Thursday, May 31, 2007

IRS Warns Taxpayers of New E-mail Scams

IRS Warns Taxpayers of New E-mail Scams

Updated June 19, 2007 — In another recent scam, consumers have received a "Tax Avoidance Investigation" e-mail claiming to come from the IRS' "Fraud Department" in which the recipient is asked to complete an "investigation form," for which there is a link contained in the e-mail, because of possible fraud that the recipient committed. It is believed that clicking on the link may activate a Trojan Horse.

IR-2007-109, May 31, 2007

WASHINGTON — The Internal Revenue Service today alerted taxpayers to the latest versions of an e-mail scam intended to fool people into believing they are under investigation by the agency’s Criminal Investigation division.

The e-mail purporting to be from IRS Criminal Investigation falsely states that the person is under a criminal probe for submitting a false tax return to the California Franchise Tax Board. The e-mail seeks to entice people to click on a link or open an attachment to learn more information about the complaint against them. The IRS warned people that the e-mail link and attachment is a Trojan Horse that can take over the person’s computer hard drive and allow someone to have remote access to the computer.

The IRS urged people not to click the link in the e-mail or open the attachment.
Similar e-mail variations suggest a customer has filed a complaint against a company and the IRS can act as an arbitrator. The latest versions appear aimed at business taxpayers as well as individual taxpayers.

The IRS does not send out unsolicited e-mails or ask for detailed personal and financial information. Additionally, the IRS never asks people for the PIN numbers, passwords or similar secret access information for their credit card, bank or other financial accounts.

“Everyone should beware of these scam artists,” said Kevin M. Brown, Acting IRS Commissioner. “Always exercise caution when you receive unsolicited e-mails or e-mails from senders you don’t know.”

Recipients of questionable e-mails claiming to come from the IRS should not open any attachments or click on any links contained in the e-mails. Instead, they should forward the e-mails to phishing@irs.gov (follow the instructions).

The IRS also sees other e-mail scams that involve tricking victims into revealing private personal and financial information over the Internet, a practice that is known as “phishing” for information.

The IRS and the Treasury Inspector General for Tax Administration work with the U.S. Computer Emergency Readiness Team (US-CERT) and various Internet service providers and international CERT teams to have the phishing sites taken offline as soon as they are reported.

Since the establishment of the mail box last year, the IRS has received more than 17,700 e-mails from taxpayers reporting more than 240 separate phishing incidents. To date, investigations by TIGTA have identified host sites in at least 27 different countries, as well as in the United States.

Other fraudulent e-mail scams try to entice taxpayers to click their way to a fake IRS Web site and ask for bank account numbers. Another widespread e-mail tells taxpayers the IRS is holding a refund (often $63.80) for them and seeks financial account information. Still another email claims the IRS’s ‘anti-fraud commission’ is investigating their tax returns.

Related Item:

Suspicious e-Mails and Identity Theft

Friday, May 25, 2007

Terri McField Named Special Counsel to the Chief Counsel (Legislation)

Terri McField Named Special Counsel to the Chief Counsel (Legislation)

IR-2007-107, May 25, 2007

WASHINGTON — The Internal Revenue Service announced the appointment of Terri McField to the position of Special Counsel to the Chief Counsel (Legislation) effective May, 29. She will be replacing Clarissa Potter who became the Deputy Chief Counsel in September 2006.

"We are extremely fortunate to have Terri McField join the Office of Chief Counsel,” said Donald L. Korb, IRS Chief Counsel. “Ms. McField’s extensive experience and her substantial knowledge of the legislative process make her an excellent candidate for this position."

The Special Counsel to the Chief Counsel (Legislation) serves as program manager and senior advisor to the Chief Counsel on a broad array of activities designed to fulfill the Chief Counsel’s responsibilities to prepare, review, and assist in the preparation of proposed legislation, and to provide legal support to the Internal Revenue Service in fulfilling its legislative responsibilities.

Since 2001, McField has served as the Vice President and General Counsel for Black Entertainment Television’s subsidiary, BET Interactive. In this position she was responsible for legal matters pertaining to BET’s internet company. From 1998-2001, McField was Vice President and Associate General Counsel for BET, where she assisted with the company’s legislative and tax matters. Prior to those positions, she worked as a Legislative Tax Counsel to a member of Congress on the House Committee on Ways and Means and served as a Senior Tax Associate at Coopers & Lybrand. She began her tax career as a Revenue Agent for IRS in New Orleans where she obtained her CPA certificate.

McField received her LL.M. in taxation from Georgetown University Law Center, and also earned her J.D., cum laude, from Howard University School of Law. She received her MBA and a B.S. in Accounting from the University of New Orleans.

Thursday, May 24, 2007

Ford Hybrids Still Qualify for Tax Credit

Ford Hybrids Still Qualify for Tax Credit

IR-2007-108, May 24, 2007

WASHINGTON — The Internal Revenue Service announced that purchasers of qualified Ford Motor Company vehicles may continue to claim the Alternative Motor Vehicle Credit.

