Tax News

CCH (cch.taxgroup.com) reports:

  As part of his job creation and economic development proposals for the upcoming 2009 legislative session, Colorado Gov. Bill Ritter, Jr. has proposed the creation of a new corporate and personal income tax credit program as an incentive for businesses to create jobs in Colorado. A company would be eligible for a tax credit of up to 50% of its annual FICA taxes on new employees under the Job Growth Incentive Program, if it applies to the Economic Development Commission and meets specific criteria.

  Subscribers to CCH Tax Research NetWork can view the governor's press release.

   
Press Release , Colorado Gov. Bill Ritter, Jr., December 18, 2008

CCH (cch.taxgroup.com) reports:

  The Tax Court has upheld the validity of Temporary Reg. §301.6221-1T(c) and (d), which provide that a partner may only assert a partner-level defense to a penalty, addition to tax or additional amount that relates to an adjustment to a partnership item at a partnership-level proceeding through a refund action following assessment and payment of the penalty. Accordingly, a limited partner was not allowed to raise a reasonable cause defense at partnership-level proceedings, even though the penalties imposed by the IRS were the result of the conduct of the limited partner.

  According to the Tax Court, when read in conjunction, Code Secs. 6221 and
6230(c)(1)(C) and (c)(4) make clear that Congress intended that a partner may only raise partner-level defenses in a refund action filed after the close of the partnership-level proceedings. The regulations, therefore, do not impermissibly strip the court of its jurisdiction. Rather, they implement the statutory jurisdictional scheme. Furthermore, the definition of partner-level defenses in Temporary Reg. §301.6221-1T(d) as those that are personal to the partner or are dependant upon the partner's separate return does not place an impermissible limit on the types of defenses that may be raised by a partner.

New Millennium Trading, L.L.C., Dec. 57,620

Other References:

 
Code Sec. 6221

  CCH Reference - 2008FED ¶37,569.12

  Tax Research Consultant

  CCH Reference - TRC PART: 60,060

CCH (cch.taxgroup.com) reports:

  The IRS's enforcement revenues declined by $2.8 billion in fiscal year (FY) 2008, statistics released on December 22 revealed. The IRS collected $56.4 billion from collection activities, audits and document matching, down almost 5 percent from FY 2007 revenue of $59.2 billion.

  Deputy Commissioner Linda Stiff attributed the drop to a number of factors. Enforcement personnel declined by 2.2 percent, to 20,722 agents and officers, because of retirements and a flat budget, she indicated. To administer the economic stimulus program, the IRS shifted enforcement personnel to taxpayer service to deliver 117 million checks and respond to a "crush" of phone calls. She noted that 2007 was a record year, because of closings of large corporate audits and heavy tax shelter activity, such as Son of BOSS settlements.

  According to Stiff, the IRS held steady on key service and enforcement results. Correspondence audits of individuals increased to 1.08 million and face-to-face audits remained at 310,000. Some other measures of enforcement activity declined; others stayed even or increased. Audits of individuals increased by 7,000 (one-half of 1 percent), based on the increase in correspondence audits, but audit coverage of individuals declined from 1.03 percent to 1.01 percent. Audits of individuals with income under $200,000 declined by 11,000, or 1 percent, but audits of individuals with income of $200,000 and higher increased over 15 percent.

  Business audits essentially held steady, but business filings increased by almost 460,000, primarily in the partnership and S corporation categories. Overall corporate audits increased slightly, to 30,000, and audit coverage of large corporations ($10 million or more in assets) was over 15 percent. However, audit coverage of partnerships and S corporations was less than one-half of 1 percent. Audits of tax-exempts increased by 4 percent, to almost 7,900, while filings increased to 890,000 returns.

  Stiff said there will be continued emphasis on high-income individuals and the largest corporations. Priorities for 2009 will also include international transactions and employment taxes. Audit coverage of smaller corporations (under $50 million in assets) is not likely to increase, she indicated.

  The IRS needs to be sensitive to taxpayers in distress situations and strike the right balance in the collection area, Stiff said. She noted that the IRS recently provided relief on lien discharges, to facilitate taxpayer housing sales, and has provided additional training to IRS employees on the exclusion of cancellation of debt income. The IRS increased lien filings 85,000, to 768,000, but levies of taxpayer property declined 30 percent, to 2.6 million. Seizures of taxpayer assets dropped 10 percent, from 676 to 610.

  In the taxpayer service area, the IRS statistics indicated that the electronic filing rate increased from 57 to 58 percent and web page visits to IRS.gov increased 65 percent, to 348 million. The level of accuracy for toll-free assistance remained at 91 percent, and customer satisfaction ratings held at 93 percent. However, the toll-free assistance level of service rating dropped to 53 percent.

  By Brant Goldwyn, CCH News Staff

CCH (cch.taxgroup.com) reports:

  The IRS is changing the lockbox payment addresses for individual taxpayers in five states and business taxpayers in 23 states. Individuals who live in Kentucky, Louisiana, Mississippi, Tennessee or Texas who sent payments to the Dallas lockbox facility should now send payments to the new Charlotte, N.C., lockbox addresses. Business taxpayers who sent payments to the Charlotte lockbox facility should now sent payments to the new Cincinnati, Ohio, lockbox addresses. This change affects business taxpayers in Connecticut, Delaware, Georgia, Illinois, Indiana, Kentucky, Maine, Maryland, Massachusetts, Michigan, New Hampshire, New Jersey, New York, North Carolina, Ohio, Pennsylvania, Rhode Island, South Carolina, Tennessee, Vermont, Virginia, West Virginia and Wisconsin.

Changes to Lockbox Addresses Could Affect the Clients You Serve
 

Tax Analysts report: