etrent17/irs-articles huggingface dataset:
IR-2004-25, Feb. 27, 2004
WASHINGTON — The Internal Revenue Service said today that electronic filing has shown a sharp increase for this year’s early filers.
Through February 20, overall e-filing reached 29 million returns, an increase of more than 2 million, or 8 percent, over the same period last year. More than 6.6 million taxpayers have e-filed from their personal computers, a 23 percent increase.
“E-filing is off to another good start,” said IRS Commissioner Mark W. Everson. “More and more taxpayers are discovering the benefits of e-file.”  
E-filing is fast, safe and accurate. By choosing to have their refunds deposited directly to a bank account, e-filers can have the money in two weeks or less.
The early refund statistics show that:

The IRS has certified 31.8 million refunds, an increase of 4.1 percent over the same time last year.


The refunds total $72.8 billion, up from $66.9 billion.


The average refund is up $97, to $2,292 — a 4.5 percent increase. 


Three out of four taxpayers receiving refunds had them deposited directly to their bank accounts. Direct deposit — the fastest, safest and most convenient way to get a refund — is available to all filers.

2004 Filing Season Statistics
Cumulative through the week ending 2/21/03 and 2/20/04
 

 


2003


2004 


Change


Individual Income Tax Returns


 


 


 


     Total Receipts


39,078,000


40,110,000


  2.6 %


     Total Processed


32,936,000


34,328,000


    4.2 %


E-filing Receipts:


 


 


 


     TOTAL


27,019,000


29,145,000


  7.9 %


     TeleFile (phone)


  2,509,000


  2,330,000


 - 7.1 %


     Computer


24,510,000


26,815,000


  9.4 %


     Tax Professionals


19,121,000


20,184,000


  5.6 %


     Self-prepared


  5,389,000


  6,631,000


  23.0 %


Tax Year 2003 Refunds Certified:


 


 


 


     Number


30,507,000


31,753,000


4.1 %


     Amount of Principal


$66.948 billion


$72.792 billion


8.7 %


     Average Refund


$2,195


$2,292


4.5 %


 Direct Deposit Refunds:


 


 


 