The announcement comes after the IRS concluded its quarterly review of the number of hybrid vehicles sold. Ford sold 5,149 qualifying vehicles to retail dealers during the quarter ending March 31, 2007. This brings the total number of Ford qualifying hybrids reported to date to 27, 275.

The credit amount and make and model of the certified vehicles sold are:

  • Ford Escape 2WD Hybrid Model Year 2008 — $3,000
  • Ford Escape 2WD, Model Years 2005, 2006 and 2007 — $2,600
  • Ford Escape 4WD Hybrid Model Year 2008 — $2,200
  • Ford Escape 4WD, Model Years 2005, 2006 and 2007 — $1,950
  • Mercury Mariner 4WD Hybrid Model year 2008 — $2,200
  • Mercury Mariner 4WD, Model Years 2006 and 2007 — $1,950
  • Mercury Mariner 2WD Hybrid Model Year 2008 — $3,000

Taxpayers may claim the full amount of the allowable credit up to the end of the first calendar quarter after the quarter in which the manufacturer records its sale of the 60,000th vehicle. For the second and third calendar quarters after the quarter in which the 60,000th vehicle is sold, taxpayers may claim 50 percent of the credit. For the fourth and fifth calendar quarters, taxpayers may claim 25 percent of the credit. No credit is allowed after the fifth quarter.

IRS Seeking ETAAC Applicants from Large Businesses

IRS Seeking ETAAC Applicants from Large Businesses

IR-2007-106, May 24, 2007

WASHINGTON — The Internal Revenue Service is seeking applicants from large businesses who file annual corporation or partnership returns for membership on the Electronic Tax Administration Advisory Committee (ETAAC). The IRS defines large businesses as enterprises with assets greater than $10 million.

The 13-member ETAAC panel provides an organized public forum for discussion of electronic tax administration issues in support of the overriding goal that paperless filing as the preferred and most convenient method of filing tax and information returns.

“ETAAC members convey the public’s perception of IRS electronic tax administration activities, offer constructive observations on current or proposed policies and programs," said Bert DuMars, IRS Electronic Tax Administration director. “It is critically important that our ETAAC includes members with a strong background in corporate and partnership tax issues.”

The ETAAC also provides an annual report to Congress on IRS’s progress in meeting the Restructuring and Reform Act of 1998 goals for electronic filing of tax returns. The ETAAC researches, analyzes and make recommendations on a wide range of electronic tax administration issues and provides input into the development of the strategic plan for Electronic Tax Administration.

Application packages should include a resume and a completed application form. They can be submitted via email at ETAAC@irs.gov. They can also be mailed to:

Internal Revenue Service
ATTN: Cassandra Daniels
5000 Ellin Rd
C4-226, SE:W:ETA:S:RM
Lanham, MD 20706.

Packages can also be faxed to 202-283-2845 (not a toll-free call).

The deadline for submitting applications is June 6, 2007

Related Item:

ETAAC Membership Application

Wednesday, May 23, 2007

IRS Announces Public Meeting of ACT, Names New Members

IRS Announces Public Meeting of ACT, Names New Members

IR-2007-105, May 23, 2007

WASHINGTON — The Internal Revenue Service’s Advisory Committee on Tax Exempt and Government Entities (ACT) will hold a public meeting June 13, 2007, at 9 a.m. at 1111 Constitution Ave., N.W., Washington, D.C. At the public meeting, six ACT project teams will present recommendations to the IRS Commissioner and senior leadership of the IRS’s Tax Exempt and Government Entities Division (TE/GE). The projects are:

  • A Review of the Voluntary Self-Compliance Program for Indian Tribal Governments,
  • A Proposal for an Exempt Organizations Voluntary Compliance Program,
  • After the Bonds Are Issued: What Then?,
  • Improving Compliance for Adopters of Pre-Approved Plans,
  • A Prototype for Public Sector Defined Contribution Plans, and
  • Public Employers’ Withholding and Reporting for Non-Resident Aliens.

The IRS has also named six new members who will begin their two-year terms on the ACT in June. They join 15 returning committee members. The six new members of the ACT are listed below by area of expertise.

Employee Plans

Michael M. Spickard, Summit Retirement Plan Services, Inc., Akron, Ohio

Michael M. Spickard is the owner, chief executive officer and chief actuary of Summit Retirement Plans Services, a leading third-party administrator in northern Ohio. He is an Enrolled Actuary and has more than 16 years experience designing and administering all types of retirement plans, with in-depth experience in the areas of salaried, hourly and union defined benefit plans. Mr. Spickard holds a Bachelor of Science in Applied Mathematics from the University of Akron.

Marcia S. Wagner, The Wagner Law Group, Boston

Marcia S. Wagner is a principal of The Wagner Law Group, specializing in pension and employee benefits law. Previously, she was a partner at the Boston law firm of Warner & Stackpole LLP and the head of its ERISA/Employee Benefits Practice Group. In her practice, Ms. Wagner’s “core” client is in the small or mid-sized market, and her firm advises clients on matters concerning qualified, nonqualified and welfare benefits plans. Ms. Wagner received her Juris Doctorate from Harvard Law School.

Exempt Organizations

Fred T. Goldberg, Jr., Skadden, Arps, Slate, Meagher & Flom, LLP, Washington, D.C.

