etrent17/irs-articles huggingface dataset:
IR-2007-167, Oct. 9, 2007
WASHINGTON — The Treasury Department and the Internal Revenue Service (IRS) today issued a notice providing guidance on the methodology used to produce the corporate bond yield curve and segmented rates as part of enhanced pension funding rules for companies enacted by the Pension Protection Act of 2006 (PPA).
Under PPA, Treasury was required to produce a yield curve for investment-quality corporate debt that private pension plans must use to calculate their funding obligations and the amounts of their lump-sum payments to retirees. IRS Notice 2007-81 outlines the methodology used by Treasury in producing the yield curve. 
Notice 2007-81 covers the use of the yield curve for purposes of applying the funding rules and minimum present value requirements of PPA.  The Notice also provides the full yield curve and various segment rates for August 2007 and historical segment rates starting in September of 2005.  In addition, each month IRS will then publish a standard notice containing updated monthly yields along with the additional rates required under the provisions of PPA.
 
The initial yield curve, as well as monthly updates will also be posted on the IRS’s website and on Treasury’s Economic Policy page.
Related Items:

Notice 2007-81PDF


Pension Protection Act of 2006 (PL 109-280)
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IR-2007-166, Oct. 9, 2007
WASHINGTON — Businesses that are eligible to elect S corporation tax treatment now have a simpler process for requesting relief for late elections under a change announced by the Internal Revenue Service today.
Revenue Procedure 2007-62 allows small businesses that missed filing Form 2553, Election by a Small Business Corporation, before filing their first Form 1120S, U.S. Income Tax Return for an S Corporation, to file both forms simultaneously. The change is effective for taxable years that end on or after Dec. 31, 2007. Internal Revenue Bulletin 2007-41, published on Oct. 9, 2007, includes this new guidance.
The IRS cautioned that the requirement for filing Form 2553 to establish the election in advance of filing the initial Form 1120S remains in effect. However, the new process will save time and effort for those taxpayers who can establish reasonable cause for making a late election.
Form 2553 will be updated to reflect the new rules, so taxpayers filing paper Forms 2553 should download the most recent revision from IRS.gov. Form 2553 can also be submitted electronically as an attachment to an e-filed Form 1120S.
There is relief under earlier guidance for late elections for taxpayers who meet certain conditions. Previously, taxpayers had to submit Form 2553 along with a statement explaining the reasons for the late election. The new guidance provides a simplified method to request relief by permitting taxpayers to file their first Form 1120S along with Form 2553 and include the statement on the form.
Small business corporations that are eligible for tax treatment under Subchapter S of the Internal Revenue Code enjoy the advantages of the corporate structure while being taxed similarly to a partnership or sole proprietorship.
The new procedure will reduce taxpayer burden by allowing the agency to process a properly completed tax return and its corresponding election without delays or additional contacts with taxpayers to resolve the issue of a missing election.
The change, based on suggestions from tax professionals and small business owners, resulted from the work of an IRS process improvement team led by the Office of Taxpayer Burden Reduction.
Related Item: Revenue Procedure 2007-62PDF
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IR-2007-164, Oct. 4, 2007
 
WASHINGTON – The Internal Revenue Service announced today that more than 800,000 of the nation’s small businesses and large corporations have electronically filed their tax returns so far this year, a 60 percent increase from last year.
Even though they have no electronic filing requirement, more than 780,000 small businesses have opted to e-file their tax returns this year, up more than 50 percent from last year. 
Many large corporations are voluntarily e-filing as well. The more than 42,000 large corporations that e-filed far exceeded the approximately 22,000 that were required to file by the Sept. 17 deadline.
“This is a record-breaking year for electronically filed returns by corporations and businesses,” said Acting IRS Commissioner Linda Stiff.  “We will continue to work with the business community, tax practitioners and the software industry to improve this important program.”
Starting in 2006, certain corporations with assets of more than $50 million were required to file their Form 1120 and 1120-S electronically. Approximately 15,500 of these corporations filed their returns electronically last year. Starting in 2007, certain corporations with assets of more than $10 million were required to file electronically. 
“Corporations of all sizes are seeing the long range advantages of integrating their tax filing in an electronic environment along with their tax and financial accounting,” said IRS Treaty Administration Director Elvin Hedgpeth, who led the implementation of e-filing for large corporations.  “While large and mid-size corporations are required to e-file, many small corporations are seeing the advantages of e-filing voluntarily.” 
The collaboration with corporate practitioner, software development and technology stakeholder groups has facilitated the growth in corporate e-filing,” Hedgpeth went on to say.  “Software and e-filing support services have become readily available to all corporations that want to transition their tax filing from paper to electronic,” he said.
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IR-2007-163, Oct. 1, 2007
WASHINGTON — The Internal Revenue Service today issued the 2007 allowable living expense standards.
Allowable living expense standards, also known as collection financial standards, are used to determine the ability of a taxpayer to pay a delinquent tax liability. For purposes of federal tax administration the standards are effective Oct. 1, 2007.
This year the standards have been redesigned to incorporate:

a new category for out of pocket health care expenses


the elimination of income ranges for national standards for food, clothing and other items


a nationwide set of tables for national standard expenses, eliminating separate tables for Alaska and Hawaii


an expanded number of household categories for housing and utilities


an allowance for cell phone costs in housing and utilities


equal allowances for first and second vehicles under transportation expenses


fewer Metropolitan Statistical Areas for vehicle operating costs


a separate nationwide public transportation allowance

The Allowable Living Expense standards rely on data from the Bureau of Labor Statistics, the Medical Expense Panel Survey and other governmental surveys of actual consumer expenditures and provide a basis for allowances. The IRS adjusts survey data for inflation according to the Consumer Price Index.
Expense information for use in bankruptcy calculations can be found on the Department of Justice U.S Trustee Program Web site. For bankruptcy purposes, the effective date for the new standards will be Jan. 1, 2008.
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IR-2007-194, Nov. 28, 2007
WASHINGTON — The 2008 filing season is right around the corner.  December’s Tax Talk Today program, “Getting Ready for the Filing Season 2008: Part 1 (Individuals)”, on Tuesday, Dec. 11, 2007 at 2 p.m. will give tax professionals a head start and get preparers off on the right foot. 
This annual filing season program focuses on individual tax return issues, such as changes to forms, the latest tax law changes and IRS processing issues that affect individual taxpayers. Tax preparers also will get tips on how to avoid common errors that can cost them and their clients time and money.
Panelists will be Kathleen Collins, principal of her own Savannah, Georgia-based tax practice, and president of the Georgia Association of Enrolled Agents; William Stevenson, president of National Tax Consultants, Inc., a tax preparation and taxpayer representation firm for individuals and businesses; Pamela J. Walker, IRS deputy director for Submission Processing at Cincinnati and Carole Barnette, IRS acting chief for Individual Tax Forms and Publications.
Tax Talk Today is a Webcast aimed at educating tax and payroll professionals on the most current and complex tax issues. Tax professionals are encouraged to watch and submit questions.
To access the Webcast at no charge, viewers can register online at www.TaxTalkToday.tv. Tax professionals in need of continuing education credits (CECs) are eligible to receive one CEC by viewing the Dec. 11 Webcast.
Archived shows are available on the site also, including the November broadcast “What’s Hot in Employment Taxes: Independent Contractor or Employee?”
NOTE: The next show will air on Tuesday, Jan. 8, 2008: “Getting Ready for Filing Season 2008 - Part 2 (Business)”, 2 p.m. - 3 p.m.
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IR-2007-193, Nov. 28, 2007
 
WASHINGTON – The Internal Revenue Service today announced that interest rates for the calendar quarter beginning January 1, 2008, will drop by one percentage point. The new rates will be: 
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 October 2007.
Related Item: Revenue Ruling 2007-68PDF
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IR-2007-192, Nov. 27, 2007
WASHINGTON — The Internal Revenue Service today issued the 2008 optional standard mileage rates used to calculate the deductible costs of operating an automobile for business, charitable, medical or moving purposes.
Beginning Jan. 1, 2008, the standard mileage rates for the use of a car (including vans, pickups or panel trucks) will be:
50.5 cents per mile for business miles driven;
19 cents per mile driven for medical or moving purposes; and
14 cents per mile driven in service of charitable organizations.
The new rate for business miles compares to a rate of 48.5 cents per mile for 2007. The new rate for medical and moving purposes compares to 20 cents in 2007. The rate for miles driven in service of charitable organizations has remained the same.
The standard mileage rate for business is based on an annual study of the fixed and variable costs of operating an automobile; the standard rate for medical and moving purposes is based on the variable costs as determined by the same study. Runzheimer International, an independent contractor, conducted the study for the IRS.
The mileage rate for charitable miles is set by law.
A taxpayer may not use the business standard mileage rate for a vehicle after using any depreciation method under the Modified Accelerated Cost Recovery System (MACRS), after claiming a Section 179 deduction for that vehicle, for any vehicle used for hire or for more than four vehicles used simultaneously.
Revenue Procedure 2007-70PDF contains additional information on these standard mileage rates.
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IR-2007-191, Nov. 19, 2007
WASHINGTON — The Internal Revenue Service announced today that American Honda Motor Company, Inc, has submitted quarterly reports indicating that its cumulative sales of qualified vehicles to retail dealers reached the 60,000-vehicle limit during the calendar quarter ending Sept. 30, 2007.
Under the current tax law, the credit for buying a hybrid vehicle begins to phase out in the second calendar quarter after the quarter in which the manufacturer sells its 60,000th hybrid or lean burn technology vehicle.
The credit for all new qualified hybrid passenger automobiles or light trucks manufactured by Honda will begin to phase out on Jan. 1, 2008.
Vehicles purchased before Jan. 1, 2008 qualify for the full credit. For Honda hybrid vehicles bought on or after Jan. 1, 2008, and on or before June 30, 2008, the credit is 50 percent of the otherwise allowable credit amount. Taxpayers buying vehicles on or after July 1, 2008, and on or before Dec. 31, 2008, can only get 25 percent of the credit.
Here are the credit amounts for Jan. 1, 2008, through June 30, 2008:
Honda Accord Hybrid AT, Model Year 2007 — $650
Honda Accord Hybrid Navi AT, Model Year 2007 — $650
Honda Civic Hybrid CVT, Model Year 2007 —$1,050
Honda Civic Hybrid CVT, Model Year 2008 — $1,050

