News Items for Tax Professionals

INTERNAL REVENUE SERVICE NEWS ITEMS FOR TAX PROFESSIONALS APRIL 2007

● IRS Stakeholder Liaison presents a FREE phone forum on Power of Attorney on Thursday, May 10, 2007. This forum will cover what authorities you can be granted via Forms 2848, 8821, and check-box; how to avoid common errors that cause your POA to be rejected, and how to submit a Form 2848 electronically via e-services. ▪Register at: https://www.attevent.com/rsvpreg.asp?PPass=864666 ▪You will be assigned a Personal Identification Number (PIN) that must be used to join the conference. ▪ If you have never registered with AT&T for a prior phone forum, click on “create a profile” first. ▪Registration deadline is May 7, 2007.

● Publication 4437 2007 Tax Hints, Practitioner’s Guide to the Filing Season, is now available, only on IRS.gov.

● IR-2007-45 Farmers may ask the IRS to waive any estimated tax penalties if they were affected by the snowstorms that began on February 19, 2007.

● The Oversight Board held a forum on "What can my organization do differently than it has in the past to reduce the Tax Gap?" Stakeholder groups such as AICPA, NATP, NAEA, NSA, TEI and NSTP participated. Read their testimony.

● The IRS’ 41 Audit Technique Guides (ATG) and industry/profession web pages are excellent sources of tax information. They are organized by industry group and cover a range of topics about tax issues faced by industries. . Audit Technique Guides include those on retail, auto sales, banking, construction, (dry wall, masonry), laundromats, farming, auto body/repair, scrap metal, and various compensation issues. . Industry and Profession pages include gas retailers, online auction sellers, real estate, restaurants, and manufacturing.

● FS-2007-15 More people in the U.S. have foreign financial accounts and may have to report their accounts to the government, even if the accounts do not generate any taxable income. See Publication 4261 , D o You Have a Foreign Bank Account?

● Retailers who offer money services, such as check cashing, money orders, and wire transfers, may be defined as a Money Service Business (MSB) under the Bank Secrecy Act and are subject to reporting and recordkeeping requirements. . MSBs register by using FinCEN Form 107, Registration of Money Services Business. . Many MSBs are required to file Suspicious Activity Reports (Form 109 effective 3/31/2007, previously TD F 90-22.56) . All MSBs are required to have anti-money laundering compliance programs and to file Currency Transaction Reports (FinCEN Form 104) to report cash transactions of more than $10,000.

If you would like more information about MSB reporting, please call Teresa McGill at (530) 493- 5190, or visit these sites: www.fincen.gov or www.msb.gov. For answers to questions about filing Bank Secrecy Act forms, call the IRS-Detroit Computing Center hotline at 1-800-800-2877.

● IR-2007-61. The IRS issued guidance identifying 40 frivolous positions to avoid when filing tax returns. They have no basis for validity in existing law or have been deemed frivolous by the United States Tax Court or other federal court. If these or other frivolous positions are contained in a tax return, taxpayers could face a $5,000 penalty – 10 times the previous maximum. Notice 2007-30 lists the frivolous positions. Revenue Rulings 2007-19 , 2007-20 , 2007-21 and 2007- 22 discusses and refutes some of these frivolous positions.

● Form 2290, Heavy Highway Vehicle Use Tax. In the case of vehicles used and subsequently sold in the same tax period of July 1 through June 30, The person acquiring the vehicle during the tax period is required to report and pay the tax due for the remaining months of the tax period and is not required to provide the previous owner's Schedule 1. More information is in the Form 2290 instructions.

● Appeals self-help tools can help your clients decide whether to request an appeal for offers in compromise, innocent spouse relief and penalty abatement.

●Headliner 199 Tax Talk Today programs can now be downloaded via Itunes. Upcoming Tax Talk Today programs at www.taxtalktoday.tv include: May 8, 2007 We’re working for you! June 12, 2007 Tax Gap and NRP and Compliance Update

● FS-2007-14, explains the rules for deducting rent and lease expenses as part of a trade or business. They account for part of the overstated adjustments, deductions, exemptions and credits that add up to $30 billion per year in unpaid taxes.

● Taxpayer Advocacy Panel: A unique opportunity is now available to make a positive contribution to your tax administration system by becoming a member of the IRS Taxpayer Advocacy Panel (TAP). The mission of the TAP is to listen to taxpayers, identify taxpayers’ issues, and make recommendations for improving IRS service and customer satisfaction. The TAP serves as an advisory body and serve a three-year appointment. The application form may be submitted electronically online from March 19, 2007 through April 30, 2007. If you do not have access to a computer, call 1-888-912-1227 to request a paper application form.

● W-2c can be filed Online, free. Visit www.socialsecurity.gov/employer.

● Anyone who received Social Security benefits in 2006 and did not receive a Social Security Benefit Statement (Form 1099), can request one online by visiting the Social Security website at www.socialsecurity.gov.

● The office of Indian Tribal Governments posted a new link on their fraud and abuse page for reporting abusive schemes that surface within Native American country.

● IR 2007-058 IRS Often imitated, never duplicated... The IRS reminded taxpayers that the address of the official IRS government Web site is www.irs.gov. Taxpayers may be confused by Internet sites that contain some form of the Internal Revenue Service name acronym with a .com, .net, .org or other designation in the address instead of .gov. These sites are not the official IRS Web site. Also, Taxpayers who receive an unsolicited e-mail purporting to be from the IRS should never click on any links in the message, open any attachments or provide any personal or financial information to the sender.

● The U.S. Immigration and Customs Enforcement (ICE) and IRS Criminal Investigation Division announce the indictment of three executives on charges related to illegal aliens and taxes. Get details in the news release issued by ICE.

RECENT TECHNICAL GUIDANCE

Telephone Excise Tax Refund ▪ IR-2007-40. A significant number of filers so far have not taken advantage of this refund. ▪ IR-2007-60 Under the law, retailers and other businesses that sell prepaid phone cards for long-distance service usually qualify for the telephone tax refund. ▪ Corporations with a March 15, 2007, tax-filing deadline can use these interest factors when figuring their telephone excise tax refund.

● Corporate e-file updates:  Tax Year 2006 Directions for Corporations Required to e-file (rev. 02-26-2007)  Amended and Superseding Corporate Returns  2006 Tax Year Known e-file Issues and Solutions

Headliner 193: Reporting Suspected Tax Fraud Activity Headliner 194: EITC Resources Online for Tax Professionals 24/7 Headliner 195: Changes for U.S. Citizens & Resident Aliens Working Overseas Headliner 196: Work Opportunity Tax Credit and Welfare-to-Work Credit Extended Headliner 197: 15-Year Depreciation for Qualified Leasehold and Restaurant Improvements Extended

● Industry Issue Resolution and Guidance: . In IR-2007-47, the IRS encourages business taxpayers, associations and other interested parties to submit to the Industry Issue Resolution (IIR) Program topics such as these for resolution involving a controversy, a dispute or an unnecessary burden on taxpayers. . In Notice 2007-17 announced the launch of a pilot program to solicit greater input from the public in the initial development of certain types of guidance projects. As a model for the pilot program, the IRS and Treasury solicit input on whether it is appropriate to amend existing income tax regulations to permit certain modifications to securitized commercial mortgage loans.

● Announcement 2007-24 notifies trustees and custodians of Archer Medical Savings Accounts (MSAs) that they must report, on Forms 8851, the number of Archer MSAs established between Jan. 1, 2005 and June 30, 2005 and between Jan.1, 2006 and June 30, 2006.

● Announcement 2007-31 Secretary of the Treasury reports on Advance Pricing Agreements.

● IR-2007-39 Guidance is to be published for automobile wholesalers, manufacturers and dealers on the proper treatment of the dollar-value, last-in, first out (LIFO) inventory method for pooling purposes of crossover vehicles.

● IR-2007-42. has tips to avoid errors on Schedules K-1. Correct information on the forms by issuers and reporting of the income by recipients is important because the IRS matches the data to other tax returns to ensure accurate reporting.

● IR-2007-44 The IRS extended the 2007 deadline until June 30 for restaurant or beverage businesses to elect to participate in the Attributed Tip Income Program.

● IR-2007-50. The revised application for an offer in compromise (OIC), the Form 656 package, is now available.

● Notice 2007-24 requests comments on draft forms issued to collect information from charities and certain other entities with respect to certain structured insurance transactions. It also solicits comments regarding a congressionally mandated study being conducted by the IRS.

● Notice 2007-25 provides modifications and additions to the adjusted limitations on housing expense for purposes of section 911 of the Code. ● Notice 2007-26 solicits applications for the allocation of the available clean renewable energy bond national limitation under Section 54 of the Internal Revenue Code and provides other guidance with respect to clean renewable energy bonds.

● Notice-2007-28 provides guidance on certain of the changes made by the Pension Protection Act of 2006 concerning the deduction for contributions to plans of deferred compensation.

● Notice 2007-29 requests comments and provides interim guidance regarding allocation of costs under the simplified methods of accounting under section 263A. I

● Revenue Procedure 2007-27, concerns political organizations and sets forth the elements of a safe harbor under section 527(l) of the Internal Revenue Code for waiver of amounts due for failure to comply with certain reporting requirements due to reasonable cause but not willful neglect.