February 16, 2008 2007 Year-End Tax Legislation IRS wins big victory in tax shelter case... IRS warns taxpayers about frivolous return arguments ... Final IRS regulations protect confidentiality of taxpayer return information... Economic stimulus package likely to include tax rebates... IRS reveals stepped up audits of high-income individuals and pass-through entities... AL - Changes affecting 2007 returns explained... AK - Challenge to nonprofit's gaming permit properly dismissed... AZ - Return filing extensions addressed... AR - Act authorizing lien for cleanup fees constitutional... CA - Interest rates drop for second half of 2008... CO - Credit, refunds, withholding, and other matters discussed... CT - Property leased to charitable organization exempt... CT - Job-related pilot training services exempt... CT - Exemptions for fuel efficient motor vehicles discussed... DE - Online filing questions answered... DC - Determination of residential multi-unit income property's FMV addressed... FL - Governor recommends continuation of tax holidays, new energy exemptions and credits... FL - Advertising materials exemption requirements provided... GA - Comments on interest income on government obligations regulation requested... HI - Change of form names, obsolete forms, and form errors announced... ID - Exemption for rebuilt railroad rolling stock denied... ID - Building materials purchased by contractor taxable... IL - Secretary of state reminds corporate taxpayers of amnesty... IN - Nonprofit retirement community only partially exempt... IA - 2008 tax holiday discussed... KS - Regulations issued for energy development credits... KY - 2007 return updates and tips discussed... LA - Country club exempt as fraternal organization... LA - Emergency rule on special assessment levels, other provisions adopted... ME - Mandatory electronic filing rule proposed... MD - Taxability of land in federal enclaves discussed... MA - Manufacturing corporation cases discussed... MI - Renaissance zone property exempt from PA 345 taxes... MI - Exemption clarified for start-up business taxpayers... MI - MEGA granted authority to issue MBT credits... MN - Nonprofit publishing organization property entitled to exemption... MN - Daycare facility not entitled to exemption... MN - Governor to propose tax cuts for individuals... MN - Taxpayer burden of proof upheld... MS - Gas processor assessed tax on gas used in its operations... MO - Company qualifies for material recovery processing plant exemption... MO - Application of utility exemption for manufacturers discussed... MT - Rules clarify treatment of married taxpayers, other matters... NE - New electronic fund transfer account numbers announced... NV - Regulations adopted for golf courses, mining... NH - Exemption inapplicable to improvements that did not aid mobility... NH - Research and development credit details released... NJ - Assessment of low- and moderate-income housing upheld... NM - County regional spaceport tax enacted prematurely... NY - Rabbi's duties entitled property to full exemption... NC - Rental of inflatable attractions exempt because operators were furnished... ND - Expanded income exclusion for native americans discussed... OH - Electronic publishing exemption authorized, other changes noted... OH - Military retirement pay exempt; credit extended... OH - Nonprofit corporation not entitled to exemption... OH - Sale of customized software was exempt casual sale... OK - Governor's budget proposal revealed... OR - Filing requirements for disabled veteran's exemption explained... PA - Software license renewals were taxable sales... RI - Tax sale without notice to record owner was valid... SC - Rebate for alternative fuel or fuel efficient vehicle explained... SD - New exemption for disabled veterans explained... SD - Sioux Falls will host business workshops... TN - Agricultural exemptions, certificates discussed... TN - Payment warehousing announced for online filing... TX - Sales of deposition videotapes to attorneys exempt... UT - Exemptions, credits for mining, prosthetics, cable, satellite discussed... VT - 2007 tax rate schedules and tables released... VT - Bills showing homestead adjustments are public records... VA - Changes to federal AMT will not impact state tax return filing... WA - Lessor liable for deferred taxes on disqualified tenant project... WV - Veterinarians' drug transactions clarified; exemptions discussed... WI - Paper recycling, manufacturing plant partially exempt... WI - Taxpayer failed to show payment was misapplied... WY - 2008 interest rate set; 2007 interest rate corrected...

IRS prepares for first spike in 2008 filing season
The end of February usually marks the first spike in the filing season. This year, everyone is watching for how well the IRS is prepared to handle the first wave of returns while at the same time reprogramming its computer systems for the alternative minimum tax (AMT) patch. The IRS is encouraging taxpayers to file electronically, hoping to break the 60 percent threshold for e-filing this year. more...

How the Mortgage Forgiveness Debt Relief Act is helping homeowners
On December 18, 2007, Congress passed the Mortgage Forgiveness Debt Relief Act of 2007 (Mortgage Debt Relief Act), providing some major assistance to certain homeowners struggling to make their mortgage payments. The centerpiece of the new law is a three-year exception to the long-standing rule under the Tax Code that mortgage debt forgiven by a lender constitutes taxable income to the borrower. However, the new law does not alleviate all the pain of all troubled homeowners but, in conjunction with a mortgage relief plan recently announced by the Treasury Department, the Act provides assistance to many subprime borrowers. more...

FAQ: Do I have a higher risk of being audited if I file early?
Often, timing is everything or so the adage goes. From medicine to sports and cooking, timing can make all the difference in the outcome. What about with taxes? Does timing play a factor in raising or decreasing your risk of being audited by the IRS? For example, does the time when you file your income tax return affect the IRS's decision to audit you? Some individuals think filing early will decrease their risk of an audit, while others file at the very-last minute, believing this will reduce their chance of being audited. And some taxpayers don't think timing matters at all. more...

How Do I? Compute a negligence penalty for not having the right proof for a deduction?
An accuracy-related penalty applies to a tax underpayment due to "negligence or disregard of the rules and regulations." "Negligence" for this purpose includes any failure to make a reasonable attempt to comply with the Tax Code, to exercise ordinary and reasonable care in preparing your tax return, to keep adequate books and records, or to properly substantiate items on your return. A return position that has a reasonable basis is not negligent. A taxpayer can also qualify for relief by showing reasonable cause and good faith. more...

February 2008 tax compliance calendar
As an individual or business, it is your responsibility to be aware of and to meet your tax filing/reporting deadlines. This calendar summarizes important tax reporting and filing data for individuals, businesses and other taxpayers for the month of February 2008. more...