etrent17/irs-articles huggingface dataset:
IR-2006–130, August 18, 2006
WASHINGTON — The Treasury Department and the Internal Revenue Service issued proposed regulations that clarify the treatment of expenditures incurred in selling, acquiring, producing or improving tangible assets. If adopted as proposed, the regulations should reduce the amount of controversy between taxpayers and the IRS in this area.
For many years, there has been controversy about whether taxpayers are required to capitalize certain expenditures as an improvement or take an immediate deduction for the expenditures as necessary repair and maintenance expenses. There has been debate on how to apply the tests used to determine the tax treatment of these types of expenses.
The proposed regulations provide an overall framework that expands the standards in the current regulations by drawing on principles developed through case law.  Specifically, the proposal provides exclusive factors for determining whether amounts paid to restore property to its former working condition must be capitalized as an improvement.
The proposed regulations also provide guidance concerning the economic useful life of a unit of property and activities that substantially prolong the economic useful life. Additionally, the proposed regulations provide rules for determining the appropriate unit of property to which the rules should be applied. 
To reduce the administrative and compliance costs associated with this section of the tax code, the proposed regulations provide several safe harbors and simplifying assumptions.  Although the proposed regulations do not provide a de minimis rule in which small cost items are exempt from capitalization, the preamble solicits comments on whether such a rule should be adopted in final regulations. The Treasury Department and the IRS expect to receive a number of comments on the proposed regulations and will take those comments into consideration before finalizing the regulations.
The Treasury Department and the IRS plan to address in future guidance the treatment of costs related to the development and implementation of computer software and costs required to be capitalized in certain transactions including tax-free acquisitive transactions and stock issuance transactions.
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IR-2006-129, Aug. 18, 2006
WASHINGTON — Members of the military serving in Iraq, Afghanistan and other combat zone localities can now put money into an individual retirement account, even if they received tax-free combat pay, according to the Internal Revenue Service.
Under the Heroes Earned Retirement Opportunities (HERO) Act, signed into law on Memorial Day, taxpayers can now count tax-free combat pay when determining whether they qualify to contribute to either a Roth or traditional IRA. Before this change, members of the military whose earnings came entirely from tax-free combat pay were generally barred from using IRAs to save for retirement.
“The HERO act is one more way to let our fighting forces in combat areas know that we support them,” said IRS Commissioner Mark W. Everson. “This is a good way for people serving in combat zones to save more of their earnings for retirement.”
In addition, the HERO Act allows military personnel who received tax-free combat pay in either 2004 or 2005 to go back and make IRA contributions for those years. Eligible military members will have extra time, until May 28, 2009, to make these special back-year contributions.
For those under the age of 50, the IRA contribution limit was $3,000 for 2004 and $4,000 for 2005. For those 50 and over, the limit was $3,500 for 2004 and $4,500 for 2005.
Taxpayers choosing to put money into a Roth IRA don’t need to report these contributions on their individual tax return. Roth contributions are not deductible, but distributions, usually after retirement, are normally tax-free. Income limits and other special rules apply.
On the other hand, contributions to a traditional IRA are often, though not always, deductible, and distributions are generally taxable.
Deductible or not, contributions to a traditional IRA must be reported on the return for the year made. Deductible contributions are claimed on Form 1040, 1040A or 1040NR. Nondeductible contributions are reported on Form 8606, which is normally attached to one of these individual return Forms.
If a return has already been filed for a particular year, contributions should be reported on an amended return, Form 1040X. Depending upon the circumstances, military personnel who choose to put money into a traditional IRA for 2004 or 2005 may qualify for additional tax refunds.
For those planning ahead, the IRA contribution limit for 2006 is $4,000 for those under age 50 and $5,000 for those 50 and over.
Related Items:

Form 1040XPDF, Amended U.S. Individual Income Tax Return


Form 1040X InstructionsPDF


Form 8606PDF, Nondeductible IRAs


Form 8606 InstructionsPDF

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IR-2006-128, August 17, 2006
WASHINGTON — The Internal Revenue Service announced today the beginning of an outreach campaign to the entertainment industry regarding the taxability of gift bags and promotional items. The effort follows an agreement announced today between the tax agency and the Academy of Motion Picture Arts and Sciences.
The Academy and the IRS reached a mutually satisfactory agreement that will resolve outstanding tax responsibilities with respect to Academy Awards gift baskets. The Academy had voluntarily approached the IRS shortly after this year’s awards presentations seeking to clarify the tax issues surrounding the gift baskets, as well as to ensure that any obligations for the prior years were met.
Under the closing agreement, the Academy and the IRS have settled the tax obligations with respect to gifts given through 2005. Recipients of this year’s gift basket will be issued appropriate informational tax forms by the Academy and will be responsible for satisfying their income tax obligations.
“We appreciate the Academy’s leadership on this issue,” IRS Commissioner Mark W. Everson said. “The gift basket industry has exploded, and it’s important that the groups running these events keep in mind the tax consequences.”
Following the agreement with the Academy, the IRS has started a new outreach campaign aimed at the entertainment industry. This effort is focused on distribution of celebrity gift bags and goodie bags in conjunction with appearances by the stars at award shows and other gatherings. Such bags can include luxury trips, jewelry and electronics. Dozens of the award shows take place each year.
“There’s no special red-carpet tax loophole for the stars,” Everson said. “Whether you’re popping the popcorn, sitting in the audience or starring on the big screen, you need to respect the law and pay your taxes.”
The IRS will be contacting entertainment industry groups and others to focus attention on tax guidelines for gift bags and other promotional items. The effort will focus on two main areas:

Reporting compliance by the stars and other recipients receiving the items.
	 


