L.A. Times: Tax Deduction Reduction:

Consider three popular deductions: contributions to charity; mortgage interest; and state and local income taxes. Bush has said he won’t mess with the first two. It’s hard to blame him for wanting to avoid these hornets’ nests. But the most popular deductions are also the most expensive. Leaving them untouched means that tax rates can’t be reduced as much. It also makes the advocates of other deductions feel like suckers. An ambitious tax reform that goes beyond the 1986 overhaul can happen only in a spirit of "I’ll give up my deductions if you’ll give up yours." [Thanks to Ellen Aprill (Loyola-L.A.) for the tip.]

New York Times: Treasury’s Snow — Tax Code Overhaul a Priority:

Overhauling an excessively complicated U.S. tax code is a "top priority" of the Bush administration over the next four years, Treasury Secretary John Snow said on Wednesday.  "This administration is committed to that task, and we will get it done," Snow said in prepared remarks at a two-day economic conference sponsored by the White House.

Wall Street Journal: Auditing-Rule Maker Seeks New Limits On Tax Services:

The auditing profession’s chief regulator unveiled a broad proposal aimed at preventing accounting firms from auditing the books of public companies to which they have sold tax shelters that the Internal Revenue Service deems abusive tax-avoidance schemes. The proposal by the two-year-old Public Company Accounting Oversight Board also would prohibit accounting firms from selling any tax services at all to senior officers of publicly held audit clients. Until recently, regulators had seen little need to pass significant restrictions on firms’ ability to sell tax services to audit clients, believing they created few conflicts of interest. In the past two years, however, several highly publicized controversies have called that premise into question.

Wall Street Journal (Tom Herman): Many Filers Ignore Nanny Tax , Expecting Not to Get Caught:

Bernard Kerik has plenty of company, at least when it comes to not paying the so-called nanny tax . The former New York City police commissioner was President Bush’s choice to be the nation’s next Homeland Security secretary, succeeding Tom Ridge. Mr. Kerik withdrew last week after acknowledging, among other things, he had failed to pay taxes for an immigrant nanny who may have been in the U.S. illegally. New Internal Revenue Service statistics suggest that many other people don’t bother complying with nanny-tax laws, either.

Wall Street Journal: Using IRAs to Buy Mortgages Boosts Benefits:

Wish you could invest in real estate without having to own or manage a property, while earning tax-exempt or tax-deferred income from that real estate? Well, financial planners are increasingly recommending an investment strategy that allows investors to do just that. Buying property using an individual retirement account is a way to earn tax-exempt or tax-deferred income. And buying or creating mortgages or notes is a way an investor can invest in real estate without actually having to own and manage the property itself. Now more investors are combining the two — using traditional and Roth IRAs to buy or create mortgage notes.

Wall Street Journal: Free Speech vs. Tax Code:

Kweisi Mfume recently announced his departure as NAACP President, and not a moment too soon. His tenure has been a disaster for the storied civil rights organization, driving it deeper into liberal irrelevance. But that doesn’t mean it still shouldn’t be defended against the current IRS probe of its tax-exempt status. Back in October the NAACP was informed that it may have violated a law that prohibits charities, churches and other nonprofits from engaging in partisan activities. Under Mr. Mfume and chairman Julian Bond, the group has accused President Bush of being at war with black America; compared Republicans to the Taliban; and declared that the GOP’s "idea of equal rights is the American flag and the Confederate swastika flying side by side." Charming stuff. But in an address to the NAACP’s 95th annual convention in July, Mr. Bond apparently crossed a far more consequential line. According to the IRS, Mr. Bond explicitly "condemned the administration policies of George W. Bush," which is a no-no if your organization is tax-exempt and wants to stay that way.

Wall Street Journal: Rules to Limit Tax Services Given By Accountants to Audit Clients:

The auditing profession’s chief regulator today unveiled a proposal that for the first time would significantly restrict the types of tax services that accounting firms can sell to audit clients. Generally speaking, the restrictions are expected to be aimed at reducing conflicts of interest at auditors of publicly held companies and preventing accounting firms from auditing their own work.

Washington Post: New Rules for Auditors Proposed; Shelters, Executives’ Tax Returns Addressed:

Regulators yesterday proposed new rules that would bar auditors from peddling questionable tax strategies and preparing tax returns for top executives whose companies’ accounting they review, the latest move in a broad debate about ethics in the accounting industry. The Public Company Accounting Oversight Board, created by Congress to help impose a new disciplinary regime on accountants after a series of corporate scandals, voted unanimously to issue the rules for public comment.

Washington Post: Pauper Chase at the IRS:

Before the Internal Revenue Service outsources its debt-collection function, Congress and taxpayers need assurance that it has purged its files of known uncollectable debts. Otherwise, good taxpayer money will chase after bad.

Washington Post: Tax Break Turns into Big Business:

Historic preservation was a sleepy little field until seven years ago, when financial adviser James M. Kearns began inviting property owners into his Dupont Circle home to learn about an obscure federal program. Kearns and a friend, Steven McClain, advise
d homeowners that they could use the program to claim sizable income tax write-offs — tax breaks that generally totaled 11 percent of their house’s market value. To obtain that windfall, though, homeowners first had to engage in a complicated process ending in a facade easement donation. Kearns and McClain offered a pain-free alternative in fliers for their business partnership: "For a fee, the Capitol Preservation Alliance will prepare and process the easement donations for you." That user-friendly pitch proved a hit. Brass plaques identifying houses in the program began popping up like crocuses, first in Washington, then in New York and other cities.