Fred T. Goldberg is a partner at Skadden, Arps, Slate, Meagher & Flom LLP, with extensive experience not only in the area of exempt organizations, but also employee plans and tax-exempt bonds. Mr. Goldberg was Assistant Secretary for Tax Policy, U.S. Department of the Treasury (1992). He also served as Commissioner of Internal Revenue (1986–89) and Chief Counsel of the Internal Revenue Service (1984–86). He holds a Juris Doctorate from Yale University.

Mary Rauschenberg, Deloitte Tax LLP, Chicago

Mary Rauschenberg is Director of Deloitte Tax LLP’s Chicago healthcare and not-for-profit tax practices. Her clients include academic medical centers, colleges and universities, teaching hospitals, cultural organizations, trade associations, public and private foundations, and other tax-exempt organizations. Ms. Rauschenberg holds a Masters of Accounting Science from the University of Illinois.

Government Entities: Indian Tribal Governments

Dennis Puzz, Jr., Best & Flanagan LLC, Minneapolis

Dennis Puzz is a member of the Yurok Tribe of Northern California and an attorney in the Native American Law section of Best & Flanagan. Mr. Puzz focuses his practice on representing tribal governments in the areas of gaming, economic development, constitution, ordinance and regulation drafting, and employment. Prior to rejoining the firm, he was executive director of the Yurok Tribe, in Klamath, Calif. As executive director, he oversaw all operations of the tribal government, which employs approximately 250 employees and operates on a yearly budget of $12 million. He was also tasked with managing all Tribal Council initiatives internally, representing the Tribe on these issues with outside entities, and managing four outside law firm relationships regarding these projects. Mr. Puzz has a Juris Doctorate from the University of Minnesota Law School.

Government Entities: Tax Exempt Bonds

John G. Pasicznyk, Dormitory Authority of the State of New York, Albany, N.Y.

John G. Pasicznyk is the chief financial officer and treasurer of the Dormitory Authority of the State of New York, one of the largest issuers of tax-exempt debt and one of the largest public construction companies in the nation. In this position, Mr. Pasicznyk is responsible for all treasury, accounting, computer and information services functions related to a $34 billion debt portfolio. In addition to being responsible for administering all outstanding bond issues, he is also responsible for investments and arbitrage rebate compliance. Mr. Pasicznyk holds a Masters of Business Administration from the Duke University Fuqua School of Business.

ACT Members Continuing on the Committee

Employee Plans

  • Susan D. Diehl, PenServ, Inc., Horsham, Pa.
  • Dodi Walker Gross, Reed Smith, LLP, Pittsburgh
  • Daniel J. Schwartz, Greensfelder, Hemker & Gale, P.C., St. Louis
  • Michael S. Sirkin, Proskauer Rose LLP, New York

Exempt Organizations

  • Betsy Buchalter Adler, Silk, Adler & Colvin, San Francisco
  • Bonnie Brier, The Children’s Hospital of Philadelphia, Philadelphia
  • Sean Delany, Lawyers Alliance for New York, New York
  • Ana Thompson, The Charles and Helen Schwab Foundation, San Mateo, Calif.

Government Entities – Federal, State and Local Governments

  • Steven W. Hoffman, The Ohio State University, Columbus, Ohio.
  • Nicholas C. Merrill, Jr., State Employees’ Retirement System of Illinois, Springfield, Ill.
  • Julian Regan, Fidelity Employer Services Company, Marlborough, Mass.


Government Entities – Indian Tribal Governments

  • Sandra Starnes, Port Gamble S’Klallam Tribe, Kingston, Wash.
  • Mary J. Streitz, Dorsey & Whitney LLP, Minneapolis

Government Entities – Tax Exempt Bonds

  • Joan M. DiMarco, BondResources Partners, LP, Philadelphia
  • Maxwell D. Solet, Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C., Boston

ACT Members Leaving the Committee in June 2007

Employee Plans

  • Charles M. Lax, Maddin, Hauser, Wartell, Roth & Heller, P.C., Southfield, Mich.
  • Charles F. Plenge, Hayes and Boone, LLP, Dallas

Exempt Organizations

  • Julie L. Floch, Eiser LLP, New York
  • Suzanne Ross McDowell, Steptoe & Johnson, LLP, Washington, D.C.

Government Entities – Indian Tribal Governments

  • Lenor A. Scheffler, Best & Flanagan LLC, Minneapolis

Government Entities – Tax Exempt Bonds

  • Robert E. Donovan, Rhode Island Health and Educational Building Corporation, Providence, R.I.

Maxwell D. Solet, with Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C., will be the ACT Chair for 2007–2008.

The 21-member advisory committee includes external stakeholders and representatives who deal with employee retirement plans, tax-exempt organizations, tax-exempt bonds and federal, state, local and Indian tribal governments. ACT members are appointed by the Secretary of the Treasury and generally serve two-year terms. They advise the IRS on operational policies and procedures.

The ACT was established in May 2001 under the Federal Advisory Committee Act to provide an organized public forum for discussion of relevant issues affecting the tax exempt and government entities communities. It allows the IRS to receive regular input with respect to the development and implementation of policy concerning employee plans, exempt organizations, tax-exempt bonds and federal, state, local and Indian tribal government issues.

The project reports and proceedings of the June 13 meeting will be made public under the Federal Advisory Committee Act. The report will be available on this Web site.

Due to limited seating and security requirements, members of the public interested in attending the public meeting should call Cynthia Phillips Grady to confirm their attendance. She can be reached at 202-283-9954 (not a toll-free call). Attendees must have photo identification and are encouraged to arrive at least 30 minutes before the session begins.

Joint International Tax Shelter Information Centre Expands and Opens a Second Office in the United Kingdom

Joint International Tax Shelter Information Centre Expands and Opens a Second Office in the United Kingdom

IR-2007-104, May 23, 2007

WASHINGTON — The Commissioners of the Australian, Canadian, United Kingdom and United States tax administrations have decided to open a second office of the Joint International Tax Shelter Information Centre (JITSIC) in London in fall 2007. Additionally, Japan has accepted an invitation to join JITSIC, and a representative of the National Tax Agency will be present at the London centre.

The Commissioners agreed that exchanging information in real-time is making a significant difference to the complex task of tracking tax avoidance and abusive cross-border transactions. JITSIC members have identified and challenged the following highly artificial arrangements:

  • A cross-border scheme was marketed, involving hundreds of taxpayers and tens of millions of dollars in improper deductions and unreported income from retirement account withdrawals.
  • Highly structured financing transactions created by financial institutions in which taxpayers generated inappropriate foreign tax credit benefits
  • Brokers provided made-to-order losses on futures and options transactions for individuals in other JITSIC jurisdictions, leading to a tax loss of more than $100,000,000.

The Commissioners have also made further plans for the future development of JITSIC, along with the measured expansion to cover North America, Europe and Asia - broadening the focus of its activities, further sharing best practices on risk assessment and other key areas of interest, and particularly increasing the transparency of cross-border transactions in order to create a level playing field for taxpayers who are voluntarily compliant.

JITSIC was established in 2004 by the tax administrations of Australia, Canada, the United Kingdom and the United States to supplement the ongoing work of the Australian Taxation Office, the Canada Revenue Agency, HM Revenue and Customs, and the Internal Revenue Service in identifying and curbing tax avoidance and shelters and those who promote them and invest in them.

To date, delegates from each of the four countries have been based in Washington DC, and exchange information on abusive tax schemes, their promoters and investors, consistent with the provisions of bilateral tax conventions.

Sidley Austin LLP Pays IRS $39.4 Million Penalty

Sidley Austin LLP Pays IRS $39.4 Million Penalty

IR-2007-103, May 23, 2007

WASHINGTON — The Internal Revenue Service today announced that it has reached a settlement with the law firm of Sidley Austin, LLP, the successor firm of the merger in 2001 between Sidley & Austin and Brown & Wood, LLP, which has paid a civil tax shelter promoter penalty of $39.4 million. The penalty stems from the firm’s promotion of abusive tax shelters and a failure to comply with tax shelter registration requirements.

“Sidley Austin has paid a significant penalty for its role in promoting abusive tax shelters,” said IRS Acting Commissioner Kevin M. Brown. “The firm has also concrete steps to prevent a recurrence of this behavior in the future, which they have agreed to maintain going forward. We appreciate their actions and their cooperation in our ongoing investigations.”

The firm issued opinions in connection with potentially abusive tax shelters to over high-net worth individuals and corporations. Some of the packages marketed to these individuals included listed transactions such as BOSS (Bond & Option Sale Strategy), variants of the so-called “Son of BOSS” shelter that went by names of COBRA (Currency Options Bring Reward Alternatives), BLIPS (Bond Linked Issue Premium Structure) and COINS (Currency Option Investment Strategy), and others that went by the names of FLIP (Foreign Leveraged Investment Program), OPIS (Offshore Portfolio Investment Strategy) and POPS (Partnership Option Portfolio Securities).

The firm also issued tax opinions in connection with certain potentially abusive non-listed transactions involving distressed assets, bond and equity strips and lease strips.

Sidley Austin LLP has offices in Beijing, Brussels, Chicago, Dallas, Frankfurt, Geneva, Hong Kong, London, Los Angeles, New York, San Francisco, Shanghai, Singapore, Tokyo and Washington, D.C.

Monday, May 21, 2007

IRS Announces 2007 Low Income Taxpayer Clinics Grant Recipients

IRS Announces 2007 Low Income Taxpayer Clinics Grant Recipients

IR-2007-102, May 21, 2007

WASHINGTON — National Taxpayer Advocate Nina E. Olson announced today that the Internal Revenue Service has awarded almost $8 million in matching grants to Low Income Taxpayer Clinics (LITCs) for the 2007 grant cycle (Jan. 1, 2007, through Dec. 31, 2007).

LITCs are qualifying organizations that provide representation for free or a nominal fee to low-income taxpayers involved in tax disputes with the IRS or that provide education on taxpayer rights and responsibilities to taxpayers for whom English is a second language or who have limited English proficiency. For more details about languages other than English served by LITCs, see IRS Publication 4134, Low Income Taxpayer Clinic List.

