Friday, January 26, 2007

10 Key Issues in Dealing with IRS in 2007

George Jones and Mark Luscombe of Accounting Today point out ten issues that CPA tax preparers must strategically consider during the upcoming tax season. These include: [1] the impact and yet-expanding scope of the economic substance doctrine, [2] IRS efforts to close the "tax gap" (the authors hope that technology will be helpful here), [3] the impact of 2006 tax law changes--with three significant bills, there is lots of new material to consider, [4] the interaction of Schedule M-3 and FIN 48 on creating a climate conducive to conservative tax accounting for corporations, [5] opportunities created by the domestic production activities deduction, [6] new proposed Circular 230 regs and their potential for chilling aggressive tax positions, [7] the impact of new deferred compensation rules, [8] after many calm years, inflation may be making a comeback, [9] retirement savings issues, such as increased IRA contribution limits and new 401k rules, [10] issues yet to be decided, such as tax reform, long-term AMT improvement and the 2010 sunset question. Jones and Luscombe also mention as "runner-up" issues abuses by some charitable organizations, limitations on energy credits and the increase in "e-filing."

An excellent summary of the 2006 tax year and look ahead to 2007. Good luck to the tax preparation community; Jones and Luscombe have spelled out a potentially-daunting year ahead.


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