The Internal Revenue Service is auditing wealthy taxpayers at a higher rate than the general population via its Global High Wealth Industry unit. Among the red flags that could prompt an audit: property-transfer records without corresponding gift-tax returns and high mortgage-interest deductions. Read more»
The Senate Finance Committee hearing today will consider options for overhauling the retirement-investment industry. Among the options under consideration: the replacement of the 401(k) tax deduction with a flat-rate tax-break; an increase in retirement age; and a change in the method for calculating Social Security benefits. Read more»
President Barack Obama’s American Jobs Act contains both tax breaks and tax increases among its many provisions. These range from new credits for hiring unemployed workers and a temporary payroll tax cut to limits on itemized deductions and a change in the treatment of carried interests in investment partnerships. Read more»
The 2011 Estate Planning Guide is now available. Read more»
The Internal Revenue Service is using state land-transfer records to find taxpayers who did not report gifts of real estate from family members. Read more»
Because of recent tax law changes, the Internal Revenue Service says it will not be able to accept returns from taxpayers who itemize deductions until mid- to late February. Taxpayers who claim certain other deductions and credits will also have to wait to file until the IRS updates forms and reprograms its systems. Read more»
Allowing taxpayers to deduct the interest paid on their home mortgages has been part of U.S. tax law since 1913, but with deficit hawks arriving in Congress, it might be on the way out. Policymakers increasingly see elimination of the deduction as a way to significantly reduce the federal deficit while causing surprisingly little pain on most homeowners. Read more»
The Making Work Pay tax credit, which was part of the economic-stimulus package, may cause about 13.4 million taxpayers who took the credit to owe more taxes because adjustments to the withholding tables failed to consider some taxpayer circumstances, according to a report by the Treasury Inspector General for Tax Administration. The credit may also have led to about 108,000 taxpayers being assessed the estimated-tax penalty and 1 million more taxpayers having their estimated-tax penalty amount increased. Read more»
Despite having had temporary regulations on the subject declared invalid by the Tax Court, the Internal Revenue Service issued final regulations on Wednesday that define an overstatement of basis as an omission from gross income for purposes of the extended six-year limitation on assessment of tax attributable to partnership items. The final regulations make no change to the temporary regulations, which the Tax Court in May held to violate the Supreme Court’s definition of omission from gross income. Read more»
South Dakota, Alaska and Wyoming have tax laws that are the most hospitable to businesses, according to this year’s State Business Tax Climate Index by the Tax Foundation. The organization said the report is designed to educate lawmakers and help them measure their state’s performance against that of other regions. New York, California and New Jersey are the least friendly on account of complexity, high rates and fewer business exemptions. Read more»