     Number


  22,470,000


  24,195,000


  7.7 %


     Amount


$55.816 billion


 $61.892 billion


 10.9 %


     Average


     $2,484


     $2,558


   3.0 %

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IR-2004-24, Feb. 26, 2004
WASHINGTON — The Internal Revenue Service today announced the selection of Bert DuMars, an electronic commerce expert and veteran of the information technology industry, as Director, Electronic Tax Administration.
The Electronic Tax Administration oversees all aspects of the growing exchange of electronic information between the IRS and individual taxpayers, businesses and practitioners. As part of his new role at the IRS, DuMars will be responsible for the continued evolution of the IRS’ e-file program.
Nearly 53 million taxpayers used IRS e-file services in 2003, 13 percent more than the previous year. The IRS expects continued growth in e-filing as more taxpayers embrace the greater accuracy and faster refunds associated with e-file.
“Bert brings a variety of talents from the private sector to help lead us through the next stage of our e-file strategy,” IRS Commissioner Mark W. Everson said. “His business experience will help the IRS expand electronic services in the years to come.”
DuMars comes to the IRS from Trend Micro, Inc., a $400-million company specializing in content security and anti-virus software. As global director of Trend Micro’s 130-person eBusiness Group, DuMars led the redevelopment of the company’s global Web site and e-commerce consumer stores.
Previously, as manager of services marketing at Intel Corporation, he put together the project plans, architecture and operating support systems strategy for Intel Online Services. DuMars also served as a strategic marketing manager at Dell Corporation and network engineer for Southern California Edison.
DuMars earned a bachelor’s degree in history from Pomona College and an MBA from the University of Michigan.
The new chief of Electronic Tax Administration follows in the footsteps of former Director Terry Lutes, who was recently promoted to Associate Chief Information Officer for IRS Information Technology Services.
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IR-2003-23, Feb. 26, 2004
WASHINGTON — The Internal Revenue Service announced the appointment of Nicholas J. DeNovio to the position of Deputy Chief Counsel (Technical) in the Office of Chief Counsel today. The Deputy Chief Counsel (Technical) is responsible for overseeing the IRS published guidance program carried out by some 600 Counsel attorneys working with the Treasury Department’s Office of Tax Policy.
“I have a high regard for Nick, and he makes a strong addition to our team,” said IRS Commissioner Mark W. Everson.
“Nick brings to this position both extensive technical knowledge and valuable experience as Senior Counsel to the Chief Counsel,” added Emily A. Parker, Acting Chief Counsel. “This appointment shows our continuing commitment to published guidance as an important element of the IRS’s twin goals of improving taxpayer service and enforcement of the tax law.”
DeNovio joined the Office of Chief Counsel in 2003, as Senior Counsel to the Chief Counsel with primary responsibility for tax shelter analysis. He and his staff oversee technical analysis of potentially abusive tax avoidance transactions and develop published guidance and other strategies to address such transactions.
Prior to joining the Office of Chief Counsel last year, DeNovio was a partner in PricewaterhouseCoopers, Washington National Tax Services, working in the International and Corporate areas. Before joining PwC in late 1999, he was an International Tax Partner with Baker & McKenzie. He is an Adjunct Professor (International Taxation) at the Georgetown University Law School LL.M. Program.  He was admitted to practice in New York in 1987 and Florida in 1992.
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IR-2004-20, Feb. 11, 2004
WASHINGTON — As part of its effort to combat abusive tax shelter schemes and transactions, the Internal Revenue Service launched a new section on IRS.gov containing important information about abusive schemes involving employee retirement plans. The site is intended to warn promoters and plan professionals about the consequences of participating in such schemes.
The new employee plans (EP) information is located in the Retirement Plans section under “EP Abusive Tax Transactions.” In the new section, the IRS identifies so-called “listed transactions” involving employee retirement plans. It also provides recently issued guidance — such as Treasury regulations and IRS revenue rulings — intended to shut down transactions the IRS deems abusive.
“Employees and retirees count on the reliability of employee plans, which are overseen by the IRS,” said IRS Commissioner Mark W. Everson. “We’re providing this information so law-abiding plan professionals and participants can avoid being duped by promoters of abusive schemes that endanger the integrity of employee retirement plans.”
The Treasury Department recently identified as listed transactions a scheme involving indirect contributions to Roth IRAs and one involving S corporation ESOPs — employee stock ownership plans. A listed transaction is one that is identical or substantially similar to one the IRS has determined to be a tax avoidance transaction by published guidance.
The new section also provides contact information for reporting suspected abusive transactions to the IRS.
Related Link:  EP Abusive Tax Transactions
Update Jan. 6, 2014 — Use Form 656 BookletPDF, Offer in Compromise, to find the correct form to use. 
Update Sept. 28, 2011 — For current information, see Offer in Compromise Program.
IR-2004-17, Feb. 3, 2004
WASHINGTON — The Internal Revenue Service today issued a consumer alert advising taxpayers to beware of promoters’ claims that tax debts can be settled for “pennies on the dollar” through the Offer in Compromise Program.
Some promoters are inappropriately advising indebted taxpayers to file an Offer in Compromise (OIC) application with the IRS. This bad advice costs taxpayers money and time. 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 "compromise," federal tax liabilities by accepting less than full payment under certain circumstances.
“This program serves an important purpose for a select group of taxpayers. But we are increasingly concerned about unscrupulous promoters charging excessive fees to taxpayers who have no chance of meeting the program’s requirements,” said IRS Commissioner Mark W. Everson. “We urge taxpayers not to be duped by high-priced promises.”
The OIC may be considered only after other payment options have been exhausted. If taxpayers are unable to pay their taxes in full, there are other payment options, such as monthly installment agreements, that must be explored before an OIC can be submitted.
The IRS.gov Web site contains complete information on the collection process and payment options. Publication 594, The IRS Collection Process, also provides helpful information on the options available to taxpayers. Taxpayers also should review Form 656, Offer In Compromise, or Form 9465, Installment Agreement Request, to determine if they qualify for either payment program. Form 656 provides detailed instructions for submitting an offer and includes all of the necessary financial forms.
Some taxpayers may be exempt from the $150 OIC fee depending on income or whether the OIC is based solely on doubt as to tax liability. Taxpayers who claim the poverty guideline exception must certify their eligibility using Form 656-A, Income Certification for Offer in Compromise Application Fee. The poverty guideline exception applies only to individuals.
All publications and forms are available at IRS.gov or taxpayers may order copies by calling 1-800-829-3676. All publications and forms are available free. Taxpayers may feel they need the assistance of a qualified tax professional to prepare and submit an OIC. Taxpayers may contact local or state tax professional associations for enrolled agents, CPAs or attorneys to locate someone in their geographic area that has the education and experience to assist them.

Related Items:

Offer in Compromise Program (see update at top of page)


Publication 594, The IRS Collection Process (173KPDF)


Form 9465, Installment Agreement Request (55KPDF)

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IR-2004-40, Mar. 24, 2004
WASHINGTON — More and more taxpayers are using their home computers to prepare and file their returns electronically this year, according to new statistics released today by the Internal Revenue Service.
Nearly 10 million returns were self-prepared on a home computer and submitted through e-file through March 19, representing a 22.9 percent increase from last year. The increased home computer use reflected part of a bigger overall increase in e-filing, with more than 43 million returns filed electronically — an 11.4 percent increase from last year.
“Home computer users are on a record pace to use e-file this year,” said IRS Commissioner Mark W. Everson. “People are discovering that e-filing is the fastest, easiest way to do their taxes. There are fewer errors, and taxpayers get their refunds in less than half the time of paper returns.”
E-filing is showing growth in several categories. In addition to home computers, tax professional use of e-filing is up 10 percent.
And the IRS Free File program has received more than 2.46 million returns. That’s an increase of more than 24 percent, representing nearly 500,000 more returns than the same period last year.
Free File is a public-private partnership between the IRS and a consortium of tax software companies that offer free e-file services to eligible taxpayers. Free File, which is available through IRS.gov, gives taxpayers free access to the benefits of online tax preparation and e-filing.
“Free File helps taxpayers in underserved and disadvantaged communities, and it’s working,” Everson said.
Each private company sets its own eligibility requirements for the Free File program. The IRS hosts the Free File Web page, but the online tax preparation occurs on the companies’ Web sites. The companies file the returns using IRS’s secure e-file transmission system.
Related Item: Free File
2004 Filing Season Statistics
Cumulative through the week ending 3/21/03 and 3/19/04

