Paul L. Caron
Dean
Pepperdine Caruso
School of Law
Gov’t Reports
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TIGTA: IRS Fails to Properly Consider Accuracy-Related Penalties in 92% of Audits
The Treasury Inspector General for Tax Administration yesterday released Accuracy-Related Penalties Are Seldom Considered Properly During Correspondence Audits (2010-30-059): The IRS must take additional steps to ensure that accuracy-related penalties are appropriately considered when assessing correspondence audits. … A TIGTA review of 229 correspondence audits closed in Fiscal Year 2008 found that 211 (92%) of the…
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CRS: Tax Issues and the Gulf of Mexico Oil Spill
The Congressional Research Service has released Tax Issues and the Gulf of Mexico Oil Spill: Legal Analysis of Payments and Tax Relief Policy Options (R41323) (July 15, 2010), Here is the abstract: Legislation has been introduced in the House and is being discussed in the Senate that would provide tax relief to the Gulf Coast…
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TIGTA: IRS Did Not Properly Manage New $574m e-File System
The Treasury Inspector General for Tax Administration today released Modernized e-File Will Enhance Processing of Electronically Filed Individual Tax Returns, but System Development and Security Need Improvement (2010-20-041): The IRS's Modernized E-file (MeF) system did not process electronically filed individual tax returns as effectively as it should have during the 2010 filing season. … The estimated $574…
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CRS: International Tax Avoidance and Evasion
Open CRS has posted Tax Havens: International Tax Avoidance and Evasion (R40623) (June 4, 2010), by Jane G. Gravelle (Senior Specialist in Economic Policy). Here is the Summary: The federal government loses both individual and corporate income tax revenue from the shifting of profits and income into low-tax countries, often referred to as tax havens.…
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‘Sin Tax’ Revenue Surges
The Treasury Department's Alcohol and Tobacco Trade and Tax Bureau has released its Fiscal Year 2009 Annual Report, detailing a 41% increase (to $20.6 billion) in the amount of "sin taxes" on alcohol, tobacco, firearms, and ammunition collected by the federal government. Most of the $6 billion revenue increase resulted from the higher tobacco taxes included in the Children's Health…
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National Taxpayer Advocate Releases Report to Congress
National Taxpayer Advocate Nina E. Olson yesterday released (IR-2010-83) her mid-year repoert to Congress, Fiscal Year 2011 Objectives. Forbes, Will Bad History Repeat With Congress And The IRS? Tax Lawyer's Blog, Taxpayer Advocate Nina Olson Concerned that Burden of New 1099 Reporting Will Exceed Benefits USA Today, Small Businesses, Charities Face More Reporting Rules Wall Street Journal,…
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GAO Issues Report on IRS’s Internal Controls
The Government Accountability Office yesterday released Status of GAO Financial Audit and Related Financial Management Report Recommendations (GAO-10-597): IRS has made progress in improving its internal controls and financial management since its first financial statement audit in 1992, as evidenced by 10 consecutive years of clean audit opinions on its financial statements, the resolution of…
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TIGTA: Has IRS Achieved Goals of 1998 Restructuring and Reform Act?
The Treasury Inspector General for Tax Administration today released its evaluation of whether the goals of the IRS Restructuring and Reform Act of 1998 (RRA 98) have been substantially achieved. The Internal Revenue Service Restructuring and Reform Act of 1998 Was Substantially Implemented but Challenges Remain (2010-IE-R002): RRA 98 was broadly scoped legislation intended to transform…
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Open CRS Releases Tax Reports
Tax Options for Financing Health Care Reform (R40648) The Role of Federal Gasoline Excise Taxes in Public Policy (R40808) Dependent Care: Current Tax Benefits and Legislative Issues (RS21466)
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Taxing Arizona: IRS Refuses TIGTA’s Recommendation That it Verify Citizenship of 200,000 e-File Providers
The Treasury Inspector General for Tax Administration (TIGTA) today released The Screening and Monitoring of E-File Providers Has Improved, but More Work Is Needed to Ensure the Integrity of the E-File Program (2010-40-042): The primary means by which the IRS regulates electronic filing (e-file) Providers are the application screening process and the monitoring program. … …
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GAO: IRS Can’t Track Nonresident Alien Tax Noncompliance
The Government Accountability Office yesterday released IRS May Be Able to Improve Compliance for Nonresident Aliens and Updating Requirements Could Reduce Their Compliance Burden (GAO-10-429): For tax year 2007, nonresident alien individuals filed about 634,000 Forms 1040NR, the U.S. Nonresident Alien Income Tax Return. IRS has not developed estimates for the extent of nonresident alien…
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CBO: ‘Nearly All’ Colleges Engage in Tax Arbitrage
The Congressional Budget Office on Friday released Tax Arbitrage by Colleges and Universities: Because colleges and universities serve a public purpose—advancing higher education and promoting myriad forms of research—they enjoy a variety of tax preferences. In addition to being exempt from paying federal income taxes, institutions of higher learning can accept tax-deductible charitable contributions and…
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Joint Tax Committee Releases IRS Disclosures of Tax Return Information, 2009
