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Thursday, December 23, 2004

Tax News Roundup

New York Times: Bush's Tax Overhaul May Be Incremental:

President Bush's campaign to make the tax code simpler, fairer and more pro-growth is likely to involve incremental changes to the current system rather than a sweeping effort to scrap the venerable income tax for a radically new approach, such as a national sales tax. But the changes Bush will propose are still expected to generate huge opposition, especially if he suggests scrapping favored tax breaks such as the deduction for state income tax payments.

Wall Street Journal:  A National Telephone Tax?

Much of the Washington press corps was preoccupied last week with the White House economic proposals, which are about allowing people to keep more of their money. Meanwhile, the National Governors Association was across town hosting a separate gathering that focused on just the opposite. The NGA -- along with its buddies at the National Conference of State Legislatures, the National League of Counties, the National League of Cities and the U.S. Conference of Mayors -- desperately wants to tax Internet use. And they're hoping that Internet phone calls, the latest hot Web application, will pave the way.... They want the Internet classified as one giant telephone for tax purposes. That's because telecom levies are some of the highest in the country, averaging 17.9%, according to the Council on State Taxation, and producing a cool $20 billion or so every year for state and local coffers.

Wall Street Journal (Tom Herman):  New Tax Laws Create Traps At Year End:

First, do no harm. Taxpayers should keep that in mind as they scramble to make year-end maneuvers, such as tax-loss selling and charitable giving. After a rash of tax-law changes affecting everything from used-car donations to the deductibility of sales taxes, it is easier than ever to make costly year-end blunders that could mean higher tax bills.

Wall Street Journal:  Stock Option Tax Rules Are Revised:

The Treasury Department and the Internal Revenue Service yesterday gave a holiday gift to companies and executives worried about the future of stock-appreciation rights, a form of deferred compensation that has been expected to grow in popularity as the appeal of stock options wanes.

Wall Street Journal:  The New Sales-Tax Deduction:

If you decide it's better for you to deduct your sales taxes instead of income taxes, you can use the new IRS tables instead of relying on actual receipts that you saved throughout the year. Use your income level and number of exemptions to find the sales tax amount for your state.

Washington Post:  An Early, Untaxed Bequest:

This is the season for giving, and merchants and children alike encourage it. But so do the nation's tax laws, and as parents and grandparents look toward the end of the year, accountants and other advisers suggest they think outside the gift-wrapped box. In general, taxes on what tax folks call "intergenerational transfers," and what the rest of us call gifts and bequests to the younger generation, can be quite harsh, despite Republicans' efforts to cut or repeal them.

Washington Post: Senators Vow to End Tax Break on Easements; Wealthy Homeowners Have Taken Advantage:

Members of the Senate Finance Committee announced plans yesterday to stop millions of dollars in excessive income tax write-offs by property owners who promise not to change the facades on their historic properties. Chairman Charles E. Grassley (R-Iowa) and ranking Democrat Max Baucus (Mont.) said they will introduce legislation to fine property owners, promoters and appraisers involved in donating facade easements that lead to undue tax deductions. The penalties would be retroactive to prevent homeowners from cashing in this tax season, before the reforms, they said.

Washington Post: IRS Toughens Rules For Tax Shelter Advice:

The Internal Revenue Service yesterday toughened the rules that lawyers, accountants and other tax professionals must follow when they tell clients in writing that a tax strategy is likely to withstand a challenge from the government. The IRS also made final a list of practices it wants tax professionals to follow, but that do not carry penalties.

Washington Post: Outsourcing Tax Collection:

In response to the Dec. 9 editorial "Why Can't the IRS Do It?" I would like to explain the rationale for using private firms to collect unpaid taxes owed to the IRS. This policy is a matter of fairness: You pay your share of taxes; so should everyone else who owes them. Debt-collection firms successfully collect tax debt for more than 40 states and student loan debt for the U.S. Education Department.

Washington Post: In Tax Debate, Varying Estimates Drive Debate:

State policymakers frequently cite a 2002 study by two University of Tennessee economists estimating the amount of revenue the states would fail to realize in absence of a national system for taxing Internet sales. Based in part on an aggressive projection for total online sales, the Tennessee researchers concluded that the states would be losing out on $45 billion in tax revenue by 2006.

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» BIG MEDIA TAX ROUNDUP: FACADE EASEMENTS UNDER FIRE from Roth & Company, P.C.
The TaxProf has again rounded up tax stories from the big media. One worth noting is the Washington Post story... [Read More]

Tracked on Dec 23, 2004 4:55:21 AM

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