Completion of Form 1099s as appropriate by those providing the items to the stars and other recipients.

This guidance will provide an opportunity for taxpayers, businesses and tax professionals to better understand their tax obligations as it relates to these luxury goods and services and the associated tax implications. This effort will also be aimed at keeping entertainers, organizations and others in this area in compliance with the tax law.
Related Items:

Gift Bag Questions and Answers


Academy of Arts and Sciences News ReleasePDF

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IR-2006-127, August 16, 2006    
WASHINGTON — The Internal Revenue Service has announced five director-level appointments in its Large and Mid-Size Business (LMSB) division, which serves corporations, subchapter S corporations and partnerships with assets greater than $10 million. New directors were named for four of LMSB’s five industries as well as for LMSB’s Pre-Filing and Technical Guidance unit. These leadership changes followed other recent executive retirements, transfers and promotions within the IRS.
Patricia Chaback was named Industry Director, Communications, Technology and Media (CTM), filling the vacancy left by Frank Ng who recently was named Deputy Commissioner, LMSB (International). For the past four years, Chaback served as Director Field Operations (DFO) for the Financial Services (FS) industry. She began her career as a revenue agent in 1982, and she was instrumental in the creation of the Compliance Assurance Process (CAP), currently being piloted in LMSB. The CTM serves businesses involved in computer production, media (including communication and software), sports franchises, gaming and recreation.
Paul DeNard was named Director, Pre-filing and Technical Guidance (PFTG), following the promotion of Kathy Petronchak to serve as Chief of Staff for IRS Commissioner Mark W. Everson. For the past three years, DeNard served as Industry Director, FS. He began his IRS career in 1978. PFTG oversees a variety of pre-filing and tax administration initiatives, including the industry issue resolution process, pre-filing agreements and implementation of Schedule M-3. PFTG oversees LMSB’s efforts to identify and combat abusive tax shelters. 
 
Barry Shott was named Industry Director FS, filling the vacancy left by DeNard. For the prior six months, Shott served as Acting Industry Director, CTM. Before that, he served as DFO (Manhattan) for the FS industry for over two years. Shott began his career with the IRS in 1975. FS serves taxpayers in the commercial banking, savings and loan, securities and financial service businesses.
Henry Singleton was named Industry Director, Heavy Manufacturing & Transportation (HMT) filling the vacancy left by John Petrella, who retired in early July. Singleton previously served as Director for Retailers, Food, Pharmaceuticals and Healthcare (RFPH) industry and also served as a DFO in the HMT industry. He began his career in 1987. HMT serves aerospace, air transportation, shipping, rail, trucking, motor vehicle and domestic production sectors.
John Risacher was named Director of the RFPH, filling the vacancy left by Henry Singleton. Risacher most recently served for several years as a DFO in HMT.  He began his career in IRS in 1973 and held a number of significant examination leadership positions in multiple district offices. Headquartered in Downers Grove, Ill., RFPH serves taxpayers dealing in food and beverages, retailing, pharmaceuticals, agricultural commodities, farms and healthcare. 
Related Item:
Large and Mid-Size Business Division At-a-Glance
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IR-2006–126, August 14, 2006
WASHINGTON — The Internal Revenue Service announced that purchasers of qualified American Honda Motor Corp., Inc., vehicles may continue to claim the Alternative Motor Vehicle Credit. The announcement comes after the IRS concluded its second quarterly review of the number of hybrid vehicles sold.
Honda sold 9,424 qualifying vehicles to retail dealers during the quarter ending June 30, 2006. The credit amount and make and model of qualified vehicles sold are:

Honda Insight, Model Year 2006 — $1,450


Honda Civic Hybrid, Model Year 2006 — $2,100


Honda Accord Hybrid, Model Year 2006 — $1,300 *


Honda Accord Hybrid Navi, Model Year 2006 — $1,300 *

*2006 Honda Accord Hybrid and Navi without updated calibration qualify for a credit of $650.
This brings the total number of qualifying Honda hybrids reported to date to 18,496. Purchasers of Honda’s qualified vehicles may continue to rely on the previously issued IRS certifications concerning the vehicles’ qualification for the credit. However, those seeking the credit may want to buy early because the full credit is only available for a limited time.
Taxpayers may claim the full amount of the allowable credit up to the end of the first calendar quarter after the quarter in which the manufacturer records its sale of the 60,000th vehicle. For the second and third calendar quarters after the quarter in which the 60,000th vehicle is sold, taxpayers may claim 50 percent of the credit. For the fourth and fifth calendar quarters, taxpayers may claim 25 percent of the credit. No credit is allowed after the fifth quarter.
Related Item: Hybrid Cars and Alternative Motor Vehicles
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IR-2006–125, August 14, 2006
WASHINGTON — The Internal Revenue Service announced that purchasers of qualifed Ford Motor Company vehicles may continue to claim the Alternative Motor Vehicle Credit. The announcement comes after the IRS concluded its second quarterly review of the number of hybrid vehicles sold.
Ford sold 5,663 qualifying vehicles to retail dealers during the quarter ending June 30, 2006. The credit amount and make and model of qualified vehicles sold are:

Ford Escape 2WD, Model Years 2006 and 2007 — $2,600


Ford Escape 4WD, Model Years 2006 and 2007 — $1,950


Mercury Mariner 4WD, Model Years 2006 and 2007 — $1,950

This brings the total number of Ford qualifying hybrids reported to date to 11,885. Purchasers of Ford’s qualified vehicles may continue to rely on the previously issued IRS certifications concerning the vehicles’ qualification for the credit. However, those seeking the credit may want to buy early because the full credit is only available for a limited time.
Taxpayers may claim the full amount of the allowable credit up to the end of the first calendar quarter after the quarter in which the manufacturer records its sale of the 60,000th vehicle. For the second and third calendar quarters after the quarter in which the 60,000th vehicle is sold, taxpayers may claim 50 percent of the credit. For the fourth and fifth calendar quarters, taxpayers may claim 25 percent of the credit. No credit is allowed after the fifth quarter.
Related Item:

Hybrid Cars and Alternative Motor Vehicles

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IR-2006-124, August 10, 2006
WASHINGTON — Because of the closure of the main IRS Headquarters Building, there is a new temporary address for the delivery of taxpayer requests for rulings, requests for determination letters, Applications for Change in Accounting Method (Form 3115), and similar requests that are permitted to be hand-delivered to the main IRS building.
Until further notice, these requests and applications should be delivered to: Courier's Desk, Room 105, First Floor, Internal Revenue Service, Attn: CC:PA:LPD:DRU, Crystal Mall 4 Building at 1901 S. Bell St. or 1941 Jeff Davis Highway in Arlington, Va. This address, as of Monday, August 14, 2006, will supersede the temporary address listed in IR-2006-103 and will be effective until further notice.
Complaints, subpoenas or any other service of process, as well as public comments on published guidance such as proposed regulations, normally delivered to the main IRS Headquarters Building should also be temporarily delivered to this same address.
Documents previously hand-delivered to the main IRS Headquarters Building will be processed in the ordinary course.
The main IRS Headquarters Building is temporarily closed due to extensive repairs required after a major flood.
Link:
IR-06-123, New Temporary Procedures for Certain Expedited Ruling Requests
IR-2006-123, August 9, 2006
WASHINGTON — The Internal Revenue Service is updating its temporary procedure for processing requests for certain expedited letter rulings for reorganizations and section 355 distributions. The temporary procedure was put in place because flooding caused the temporary closure of the IRS headquarters building in Washington, D.C.
The Internal Revenue Service established a pilot program for processing requests for letter rulings for reorganizations and section 355 distributions on an expedited basis, provided certain requirements were met.
For expedited treatment as described in Revenue Procedures 2005-68 and 2006-1, taxpayers should fax their requests to (703) 605-1764. The temporary number listed in IR-2006-105 no longer serves this function.
Also requesters no longer need to contact an IRS attorney before making expedited ruling requests, thus the temporary procedure described in IR-2006-105 is withdrawn. Taxpayers should instead follow the normal instructions in Revenue Procedures 2005-68 and 2006-1. However, taxpayers may call the Office of the Associate Chief Counsel (Corporate) at (202) 622-7242 or (202) 622-4038, if they have questions regarding this procedure.
Remember, as noted in IR-2006-103, the temporary address for hand or courier delivery of these requests is: IRS, 950 L’Enfant Plaza, Fifth Floor, Washington, D.C. 20024. The IRS will issue another news release when the address for hand or courier delivery is changed to our Virginia offices.
All requests that are not hand delivered should continue to be sent to the Post Office Box specified in Revenue Procedure 2006-1: Internal Revenue Service, Attn: CC:PA:DRU, P.O. Box 7604, Ben Franklin Station, Washington, DC 20044.
Link:
IR-06-124, New Temporary Address for Certain Hand-Delivered Documents
IR-2006-122, August 9, 2006
WASHINGTON — The Internal Revenue Service announced that purchasers of General Motors Corp. qualified vehicles may continue to claim the Alternative Motor Vehicle Credit. The announcement comes after the IRS concluded its quarterly review of the number of hybrid vehicles sold.
GMC sold 1,388 qualifying vehicles to retail dealers in the quarter ending June 30, 2006. The credit amount and make and model of qualified vehicles sold are:
• GMC Silverado Hybrid 2WD, Model Years 2006 and 2007 — $250
• GMC Silverado Hybrid 4WD, Model Years 2006 and 2007 — $650
• GMC Sierra Hybrid 2WD, Model Years 2006 and 2007 — $250