 


2003


2004 


Change


Individual Income Tax Returns


 


 


 


     Total Receipts


66,971,000


68,182,000


  1.8 %


     Total Processed


60,744,000


63,220,000


   4.1 %


E-filing Receipts:


 


 


 


     TOTAL


38,659,000


43,048,000


 11.4 %


     TeleFile (phone)


  3,182,000


  2,973,000


 - 6.6 %


     Computer


35,477,000


40,075,000


 13.0 %


     Tax Professionals


27,438,000


30,195,000


 10.0 %


     Self-prepared


  8,039,000


  9,880,000


   22.9 %


Tax Year 2003 Refunds Certified:


 


 


 


     Number


54,988,000


57,516,000


4.6 %


     Amount of Principal


$111.483 billion


$122.373 billion


9.8 %


     Average Refund


$2,027


$2,128


4.9 %


 Direct Deposit Refunds:


 


 


 


     Number


  32,564,000


  35,918,000


 10.3 %


     Amount


$78.159 billion


 $89.001 billion


 13.9 %


     Average


     $2,400


     $2,478


   3.2 %

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IR-2004-36, Mar. 15, 2004
WASHINGTON — Internal Revenue Service Commissioner Mark W. Everson today announced two key staff selections. The commissioner named Bruce Ungar as Deputy Commissioner, Large and Mid-Size Business Division, and Frank Keith as Chief, Communications and Liaison.
The appointments are affective immediately. Ungar will report to LMSB Commissioner Deborah M. Nolan, who has served in the position since 2003. Keith will report to Commissioner Everson.
“Bruce Ungar brings a wealth of experience to the IRS and to LMSB,” Everson said. “Bruce understands the complexity and challenges that arise in the LMSB arena. As the IRS enhances its efforts on abusive corporate tax shelters, Bruce will be a valued addition to the entire LMSB team.”
Ungar, who joined the agency in 2003, currently serves as counselor to the commissioner. He previously worked as an executive in the securities and banking businesses, first for Lehman Brothers and later Canadian Imperial Bank of Commerce. A graduate of Harvard Law School, he also was a member of a private company that financed and developed the International Securities Exchange, the first all-electronic securities exchange in the United States.
LMSB is one of four operating divisions within the IRS. It employs 6,000 workers and serves 160,000 business taxpayers. The division oversees the tax and compliance issues of the nation’s largest corporations and of businesses with assets of more than $10 million.
Ungar will work with LMSB leaders to continue improving the compliance process. Key goals include working to resolve issues faster and make improvements to the examination process.
Keith began his IRS career in Providence, R.I., in 1975 as a taxpayer service representative and later served as a district problem resolution officer and public affairs officer. In 1988, he moved to Washington and joined the Media Relations Office. He became director of the Office of Media Relations in 1997 and director of Communications in 1999. In these roles, he worked closely with the two previous IRS Commissioners.

Keith will oversee Communications and Liaison, which oversees all aspects of communications for the IRS with the public and outside stakeholders, including tax practitioners and governmental agencies. Communications and Liaison is also responsible for internal communications with 100,000 IRS employees.
In 2003, Keith was named the third IRS recipient of The Robert E. Wenzel Excellence in Service Award. The award recognizes a career IRS executive who best represents the standards of excellence and dedication in public service.
“Frank's extensive knowledge of the IRS, built through years of work in tax administration, provides a strong background for this important position," Everson said. "Communications and Liaison plays a critical role interacting with tax practitioners, IRS employees and other key agency stakeholders."
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IR-2004-35, March 15, 2004
The commissioners of the tax administrations of Australia, Canada, the United Kingdom and the United States have begun discussions to form a joint task force to increase collaboration and coordinate information about abusive tax transactions.
The tax commissioners share a number of common challenges with respect to abusive tax transactions. While the tax administrations operate primarily within their own borders, many abusive tax transactions employ strategies that cross borders, and many of the promoters of these transactions operate globally without regard to national boundaries. Setting up a joint task force would enable the four countries to:

Share expertise, best practices and experiences in the field of tax administration to identify and better understand abusive tax transactions and emerging schemes, as well as those who promote them.


Exchange information about specific abusive transactions and their promoters and investors within the framework of the countries’ existing bilateral tax treaties.


Carry out their individual abusive tax transaction enforcement activities more effectively and efficiently.

