Tax News

CCH (cch.taxgroup.com) reports:

In four separate measures, corporate income, personal income, and property tax relief has been extended to California taxpayers affected by specific natural disasters occurring between September 2006 and July 2007. Generally, the legislation applies to losses and damages sustained in
-- the counties of Riverside and Ventura as a result of wildfires that occurred during the 2006 calendar year;
-- the counties of El Dorado, Fresno, Imperial, Kern, Kings, Madera, Merced, Monterey, Riverside, Sand Bernardino, San Diego, San Luis Obispo, Santa Barbara, Santa Clara, Stanislaus, Tulare, Venture, and Yuba that were the subject of a proclamation by the Governor of a state of emergency for freezing conditions that occurred in January 2007;
-- the county of El Dorado as a result of June 2007 wildfires; and
-- the counties of Santa Barbara and Ventura as a result of the Zaca Fire during the 2007 calendar year.
For corporate and personal income taxes, excess disaster losses arising from the 2006-2007 disasters can be carried over to other taxable years. The carryover provisions themselves were not amended.

CCH (cch.taxgroup.com) reports:

Neither an IRS levy on a taxpayer's cash and other liquid assets nor the placement of these funds into an escrow account pending final resolution of a disputed tax liability constituted the payment of the liability that stopped the accrual of interest. The levy only gave the IRS a security interest in the property. Since it did not transfer ownership to the IRS, it was not a payment of the disputed tax. Likewise, the placement of the property into an escrow account was not a payment of the disputed tax because the terms of the escrow specifically provided that escrowed amounts did not constitute a payment.
Affirming FedCl, 2003-1 USTC ¶50,407.
LaRosa's International Fuel Co., Inc., CA-FC, 2007-2 USTC ¶50,657
Other References:
Code Sec. 6511
CCH Reference - 2007FED ¶39,080.30
Code Sec. 6601
CCH Reference - 2007FED ¶39,415.168
Tax Research Consultant
CCH Reference - TRC PENALTY: 9,056
 

CCH (cch.taxgroup.com) reports:

A new e-mail scam, which imitates the IRS's "Where's My Refund?" tool, has surfaced on the Internet, the Service is warning. Individuals are directed to a website called "Get Your Tax Refund!" where criminals steal the victims' identities and financial information.
Tracing Refunds
The real "Where's My Refund?" tool enables individuals to trace their refunds online. Individuals expecting a refund enter their Social Security number, filing status and exact amount of refund shown on their return. The "Where's My Refund?" tool searches for the individual's refund and advises the taxpayer of the status of his or her refund.
Information at Risk
According to the IRS, the "Get Your Tax Refund!" scam is appearing in e-mails that claim that the IRS has calculated the recipient's "fiscal activity" and he or she is eligible for a refund. The taxpayer is instructed to link to the "Get Your Tax Refund!" page.
"Get Your Tax Refund!" copies the appearance of "Where's My Refund?" However, unlike the real website, "Get Your Tax Refund!" asks for confidential personal financial information. Individuals are instructed to reveal their Social Security numbers along with credit card numbers. Instead of entering the amount of refund shown on their return, "Get Your Tax Refund!" asks individuals to enter their credit card numbers, which are then stolen by identity thieves.
Reporting Suspicious E-mails
Individuals receiving "Get Your Tax Refund!" e-mails or any suspicious e-mails claiming to be from the IRS should contact the Service or the Treasury Inspector General for Tax Administration (TIGTA). Individuals can forward suspicious e-mails to a special IRS mailbox, hishing@irs.gov.">phishing@irs.gov. TIGTA, which investigates groups or individuals impersonating the IRS, can be reached at (800) 366-4484.
CCH Comment. These emails are designed to trigger an emotional response, Edward Zollers, CPA, Phoenix, Ariz., told CCH. "They (scam artists) want taxpayers to react before they think." "If you get anything in an email that appears to be from the IRS, delete it," Charles Wold, CPA/PFS, chair of the financial planning section of the Arizona Society of CPAs, added. "The IRS will not contact you by email."
By George L. Yaksick, Jr., CCH News Staff
IRS Example of Phishing E-mail
IRS Website Sample

CCH (cch.taxgroup.com) reports:

The IRS has released proposed regulations on the arbitrage restrictions under Code Sec. 148 applicable to tax-exempt bonds issued by state and local governments. These proposed regulations are being issued in order to update existing regulations, address certain current market developments, simplify and correct certain provisions and to make existing regulations more administrable.
Hedges Based on Taxable Interest Rates
The proposed regulations make revisions to accommodate certain hedges in which floating payments under the hedge are based on a taxable interest rate and to clarify that bonds covered by such a hedge are ineligible for treatment as fixed yield bonds under the special hedging rule in Reg. §1.148-4(h)(4). The IRS has determined that taxable-index hedges based on widely-used taxable indices, such as LIBOR-based hedges, sufficiently improve the efficiency of the tax-exempt bond market to warrant accommodation. The regulations accommodate these hedges by modifying (1) the provisions for "yield reduction payments," which permit an issuer to reduce yield on an investment by making payments to the federal government in certain permitted circumstances to comply with yield restriction rules, and (2) the qualified hedge provisions.
The proposed regulations make clear, however, that while taxable-index hedges can be qualified hedges, and, therefore, eligible for simple integration, they are not eligible for super integration because there is an insufficient correlation between tax-exempt bond interest rates and taxable market interest rate indices. In addition, the regulations modify the yield reduction payment rules to permit issuers to make yield reduction payments on certain variable-yield advance refunding issues in which the issuer has entered into a qualified hedge in the form of a variable-to-fixed interest rate swap to hedge its interest rate risk.
Electronic GIC Bidding
The bidding safe harbor for establishing the fair market value of guaranteed investment contracts (GICs) to accommodate electronic bidding has been revised by the proposed regulations. The regulations amend the fair market value safe harbor for GICs to allow electronic bidding procedures by (1) permitting bid specifications to be sent electronically over the Internet or by fax, and (2) amending the last look rule to provide that there is not a prohibited last look if all bidders have an equal opportunity for a last look.
Other Provisions
The proposed regulations remove the provision in the existing regulations that permits the IRS Commissioner to authorize a single yield computation on multiple bond issues. The proposed regulations also clarify that the amount that an issuer is entitled to receive under a rebate refund claim is the excess of the total amount actually paid over the rebate amount.
Comments
Written or electronic comments must be received by December 24, 2007. Outlines of topics to be discussed at a public hearing scheduled for January 30, 2008, must be received by January 2, 2008.
Proposed Regulations, NPRM REG-106143-07, 2007FED ¶49,763
Other References:
Code Sec. 148
CCH Reference - 2007FED ¶7871C
CCH Reference - 2007FED ¶7874A
CCH Reference - 2007FED ¶7875B
CCH Reference - 2007FED ¶7876B
CCH Reference - 2007FED ¶7880C
CCH Reference - 2007FED ¶7888B
Tax Research Consultant
CCH Reference - TRC SALES: 51,050
 

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