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Tax Letter
The IRS Restructuring and Reform Act of 1998: Summary of the Key Provisions
Just the other day, on July 22, his Excellency the President signed into law the above mentioned Act. In basic terms, the Act brings fourth significant changes in not only the management but also the oversight of the IRS. This letter will focus on the Acts' key provisions.
Capital Gains Holding Period
Previously, non-corporate tax payers' capital gains have been exposed to a three-tier structure -- with one of these distinct levels recommending a 28% mid-term rate for capital assets held for 12 consecutive months (but for less than 18 months). This new Act does away with this particular mid-term rate and replaces it with a maximum rate of 20% for gains raked in by non-corporate taxpayers from the sale of some capital assets held for 12 consecutive months (and beyond). It is important to note that before the enactment of this Act, the 20%...
Joint Income Tax Returns
Under this Act, a spouse will find it easier to set up innocent spouse status. An innocent spouse could be defined as that spouse who at the time of signing the joint return is unaware that the tax attributable to the other spouse suffers an understatement. As per the provisions of the Act, it will be possible for a spouse to be relieved of a tax deficiency liability if the said person can establish that they:
Filed a joint return with an understatement of taxes owed; the understatement must result from erroneous items of the spouse; and the person applying for innocent spouse relief must not have known about the errors caused by the other spouse. (United States General Accounting Office, 1999, p. 14)
In that regard, therefore, the spouse does not need to demonstrate that certain AGI percentage thresholds have been…
References
Berson, S.A. (2001). Federal Tax Litigation. New York, NY: Law Journal Press.
United States General Accounting Office. (2002). IRS Management: IRS Faces Challenges as it Restructures the Office of the Taxpayer Advocate. Washington, DC: General Accounting Office.
Because the home country is not required to reimburse foreign depositors for losses, there is no corresponding financial penalty for lax supervision; there is, though, a benefit to the country with lenient regulatory policies because of increased revenues generated and the employment opportunities these services provide (Edwards 1999). Furthermore, banks seeking to conduct multinational business are attracted to countries where incorporation laws and the regulatory framework offer less regulatory oversight
As Geisel (2004) notes: Income-tax deductions are worth the most to high-bracket taxpayers, who need little incentive to save, whereas the lowest-paid third of workers, whose tax burden consists primarily of the Social Security payroll tax (and who have no income-tax liability), receive no subsidy at all. Federal tax subsidies for retirement saving exceed $120 billion a year, but two thirds of that money benefits the most affluent 20% of
awarding audit contracts by U.S. government departments and agencies Audit Management Red Rationale for and Objectives of the project main and secondary Desktop or literature search Rationale for Search Methodology LITERATURE/DESKTOP RESEARCH Authoritative sources Desktop Findings Justification for audits Evolving role of auditors Types of audit contracts Understanding the Audit Process Best practices and benchmarking Terminology Case Studies Audit management is a fundamental element in government accountability, control and performance management. Certainly there is justification within the Federal government to conduct audits of contracts for the