“This is an unprecedented step in the battle against the plague of abusive tax transactions,” said IRS Commissioner Mark W. Everson.
The commissioners of the four tax administrations agreed to meet in Washington in the next month to finalize a plan to launch this initiative.
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IR-2004-33, March 11, 2004
WASHINGTON — Internal Revenue Service Commissioner Mark W. Everson today announced several important changes in the agency’s senior management team. Effective June 1, Kevin M. Brown will become the commissioner of the Small Business/Self-Employed Division replacing Commissioner Dale Hart, who is retiring.
Brown is currently chief of staff to Everson. Replacing Brown as chief of staff to the commissioner will be Evelyn Petschek. Petschek is currently the commissioner of the Tax-Exempt and Government Entities Division.
SB/SE, one of four operating divisions within the IRS, employs almost 44,000 workers and oversees the compliance programs for all individuals and small businesses. It serves 45 million taxpayers.
Brown previously served as SB/SE Division Counsel. He joined the IRS in 1998 as Assistant to the Commissioner. He also participated in advising the agency during the Restructuring and Reform Act of 1998. He worked as an attorney at the Justice Department from 1987 until 1998.
“Kevin is well-qualified to assume the SB/SE commissioner’s chair,” Everson said. “Kevin has served in several valuable roles within the IRS, and he has sound knowledge of tax issues inside and outside the IRS. He is committed to improving taxpayer service, respecting taxpayer rights and enhancing compliance with the tax laws.”
Petschek, who has been with the IRS since 1993, has been commissioner of the Tax-Exempt and Government Entities Division since its inception in 1999. Before joining the IRS, Petschek served in the Treasury Department’s Office of Tax Policy as benefits tax counsel. The TEGE function, one of four operating divisions within the IRS, employs 2,400 workers and serves 3 million taxpayers.
“I’m pleased that Evelyn is willing to take on this important assignment,” Everson said. “She is a seasoned leader who has wide experience in the agency. One of our four enforcement priorities is to discourage and deter non-compliance within tax-exempt and government entities and misuse of such entities by third parties for tax avoidance and other unintended purposes. Evelyn’s knowledge of this area will help us on a service-wide basis.”

Everson also thanked Hart for her service. She is retiring after 37 years at the IRS.
“Dale Hart has held a number of key positions throughout her career, culminating in the successful stand-up of the Small Business / Self-Employed Division,” Everson said.
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IR-2004-31, March 8, 2004
WASHINGTON — The Internal Revenue Service today issued new guidance on the computation of total recoverable units for purposes of computing cost depletion under Section 611 of the Internal Revenue Code. This guidance was developed under the Industry Issue Resolution program (IIR).
The IRS issued Revenue Procedure 2004-19, which provides an elective safe harbor where an owner of domestic oil and/or gas properties may use an estimate of the properties’ “probable” or “prospective” reserves for purposes of computing cost depletion under Section 611 of the Code. The safe harbor contained in the Revenue Procedure allows taxpayers and the Service to avoid complex factual arguments over what constitutes the appropriate quantity of probable or prospective reserves for purposes of computing cost depletion. Under the safe harbor, the IRS will not disturb a taxpayer’s estimate of an oil and/or gas property’s total recoverable unit where that estimate is equal to 105 percent of the property’s proved reserves as defined in 17 C.F.R. Section 210.4-10(a) of Regulation S-X, remaining as of the taxable year.
It is estimated that for 50 percent of the taxpayers having a primary business of oil and gas extraction, cost depletion comprises a substantial portion of their depletion deduction. The safe harbor contained in Revenue Procedure 2004-19 will reduce the burden for electing taxpayers by eliminating the need to determine probable and prospective reserves solely for computing cost depletion for tax reporting.
The IIR Program, launched in 2001 by the IRS, tackles tax issues submitted by taxpayers, associations and other groups representing businesses. The objective is to resolve frequently disputed or burdensome tax issues more efficiently.
As part of the IIR Program, business taxpayers are encouraged to submit tax issues they believe could be resolved more efficiently with new or improved guidance.  Submissions received are reviewed semi-annually – with selections next being made from issues submitted by March 31, 2004.
Revenue Procedure 2004-19 will be in Internal Revenue Bulletin 2004-10, dated March 8, 2004, and will be posted on the IRS Web site, IRS.gov. Information on the IIR Program is found in Revenue Procedure 2003-36, also available at the Web site.
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IR-2004-30, March 4, 2004
WASHINGTON — Business taxpayers are encouraged to submit tax issues they believe could be resolved more efficiently with new or improved guidance for the Industry Issue Resolution Program (IIR) by March 31, 2004, to be considered for the next selection process.
Under the IIR Program, taxpayers, industry associations, and other interested parties submit business tax issues for possible resolution through published or administrative guidance. For each issue selected, an IIR team of IRS and Treasury personnel gather relevant facts from taxpayers or other interested parties and recommend guidance to resolve the issue.
The goal is to resolve tax issues that are common to a significant number of business taxpayers by providing more effective guidance. Under the program, the IRS has issued guidance that reduced costs, burden and uncertainty for taxpayers. These include:

Clarification of the depreciation of gasoline station pump canopies (published in Revenue Ruling 2003-54).
	 


A safe harbor method for depreciating certain fiber cable used in cable television distribution systems as a unit of property (published in Revenue Procedure 2003-63).
	 