Here are the credit amounts for July 1, 2008 – Dec. 31, 2008:
Honda Accord Hybrid AT, Model Year 2007 — $325
Honda Accord Hybrid Navi AT, Model Year 2007 — $325
Honda Civic Hybrid CVT, Model Year 2007 —$525
Honda Civic Hybrid CVT, Model Year 2008 — $525
Beginning Jan 1, 2009, taxpayers who buy a Honda hybrid cannot claim the related tax credit.
Related Item: Notice 2007-98PDF
 
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IR-2007-190, Nov. 19, 2007
WASHINGTON — The Internal Revenue Service today reminded section 501(c)(3) organizations, including charities and churches that federal law prohibits them from becoming directly or indirectly involved in campaigns of political candidates.
The prohibition against political campaign activity has been in effect for more than half a century and bars certain tax-exempt organizations from engaging on behalf of or in opposition to political candidates. However, these organizations can engage in advocating for or against issues and, to a limited extent, ballot initiatives or other legislative activities.
“The political contests, especially for president, are starting earlier than usual. The IRS, as it has in the past, wants to remind charities and churches of the ban on political campaign activity. We also want to urge nonprofit and religious organizations to review the guidance we have issued to help them avoid any problems,” said Steven T. Miller, Commissioner of IRS’ Tax Exempt and Government Entities Division.
The IRS’ goal is to educate the leadership of these organizations to help them stay within the legal boundaries. In this regard, IRS Revenue Ruling 2007-41 outlines a number of scenarios to help charities and churches understand the ban on political campaign activity and actions that may arise.
In addition to the revenue ruling, the IRS has other helpful information for churches and charities on its website at /eo. For example, IRS Publication 1828, Tax Guide for Churches and Religious Organizations, contains a discussion of the law affecting political campaign activity by churches and religious institutions.
Violation of the law can result in imposition of an excise tax or, in extreme cases, a loss of tax exempt status.
In June 2007, the IRS released its Report on the Political Activity Compliance Initiative for the 2006 election cycle. This report, PACI 2006, follows the report on prohibited political campaign intervention in the 2004 election cycle, which was issued in February 2006.
Related Items:

Revenue Ruling 2007-41PDF


Publication 1828PDF


Past PACI Reports


Charities, Churches and Educational Organizations - Political Campaign Initiative

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IR-2007–188, Nov. 13, 2007
WASHINGTON —The Internal Revenue Service has acknowledged the certification by Nissan North America, Inc., that its 2008 Nissan Altima Hybrid vehicle meets the requirements of the Alternative Motor Vehicle Credit as a qualified hybrid motor vehicle.
The credit amount for the hybrid vehicle certification of the 2008 Nissan Altima Hybrid is $2,350.
The announcement comes after the IRS concluded its quarterly review of the number of hybrid vehicles sold. Nissan sold 2,627 qualifying vehicles to retail dealers in the quarter ending Sept. 30, 2007. This brings the total number of qualified hybrid vehicles sold to 7,849.
Original owners 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.
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IR-2007-186, Nov. 8, 2007
 
WASHINGTON — The Internal Revenue Service acknowledged the certification by Toyota Motor Sales U.S.A., Inc., that several of its Model Year 2008 vehicles qualify for the hybrid vehicle tax credit. Only vehicles purchased prior to Oct. 1, 2007, qualify for a credit.  
For purchases made April 1, 2007, through Sept. 30, 2007, the hybrid vehicle certifications recently acknowledged by the IRS and their credit amounts are:
2008 Toyota Prius Hybrid — $787.50
2008 Toyota Camry Hybrid —$650
2008 Toyota Highlander Hybrid 4WD — $650
2008 Lexus LS 600h L Hybrid — $450
2008 Lexus RX 400h 2WD and 4WD— $550
No credit is allowed for purchase of these vehicles after Sept. 30, 2007.
The credit amounts reflect a decrease in the credit beginning on Oct. 1, 2006, as a result of the manufacturer’s having sold 60,000 qualified hybrid motor vehicles. 
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IR-2007-185, Nov. 7, 2007
 
WASHINGTON — The Internal Revenue Service this year received nearly 80 million tax returns through e-file, breaking the record set last year.
The 2007 level is up about 9 percent from the 73 million returns filed for the same period last year. Of the 139.3 million returns filed in 2007, 79.98 million or about 57.4 percent were filed electronically.
  “It was another record-breaking year for e-file,” said IRS Acting Commissioner Linda E. Stiff. “Paper returns continue to drop year after year. E-file is the safe, accurate way for more and more taxpayers to quickly complete their taxes and get a refund faster.”
Since 2001, the number of e-filed returns has almost doubled and over the past decade the number of e-filers has increased four-fold.
 

  Year 


Returns


  Total E-file 


 Percent E-file


1997


 121.5 million


19.2 million


15.8%


1998


123.8 million


24.6 million


19.9%


1999


125.9 million


29.3 million


23.3%


2000


128.4 million


35.4 million


27.6%


2001


131.0 million


40.2 million


30.7%


2002


131.7 million


46.9 million


35.6%


2003


131.6 million


52.9 million


40.2%


2004


132.2 million


61.5 million


46.5%


2005


134.0 million


68.5 million


51.1%


2006


136.1 million


73.3 million


53.8%

More than 22.6 million returns have been e-filed by taxpayers doing their own returns, up from 20.3 million from the same period last year. More than 57.4 million returns were e-filed by tax professionals, up from nearly 52.9 million last year.
Direct Deposit, IRS.gov also Set Records
Meanwhile, more people this year chose to have their tax refunds directly deposited than ever before. For the year to date, the IRS has directly deposited 61.4 million refunds, up 8 percent from last year.
The IRS Web site — IRS.gov — also experienced a record year. The IRS recorded 196.2 million visits to IRS.gov this year, a more than 10 percent increase from the 177.5 million visits for the same period last year.
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IR-2007-182, Nov. 2, 2007
WASHINGTON — The Internal Revenue Service today announced the availability of five new publications to help foreign-language communities understand federal tax forms and publications that are written in English. These new glossaries of tax terminology will help meet increased demand for tax-related resources in languages other than English.
The five new publications are new versions of Publication 850 for Chinese (simplified), Chinese (traditional), Korean, Russian and Vietnamese. A Spanish versionPDF was previously available.
The Virtual Translation Office of the IRS helped create these glossaries of tax terminology to help taxpayers and the professionals who assist them. The publications were developed in cooperation with professional translators and editors to establish uniformity in language usage in IRS tax products and to function as reference materials for these products.
Although the publications are not legal documents, the IRS hopes that these glossaries will be useful to members of the U.S. Chinese, Korean, Russian and Vietnamese communities in understanding IRS documents and clarifying tax-related issues.
The new publications are:

Publication 850 (EN/CN-S)PDF, English-Chinese (Simplified) Glossary of Words and Phrases


Publication 850 (EN/CN-T)PDF, English-Chinese (Traditional) Glossary of Words and Phrases


Publication 850 (EN/KR)PDF, English-Korean Glossary of Words and Phrases


Publication 850 (EN/RU)PDF, English-Russian Glossary of Words and Phrases


Publication 850 (EN/VN)PDF, English-Vietnamese Glossary of Words and Phrases

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IR-2007-213, Dec. 31, 2007
WASHINGTON — The Treasury Department and the Internal Revenue Service today issued Notice 2008-13 that implements a May 2007 law that expanded the tax return preparer penalty and heightened the standards of conduct that must be met by tax return preparers in order to avoid that penalty.
Notice 2008-13 also solicits input from the tax return preparer community on a planned overhaul of the tax return preparer penalty regime anticipated to be completed by the end of 2008.
“The plan to take a fresh look at the preparer penalty regulations will be a top priority for us in 2008,” said IRS Chief Counsel Don Korb. “We look forward to receiving comments from all interested parties on their recommendations for the final regulations. Our goal is to complete our work on the overhaul of these rules by the end of 2008,” he said.
For undisclosed positions on a tax return, the new law replaced the realistic possibility standard with a requirement that there be a reasonable belief that the tax treatment of the position would more likely than not be sustained on its merits. In cases in which the taxpayer discloses the position on the tax return, the notice implements the new law that states there must be a reasonable basis for the tax treatment of the position taken on the tax return.
The notice provides interim rules to implement and interpret these heightened standards. The interim rules will be in effect until the overhaul of the current return preparer penalty regulations is complete. The interim rules emphasize the importance to preparers of understanding the legal basis for positions taken on tax returns, the requirement for taxpayers to disclose certain positions, and the need for preparers to advise taxpayers on the various penalties that can apply when a position is taken on a return that may not be supported by existing law.
Under the notice, preparers generally can continue to rely on taxpayer representations in preparing returns and can also generally rely on representations of third parties, unless the preparer has reason to know they are wrong.
The new law also expanded the return preparer penalty to cover all tax return preparers, not just income tax return preparers. Under the notice, preparers of many information returns, however, will not be subject to the new penalty provision unless they willfully understate tax or act in reckless or intentional disregard of the law. The notice also includes examples illustrating how the new standards would apply.
In addition to Notice 2008-13, additional guidance has been provided in Notice 2008-12 with respect to the implementation of the tax return preparer signature requirement, and in Notice 2008-11, which clarifies the transition relief provided in Notice 2007-54, issued earlier this year.
Related Items:
Notice 2008-11PDF
Notice 2008-12PDF
Notice 2008-13PDF
Notice 2007-54PDF
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IR-2007-212, Dec. 28, 2007
 
