According to Charlie Rangel, the Chairman of the House Ways and Means Committee, The tax code is not “a political weapon.” That was just a few days ago. Now the House has passed a bill that would confiscate payments made under contracts between AIG and its employees. How quickly the worm turns.
Continue Reading...The IRS has issued its annual data book, which provides statistical data on its 2008 fiscal year. The data book provides valuable information about how many tax returns IRS examines, and what categories of returns IRS is focusing its resources on, as well as data on other enforcement activities, such as collections. A total of 1,391,581 individual income tax returns were audited during FY 2008 (Oct. 1, 2007 through Sept. 30, 2008) out of a total of 137.8 million individual returns that were filed in the previous year. This works out to 1.0% of all individual returns filed (about the same as the audit rate for the preceding year).
Continue Reading...A recent report by the Joint Committee on Taxation included a list of expired and expiring tax provisions from 2008 through 2020. The report serves as a reminder that numerous key provisions — many of them only recently extended by the Emergency Economic Stabilization Act and the American Recovery and Reinvestment Act of 2009 — are currently slated to be on the books only through 2009, while others last only through 2010. While these provisions may ultimately be extended (and some of them surely will be), one, where possible, should take action now to prevent losing out on tax breaks.
Continue Reading...The Seventh Circuit reversed the Tax Court's holding that a closely held corporation could deduct only about $7 million of a $17 million CEO bonus based on a percentage of pretax net income. The appellate court's decision rejected the Tax Court's view that a repayment agreement in the event of IRS challenge was evidence that a dividend had been intended. It also rejected the Tax Court's methodology which concluded the CEO was overpaid relative to the compensation of CEOs of publicly held corporations in the same business. Menard, Inc. v Commissioner (CA 7 3/10/2009)
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