An option for family day care providers to use standard meal and snack rates in computing the deductible cost of food provided to eligible children under their care (published in Revenue Procedure 2003-22).

These successes were made possible following suggestions submitted by industry associations and others representing both small and large business taxpayers.
IRS will review submissions semi-annually, after March 31 and August 31 of each year. All requests received by March 31, 2004, will be considered for IIR project selections that are expected to be included in the 2004-2005 Treasury and IRS Guidance Priority List.
Submitting an issue to the IRS is easy. Just e-mail your suggestion to IIR@IRS.gov, as explained in Revenue Procedure 2003-36.
Related Items:

Industry Issue Resolution Program


Rev. Proc. 2003-36 (100KPDF)
IR-2004-29, March 4, 2004
WASHINGTON — Taxpayers have made about 9.8 million visits to the “Where’s My Refund?” service so far this tax season, almost twice as many as a year ago, according to the Internal Revenue Service. This reflects activity through Feb. 29.
Taxpayers who file electronically can use the service within 72 hours of submitting their returns. Paper filers can use “Where’s My Refund?” three to four weeks after their returns are mailed.
“Taxpayers have discovered that ‘Where’s My Refund?’ is a fast, easy way to check on their refunds,” said IRS Commissioner Mark Everson.
The “Where’s My Refund?” service is accessible from the IRS.gov home page. Instructions guide individual taxpayers through a process that asks for three pieces of information from their returns: Social Security Number, filing status and refund amount.
Once the information is submitted, “Where’s My Refund?” notifies the taxpayer whether the return was received and is being processed, and, if processed, the expected mailing date or direct-deposit date for the refund. The service will also notify a taxpayer if a refund has been returned to the IRS as undeliverable.
In cases where a refund is delayed because of a math error or other issue, “Where’s My Refund?” will advise the taxpayer on steps he or she can take to resolve the problem.
Taxpayers can ensure a successful experience by entering the requested information exactly as it appears on their tax returns filed with the IRS.
The “Where’s My Refund?” service debuted nearly two years ago. It handled more than 18 million electronic inquiries in 2003.
Related Item: Where's My Refund?
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IR-2004-28, March 3, 2004
WASHINGTON — The Internal Revenue Service said today that electronic filing continues its solid growth, with early tax returns showing e-filing running more than 9 percent ahead of last year’s pace. Overall, the number of tax returns has increased 2.8 percent compared to last year.
More than 33.5 million returns have been e-filed, about 3 million more than this time last year. Returns prepared and filed from home computers have jumped 23 percent.
“We continue to see strong growth in e-filing,” said IRS Commissioner Mark W. Everson. “More and more taxpayers are learning it’s an easy way of reliably filing tax returns. And e-filers get their refunds in half the time of those filing a paper return.”
The IRS Free File program also has shown growth. So far, the IRS has received more than 1.9 million returns through Free File, an increase of more than 24 percent from last year, when the program was introduced.
Free File is a public-private partnership between the IRS and a consortium of tax software companies that offer free e-file services to eligible taxpayers. Free File, which is available only through IRS.gov, gives taxpayers free access to the benefits of online tax preparation and e-filing.
“Free File helps taxpayers in underserved and disadvantaged communities, and it’s working,” Everson said.
Each private company sets its own eligibility requirements for the Free File program. The IRS hosts the Free File Web page, but the online tax preparation occurs on the companies’ Web sites. The companies file the returns using IRS’s secure e-file transmission system. To find out more about Free File, visit the IRS Web site.
Tax returns filed so far show:

The total number of e-filed returns hit 33.5 million, a more than 9 percent increase from last year.


Nearly 7.7 million taxpayers have prepared and filed returns on their home computers, a 23 percent increase from last year.


Tax professionals have submitted more than 23 million e-filed returns, a 7.2 percent increase from last year.


Direct deposit of refunds climbed to nearly 28 million, a 9.3 percent increase.

Related Item:  Free File
2004 Filing Season Statistics
Cumulative through the week ending 2/28/03 and 2/27/04

 


2003


2004


Change


Individual Income Tax Returns


 


 


 


     Total Receipts


47,087,000


48,390,000


  2.8 %


     Total Processed


40,003,000


42,260,000


   5.6 %


E-filing Receipts:


 


 


 


     TOTAL


30,669,000


33,511,000


  9.3 %


     TeleFile (phone)


  2,736,000


  2,547,000


 - 6.9 %


     Computer


27,933,000


30,964,000


 10.9 %


     Tax Professionals


21,700,000


23,273,000


  7.2 %


     Self-prepared


  6,233,000


  7,691,000


  23.4 %


Tax Year 2003 Refunds Certified:


 


 


 


     Number


36,907,000


38,932,000


5.5 %


     Amount of Principal


$78.826 billion


$86.836 billion


10.2 %


     Average Refund


$2,136


$2,230


4.4 %


 Direct Deposit Refunds:


 


 


 


     Number


  25,586,000


  27,955,000


  9.3 %


     Amount


$62.797 billion


 $70.658 billion


 12.5 %


     Average


     $2,454


     $2,528


   3.0 %

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IR-2004-27, Mar. 1, 2004
WASHINGTON — The Internal Revenue Service today announced that interest rates will rise by one percentage point for the calendar quarter beginning April 1, 2004. The interest rates are as follows:

five (5) percent for overpayments [four (4) percent in the case of a corporation];


five (5) percent for underpayments;


seven (7) percent for large corporate underpayments; and


two and one-half (2.5) percent for the portion of a corporate overpayment exceeding $10,000.