WASHINGTON — The Treasury Department and the Internal Revenue Service today issued proposed regulations that provide employers sponsoring single-employer defined benefit plans with guidance regarding the measurement of pension assets and liabilities under the new funding rules enacted as part of the Pension Protection Act of 2006. 
These proposed regulations, together with proposed regulations related to mortality issued in May, proposed regulations relating to funding balances and funding-based benefit limitations issued in August, the yield curve guidance issued in October, and guidance on lump sum determinations issued in November will assist plan sponsors in determining the contribution requirements that apply to their defined benefit plans for the first year that the new funding rules apply. 
Although the new funding rules are generally effective for plan years beginning on or after Jan. 1, 2008, these regulations are proposed to be effective for plan years beginning on or after Jan. 1, 2009.  However, plan sponsors can rely on these proposed regulations for purposes of satisfying the requirements of section 430 for plan years beginning in 2008.
The Treasury Department and the Internal Revenue Service intend to issue guidance in the near future indicating that the proposed effective date for these regulations should also apply for the proposed regulations relating to employer-specific mortality tables issued in May and the proposed regulations related to funding balances and funding based-benefit limitations under sections 430(f) and 436 issued in August.  Although final regulations will not apply to plan years beginning before January 1, 2009, plan sponsors may also rely on those proposed regulations for purposes of satisfying the statutory requirements for plan years beginning in 2008.
On Dec. 19, 2007, the Senate passed an amended version of the Pension Protection Technical Corrections Act of 2007.  These proposed regulations, like the earlier proposed regulations, do not reflect any proposed technical corrections.  Nor do they include any reflection of the proposed modification to the rules for determining asset values.  After technical corrections are enacted, the regulations will be modified to take into account the enacted provisions.  
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IR-2007-211, Dec. 28, 2007
WASHINGTON — The Treasury Department and Internal Revenue Service (IRS) issued proposed regulations relating to cash balance plans and other hybrid pension plans. 
The proposed regulations would interpret rules that were added to the tax law by the Pension Protection Act of 2006 (PPA), including an age discrimination safe harbor for hybrid pension plans, conversion protection for employees, and a 3-year minimum vesting requirement. The proposed regulations would also apply for purposes of the parallel rules that were added by PPA to the Employee Retirement Income Security Act of 1974 (ERISA).
The regulations are generally proposed to be effective for plan years beginning on and after Jan. 1, 2009. For periods before the effective date of these regulations, a plan must comply with the new PPA statutory provisions. During these periods, a plan is permitted to rely on the regulations for purposes of satisfying the new PPA statutory provisions.
Related Item: Notice of Proposed Rulemaking
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IR-2007-210, Dec. 28, 2007
WASHINGTON — The Internal Revenue Service has acknowledged the certification by General Motors Corp. that five of its Model Year 2008 vehicles meet the requirements of the Alternative Motor Vehicle Credit as qualified hybrid motor vehicles.
The credit amount for the certified 2008 model year hybrid vehicles are:
Chevrolet Tahoe Hybrid (2WD and 4WD)$2,200.00
GMC Yukon Hybrid (2WD and 4WD)$2,200.00
Saturn Vue Green Line $1,550.00
Original purchasers of these vehicles 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.
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IR-2007-208, Dec. 27, 2007
 