Under the LITC program, the IRS awards matching grants of up to $100,000 a year to qualifying organizations. For the 2007 grant cycle, the IRS awarded LITC grants to 154 organizations representing 49 states plus the District of Columbia, Puerto Rico and Guam.

Currently there are no LITCs in the state of Colorado. The LITC Program Office will open a supplemental period for accepting LITC applications for the 2007 grant cycle for the state of Colorado. The supplemental application period will run from April 27 to May 25, 2007. LITC applications for this grant must be electronically submitted or postmarked by May 25, 2007. The 2007 Grant Application Package and Guidelines, IRS Publication 3319 (Rev. 5-2006), is available on the Taxpayer Advocate Web site.

Questions about the LITC Program can be addressed to the LITC Program Office at (202) 622-4711 (not a toll-free call) or by e-mail at LITCProgramOffice@irs.gov.

A list of organizations awarded a matching grant for the 2007 grant cycle is available.

Thursday, May 17, 2007

IRS Accepting Applications for Low Income Taxpayer Clinic Matching Grants

IRS Accepting Applications for Low Income Taxpayer Clinic Matching Grants

IR-2007-101, May 17, 2007

WASHINGTON — National Taxpayer Advocate Nina E. Olson announced today that the 2008 Low Income Taxpayer Clinic (LITC) grant application process is now open. The LITC grant program is a federal program administered by the Taxpayer Advocate Service, an independent organization within the IRS that helps taxpayers resolve problems with the IRS and recommends changes to prevent taxpayer problems.

Under the LITC grant program, the IRS awards matching grants of up to $100,000 per year to develop, expand or maintain low income taxpayer clinics. The program is in its ninth year and continues to expand. To date in 2007, the LITC Program Office has awarded LITC grants to 154 organizations in 49 states, the District of Columbia, Puerto Rico and Guam. There are currently no LITCs in the state of Colorado, but the IRS has opened a supplemental period for accepting applications for Colorado for the remainder of the 2007 grant cycle.

LITCs are qualifying organizations that provide representation for free or a nominal fee to low income taxpayers involved in tax disputes with the IRS. They also provide education on taxpayer rights and responsibilities to taxpayers for whom English is a second language or who have limited English proficiency. Examples of qualifying organizations include:

  • Clinical programs at accredited law, business or accounting schools, whose students may represent low income taxpayers in tax disputes with the IRS, and
  • Organizations exempt from tax under I.R.C. § 501(a) that represent low income taxpayers in tax disputes with the IRS or refer those taxpayers to qualified representatives.

The application period for this grant will run from May 7, 2007, to July 6, 2007. The grant will cover the 2008 grant cycle, from Jan. 1, 2008, through Dec. 31, 2008. Applications must be postmarked or filed electronically by July 6, 2007.

Copies of the 2008 Grant Application Package and Guidelines, IRS Publication 3319 (Rev. 5-2007), are available on the Taxpayer Advocate Service Web site. Applicants may also order application packages from the IRS Distribution Center by calling 1-800-829-3676. Applicants can also file electronically at Grants.gov –– those applying through this Web site should use the Funding Number TREAS-GRANTS-052008-001.

Questions about the LITC Program or grant application process can be addressed to the LITC Program Office at (202) 622-7186, not a toll-free call, or by e-mail at LITCProgramOffice@irs.gov.

Tuesday, May 15, 2007

2007 Tax Season Sets Records for E-file, Direct Deposit, IRS.gov

2007 Tax Season Sets Records for E-file, Direct Deposit, IRS.gov

IR-2007-100, May 15, 2007

WASHINGTON — The recently completed 2007 tax filing season set a number of electronic records, highlighted by over 76 million electronically-filed individual tax returns and more than 140 million visits to IRS.gov, the Internal Revenue Service said today.

“E-file and our other electronic services helped us deliver a strong filing season for the nation’s taxpayers,” said IRS Acting Commissioner Kevin M. Brown. “Again this year, millions of additional taxpayers gave up paper tax returns to file electronically. E-file and IRS.gov were among several factors that helped us overcome one of the most challenging filing seasons ever for the IRS.”

This year’s tax season saw a surge in electronic filing among last-minute filers, a group that has traditionally sent in paper returns. During the week that included this year’s tax-filing deadline (April 14 to 20) alone, the number of electronically-filed returns received by the IRS jumped 35 percent over the same week last year, even though the overall number of returns (paper and electronic) received during the same week only rose 12 percent.