Under the Internal Revenue Code, the rate of interest is determined on a quarterly basis. For taxpayers other than corporations, the overpayment and underpayment rate is the federal short-term rate plus 3 percentage points. Generally, in the case of a corporation, the underpayment rate is the federal short-term rate plus 3 percentage points and the overpayment rate is the federal short-term rate plus 2 percentage points. The rate for large corporate underpayments is the federal short-term rate plus 5 percentage points. The rate on the portion of a corporate overpayment of tax exceeding $10,000 for a taxable period is the federal short-term rate plus one-half (0.5) of a percentage point.
The interest rates announced today are computed from the federal short-term rate based on daily compounding determined during January 2004.
Related Item: Rev. Rul. 2004-26 (52KPDF), setting the new interest rates
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IR-2004-60, April 30, 2004

WASHINGTON—The U.S. Department of the Treasury and the Internal Revenue Service today warned taxpayers of an e-mail-based scheme that attempts to trick taxpayers into revealing personal information such as social security numbers, driver’s license information and bank and credit card numbers.
In this ploy, unsuspecting consumers receive an e-mail, claiming they are under investigation for tax fraud and are subject to prosecution. The e-mail informs recipients they can “help” the investigation by providing “real” information and directs them to an official-looking Web site, http://deptreas.org/irs/7634//, where detailed personal information must be provided to dispute the charge.
Identity thieves can use an individual’s personal data to take over their financial accounts, run up charges on their credit cards, apply for loans, credit cards or other services in the victim’s name and file fraudulent tax returns.
At the request of the IRS and the Treasury Inspector General for Tax Administration (TIGTA), the Internet service provider that was hosting the Web site has shut the site down. The scheme is being investigated by TIGTA, which addresses threats to federal tax administration.
The bogus IRS web page and the e-mail in this instance contained several grammatical errors, rendering them immediately suspect. However, new versions of the scam could surface in the future, including more effectively-written text and a different destination Web site.
The IRS does not use e-mail to contact taxpayers about issues related to their accounts. Official taxpayer contact usually includes a letter on IRS stationery in an IRS envelope. IRS letters also contain a contact phone number.
Taxpayers who believe they have received suspect communication are encouraged to call TIGTA’s toll-free fraud referral hotline at 1-800-366-4484. Taxpayers can also contact the IRS at 1-800-829-1040. An IRS representative will be able to verify the taxpayer’s account status and determine whether a communication is legitimate.
Related Items:


Federal Trade Commission, Identify Theft Home


Treasury Inspector General for Tax Administration Hotline

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IR-2004-59, April 28, 2004
WASHINGTON — Charities should be careful that their efforts to educate voters comply with the Internal Revenue Code requirements concerning political campaign activities, the tax agency said today in a presidential election-year advisory.
Organizations described in section 501(c)(3) of the Code that are exempt from federal income tax are prohibited from participating or intervening in any political campaign on behalf of, or in opposition to, any candidate for public office. Charities, educational institutions and religious organizations, including churches, are among those that are tax-exempt under this code section.
These organizations cannot endorse any candidates, make donations to their campaigns, engage in fund raising, distribute statements, or become involved in any other activities that may be beneficial or detrimental to any candidate. Even activities that encourage people to vote for or against a particular candidate on the basis of nonpartisan criteria violate the political campaign prohibition of section 501(c)(3).
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. If the debate or forum shows a preference for or against a certain candidate, however, it becomes a prohibited activity.
The federal courts have upheld this prohibition on political campaign activity, most recently in Branch Ministries v. Rossotti, 211 F.3d 137 (D.C. Cir. 2000). The courts have held that it is not unconstitutional for the tax law to impose conditions, such as the political campaign prohibition, upon exemption from federal income tax.
If the IRS finds a section 501(c)(3) organization engaged in prohibited campaign activity, the organization could lose its tax-exempt status and it could be subject to an excise tax on the amount of money spent on that activity.
In cases of flagrant violation of the law, the IRS has specific statutory authority to make an immediate determination and assessment of tax. Also, the IRS can ask a federal district court to enjoin the organization from making further political expenditures.