• GMC Sierra Hybrid 4WD, Model Years 2006 and 2007 — $650
• Saturn Vue GreenLine, Model Year 2007 — $650
Purchasers of GMC’s qualified vehicles may continue to rely on the certifications concerning the vehicles’ qualification for the credit. Consumers seeking the credit may want to buy early because the full credit is only available for a limited time.
Taxpayers may claim the full amount of the 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.Links:
Hybrid Cars and Alternative Motor Vehicles
IR-2006-121, August 3, 2006
WASHINGTON — Officials of the Canada Revenue Agency and the United States Internal Revenue Service today announced significant progress in unraveling an abusive cross-border tax scheme. This effort stems from leads and information first developed by the Joint International Tax Shelter Information Centre (JITSIC).
The scheme involves hundreds of taxpayers and tens of millions of dollars in improper deductions and unreported income from retirement account withdrawals. U.S. and Canadian promoters have been marketing the scheme on both sides of the border to individual investors, ranging from middle to high-income individuals.
Leaders of the IRS and CRA said the collaborative effort reflects the progress being taken by JITSIC in the complex task of tracking international tax schemes and shelters involving individuals and corporations.
CRA Commissioner Michel Dorais said, “Tax administrations in many parts of the world are working together to detect and shut down abusive tax schemes. Promoters who believe they can play one country against another in developing tax schemes should beware.”
“The real time exchange of information, including the identities of promoters and hundreds of investors has been critical to this investigation,” said IRS Commissioner Mark W. Everson. “JITSIC is emerging as an important part of efforts to combat abusive schemes.”
Under the scheme, investors purchased what appear to be high-yield offshore investments through offshore corporations and foreign bank accounts. Typically, investors make these purchases using cash or proceeds from withdrawals, allegedly tax free, of retirement funds (RRSPs in Canada, IRAs in the US). Investors also make purchases through using tax refunds improperly generated by alleged losses claimed for natural resource industry investments.
CRA and IRS agents continue to identify promoters, participants and entities involved in the scheme. Promoters and participants engaged in abusive schemes have routinely been subjected to strict enforcement action by both tax administrations.
JITSIC was established in 2004 by the tax administrations of four countries, Australia, Canada, the United Kingdom and the United States, to supplement the ongoing work of the Australian Taxation Office, Canada Revenue Agency, Her Majesty’s Revenue and Customs, and the Internal Revenue Service in identifying and curbing abusive tax schemes. Delegates from each of the four countries work together in Washington, DC.
Related Item:
IR-2006-120, Everson Chairs International Tax Forum, Emphasizes Enforcement.
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IR-2006-154, Sept. 29, 2006
WASHINGTON — The Internal Revenue Service acknowledged the certification by Toyota Motor Sales U.S.A., Inc., that several of their hybrid Model Year 2007 vehicles qualify for the hybrid tax credit enacted by the Energy Policy Act of 2005.
The certified vehicles are the Toyota Prius, Toyota Highlander Hybrid and the Lexus RX 400h 2WD and 4WD vehicles. The tax credit for hybrid vehicles applies to vehicles purchased on or after January 1, 2006, and may be as much as $3,400 for those who purchase the most fuel-efficient vehicles.
The hybrid vehicle certifications recently acknowledged by the IRS and their full credit amounts are:

2007 Toyota Prius $3,150


2007 Toyota Highlander Hybrid 2WD and 4WD $2,600


2007 Lexus RX 400h 2WD and 4WD $2,200

The full credit amount for these Toyota and Lexus vehicles is available to qualifying purchasers through September 30, 2006.
This tax credit replaced the tax deduction of $2,000, which was previously allowed for taxpayers who purchased a new hybrid vehicle before December 31, 2005, for the clean-burning fuel deduction. Many currently available hybrid vehicles have been certified and qualify for the credit.
The credit for otherwise qualifying vehicles begins to phase out in the second calendar quarter after the quarter in which the manufacturer sells its 60,000th qualifying vehicle. Toyota has reported sales of 88,610 qualifying vehicles (41,779 in the quarter ended March 31, 2006 and 44,831 in the quarter ended June 30, 2006). The phase out period for Toyota vehicles will begin on October 1, 2006.
Therefore the applicable credit amounts during the phase out period for the 2007 model-year vehicles are as follows:
 