WASHINGTON — Today the Internal Revenue Service announced the 2008 inflation adjustments to the excise taxes on air transportation.
Excise taxes apply to the domestic segments of taxable air transportation and to the use of international air facilities. The Consolidated Appropriations Act, 2008, signed into law on Dec. 26, 2007, extends these excise taxes to air transportation that begins or is paid for no later than Feb. 29, 2008.
These excise taxes are adjusted annually for inflation.  For 2008, the excise tax on the domestic segment of taxable air transportation is $3.50. The excise tax for 2008 for international flights that begin or end in the United States is $15.40.  The tax on use of international air facilities also applies at a reduced rate to departures of interstate flights that begin or end in Alaska or Hawaii. For 2008, the international air facilities tax on these flights is $7.70.
Revenue Procedure 2007-66, which contains other amounts that are adjusted annually for inflation, will be modified in the near future to include the 2008 inflation adjusted items listed above.
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IR-2007-207, Dec. 21, 2007
WASHINGTON — The Internal Revenue Service announced the selection of 10 new members of the Internal Revenue Service Advisory Council (IRSAC), which provides an organized public forum for IRS officials and representatives of the public to discuss key tax administration issues.
Members are picked to represent the taxpaying public, tax professionals, small and large businesses, state tax administrations, and the payroll community. IRSAC was established in 1953 and provides the IRS Commissioner and division heads with important feedback, observations and suggestions.
“The new members bring a wide range of experience and tax administration knowledge to this important group," said Linda Stiff, Acting IRS Commissioner. "I look forward to working with IRSAC as it continues to provide the IRS with valuable feedback and insight."
IRSAC meets periodically and will submit a report to the IRS in November 2008 at a public meeting. IRSAC members generally serve a two to three-year term with a possible one-year extension. The 10 new participants will join 17 returning members in 2008.
New members include:
David L. Bernard, CPA, of Neenah, Wis. He is the vice president of tax and real estate for the Kimberly-Clark Corp. and was previously international president of the Tax Executives Institute.
Jay E. Fishman of Bryn Mawr, Pa. He is a managing director of Financial Research Associates and a fellow of the American Society of Appraisers.
Dean Heyl, JD, of Washington, D.C. He is president of Heyl Consulting Inc. and is the attorney/manager of government relations with the Direct Selling Association.
Marshall Hunt, CPA, of Bloomfield Hills, Mich. He is the director of the Tax Assistance Program for the Accounting Aid Society and is an adjunct lecturer at the University of Michigan-Dearborn.
Marc J. Korab, JD, LLM, of New Brunswick, N.J. He is a senior vice president of corporate tax for Citigroup Inc.
David A. Lifson, CPA, of New York City. He is a co-managing partner with Hays & Company LLP and is the president of the New York State Society of Certified Public Accountants.
Carol Markman, CPA, of Westbury, N.Y. She is a partner with Feldman, Meinberg & Company and was previously president of the National Conference of CPA Practitioners.
Charles P. Rettig, JD, LLM, of Encino, Calif. He is an attorney with Hochman, Salkin, Rettig, Toscher & Perez, P.C. and is on the Board of Trustees for the California CPA Education Foundation.
Bonnie Speedy of Pasadena, Md. She is the National Director of AARP Tax Aide, AARP Foundation.
Carolyn R. Turnbull, CPA, of Roswell, Ga. She is a senior tax manager with Grant Thornton, LLP, and is a member of the Tax Advisor Editorial Board of the American Institute of Certified Public Accountants.
Related Items:

Tax Information for Tax Professionals


IRSAC Members Deliver 2007 Public Report


IRSAC Fact Sheet

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March 5, 2010 — The last IRS-sponsored Tax Talk Today program aired on Oct. 6, 2009.
IR-2007-206, Dec. 21, 2007
WASHINGTON — The Internal Revenue Service’s next Tax Talk Today program picks up where the December show left off. The program, “Getting Ready for the Filing Season 2008: Part 2 (Businesses),” will be available Tuesday, Jan. 8, 2008 at 2 p.m.
The January panel of experts will include Betsey Buckingham, enrolled agent and tax principal at Murray Wells Wendeln & Robinson CPAs, Inc.; Curt Freeman, branch chief, IRS Business Forms & Publications; Jerry Heschel, field director, IRS Submission Processing; and Floyd Thomas, Georgia state chair, National Society of Tax Professionals.
They will discuss tax issues facing businesses, including recent tax law changes, updates for the 2007 tax year, IRS regulations, business credits, common errors and processing issues.
Tax Talk Today is a webcast aimed at educating tax and payroll professionals on the most current and complex tax issues. Tax professionals are encouraged to watch and submit questions.
To access the webcast at no charge, viewers can register online at www.TaxTalkToday.tv. Tax professionals in need of continuing education credits (CECs) are eligible to receive one CEC by viewing the Jan. 8 webcast.
Archived shows are available on the site also, including the December broadcast, “Getting Ready for the Filing Season 2008, Part 1 (Individuals).”
NOTE: There will be no Tax Talk Today in February. The next show, “International Tax Issues: Understanding Tax Treaties,” will air on Tuesday, March 11, 2008: 2 p.m. - 3 p.m.
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IR-2007-205, Dec. 21, 2007
WASHINGTON — The Internal Revenue Service today released an updated document discussing and rebutting many of the more common frivolous arguments made by individuals and groups that oppose compliance with federal tax laws.
Anyone who contemplates arguing on legal grounds against paying their fair share of taxes should read this document first.
This 74-page document, The Truth about Frivolous Tax Arguments, is updated at least once a year by the IRS and is designed to help individuals and groups fully understand their responsibilities and not violate the law.
The document explains many of the common frivolous arguments made in recent years and it describes the legal responses that refute these claims. This document is available on IRS.gov and will help taxpayers avoid wasting their time with frivolous arguments and incurring penalties.
In 2006, Congress increased the amount of the penalty for frivolous tax returns from $500 to $5,000. The increased penalty amount applies when a person submits a tax return or other specified submission, and any portion of the submission is based on a position the IRS identifies as frivolous.
"Too good to be true schemes are exactly that--too good to be true," said IRS Chief Counsel Donald L. Korb. "Taxpayers should be careful in making frivolous arguments since courts have routinely rejected them."
A section of this document responds to some of the more common frivolous arguments made in collection due process cases brought pursuant to sections 6320 or 6330.
Another section explains the penalties that the courts may impose on those who pursue tax cases on frivolous grounds. It should be noted that the cases cited as relevant legal authority are illustrative and are not intended to provide an all-inclusive list relating to frivolous tax arguments.
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IR-2007-203, Dec. 20, 2007
 