In addition, contributions to organizations that lose their section 501(c)(3) status because of political activities are not deductible by the donors for federal income tax purposes.
The political campaign prohibition as it applies to churches is discussed in Publication 1828, Tax Guide for Churches and Religious Organizations. This publication, along with other information about the political campaign prohibition, is available on IRS.gov at /eo.
The IRS issued similar election-year advisories to charities in 1992, 1996 and 2000.
Related Items:

Publication 1828, Tax Guide for Churches and Religious Organizations. (1.3MBPDF)


Political and Lobbying Activities

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IR-2004-56, April 15, 2004
Internal Revenue Service Commissioner Mark W. Everson, joined by Treasury General Counsel Arnold I. Havens, administered the oath of office Wednesday to Donald Korb, who becomes the 46th IRS Chief Counsel.
“Don brings a wealth of government and private-sector experience to the Chief Counsel’s office,” Everson said. “I look forward to having him as a strong partner as we continue to strengthen our enforcement of the nation’s tax laws.”
Under the IRS Restructuring and Reform Act of 1998, the Chief Counsel reports to both the IRS Commissioner and the Treasury General Counsel.
“I am delighted that Don has been sworn in and I welcome his arrival,” said Havens. “We have a lot of important work ahead of us, and I look forward to working with Don and the commissioner as we continue to move forward with our agenda.”
Korb, who was confirmed by the Senate last week, begins his third tour with the IRS. In 1974, he began work as an attorney/adviser in the Chief Counsel’s office and spent four years handling a variety of issues. He rejoined the IRS for two years in the mid-1980s as a Special Assistant to then-Commissioner Roscoe Egger. Korb served as the overall coordinator of the Service's involvement in the legislative process that resulted in the Tax Reform Act of 1986
Korb most recently served as a partner at the Cleveland-based law firm of Thompson Hine LLP before being nominated by President Bush in December. Previously, he served in the same position for Coopers & Lybrand LLP in Cleveland.
“I am humbled by the confidence that the President, Secretary Snow, and Commissioner Everson have placed in me by giving me the opportunity to serve my country in this capacity,” Korb said in his Senate confirmation hearing. He also said his top priority was to assist Everson with the agency’s three key goals:

Continue to enhance the service that the IRS provides to taxpayers.
Continue to modernize the information technology systems of the IRS.
Strengthen the integrity of the nation's tax system through enhanced enforcement activities.
IR-2004-55, Apr. 15, 2004
WASHINGTON — The National Taxpayer Advocate, Nina Olson, announced that the Internal Revenue Service has awarded $7.5 million in matching grants to Low Income Taxpayer Clinics (LITCs). This amount will fund 135 clinics in 2004. LITCs are qualifying organizations that represent low income taxpayers involved in tax disputes with the IRS or that inform taxpayers for whom English is a second language or who have limited English proficiency of their tax rights and responsibilities.
The IRS matching grant program, which is in its sixth year, encourages the creation and growth of Low Income Taxpayer Clinics across the nation. These clinics provide an important resource to taxpayers who may not be able to afford a tax professional.
"I am pleased that, again this year, we are able to provide needed funding for these low income tax clinics," said Treasury Secretary John W. Snow. "Low income tax clinics are crucial to this Administration's efforts to ensure that all taxpayers, regardless of their resources, can understand their tax obligations. I would like to compliment the National Taxpayer Advocate on her devotion to these clinics."
Under the program, the IRS awards matching grants of up to $100,000 a year to organizations operating independent tax clinics. This year, LITC grant recipients represent non-profit organizations and accredited academic institutions from 49 states plus the District of Columbia and Puerto Rico. Grant amounts range from $6,448 to $85,000.
Low Income Taxpayer Clinics provide a source of assistance to low income taxpayers when they have disputes with the IRS or are trying to comply with tax laws.
There are two types of awards. One is for representation (R) and the other is for English as a Second Language (ESL). Some clinics receive awards for providing both types of services. Attached is a list of organizations awarded a matching grant for 2004. This list is arranged alphabetically by state abbreviation and, within a state, by city name.
Related Item: 2004 Low Income Tax Clinic Grants (390KPDF)
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IR-2004-46, April 1, 2004
WASHINGTON — The Internal Revenue Service is inviting civic-minded individuals to help improve the nation’s tax agency by applying to be members of the Taxpayer Advocacy Panel. The panel provides a forum for citizens from each state to make suggestions regarding IRS decision making.
Taxpayer Advocacy Panel (TAP) members:

Provide opportunities to listen to citizens and make recommendations to the IRS and Treasury on customer-service issues.


Identify and prioritize taxpayer issues.


Report annually to Treasury and the National Taxpayer Advocate.


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


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

“Because of the Administration's actions to greatly expand the Taxpayer Advocate Panel to all 50 states, it now is able to play an even more critical role — ensuring that taxpayers from every corner of the country will have their voices heard,” said Treasury Secretary John Snow. “To reach the goal of providing world-class service to the hard working Americans who pay the taxes, one of the most vital things we must do is listen better to their concerns and suggestions, and ensure that their rights are being fully protected. After all, it's their money.”
“We are committed to working with taxpayers to improve the customer-service focus of the IRS,” said Nina Olson, IRS National Taxpayer Advocate. “Working with taxpayers directly helps us identify issues that may not be on the IRS radar screen. We can also hear their concerns about issues the IRS is already addressing.”
To qualify as a TAP member, applicants must be U.S. citizens and be able to commit about 300 hours during the year to the panel. In addition, they must be current with their tax obligations and pass a criminal background check.