Qualifying
			Vehicle


Purchased by 9/30/06


Purchased from 10/1/06 through 3/31/07


Purchased from 4/1/07 through 9/30/07


Purchased After 10/1/07


Toyota Prius


$3,150


$1,575


$787.50


No Credit


Toyota Highlander 2WD and 4WD



			$2,600



			$1,300



			$650



			No Credit


Lexus RX 400h 2WD and 4WD


$2,200


$1,100


$550


No Credit

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IR-2006-153, Sept. 28, 2006
WASHINGTON — The Internal Revenue Service today announced the selection of Ronald J. Schultz as Senior Technical Advisor to the Commissioner of the IRS’s Tax Exempt and Government Entities division.
“As Senior Technical Advisor, Ron has the perfect mix of congressional and hands-on private practice experience,” said Steven T. Miller, Commissioner of TE/GE. “Ron will give us expert help in many areas of current interest, including political intervention by nonprofits, standards for community benefit for hospitals, the interaction of tribal and tax-exempt bond rules and the hard work ahead of us in providing guidance to our community in the wake of the passage of the Pension Protection Act of 2006.”
The TE/GE Senior Technical Advisor provides legal advice to the TE/GE Commissioner and other top executives on programs serving TE/GE customers. Schultz will provide expert technical advice on a wide variety of issues including legislation, regulations and other guidance, litigation matters, and trends and needs relating to tax-exempt and government entities. He will also coordinate tax administration issues with other IRS functions, as well as with outside stakeholders.
Schultz has had extensive practice in the private sector in the areas of health, nonprofit and exempt organizations, and other areas of tax law.
Until his appointment, he was a member of the law firm of Leonard, Street and Deinard, in Minneapolis. In addition, he served from May 2002 to January 2005 as legislation counsel on the staff of the Joint Committee on Taxation of the U.S. Congress. While there, he advised Congress, including the Senate Committee on Finance and the House Committee on Ways and Means, regarding hearings, investigations, legislation and tax policy pertaining to various areas of federal income tax law, concentrating on charitable and other exempt organizations, as well as charitable contribution deductions.
Schultz will join TE/GE at the end of October 2006.
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IR-2006-152, Sept. 28, 2006
WASHINGTON — Military reservists called to active duty can receive payments from their individual retirement accounts, 401(k) plans and 403(b) tax-sheltered annuities, without having to pay the early-distribution tax, according to the Internal Revenue Service.
The newly-enacted Pension Protection Act of 2006 eliminates the 10-percent early-distribution tax that normally applies to most retirement distributions received before age 59½. The new law provides this relief to reservists called to active duty for at least 180 days or for an indefinite period.
Eligible reservists activated after Sept. 11, 2001, and before Dec. 31, 2007, qualify for relief from this tax. This tax is often referred to as the 10-percent early-withdrawal penalty. Regular income taxes continue to apply to these payments in most cases.
Early distributions from both Roth and traditional IRAs received by a reservist while on active duty qualify for this relief. Likewise, a reservist’s elective contributions and earnings distributed to him or her by employer sponsored 401(k) plans and 403(b) tax-sheltered annuities also qualify for this relief.
Because this relief is retroactive, eligible reservists who already paid the 10-percent tax can claim a refund by using Form 1040X to amend their return for the year in which the retirement distribution was received. Eligible reservists should write the words, "active duty reservist," at the top of the form. In Part II Explanation of Changes, the reservist should write the date he or she was called to active duty, the amount of the retirement distribution and the amount of early-distribution tax paid.
Reservists can choose to re-contribute part or all of these distributions to an IRA. Ordinarily, these special contributions must be made within two years after the reservist's active-duty period ends. However, if the reservist's active duty ended before Aug. 17, 2006 (the date the new law was enacted), he or she will have until Aug. 17, 2008, to make these special contributions. No deduction is available for these contributions.
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WASHINGTON — The Internal Revenue Service reminds affected taxpayers from the areas of Louisiana, Mississippi and Alabama most severely damaged by Hurricane Katrina that the deadline for filing tax year 2004 and 2005 individual income tax returns is Oct. 16, 2006.
The deadline applies to affected taxpayers from 31 Louisiana parishes, 49 Mississippi counties and 11 Alabama counties. For these taxpayers, the IRS has postponed until Oct. 16, 2006, the deadline for filing the following individual income tax returns:

2004 individual income tax returns, originally due on April 15, 2005, for which taxpayers obtained an extension of time to file until Oct. 15, 2005, and 2005 individual income tax returns, originally due on April 15, 2006.
	 


No further postponements or extensions are available for tax year 2004 tax returns.

However, an additional six-month filing extension, to April 16, 2007, is available to affected taxpayers whose 2005 due date was postponed from April 17, 2006, to Oct. 16, 2006. If an affected individual taxpayer needs additional time to file beyond Oct. 16, 2006, the taxpayer must file IRS Form 4868 by Oct. 16 to receive the additional six months.
In addition, the postponement also applies to tax returns of businesses who are affected taxpayers. For example, for calendar year corporations, the 2005 Form 1120 due date was also postponed from March 15, 2006, to Oct. 16, 2006. If more time is needed to file, Form 7004 may be filed by Oct. 16, 2006, for an automatic six-month extension. This also applies to fiscal year filers whose 2005 return was postponed to Oct. 16, 2006.
All extensions should be labeled at the top in red “Hurricane Katrina” and include an estimate of the unpaid tax liability. An extension of time to file gives taxpayers extra time to get paperwork to the IRS but it does not extend the time to pay the tax due. Any tax not paid will be subject to penalty and interest beginning Oct. 17, 2006, until the tax is paid in full.
Affected taxpayers include taxpayers whose principal residence, principal place of business, tax records or tax professional’s office was located in one of the designated counties or parishes.
Further information on Katrina and hurricane-related issues can be found at IRS.gov. Taxpayers should type “Help for Hurricane Victims” in the search field in the upper right-hand corner of the Web page to navigate to a variety of relief information.
Hurricane victims who need help with tax matters can also call the IRS at 1-866-562-5227.
Information Pertaining to Casualty Losses
The IRS issued guidance in June outlining safe harbor methods for individuals filing casualty losses in connection with recent hurricane damage. Information describing the guidance can be found in IRS news release IR-2006-97.
Related Items:

IR-2006-97, IRS Issues Guidance to Hurricane Victims Claiming Casualty Losses; Safe Harbor Methods Available for Individuals


Katrina News Releases & Legal Guidance


Help for Hurricane Victims

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IR-2006-150, Sept. 25, 2006 
WASHINGTON — The Internal Revenue Service today announced the appointment of Clarissa C. Potter to the position of Deputy Chief Counsel (Technical) effective Sept. 24, 2006. Potter will replace Heather Maloy, currently acting in the position and officially the Associate Chief Counsel (Passthroughs and Special Industries). Maloy is leaving the government to return to private practice.
"Clarissa Potter is a true asset to the Office of Chief Counsel,” said Donald L. Korb, IRS Chief Counsel. “Ms. Potter’s extensive tax law experience in government and academia and her substantial knowledge of Counsel’s technical functions make her an excellent selection for this critical position."
The Deputy Chief Counsel (Technical) serves as alter ego to the Chief Counsel in the overall executive direction of the Office’s technical tax operations. The Deputy is responsible for planning and coordinating all non-litigation work related to the development, interpretation and application of Federal tax regulations, and serves as the Chief Counsel’s personal advisor on most national and international tax matters under his jurisdiction.
Since December 2005, Potter has been Senior Counsel to the Chief Counsel (Legislation), serving as program manager and senior advisor to the Chief Counsel and IRS executives on a broad array of issues related to legislation; fulfilling Counsel’s responsibilities to develop, review, and assist in shaping proposed legislation; and providing legal support to the IRS in fulfilling its legislative responsibilities. She joined Office of Chief Counsel in July 2005 from the faculty of Georgetown University Law Center, where she had been an Associate Professor teaching tax law since 1998. While there she served as director of the Georgetown University Law Center Tax Policy Workshop and as Director of Projects for the American Tax Policy Institute. She has previously held positions in the Treasury Department’s Office of Tax Policy, on the staff of the Joint Committee on Taxation of the United States Congress, and in private practice.
Potter holds an A.B. from Miami University of Ohio and a J.D. from Yale Law School, where she was managing editor of The Yale Law and Policy Review.
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IR-2006-148, Sept. 21, 2006
WASHINGTON — The Internal Revenue Service today announced the selections of Michael Julianelle as the Director of Government Entities and Joseph H. Grant as the Director of Employee Plans. Both organizations are part of the IRS’s Tax Exempt and Government Entities Division.
“Both Michael and Joseph bring a wealth of experience and talent to these important offices in TE/GE,” said Steven T. Miller, Commissioner of TE/GE. “As leaders of two of TE/GE’s three major customer divisions, Michael and Joseph will continue TE/GE’s efforts to provide the right balance of service and enforcement to achieve optimum compliance with the law.”
Julianelle begins his new assignment in mid-November. He replaces Preston R. Butcher, who plans to retire at the end of the year but will remain in TE/GE to work on special projects for Miller until then.
In his new capacity, Julianelle will oversee the operations of the three Government Entities offices: Federal, State and Local Governments; Indian Tribal Governments and Tax Exempt Bonds. GE customers include approximately 86,000 federal, state and local government employers, representing 20 percent of the American workforce, earning about $760 billion annually and paying employment taxes in excess of $200 billion. GE also oversees the tax administration and compliance needs of over 560 federally recognized Indian tribes and administers complex tax law provisions and compliance programs covering tax-exempt bonds. Tax-exempt bond value has grown to over $1.6 trillion in recent years.
Julianelle has been director of EP Examinations since 2004. Before that, he served as the International Area Director in the IRS’s Small Business/Self-Employed division. During that time he was responsible for SB/SE Worldwide Operations including Puerto Rico and the U.S. territories and possessions. He also developed and managed an offshore territory program that specialized in offshore transactions and abusive scheme promoters.     
As for Grant, starting Oct. 1, he will be responsible for leading the Employee Plans division, which is responsible for administering the law affecting more than one million public and private retirement plans that have almost $12 trillion under management. He replaces Carol Gold, EP director since November 1999, who has accepted a teaching position with the Federal Executive Institute in Charlottesville, Va.
Grant joined the IRS in August 2005, as of director of the EP Rulings & Agreements division. He was responsible for EP determination letters, technical guidance, quality assurance and voluntary compliance programs. Before that, he was chief operating officer and a deputy executive director of the Pension Benefit Guaranty Corporation (PBGC). There he exercised direct control over the legal, policy and benefit payment operations of the federal pension insurance program for more than 31,000 pension plans with 44 million participants. 
Prior to his service with the PBGC, Grant served on the staff of the Oversight and Social Security subcommittees of the Committee on Ways and Means of the U.S. House of Representatives.
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IR-2006-147, Sept. 20, 2006
 