WASHINGTON — The Internal Revenue Service has developed a new form for employees who have been misclassified as independent contractors by an employer. Form 8919PDF, Uncollected Social Security and Medicare Tax on Wages, will now be used to figure and report the employee’s share of uncollected social security and Medicare taxes due on their compensation.
Generally, a worker who receives a Form 1099 for services provided as an independent contractor must report the income on Schedule C and pay self-employment tax on the net profit, using Schedule SE. However, sometimes the worker is incorrectly treated as an independent contractor when they are actually an employee. When this happens, Form 8919 will be used beginning for tax year 2007 by workers who performed services for an employer but the employer did not withhold the worker’s share of social security and Medicare taxes.
In addition, the worker must meet one of several criteria indicating they were an employee while performing the services. The criteria include:
The worker has filed Form SS-8PDF, Determination of Worker Status for Purposes of Federal Employment Taxes and Income Tax Withholding, and received a determination letter from the IRS stating they are an employee of the firm.
	 
The worker has been designated as a section 530 employee by their employer or by the IRS prior to January 1, 1997.
	 
The worker has received other correspondence from the IRS that states they are an employee.
	 
The worker was previously treated as an employee by the firm and they are performing services in a similar capacity and under similar direction and control.
	 
The worker’s co-workers are performing similar services under similar direction and control and are treated as employees.
	 
The worker’s co-workers are performing similar services under similar direction and control and filed Form SS-8 for the firm and received a determination that they were employees.
	 
The worker has filed Form SS-8 with the IRS and has not yet received a reply.
	 
By using Form 8919, the worker’s social security and Medicare taxes will be credited to their social security record. To facilitate this process, the IRS will electronically share Form 8919 data with the Social Security Administration.
In the past, misclassified workers often used Form 4137 to report their share of social security and Medicare taxes. Misclassified workers should no longer use this form. Instead, Form 4137 should now only be used by tipped employees to report social security and Medicare taxes on allocated tips and tips not reported to their employers.
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IR-2007-202, Dec. 19, 2007
(Updated 12/21/07 to 11 impacted forms instead of 12)

WASHINGTON — The Internal Revenue Service announced it will immediately begin the final reprogramming steps for its income-tax processing systems to prepare for the upcoming tax season following final passage of the Alternative Minimum Tax “patch” Wednesday by the House.

“Our people will do everything they can to quickly update our systems for this major change and make this filing season as smooth as possible for everyone,” said Linda Stiff, IRS Acting Commissioner. “Our goal is to process tax returns accurately and to issue refunds to taxpayers as quickly as possible.”

The AMT and AMT-related tax calculations affect a number of core IRS processing systems that will need to be updated. The IRS is continuing to aggressively explore options for the 2008 filing season in order to minimize the impact of processing delays on taxpayers. Additional details will be available to the public as soon as plans are finalized.

To help the tax professional and software communities prepare for the upcoming filing season, revised copies of the 11 tax forms impacted by the AMT legislation will be posted to IRS.gov within 72 hours after the AMT patch is signed into law.

As more details on the AMT situation develop, the IRS encourages taxpayers to visit IRS.gov for more information.
IR-2007-201, Dec. 19, 2007
 
WASHINGTON — The Internal Revenue Service today outlined ways informants can report violations of the tax law and possibly claim a reward based on the amount of additional tax, penalties and interest that is owed.
“Since Congress enacted new procedures increasing award amounts last year, informants have come forward with information on alleged tax noncompliance amounting to tens of millions of dollars, and in some cases hundreds of millions of dollars,” said Stephen Whitlock, Director of the Whistleblower Office.
Since the Whistleblower Office was created in December 2006, the IRS has received about 80 claims, half of those submitted in just the last two and a half months. To make a claim, an informant must file new Form 211, Application for Award for Original Information, which asks informants to provide an estimate of the tax owed, the pertinent facts in the case and an explanation of how the informant obtained the information.
The IRS’ Whistleblower Office will make the final determination about whether an award will be paid and the amount of the award for claims that it processes. Awards will be paid in proportion to the value of information furnished voluntarily with respect to proceeds collected.
Under the new procedures, the amount of award will be at least 15%, but no more than 30%, of the collected proceeds in cases in which the IRS determines that the information submitted by the informant substantially contributed to the collection of tax. The award percentage may be reduced in some circumstances, which are described in IRS guidance.
To be eligible for an award under the new procedures, the tax, penalties, interest, additions to tax, and additional amounts in dispute must exceed $2 million for any taxable year and, if the taxpayer is an individual, the individual’s gross income must exceed $200,000 for any taxable year in question. 
All awards will be subject to normal tax reporting and withholding requirements. 
Related Items:

Notice 2008-4PDF


Form 211PDF, Application for Award for Original Information

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IR-2007-200, Dec. 14, 2007
WASHINGTON — The Internal Revenue Service today announced it is expanding the number of test areas for the Fast Track Settlement program for taxpayers under examination by the Small Business/Self-Employed Division.
The settlement program is now available for small businesses and self-employed taxpayers until Sept. 5, 2008, in five new areas, including Philadelphia, central New Jersey, San Diego, Laguna Nigel, Calif., and Riverside, Calif.
The Fast Track program is continuing in the three original test cities of Chicago, Houston and St. Paul.
The program is a jointly administered process designed to expedite case resolution. Under Fast Track, taxpayers under examination with issues in dispute work with IRS representatives from SBSE’s examination unit and the Appeals Division to resolve those issues.
Fast Track employs various techniques to facilitate case resolution. A taxpayer or IRS examination representative may initiate the Fast Track process after an issue is fully developed, and preferably before a 30-day letter is issued. The Fast Track process is designed to be completed within 60 days of acceptance of the application.
Taxpayers retain the right to request their issue be addressed through the traditional appeals process if Fast Track fails to yield a resolution.
Examination and Appeals officials will re-evaluate the Fast Track program after this test phase is completed on Sept. 5, 2008. This phase will help determine whether Fast Track is adjusted, expanded to more areas or made available nationwide.
The Small Business/Self-Employed Division Fast Track Settlement program was originally launched in September 2006. Additional background is available in IRS Announcement 2006-61PDF.
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IR-2007-198, Dec. 12, 2007
WASHINGTON — Payments under the Department of Veterans Affairs (VA) Compensated Work Therapy (CWT) program are no longer taxable and disabled veterans who paid tax on these benefits in the past three years can now claim refunds, the Internal Revenue Service said today.
Recipients of CWT payments will no longer receive a Form 1099 from the Department of Veterans Affairs. Disabled veterans who paid tax on these benefits in tax-years 2004, 2005 or 2006 can claim a refund by filing an amended return using IRS Form 1040X. According to the VA, more than 19,000 veterans received CWT in Fiscal Year 2007.
The IRS agreed with a U.S. Tax Court decision issued earlier this year, which held that CWT payments are tax-free veterans’ benefits. In so doing, the agency reversed a 1965 ruling which held that these payments were taxable and required the VA to issue 1099 forms to payment recipients.
According to the VA, the CWT program provides assistance to veterans unable to work and support themselves. Under the program, the VA contracts with private industry and the public sector for work by veterans, who learn new job skills, re-learn successful work habits and regain a sense of self-esteem and self-worth.
Related Item: Revenue Ruling 2007-69PDF
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IR-2007-197, Dec. 6, 2007
WASHINGTON — The Internal Revenue Service's Office of Professional Responsibility (OPR) announced today a settlement agreement with Michael C. Ormsby and David O. Thompson, in connection with a $31 million municipal bond issuance involving River Park Square in Spokane, Washington in 1998 handled by the former firm of Preston, Gates & Ellis LLP.
OPR raised allegations, including the scope of due diligence, under Treasury Department Circular 230 sections 10.22, 10.29, 10.34, and 10.51(j), with respect to the tax aspects of the bond opinion rendered in the matter. The Respondents filed answers denying the allegations. In the settlement, the attorneys agreed to comply fully with practices and procedures implemented by their current firm in its public finance group, including but not limited to (i) submitting new matters to a review and approval process, (ii) completing questionnaires and checklists to document the due diligence activities undertaken in the matter, and (iii) following practices and procedures established by the firm's opinion committee for municipal bond opinions. The attorneys also agreed that, for a period of 18 months from the date of settlement, any opinion proposed to be delivered by the attorneys in connection with certain specified financings will be reviewed and approved by the leader of the public finance group, who is also a member of the firm's opinion committee. OPR believes the settlement will result in enhanced oversight of the state and local bond practice of these attorneys and will help assure their compliance with the applicable requirements of Circular 230. OPR agreed that implementation of such practices and procedures is appropriate for municipal bond attorney practice.
OPR and the attorneys agreed that the settlement does not constitute any admission of wrongdoing by, or a sanction of, the attorneys.
The Office of Professional Responsibility is pleased to have reached an agreement that demonstrates its commitment to ensuring bond lawyers comply with Circular 230 when involved in tax-exempt municipal bond issuances. Such efforts are an outgrowth of OPR's enhanced oversight of Circular 230 practitioners.
The settlement agreement included a disclosure authorization that allowed the Office of Professional Responsibility to issue this release.
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