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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