The application is available at www.improveirs.org. You can apply on-line or download the form and mail it to:

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

If you do not have access to a computer, call 1-866-602-2223 for an application form.
Applications must be received by the TAP Office by April 30, 2004.
Related Item: Improve IRS
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Update Nov. 3, 2014 — Please note that 1040 Central has been replaced by the Filing page.   
IR-2004-45, April 1, 2004
WASHINGTON — As millions of taxpayers prepare to file their taxes before the April 15 deadline, the Internal Revenue Service released new statistics today showing that electronic filing remains at record levels. More than 45.8 million tax returns have been submitted through e-file so far this year, a 12 percent increase from last year.
“To avoid last-minute tax headaches, we urge people to use e-file,” said IRS Commissioner Mark W. Everson. “E-filing is the fastest, easiest way to do taxes. There are fewer errors, and taxpayers get their refunds in less than half the time of paper returns.”
Through March 26, e-filing continues to show strong growth in several areas:

Home computer filers submitted nearly 10.5 million returns, an increase of 22.9 percent from last year.


Tax professionals filed more than 32.2 million returns electronically, a 10.9 percent increase from last year.


The Free File program topped 2.6 million returns, a 24 percent increase from last year.

The continued growth in e-filing as the IRS enters the busiest part of the filing season. Nearly one-third of all taxpayers file returns in the final weeks before the April 15 tax deadline.
“It’s a good idea to go ahead and start now on your taxes,” Everson said. “Don’t wait until the last minute. Give yourself plenty of time to make sure you have the all correct information.”
The IRS has a variety of information available for taxpayers on its web site, IRS.gov. Visit the 1040 Central section to get copies of forms, answers to frequently asked questions and other valuable information as the tax deadline approaches.
“At 1040 Central, taxpayers will find virtually everything they need for their 2003 tax return,” Everson said. “The 1040 Central page can be a one stop location for help.”
Related Item: 1040 Central
 
2004 Filing Season Statistics
Cumulative through the weeks ending 3/28/03 and 3/26/04
 

 


2003


2004 


Change


Individual Income Tax Returns


 


 


 


     Total Receipts


73,057,000


74,453,000


  1.9 %


     Total Processed


67,159,000


69,479,000


   3.5 %


E-filing Receipts:


 


 


 


     TOTAL


40,898,000


45,800,000


 12.0 %


     TeleFile (phone)


  3,296,000


  3,081,000


 - 6.5 %


     Computer


37,602,000


42,719,000


 13.6 %


     Tax Professionals


29,062,000


32,225,000


 10.9 %


     Self-prepared


  8,540,000


 10,494,000


  22.9 %


Current Tax Year Refunds Certified:


 


 


 


     Number


60,432,000


62,801,000


3.9 %


     Amount of Principal


$121.440 billion


$132.682 billion


9.3 %


     Average Refund


$2,010


$2,113


5.1 %


 Direct Deposit Refunds:


 


 


 


     Number


  34,395,000


  37,950,000


 10.3 %


     Amount


$82.200 billion


 $93.728 billion


 14.0 %


     Average


     $2,390


     $2,470


   3.3 %

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IR-2004-44, April 1, 2004
WASHINGTON — The Treasury Department and the Internal Revenue Service today issued guidance on certain kinds of abusive tax avoidance transactions involving S corporations and tax-exempt entities, such as charities. These transactions are structured to improperly shift taxation away from taxable S corporation shareholders to an exempt party, for the purpose of deferring or avoiding taxes.
In Notice 2004-30, the IRS says it intends to challenge these transactions on a number of grounds. It further declares that these abusive transactions are considered "listed transactions." Participants in a listed transaction who are required to file tax returns must disclose their participation to the IRS. In addition, promoters of listed transactions must keep lists of investors and, in certain cases, register those transactions with the IRS. 
This notice is the first time the IRS has exercised its authority under the tax shelter regulations to specifically designate a tax-exempt party as a "participant" in a tax avoidance transaction.
"The participation of tax-exempt entities in these abusive transactions is a worrisome trend," said Mark W. Everson, Commissioner of Internal Revenue.  "We are acting today to ensure the integrity of our charities. We don't want Americans to lose faith in a unique and vital part of our nation's social fabric."
"These transactions are structured to eliminate tax on certain S corporation shareholders by inappropriately shifting income to a tax-exempt organization.  This abuses the special status that the law gives to tax-exempt organizations," said Gregory F. Jenner, Acting Assistant Secretary (Tax Policy).  "Use of tax-exempt organizations as mere accommodation parties should not be permitted."
In addition, the IRS will amend Form 8886, Reportable Transaction Disclosure Statement, to require parties filing the forms to identify the names of all parties to a listed transaction.  This includes any tax-exempt parties that facilitate the transaction.
The tax-exempt area is one of the IRS's four top service-wide priorities. The IRS will discourage and deter non-compliance within tax-exempt and government entities, and the misuse of such entities by third parties for tax avoidance or other unintended purposes.
Related Items:


Notice 2004-30, S Corporation Tax Shelter (46KPDF)




Notice 2004-31, Intercompany Financing Using Guaranteed Payments (47KPDF)


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