federal short-term rate plus 3 percentage points and the overpayment rate is the federal short-term rate plus 2 percentage points.  The rate for large corporate underpayments is the federal short-term rate plus 5 percentage points.  The rate on the portion of a corporate overpayment of tax exceeding $10,000 for a taxable period is the federal short-term rate plus one-half (0.5) of a percentage point.
The interest rates announced today are computed from the federal short-term rate based on daily compounding determined during April 2006.
Rev. Rul. 2006-30, announcing the new rates of interest, is attached and will appear in Internal Revenue Bulletin No. 2006-25, dated June 19, 2006.
Related Item:

Revenue Rule 2006-30PDF
 
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IR-2006-88, June 2, 2006
WASHINGTON — The Internal Revenue Service today issued an advance copy of a notice on how commercial building owners or leaseholders can qualify for the tax deduction for making their building energy efficient. The notice establishes a process to certify the required energy savings in order to claim the deduction.
The commercial building deduction, which was enacted in the Energy Policy Act of 2005, allows taxpayers to deduct the cost of energy-efficient property installed in commercial buildings.
The amount deductible may be as much as $1.80 per square foot of building floor area for buildings that achieve a 50-percent energy savings target. The notice provides that buildings below the 50-percent threshold may, nevertheless, qualify for a deduction of up to 60 cents per square foot of building floor area if they meet a 16⅔-percent energy savings target.
Before claiming the deduction, the taxpayer must obtain a certification that the required energy savings will be achieved. Today’s notice prescribes the content of that certification and the qualifications that must be met by the person providing the certification.
The notice also announces that the Department of Energy will create and maintain a public list of software that must be used to calculate energy savings for purposes of providing the certification. It also provides a process that software developers must use if they desire to have their software included on that list.
Related Item:

Notice 2006-52PDF, Deduction for Energy Efficient Commercial Buildings

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Update April 26, 2013 — Link to Procedures for the 2006 Election Season removed, due to document being obsoleted. 
IR-2006-87, June 1, 2006
WASHINGTON — This election season the Internal Revenue Service reminds charities to avoid becoming involved in political campaign activities.
In the 2004 elections, the IRS noticed an upturn in politicking on the part of 501(c)(3) organizations. The agency responded by increasing its educational efforts and launching an enforcement program, the Political Activity Compliance Initiative (PACI), to investigate specific, credible allegations of wrongdoing.
“While the vast majority of charities and churches do not engage in politicking, an increasing number did take part in prohibited activities in the 2004 election cycle,” IRS Commissioner Mark W. Everson said. “The rule against political campaign intervention by charities and churches is long established. We are stepping up our efforts to enforce it.“
The IRS has put procedures into place for the 2006 election season to more quickly address instances of potential prohibited activity on the part of charities, churches and other tax-exempt organizations. The procedures are meant to ensure that public referrals as well as activities the IRS itself uncovers are reviewed expeditiously and treated in a consistent, fair and nonpartisan manner.
As a rule, charities, religious organizations such as churches, educational organizations and other groups that are tax-exempt under section 501(c)(3) of the tax code may not participate or intervene in any political campaign on behalf of or in opposition to any candidate for public office.
This prohibition means 501(c)(3) organizations may not endorse candidates, distribute statements for or against candidates, raise funds for or donate to candidates or become involved in any activity that would be either supportive or opposed to any candidate.
Whether an organization is engaging in prohibited political campaign activity depends upon all the facts and circumstances in each case. For example, organizations may sponsor debates or forums to educate voters. But if the debate or forum shows a preference for or against a certain candidate, it becomes a prohibited activity.
Federal courts have ruled that it is not unconstitutional for the tax law to impose conditions, such as the political campaign prohibition, upon exemption from federal income tax. This position was most recently upheld in Branch Ministries v. Rossotti, 211 F.3d 137 (D.C. Cir. 2000).
Related Items:

IRS Fact Sheet 2006-17, Election Year Activities and the Prohibition on Political Campaign Intervention for Section 501(c)(3) Organizations


IRS Reports on Political Activity Compliance Initiative


Procedures for the 2006 Election Season


IRS Publication 1828PDF, Tax Guide for Churches and Religious Organizations

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IR-2006-86, June 1, 2006
WASHINGTON — The Internal Revenue Service has acknowledged the certification by American Honda Motor Company, Inc. that several of its vehicles meet the requirements of the Alternative Motor Vehicle Credit as a qualified hybrid motor vehicle. The tax credit for hybrid vehicles applies to vehicles purchased on or after Jan. 1, 2006, and could 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:
Honda Civic Hybrid CVT Model Year 2006 — $2,100.00
Honda Civic Hybrid (SULEV) MT Model Year 2005 — $1,700.00
Honda Civic Hybrid (SULEV) CVT Model Year 2005 — $1,700.00
Honda Insight CVT Model Year 2005 — $1,450.00
Honda Insight CVT Model Year 2006 — $1,450.00
Honda Accord Hybrid AT Model Year 2006 — $1,300.00*
Honda Accord Hybrid AT Model Year 2005 — $650.00
*2006 Honda Accord Hybrid AT without updated control calibration qualifies for a credit amount of $650.
Starting in 2006, the 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. 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.
Related Items: 
Hybrid Cars and Alternative Motor Vehicles
Summary of the Credit for Qualified Hybrid Vehicles
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IR-2006-119, July 31, 2006
WASHINGTON — Tax professionals are helping launch a new system that will allow many individuals who owe delinquent federal taxes to apply online for a payment agreement, the IRS announced today.
The IRS is implementing the new Online Payment Agreement (OPA) application through national partnerships with the tax professional community. Members of tax professional organizations are using OPA to apply for payment agreements for clients who owe taxes. This application will eliminate the need to write or call the IRS toll-free number for assistance. When fully implemented, OPA will provide an easier way for taxpayers on their own or with the help of tax professionals to voluntarily resolve tax liabilities.
“This new system reduces taxpayer burden by providing the convenience of online service during extended hours and on weekends,” said IRS Commissioner Mark W. Everson. “Taxpayers can set up an agreement and arrange for payment options including automatic payments through direct debit or payroll deduction.”
The IRS estimates that 90 percent of taxpayers who qualify for a payment agreement will be able to obtain one through OPA once the application is available to the general public later this year.
Related Item: Payment Plans, Installment Agreements
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IR-2006-117, July 24, 2006
WASHINGTON — The Internal Revenue Service reminds taxpayers who previously filed an extension of time to file tax returns that they can electronically file (e-file) their returns until Oct. 16, 2006.
Last year, nearly 1.8 million taxpayers filed electronically after the April deadline. This year, through April 21 alone, 70 million tax returns were e-filed (20 million from home computers).
E-filing is convenient, safe and secure, and taxpayers receive confirmation to keep with their records. Those who wish to use e-file can file through:

A tax professional — Use the Authorized IRS e-file Provider Locator Service or check the Individual e-file Providers page on this Web site to find tax professionals who offer e-file.


A home computer — A computer with a modem or Internet access and tax preparation software are all that is necessary. E-filing via home computer can be done 24 hours a day, 7 days a week.


The Free File Alliance —Taxpayers with an adjusted gross income (AGI) of $50,000 or less may be eligible to receive free tax return preparation and electronic filing through a partnership agreement between the IRS and the Free File Alliance, LLC. For more information, visit the Free File page.

The extension granted extra time for filing the tax return only, not for paying any taxes due. Taxpayers will owe interest on any past due tax and may be subject to a late payment penalty if payment was not made by the original due date of the return. This year, the original due date for most taxpayers was April 17.
Related Items:

e-file


Individual e-file Providers


Free File Home - Your Link to Free Online Filing

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IR-2006-115, July 20, 2006
WASHINGTON — The Internal Revenue Service announced that purchasers of American Honda Motor Company, Inc., qualified vehicles may continue to claim the Alternative Motor Vehicle Credit. The announcement comes after the IRS concluded its quarterly review of the number of hybrid vehicles sold.
The tax credit for hybrid vehicles applies to vehicles purchased on or after Jan. 1, 2006, and it may be as much as $3,400 for those who purchase the most fuel-efficient vehicles.
The Quarterly Report of Qualified Vehicles for the Alternative Motor Vehicle Credit for the quarter ending March 31, 2006, shows that Honda sold 9,072 qualifying vehicles to retail dealers.
The make and model of qualified vehicles sold in the quarter ended March 31, 2006, include:

Honda Civic Hybrid (SULEV) CVT Model Years 2005 and 2006


Honda Accord Hybrid AT Model Years 2005 and 2006


Honda Accord Hybrid Navi Model year 2006


Honda Insight CVT Model Year 2006                    

Consumers seeking the credit may want to buy early because the full credit is only available for a limited time. Taxpayers may claim the full amount of the allowable credit up to the end of the first calendar quarter after the quarter in which the manufacturer records its sale of the 60,000th vehicle. For the second and third calendar quarters after the quarter in which the 60,000th vehicle is sold, taxpayers may claim 50 percent of the credit. For the fourth and fifth calendar quarters, taxpayers may claim 25 percent of the credit. No credit is allowed after the fifth quarter.
Related Item:
Hybrid Cars and Alternative Motor Vehicles
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IR-2006–112, July 13, 2006
WASHINGTON — To encourage their employees to purchase environmentally friendly hybrid cars, several companies reportedly are offering “rebates” or cash incentives to their employees in select areas to offset the purchase price of these vehicles. Just like other forms of compensation, these cash incentives are taxable compensation.
Employers should include the cash incentive amounts in employees’ compensation reported on year-end Form W-2 earnings statements. The cash incentives also are subject to income tax withholding and employment tax. The tax code provides for an exclusion from income for employee discounts only if the employer produces the product and certain other requirements are met.
The tax code already includes incentives for the purchase of hybrid cars. The Alternative Motor Vehicle Credit for hybrid vehicles applies to vehicles purchased on or after Jan. 1, 2006, and it may be as much as $3,400 for those who purchase the most fuel-efficient vehicles.
Related Item: Hybrid Cars and Alternative Motor Vehicles
IR-2006-110, July 11, 2006
WASHINGTON — The Internal Revenue Service has acknowledged the certification by General Motors Corp. that its 2007 Saturn Vue Green Line vehicle qualifies for the Alternative Motor Vehicle Credit created by the Energy Policy Act of 2005. This certification is under IRS Notice 2006-9. The tax credit for hybrid vehicles applies to new vehicles placed in service on or after Jan. 1, 2006.
The credit amount for the hybrid vehicle certification of the Saturn Vue Green Line Model Year 2007 is $650.
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 Dec. 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.Related Items:Hybrid Cars and Alternative Motor Vehicles
IR-2006-109, July 11, 2006
WASHINGTON — The Internal Revenue Service has acknowledged the certification by American Honda Motor Company, Inc., that two of its vehicles powered by compressed natural gas (CNG) meet the requirements of the Alterative Motor Vehicle Credit enacted by the Energy Policy Act of 2005.
The certification meets the requirements of IRS Notice 2006-54 qualifying the vehicles as Qualified Alternative Fuel Motor Vehicles (QAFMV). Honda Civic GX Model Years 2005 and 2006 are only capable of operating on compressed natural gas.
The vehicle certifications recently acknowledged by the IRS and their credit amounts are:
Honda Civic GX Model Year 2005   $4,000.00
Honda Civic GX Model Year 2006   $4,000.00
The qualified Alternative Fuel Motor Vehicle Credit was enacted by the Energy Policy Act of 2005 as part of the Alternative Motor Vehicle Credit. The new credit includes separate credits for four distinct categories of vehicles: (1) fuel cell vehicles, (2) advanced lean burn technology vehicles, (3) hybrid vehicles, and (4) alternative fuel vehicles.
Notice 2006-54 provides procedures for manufactures to certify vehicles as Qualified Alternative Fuel Motor Vehicles.  Notice 2006-9 provides procedures for manufacturers to certify vehicles as Qualified Hybrid Vehicles.
Related Items:
Hybrid Cars and Alternative Motor Vehicles
IR-2006-108, July 11, 2006
WASHINGTON — The Internal Revenue Service has acknowledged the certification by General Motors Corporation  that several of its 2006 and 2007 vehicles qualify for the Alternative Motor Vehicle Credit created by the Energy Policy Act of 2005. The tax credit for hybrid vehicles applies to new vehicles placed in service on or after Jan. 1, 2006.
The hybrid vehicle certifications recently acknowledged by the IRS and their credit amounts are:
GMC Sierra (4WD) hybrid pickup truck Model Year 2006 $650.00
GMC Sierra (4WD) hybrid pickup truck Model Year 2007 $650.00
Chevrolet Silverado (4WD) hybrid pickup truck
Model Year 2006       $650.00
Chevrolet Silverado (4WD) hybrid pickup truck
Model Year 2007       $650.00
GMC Sierra (2WD) hybrid pickup truck Model Year 2006 $250.00
GMC Sierra (2WD) hybrid pickup truck Model Year 2007 $250.00
Chevrolet Silverado (2WD) hybrid pickup truck
Model Year 2006       $250.00
Chevrolet Silverado (2WD) hybrid pick up truck
Model Year 2007       $250.00
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 Dec. 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 quantity of vehicles sold by a manufacturer to retail dealers. 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.Related Item: Hybrid Cars and Alternative Motor Vehicles
Note — For the most recent information on this program, please see the Offer in Compromise page. 
Update Jan. 6, 2014 — Use Form 656 BookletPDF, Offer in Compromise, to find the correct form to use.  
IR-2006-106, July 11, 2006
WASHINGTON — Under a new federal law, taxpayers submitting new offers in compromise must make a 20 percent nonrefundable, up-front payment in many cases, the Internal Revenue Service announced today.
The recently-enacted Tax Increase Prevention and Reconciliation Act of 2005 (TIPRA) made major changes to the offer in compromise (OIC) program, tightening the rules for lump-sum offers and periodic-payment offers. These changes become effective for all offers received by the IRS starting July 16, 2006.
An offer in compromise is an agreement between a taxpayer and the IRS that resolves the taxpayer's tax debt. The IRS has the authority to settle, or &quotcompromise,&quot federal tax liabilities by accepting less than full payment in certain circumstances.
Under the new law, taxpayers submitting requests for lump-sum OICs must include a payment equal to 20 percent of the offer amount. The payment is nonrefundable, that is, it will not be returned if the OIC request is later rejected. A lump-sum OIC means any offer of payments made in five or fewer installments.
Taxpayers submitting requests for periodic-payment OICs must include the first proposed installment payment with their application. A periodic payment OIC is any offer of payments made in six or more installments. The taxpayer is required to pay additional installments while the offer is being evaluated by the IRS. All installment payments are nonrefundable.
Under the new law, taxpayers qualifying as low-income or filing an offer based solely on doubt as to liability qualify for a waiver of the new partial payment requirements.
If the IRS cannot make a determination on an OIC within two years, then the offer will be deemed accepted. If a liability included in the offer amount is disputed in any court proceeding, that time period is omitted from calculating the two-year timeframe.
OIC requests are submitted using Form 656, Offer in Compromise. The form provides detailed instructions for completing an offer and includes all of the necessary financial forms. When submitting Form 656, taxpayers must include an application fee of $150 unless they qualify for the low-income exemption or are filing a doubt-as-to-liability offer.
A new version of Form 656, revised to reflect the new law, will be posted on IRS.gov in the next few weeks. In the meantime, taxpayers may continue to use the 2004 revision of the form.
Complete information on the entire collection process and the OIC program are on IRS.gov. Further details on the TIPRA changes can be found in Notice 2006-68, available now on the IRS Web site and scheduled to be published in Internal Revenue Bulletin 2006-31, dated July 31, 2006.
Related Items:

Notice 2006-68PDF


Fact Sheet 2006-22
SUPERSEDED BY IR-2006-123
IR-2006-105, July 10, 2006
WASHINGTON — Because of the flooding and temporary closure of the main Internal Revenue Service headquarters building in Washington, D.C., a special procedure for processing requests for certain expedited letter rulings for reorganizations and section 355 distributions has been established.                                                                                                   
Rather than faxing a copy of the requests to (202) 622-7707 as described in Revenue Procedures 2005-68 and 2006-1, taxpayers or their representatives should call the office of the Associate Chief Counsel (Corporate) at (202) 283-7930 and ask to speak to an attorney regarding the temporary procedures for submitting these ruling requests.
The Internal Revenue Service established a pilot program for processing requests for letter rulings for reorganizations and section 355 distributions on an expedited basis, provided certain requirements were met. 
Remember as noted in the recent news release, IR-2006-103, the temporary address for courier delivery of these requests, which are typically hand delivered, is: IRS, 950 L’Enfant Plaza, Fifth Floor, Washington, D.C. 20024.  All requests that are not hand delivered should continue to be sent to the Post Office Box specified in the revenue procedures.
Note: this content has been edited from the original version to remove links or other information no longer available. The material was accurate at the time it was issued.
 
IR-2006-137, Aug. 31, 2006
 
WASHINGTON — The Internal Revenue Service today announced the standard amounts that most long-distance customers can use to figure their telephone tax refund. These amounts, which range from $30 to $60, will enable millions of individual taxpayers to request the telephone tax refund without having to dig through old phone bills.
In general, anyone who paid the long-distance telephone tax will get the refund on their 2006 federal income tax return. This includes individuals, businesses and nonprofit organizations. The 2006 return is usually filed during 2007.
The standard amounts are based on the total number of exemptions claimed on the 2006 federal income tax return. The standard amounts are $30 for a person filing a return with one exemption, $40 for two exemptions, $50 for three exemptions and $60 for four or more exemptions. For example, a married couple filing a joint return with two dependent children (for a total of four exemptions) will be eligible for the maximum standard amount of $60.
“The easiest way for eligible taxpayers to get their money back is to use the standard amounts,” said IRS Commissioner Mark W. Everson. “These amounts save taxpayers from locating 41 months of old phone bills and analyzing these bills to determine the taxes paid. We believe the standard amounts are both reasonable and fair.”
To get the standard amount, eligible taxpayers only need to fill out one additional line on their regular 2006 return. The IRS is creating a special short form (Form 1040EZ-T) for those who don’t need to file a regular return.
The standard amounts are based on actual telephone usage data, and the standard amount applicable to a family or other household reflects the long-distance phone tax paid by similarly sized families or households. Those who paid the long-distance tax on service billed after Feb. 28, 2003 and before Aug. 1, 2006 are eligible for a refund.
Only individuals can use the standard amounts. Alternatively, individual taxpayers can choose to figure their refund using the actual amount of tax paid.
Details on requesting the telephone tax refund will be included in all 2006 tax return materials and on irs.gov.
Though businesses and nonprofits must base their telephone tax refund on the actual amount of tax paid, the IRS is looking for ways to make the refund process easier for these taxpayers. The IRS is considering an estimation method businesses and nonprofits may use for figuring the tax paid.
"Businesses and nonprofits generally have more varied usage patterns than individuals do," Everson said. "We've met with a number of business and nonprofit groups to understand their concerns, and we plan to continue to work with them to come up with a reasonable method for estimating telephone excise tax refund amounts."
Related Links:
Telephone Tax Refund Questions and Answers 
IR-2006-82, Government to Stop Collecting Long-Distance Telephone Tax
Notice 2006-50PDF
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IR-2006-136, August 29, 2006
WASHINGTON —The Internal Revenue Service announced today that the general effective date for the regulations regarding section 403(b) arrangements that were proposed in 2004 (including the related controlled group regulations under section 414(c)) will be extended.
In order to provide employers, employees, insurance carriers, and mutual funds involved in section 403(b) arrangements a reasonable advance period before the regulations go into effect, the final regulations generally will not be effective earlier than January 1, 2008.
Related Item: Proposed 403(b) Regulation, November 2004PDF
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IR-2006-134, August 25, 2006
WASHINGTON — The Internal Revenue Service today announced a draft of Form 8888, Direct Deposit of Refund, the new form for taxpayers who opt to split their refunds among accounts, is now available for public comment.
Tax professionals, taxpayers and other interested parties have 30 days to make suggestions regarding the form and its instructions. The draft Form 8888 is posted on the IRS Web site under the tax professional section. Comments may be submitted electronically to the IRS by selecting Comments on Draft Forms and Publications.
Starting in January, taxpayers have more choice and flexibility for direct deposits of their 2006 federal income tax refunds. They can split their refunds among up to three checking or savings accounts and three different U.S. financial institutions by using Form 8888. This new option will be available for tax returns filed either on paper or electronically.
Taxpayers can continue to use the direct deposit line on Form 1040 to electronically send their refunds to one checking or savings account.
This change will give taxpayers more options for managing their refunds, teamed with the speed and safety of direct deposit.Related Links: Comment on Draft Forms and Publications (update: comment period closed)
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IR-2006-133, Aug. 24, 2006
WASHINGTON — In a continuing effort to assist victims of last year’s hurricanes, the IRS has issued a publication summarizing the tax incentives to rebuild the Gulf Coast, which are valued at almost $9 billion.
“The Department of Housing and Urban Development worked closely with the IRS on creating this publication,” said Kevin M. Brown, IRS Commissioner of the Small Business/ Self-Employed Division. “HUD employees are working alongside IRS workers in the communities affected by last year’s hurricanes; and through them we can let those affected by the hurricanes know about tax relief and tax benefits.”
Publication 1460, Highlights of Tax Relief Provided to Taxpayers in Response to Hurricanes Katrina, Rita, and Wilma, provides up-to-date information on tax relief, such as:

The extended deadlines available to those affected by the hurricanes.
	 


The rules on claiming a casualty loss and directions on how to get information on the new safe harbor method, which provides a simple way to calculate a loss.
	 


Summaries of the different credits available to businesses, such as the work opportunity credit, the employee retention credit and the new market tax credit.
	 


Explanations of the special depreciation rules and deduction for clean-up costs for businesses.

“GO Zone tax incentives are designed to stimulate business activity and create jobs throughout the Gulf Region,” said Alphonso Jackson, Secretary of the U.S. Department of Housing and Urban Development. “Beyond that, however, they will help to breathe new life into these communities and lay the groundwork for an even stronger, more vital Gulf Coast. For its part, HUD will work closely with the IRS to spread the word through printed materials and tax seminars as we work to bring jobs and economic development back to these communities."Related Items:

Publication 1460PDF, Highlights of Tax Relief Provided to Taxpayers in Response to Hurricanes Katrina, Rita, and Wilma


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

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IR-2006-131, Aug. 23, 2006
WASHINGTON – The Internal Revenue Service released legal guidance today outlining the protections in place for the new private debt collection program.
The guidance, contained in Announcement 2006-63, describes the limited role private collection agencies (PCAs) may play in collecting back taxes and the legal restrictions and procedures in place to safeguard taxpayer privacy and taxpayer rights.
The IRS will assign delinquent federal tax accounts to three PCAs beginning Sept. 7. An initial 12,500 taxpayers who owe back taxes will be in this group, with the number reaching approximately 40,000 by year’s end.
“We’re going to implement this program very carefully so we have a good program on sound footing,” IRS Commissioner Mark W. Everson said. “We are working hard to protect taxpayer privacy and taxpayer rights.”
In addition to describing the rules that will guide PCA conduct and protect taxpayer rights, Announcement 2006- 63 also describes the type of contacts a PCA may have with a taxpayer and the procedures in place for the IRS to assist in training and monitoring PCAs.
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 provision was carefully crafted by Congress 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 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 are not authorized to take enforcement actions such as filing liens, or making levies or property seizures. In addition, private firms are not 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 continue to focus its existing collection and enforcement personnel on more complex tax issues,” Everson said.
Links:

IR-2006-132, Simple Steps Can Prevent Scams as Private Debt Collection Begins


Announcement 2006-63PDF

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