The Joint Committee on Taxation yesterday released Disclosure Report for Public Inspection Pursuant to Internal Revenue Code Section 6103(p)(3)(C) for Calendar Year 2009 (JCX-25-10): Section 6103(p)(3)(C) of the Internal Revenue Code provides that the Secretary of the Treasury shall, within 90 days after the close of each calendar year, furnish to the Joint Committee on…
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Joint Tax Committee: IRS Lacks Authority to Enforce ObamaCare’s Individual Mandate
Big Government, Joint Committee on Taxation Confirms that ObamaCare Does Not Enforce Individual Mandate: One of the more controversial elements of ObamaCare is the mandate for most individuals to purchase insurance beginning in 2014. There is really no precedent for a federal mandate of this scale requiring individuals to purchase a product or service. So…
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Joint Tax Committee Releases Report on Manager’s Amendment to H.R. 4849
The Joint Committee on Taxation today released A Description of the Revenue Provisions Added or Modified by the Manager’s Amendment to H.R. 4849 (JCX-21-10): The manager’s amendment modifies section 306 of H.R. 4849, relating to the availability of collection due process rights with respect to levies for tax liabilities of Federal contractors, adds a provision…
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Joint Tax Committee Releases The 2010 and 2011 Tax Law
The Joint Committee on Taxation today released Present Law and Background Data Related to the Federal Tax System in Effect for 2010 And 2011 (JCX-19-10), in advance of tomorrow's House Ways & Means Committee hearing on Taxes and the Budget: The current Federal tax system has four main elements: (1) an income tax on individuals and…
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President Obama Calls for ‘Restoring Balance to the Tax Code’
The White House today released the 458-page 2010 Economic Report of the President, which includes a 4-page section on Restoring Balance to the Tax Code: The second major step the Administration is taking to address the long-run fiscal challenge is restoring balance to the tax code that has been lost since 2001. The 2001 and…
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CBO: Policy Options to Boost Employment
The Congressional Budget Office yesterday released Policies for Increasing Economic Growth and Employment in the Short Term: This testimony summarizes the outlook for the labor market and assesses the potential impact that a variety of policy options would have on economic growth and employment. Some of the options that CBO analyzed would reduce taxes on…
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Obama’s Budget ‘Cheats’ (by $98 Billion) in Reporting Cost of Child Tax Credit & EITC Expansion
The Committee for a Responsible Federal Budget: A few months ago, we pointed out that the Administration was cheating in its Mid-Session Review budget baseline. Essentially it was taking policies which President Obama had signed into law as temporary, under the stimulus bill, and assuming them as permanent. The implication being that, if the policies…
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CRS: Business Investment and Employment Tax Incentives to Stimulate the Economy
Open CRS has posted Business Investment and Employment Tax Incentives to Stimulate the Economy (R41034). Here is the summary: According to the Business Cycle Dating Committee of the National Bureau of Economic Research (NBER), the U.S. economy has been in recession since December 2007. Congress passed and the President signed an economic stimulus package, the American…
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President Obama’s Budget Contains $1.9 Trillion in Tax Increases
President Obama today released his administration's Fiscal Year 2011 Budget. The Treasury Department released its 153-page Green Book, General Explanations of the Administration’s Fiscal Year 2011 Revenue Proposals. From the Treasury Department's press release: "This set of tax reforms strikes a balance between targeted tax cuts to spur investments in job growth and innovation here…
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Joint Tax Committee Releases List of Expiring Federal Tax Provisions, 2009-2020
The Joint Committee on Taxation yesterday released List of Expiring Federal Tax Provisions 2009-2020 (JCX-3-10): This document, prepared by the staff of the Joint Committee on Taxation, provides a listing of Federal tax provisions (other than those providing time-limited transition relief after the repeal of an underlying rule) that are currently scheduled to expire in…
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GAO Issues Report on New Markets Tax Credit
The Government Accountability Office yesterday released New Markets Tax Credit: The Credit Helps Fund a Variety of Projects in Low-Income Communities, but Could Be Simplified (GAO-10-334): The Treasury Department’s Community Development Financial Institutions (CDFI) Fund awarded $26 billion in New Markets Tax Credits (NMTC) through 2009 for investment in low-income communities. The NMTC allows investors to…
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President Obama Calls for TARP Tax on Big Banks
White House Press Release White House Fact Sheet Treasury Department Press Release Treasury Department Example The Atlantic Bloomberg The Conglomerate (and here, here, here, and here) Deal Book (NY Times) Deal Journal (WSJ) Dorf on Law Financial Times FindLaw Forbes New York Times Tax.com Wall Street Journal
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GAO: 68% of S Corp Tax Returns Have Errors
The Government Accountability Office today released Tax Gap: Actions Needed to Address Noncompliance with S Corporation Tax Rules (GAO-10-195): According to IRS data, about 68% of S corporation returns filed for tax years 2003 and 2004 (the years data were available) misreported at least one item. About 80% of the time, misreporting provided a tax…