WASHINGTON – The Internal Revenue Service today announced that more than 12,500 of the nation’s largest corporations have electronically filed their 2005 corporate tax returns.
Large corporate taxpayers, those with $50 million or more in assets that file at least 250 returns, were required to e-file for the first time this year, starting with their 2005 returns. September 15, 2006 was the extended deadline for filing these returns.  Over half a million corporate tax returns were filed electronically and most did so voluntarily.
“More than12,500 of the largest corporations have successfully made the transition from paper to electronic returns,” said Deborah Nolan, Commissioner of the IRS Large and Mid-Size Business Division (LMSB).  “This is a significant milestone in the Service’s modernization efforts that will pay dividends for years to come.”   The collaboration with taxpayers, practitioners, and software developers enabled the IRS to develop a system to process large volumes of very complex returns, and develop rules to facilitate taxpayers’ ability to comply with the mandate.
The largest corporate taxpayers transmitted their returns predominately without delay or back log.  The IRS processed this volume of very complex returns, and accepted and acknowledged receipt, well within its 24-hour turn-around standard. 
"E-file will cut many months off of the audit process and will allow us to develop sophisticated analytical tools to better select areas of audit inquiry, " said IRS Commissioner Mark W. Everson. "Taxpayers will benefit by having uncertainties on their tax returns resolved sooner, and the government will benefit by more promptly identifying and responding to areas of noncompliance."
E-file for large corporations was used successfully by taxpayers in all types of industries.  Corporations in financial services, pharmaceuticals, automobile manufacturing, energy and communications all used e-file with success.  Based on feedback from external groups, the IRS designed corporate e-file to be flexible enough to accommodate the various needs of large business filers, such as allowing transition rules during the first year.  Nearly all of these taxpayers used commercial software to prepare their returns.  About 400 taxpayers transmitted the return themselves. 
Looking ahead, the electronic filing requirements will be expanded to include tax year 2006 returns of corporations with $10 million or more in total assets that file 250 or more returns a year.    Corporations not required to e-file are encouraged to do so voluntarily.  E-file has been available to corporations since 2004.
Related Link: 

IRS e-file

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IR-2006-146, Sept. 20, 2006
WASHINGTON — Internal Revenue Service Commissioner Mark W. Everson today announced the appointment of Richard A. Spires as the agency’s new Chief Information Officer, effective Sept. 17.
Spires, a private-sector information technology executive before joining the IRS in early 2004, will be responsible for virtually all aspects of the IRS’ information technology systems, including its mission-critical modernization program.
“Richard has been an important contributor to the significant progress we’ve made over the past few years in our modernization efforts,” Everson said. “In particular, he successfully spearheaded our program that mandates the electronic filing of tax returns by large corporations and nonprofits. Some in the business community had questioned whether the necessary technical infrastructure could be developed. Richard oversaw this landmark effort, which achieved its goal.”
Spires served most recently as the Associate Chief Information Officer (CIO) for Applications Development. In this role, he has had responsibility for more than 400 electronic systems within the IRS that support tax administration. Spires has also had oversight of the projects within the Business Systems Modernization (BSM) Program.
In partnership with the Small Business and Self-Employed Division and other IRS business units, Spires co-developed the agency’s Modernization Vision & Strategy and its associated Five-Year Plan for information technology development. The plan emphasizes smaller, incremental releases of products delivered more frequently, leverages existing systems where appropriate and takes a unified, portfolio-level view of investments.
From 2000 to mid-2003, Spires served as the President, Chief Operating Officer, and a Director of Mantas, Inc., a software product vendor. Prior to Mantas, Spires spent more than 16 years with SRA International, serving in a number of technical and managerial positions.
Spires received a bachelor of science in electrical engineering and a bachelor of arts in mathematical sciences from the University of Cincinnati. He also holds a master of science in electrical engineering from The George Washington University.
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IR-2006-145, September 20, 2006
Washington—The Internal Revenue Service announced today that Toyota Motor Sales, U.S.A., Inc. has submitted quarterly reports indicating that its cumulative sales of qualified vehicles to retail dealers has reached the 60,000-vehicle limit during the calendar quarter ending June 30, 2006. Under the current tax law, the credit for buying a hybrid vehicle begins to phase out during the second calendar quarter after the quarter in which the company sells its 60,000th hybrid or lean burn technology vehicle.
The credit for all new advanced lean burn technology motor vehicles or new qualified hybrid passenger automobiles or light trucks manufactured by Toyota Motor Corporation will begin to phase out on Oct. 1, 2006.
Vehicles purchased before Oct. 1, 2006 qualify for the full credit. For Toyota hybrid vehicles bought on or after October 1, 2006, and on or before March 31, 2007, the credit is 50 percent of the otherwise allowable credit amount. Taxpayers buying vehicles on or after April 1, 2007, and on or before September 30, 2007, can only get 25 percent of the credit.
Here are the credit amounts for Oct. 1, 2006 – March 31, 2007:

2005 Prius —  $1,575


2006 Prius — $1,575


2006  Highlander 4WD Hybrid — $1,300


2006 Highlander 2WD Hybrid — $1,300


2006 Lexus RX400h 2WD — $1,100


2006 Lexus RX400h 4WD — $1,100


2007 Camry Hybrid  — $1,300


2007 Lexus GS 450h  — $775

Here are the credit amounts for April 1, 2007 – September 30, 2007:

2005 Prius — $787.50


2006 Prius  — $787.50


2006  Highlander 4WD Hybrid — $650


2006 Highlander 2WD Hybrid — $650


2006 Lexus RX400h 2WD — $550


2006 Lexus RX400h 4WD — $550


2007 Camry Hybrid  — $650


2007 Lexus GS 450h  — $387.50

Beginning October 1, 2007, taxpayers who buy a Toyota hybrid cannot claim the related tax credit.
Related link: Notice 2006-78PDF
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IR-2006-144, September 19, 2006
WASHINGTON — Individual taxpayers who received a six-month extension to file their 2005 income tax return have less than a month remaining. The deadline to file the tax return is October 16.
Taxpayers who have yet to complete their tax return are encouraged to use IRS e-file to submit their return electronically or use Free File to electronically prepare and send their return. Both IRS e-file and Free File will remain available for individual taxpayers through the extension period.
“Don’t wait until the last minute to file your tax return. If you start now, you can make sure your return is accurate and that you’ve claimed all the credits and deductions available to you,” said Bert DuMars, IRS Electronic Tax Administration director. “The easiest way to ensure an accurate tax return is to use Free File and file your return electronically.”
Free File is the private-public partnership between the IRS and a consortium of tax preparation software manufacturers who formed the Free File Alliance. The group makes software and electronic filing available free to eligible taxpayers. Any taxpayer who earns $50,000 or less, which is 70 percent of all taxpayers, will find an available software program. Free File is available at IRS.gov.
Taxpayers who have purchased their own software program or who are using a paid tax preparer are urged to file their tax return electronically. More than 70 million individual taxpayers, more than half of all individual taxpayers, already have used IRS e-file this year to file their tax returns. IRS e-file is fast, secure and accurate.
An estimated 9.6 million taxpayers filed for an extension to submit their tax return this year. The extension is additional time to file a tax return, not additional time to pay. This year, for the first time, taxpayers automatically were granted a six-month extension to file their tax return rather than a four-month extension.Links:
Free File
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Sept. 15, 2006
Tax administration heads from more than 30 countries, meeting in Seoul under the auspices of the Organization for Economic Cooperation and Development's (OECD) Forum on Tax Administration, have agreed to work together on ways to improve tax administration and to address the significant and growing problem of international non-compliance with national tax requirements.
In a summing up speech, the chair of the meeting, U.S. IRS Commissioner Mark W. Everson noted that enforcement of tax laws has become more difficult as trade and capital liberalisation and advances in communications technologies have opened the global marketplace to a wider spectrum of taxpayers. While this more open economic environment is good for business and global growth, it can lead to structures which challenge tax rules, and schemes and arrangements by both domestic and foreign taxpayers to facilitate non-compliance with our national tax laws, he noted.
Participants in the Seoul meeting shared the view that international non-compliance is a significant and growing problem and agreed to improve practical co-operation between revenue bodies and other law enforcement agencies of governments to counter non-compliance. Their discussions also revealed continued concerns about corporate governance and the role of tax advisors and financial and other institutions in relation to non-compliance and the promotion of unacceptable tax minimization arrangements. They also noted the increased flows of capital into private equity funds and the potential issues this may raise for revenue bodies.
Participants in the meeting identified four areas in which they planned to intensify existing work or initiate new work under the auspices of the OECD:

1) Further developing a directory of aggressive tax planning schemes so as to identify trends and measures to counter such schemes.
2) Examining the role of tax intermediaries (e.g., law and accounting firms, other tax advisors and financial institutions) in relation to non-compliance and the promotion of unacceptable tax minimization arrangements with a view to completing a study by the end of 2007.
3) Expanding the OECD 2004 Corporate Governance Guidelines to give greater attention to the linkage between tax and good governance.
4) Improving the training of tax officials on international tax issues, including the secondment of officials from one administration to another.

Read the "Seoul DeclarationPDF" (also available in FrenchPDF and SpanishPDF).
For further information, journalists are invited to contact Jeffrey Owens, head of the OECD's Centre for Tax Policy and Administration (tel. + 33 1 45 24 91 08) or Nicholas Bray in the OECD's Media Division (tel. + 33 1 45 24 80 90).
Related Items:

Commissioner Everson's Statement


Meeting Outcomes


List of Participants

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