New records were also set for the number of returns e-filed by home computer users, the number of balance-due returns filed electronically and the number and amount of direct-deposit refunds. Among the highlights of new statistics released today:

  • The over 76.7 million e-filed returns accepted through May 4 topped the more than 73.2 million electronically-filed returns received for all of 2006. It’s also an 8.9 percent increase over last year at this time, with most of the increase coming in March and April. Based on current trends, the agency expects about 58 percent of all returns to be e-filed this year. Taxpayers who filed for extensions can use e-file until Oct. 15.
  • A record 22 million taxpayers e-filed from a home computer, up 11 percent over the same time last year and eclipsing 2006’s year-long total of 20.3 million.
  • This filing season visits to IRS.gov, the agency’s popular Web site, climbed almost 10 percent to more than 140 million.
  • The average refund this year is $2,255, a 2.5 percent increase over last year at this time. More than 59 million refunds, a new record, were deposited directly into savings, checking and brokerage accounts, representing more than 61 percent of all refunds issued. Those who choose direct deposit get their refunds at least a week sooner. Available year-round, direct deposit eliminates the chance of a lost, stolen or undeliverable refund. Taxpayers claiming refunds who have not yet filed may want to consider using direct deposit to get a head start on their 2007 IRA contribution.
  • Nearly $158 billion have been directly deposited so far this year, an 11 percent jump over last year at this time. This surpasses the 2006 year-end total of $149.2 billion.
  • The number of balance-due returns filed electronically surged 14.2 percent to a record 9.4 million. For all of last year, almost 8.9 million balance-due returns were filed electronically.

2007 FILING SEASON STATISTICS

Cumulative through the weeks ending 5/5/06 and 5/4/07

Individual Income Tax Returns

2006

2007

% Change

Total Receipts

124,383,000

127,959,000

2.9%

Total Processed

110,558,000

114,122,000

3.2%

E-filing Receipts:

TOTAL

70,501,000

76,771,000

8.9%

Tax Professionals

50,624,000

54,693,000

8.0%

Self-prepared

19,877,000

22,078,000

11.1%

Web Usage:

Visits to IRS.gov

127,580,000

140,159,000

9.9%

Total Refunds:

Number

92,612,000

96,266,000

3.9%

Amount

$203.685

Billion

$217.066

Billion

6.6%

Average refund

$2,199

$2,255

2.5%

Direct Deposit Refunds:

Number

54,848,000

59,217,000

8.0%

Amount

$142.028

Billion

$157.880

Billion

11.2%

Average refund

$2,590

$2,666

3.0%

2007 FILING SEASON STATISTICS

Cumulative through the weeks ending 4/21/06 and 4/20/07

Individual Income Tax Returns

2006

2007

% Change

Total Receipts

122,721,000

124,965,000

1.8%

Total Processed

102,148,000

105,159,000

2.9%

E-filing Receipts:

TOTAL

70,069,000

76,159,000

8.7%

Tax Professionals

50,329,000

54,324,000

7.9%

Self-prepared

19,740,000

21,835,000

10.6%

Web Usage:

Visits to IRS.gov

121,635,000

133,496,000

9.8%

Total Refunds:

Number

85,151,000

88,168,000

3.5%

Amount

$190.521

Billion

$203.021

Billion

6.6%

Average refund

$2,237

$2,303

2.9%

Direct Deposit Refunds:

Number

53,056,000

57,155,000

7.7%

Amount

$138.304

Billion

$153.486

Billion

11.0%

Average refund

$2,607

$2,685

3.0%

Friday, May 11, 2007

Many Churches, Nonprofits Qualify for Telephone Tax Refund

Many Churches, Nonprofits Qualify for Telephone Tax Refund

IR-2007-99, May 11, 2007

WASHINGTON — Churches, charities and other tax-exempt organizations that paid the federal excise tax on long-distance or bundled telephone service qualify for this year’s one-time telephone excise tax refund, according to the Internal Revenue Service.

With the annual May 15 filing deadline fast approaching for many nonprofits, the IRS urges any of these organizations that paid the 3 percent tax to be sure to request this special refund. The telephone tax refund is also available to churches and small tax-exempt organizations that don’t normally file annual returns with the IRS.

The government stopped collecting the long-distance excise tax last August after several federal court decisions held that the tax does not apply to long-distance service as it is billed today. Federal officials also authorized a one-time refund of the 3 percent tax collected on long-distance or bundled service billed after Feb. 28, 2003, and before Aug. 1, 2006. The tax continues to apply to local-only phone service.

Organizations can request the refund by filing Form 990-T, Exempt Organization Business Income Tax Return and attaching Form 8913, Credit for Federal Telephone Excise Tax Paid. Organizations that obtain a credit or refund from their service providers are not eligible to file a refund request with the IRS.

If your church or organization paid the tax, here are some tips to help you figure the refund correctly and get it quickly:

  • Start by filling out Form 8913. This form is used to figure the refund, including interest. Current interest factors for corporations, including tax-exempt organizations, can be found on the telephone excise tax refund page on IRS.gov.

  • You have two choices for figuring the refund. Base your request on the actual amount of tax paid on service billed from the beginning of March 2003 to the end of July 2006, using your phone bills or other records, or estimate the amount of tax paid using a worksheet included in the instructions for Form 8913. Choosing to use the estimation worksheet may save time and paperwork, especially if you lack ready access to complete phone records for the past few years. If you file Form 990, Return of Organization Exempt From Income Tax, the amount you entered for telephone expense on Line 34 may help you figure the credit. Publication 4589, TETR for Exempt Organizations, helps explain these calculations.

