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MAY 21, 2008

Editor's Note

This week, we are carefully watching the unfolding of the "Amazon Tax" issue in New York as Amazon takes on the Empire State over the definition of nexus. Meanwhile, the IRS gets its hands slapped by TIGTA regarding mishandling of fee assessments for installment payment programs, and taxpayers who are finding that their rebate/stimulus payments were deposited into IRA accounts can now jump through a few hoops to free the money from the tax-deferred account without paying a penalty.

Gail Perry, CPA
Managing Editor
editor@accountingweb.com


TIGTA review shows IRS charged incorrect fees for installment agreements
Each year, the Internal Revenue Service initiates approximately 1.5 million installment agreements with taxpayers allowing them to pay delinquent Federal tax in installment payments. The Treasury Inspector General for Tax Administration (TIGTA) has determined that the user fees charged taxpayers were set incorrectly and were sometimes waived without justification, and some taxpayers were charged duplicate fees.

Overstock drops Web affiliates in fallout over NY sales tax law
On the heels of Amazon.com suing the State of New York over a new tax law aimed at online retailers, Overstock.com has cut its ties with New York affiliates, saying it will no longer do business with Web site owners in the state who get commissions for referring customers to its site.

Election Watch: Pressure mounts for McCain to release tax returns
The McCain campaign's decision to withhold Cindy McCain's tax returns is drawing criticism from across the political spectrum. Editorials in both the Washington Post and Washington Times have echoed calls for the McCain campaign to release Cindy McCain's tax returns.

Direct deposit stimulus payments to IRAs may be withdrawn penalty-free
When this year's rebate/stimulus payments are deposited to an IRA or one of certain other tax-favored accounts, the IRS has ruled that the taxpayer may withdraw an amount less than or equal to the amount of the stimulus payment without having to pay interest or incurring a penalty.

Six Chicago defendants found guilty in tax fraud trial
Six defendants were convicted Monday after participating in a nationwide tax scheme that enabled 650 wealthy taxpayers to cheat the government out of $60 million.

Complex tax break on hybrids causes headaches for IRS
Some taxpayers erroneously claimed an alternative motor vehicle credit on leased cars, tried to claim it for cars that did not qualify, or claimed more than the maximum $3,150, according to a new government report.

Blog: Love Your Greencard? You'd better...
H.R. 6081, The "HEROES EARNINGS ASSISTANCE AND RELIEF TAX ACT OF 2008" has a hidden agenda that screws you, the Greencard holder, out of all your hard-earned money when you leave the U.S. to return to your home country....

Read Liz Zitzow's Offshore Taxation blog and add your own comments!!

Blog: New York Taxes Internet Sales - Register Now or Else
New York offers limited amnesty regarding uncollected sales tax to merchants shipping products to New York State customers. Register before June 1, 2008. New York State just hit Amazon.com, big time, for unpaid sales taxes even though Amazon does not have a physical location in the state. Amazon is suing, claiming the New York law is unconstitutional based on a 1992 U.S. Supreme Court ruling that claims states are prohibited from requiring out of state retailers to collect sales tax unless the company has a physical presence in the state. Quill vs North Dakota Watch this closely. This will be a landmark decision. If NY wins, then two things will happen....

Read Tax Mama's blog and add your own comments!!

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