  • Carry the total amount figured on Form 8913 to Form 990-T, Line 44f. Follow the instructions for completing the rest of Form 990-T. Normally, Form 990-T is used by organizations to report business activities unrelated to their tax-exempt purpose and figure the tax on these activities. If, like most organizations, you do not engage in unrelated business activities, you can just complete the top section (above Part I) of Form 990-T. Be sure to write, “Request for TETR Credit” on the top of the form.

  • Many cell phone customers mistakenly believe they are not eligible for the telephone tax refund. The refund is normally available to cell phone users, as well as land-line, fax and Internet phone customers. The method of phone signal transmission does not affect the refund.

  • The refund applies to the federal excise tax paid on both long-distance and bundled telephone service. Bundled service is local and long-distance service provided under a plan that does not separately list the charge for local service. Bundled service includes, for example, phone plans that provide both local and long-distance service for either a flat monthly fee or a charge that varies with the time for which the service is used. It is the type of service provided by many cell phone companies.

  • When figuring the refund, do not count amounts paid for prepaid phone cards and prepaid cell phones. Ordinarily, the customer is not liable for the federal excise tax on prepaid cards and phones and thus, not eligible to request the refund.

  • If you’re not sure whether you paid the tax, check the portion of your telephone bill that relates to long-distance or bundled service. Service providers use a number of different terms to identify the tax. Phrases to look for on English-language phone bills include: Federal, Federal Excise 3%, Federal Excise @ 3%, Federal Excise Tax, Federal Tax, Fed Excise Tax and FET; Spanish-language phone bills; Impuesto Indirecto Federal and Impuesto federal. Typically, this federal tax amount is not commingled with any other tax or surcharge on a customer's bill. In other words, it is normally shown as a separate line item. For information about accessing old phone records from various service providers, visit the “telephone companies” link on the Telephone Excise Tax Refund page of this Web site..

  • Use the Telephone Excise Tax Refund page on this Web site. Here, you can download forms and find answers to frequently-asked questions. You can also find special instructions for nonprofit hospitals, schools and government agencies that may have paid federal telephone taxes in error, as well as alternate procedures for political organizations.

Related Items:

Form 990-T, Exempt Organization Business Income Tax Return

Form 990-T Instructions

Form 8913, Credit for Federal Telephone Excise Tax Paid

Form 8913 Instructions

Form 990, Return of Organization Exempt from Income Tax

Form 990 Instructions

Publication 4589, TETR for Exempt Organizations

Telephone Excise Tax Refund

Interest Factors

Wednesday, May 9, 2007

Deadline for Submitting Clean Coal Allocation Requests Remains June 30

Deadline for Submitting Clean Coal Allocation Requests Remains June 30


IR-2007-98, May 9, 2007

WASHINGTON — Applications for the 2007 allocation for clean coal projects are due to the Department of Energy (DOE) on or before June 30, 2007. Contrary to the expectation in an earlier information release (IR-2006-184), the Internal Revenue Service no longer expects to change the deadline to June 1.

The Energy Policy Act of 2005 authorized $1.65 billion in tax credits for clean coal projects. Approximately $650 million of this amount is available for allocation to clean coal projects in 2007. Of this total, $267 million will be available for integrated gasification combined cycle (IGCC) sub-bituminous coal projects, $133 million will be available for IGCC lignite projects, $250 million will be available for non-IGCC advanced coal electricity generation projects and $337,000 will be available for gasification projects.

IRS Notices 2006-24 and 2006-25 provide complete instructions for submitting an application for the 2007 credit allocation. Under those notices, the application for DOE certification for the 2007 allocation is due to the DOE on or before June 30, 2007.

Monday, May 7, 2007

Nissan Hybrid Still Qualifies for Tax Credit

Nissan Hybrid Still Qualifies for Tax Credit

IR-2007-97, May 7, 2007

WASHINGTON — The Internal Revenue Service announced that purchasers of qualified Nissan North America Inc. vehicles may continue to claim the Alternative Motor Vehicle Credit. The announcement comes after the IRS concluded its quarterly review of the number of hybrid vehicles sold.

Nissan sold 2,094 qualifying vehicles to retail dealers in the quarter ending March 31, 2007. The allowable credit amount for the 2007 Altima Hybrid — Nissan’s only certified hybrid vehicle — is $2,350.

Consumers seeking the credit may want to buy early because the full credit is only available for a limited time. Taxpayers may claim the full amount of the allowable credit up to the end of the first calendar quarter after the quarter in which the manufacturer records its sale of the 60,000th vehicle. For the second and third calendar quarters after the quarter in which the 60,000th vehicle is sold, taxpayers may claim 50 percent of the credit. For the fourth and fifth calendar quarters, taxpayers may claim 25 percent of the credit. No credit is allowed after the fifth quarter.

Wednesday, May 2, 2007

Phase-Out of Credit for Toyota and Lexus Hybrids Continues With Reporting of First Quarter Sales

Phase-Out of Credit for Toyota and Lexus Hybrids Continues With Reporting of First Quarter Sales

IR-2007-96, May 2, 2007

WASHINGTON — After reviewing Toyota Motor Sales USA, Inc.’s, 2007 first quarter sales, the Internal Revenue Service announced that purchasers of Toyota and Lexus vehicles may continue to claim the Alternative Motor Vehicle Credit. Based on the number of vehicles sold, the phase-out period for Toyota vehicles began on Oct. 1, 2006.

Toyota sold 61,369 qualifying vehicles to retail dealers in the quarter ending March 31, 2007. This brings the cumulative sales of qualified Toyota hybrid vehicles sold from the period of Jan. 1, 2006, through March 31, 2007, to 273,442.

Taxpayers may claim the full amount of the credit up to the end of the first calendar quarter after the quarter in which the manufacturer records its sale of the 60,000th qualified vehicle. For the second and third calendar quarters after the quarter in which the 60,000th vehicle is sold, taxpayers may claim 50 percent of the credit. For the fourth and fifth calendar quarters, taxpayers may claim 25 percent of the credit. No credit is allowed after the fifth quarter. The sale of Toyota’s 60,000th qualified vehicle occurred in the quarter ending June 30, 2006.

The applicable credit amounts are as follows:

Qualifying Vehicle

Full Credit When Purchased By 9/30/06

Reduced Credit When Purchased From 10/1/06 through 3/31/07

Reduced Credit When Purchased From 4/1/07 through 9/30/07

Beginning 10/1/07

05, 06 and 07 Toyota Prius

$3,150

$1,575

$787.50

$0

06 and 07 Toyota Highlander 2WD and 4WD

$2,600

$1,300

$650

$0

07 Toyota Camry Hybrid

$2,600

$1,300

$650

$0

06 and 07 Lexus RX 400h
2WD and 4WD

$2,200

$1,100

$550

$0

07 Lexus GS450h

$1,550

$775

$387.50

$0

GM Hybrids Still Qualify for Tax Credit

GM Hybrids Still Qualify for Tax Credit

IR-2007-95, May 2, 2007

WASHINGTON — The Internal Revenue Service announced that purchasers of qualified General Motors Corp. hybrid vehicles may continue to claim the Alternative Motor Vehicle Credit.

GMC sold 2,927 qualifying vehicles to retail dealers in the quarter ending March 31, 2007. This brings the cumulative number of qualified GM hybrid vehicles sold to 8,485. The credit amount and make and model of qualified vehicles sold are:

  • Chevrolet Silverado Hybrid 2WD, Model Years 2006 and 2007 $250
  • Chevrolet Silverado Hybrid 4WD, Model Years 2006 and 2007 $650
  • GMC Sierra Hybrid 2WD, Model Years 2006 and 2007 $250
  • GMC Sierra Hybrid 4WD, Model Years 200 and 2007 $650
  • Saturn Vue Green Line, Model Year 2007 $650
  • Saturn Aura Hybrid, Model Year 2007 $1,300

Purchasers of GMC’s qualified vehicles may continue to rely on the certifications concerning the vehicles’ qualification for the credit.

Consumers seeking the credit may want to buy early because the full credit is only available for a limited time. Taxpayers may claim the full amount of the allowable credit up to the end of the first calendar quarter after the quarter in which the manufacturer records its sale of the 60,000th vehicle. For the second and third calendar quarters after the quarter in which the 60,000th vehicle is sold, taxpayers may claim 50 percent of the credit. For the fourth and fifth calendar quarters, taxpayers may claim 25 percent of the credit. No credit is allowed after the fifth quarter.

Tuesday, May 1, 2007

IRS Draft Form 1120-F and New Schedule M-3 (1120-F) Now Available for Public Comment

IRS Draft Form 1120-F and New Schedule M-3 (1120-F) Now Available for Public Comment

IR-2007-94, May 1, 2007

WASHINGTON — The Internal Revenue Service has issued for public comment draft versions of the revised Form 1120-F, U.S. Income Tax Return of a Foreign Corporation, for tax year 2007 and related schedules, including Schedule M-3, new for 2007. Taxpayers with $10 million or more in total reportable assets filing Form 1120-F for tax years ending on or after Dec. 31, 2007 will be required to file Schedule M-3.

Three other new schedules for Form 1120-F include:

  • Schedule H, Deductions Allocated To Effectively Connected Income Under Regulations Section 1.861-8

  • Schedule I, Interest Expense Allocated Under Regulations Section 1.882-5

  • Schedule P, List of Foreign Partner Interest in Partnerships

The new schedules will provide for increased disclosure of information regarding such items as allocable interest expense and home office deductions, as well as effectively- and non-effectively-connected income that is included in Form K-1 reported by a partnership to a foreign corporate partner and that is reportable by the partner on Form 1120-F. The new schedules also provide a consistent reporting format for all taxpayers.

In addition, Schedules M-1 and M-2, previously included in Form 1120-F, are now separate forms. Schedule M-1, Reconciliation of Income (Loss) per Books with Income per Return is used by corporations with assets under $10 million. Schedule M-2, Analysis of Unappropriated Retained Earnings per Books, is used by all asset size corporations.

The draft Form 1120-F and related schedules are available on this Web site. Comments should be submitted by May 25, 2007, via e-mail to SchM3@irs.gov.

Related Item: Draft Forms and Schedules