Airlines should refund ticket taxes, IRS says

  1. Airlines should refund ticket taxes, IRS says

    The Internal Revenue Service asked airlines to refund to customers the money they paid in federal ticket taxes that the government did not levy. The Federal Aviation Authority stopped collecting the taxes over the weekend because Congress didn’t pass a budget for the agency. But instead of passing the savings to customers, airlines raised their fares. Airlines are sending customers to the IRS for refunds. USA TODAY/Bloomberg

  2. IRS lists Five Tax Scams to Avoid this Summer

    “Hiding income offshore, identity theft and return preparer fraud topped the IRS’s list of tax scams in 2011. The Internal Revenue Service issues an annual list of the top 12 tax scams, known as the “Dirty Dozen.” These scams are illegal and can lead to significant penalties and interest and possible criminal prosecution.” See http://www.irs.gov/newsroom/article/0,,id=173404,00.html for more information and details on these scams.

  3. Trade or Business versus Hobby

    The Tax Court held a taxpayer’s drag racing activities were not conducted for profit within the meaning of IRC Sec. 183 . The taxpayer, along with his two children, established a drag racing team that raced Chevrolet sports cars in local, divisional, and national racing events from which he received $2,150 in cash awards while spending $117,660 for the years in question. After reviewing the list of factors in Reg. 1.183-2(b) for determining whether a profit objective exists, the Tax Court concluded the taxpayer engaged in the activity because of his long-held interest in drag racing, from which he derived substantial personal pleasure, and he had no good-faith expectation of making a profit. Ronald Zenzen , TC Memo 2011-167 (Tax Ct.).

  4. IRS Regulation of Return Preparers

    The IRS began sending letters on 7/7/11 to approximately 100,000 tax return preparers who failed to follow the Preparer Tax Identification Number (PTIN) registration requirements by using either outdated PTINs or incorrectly using social security numbers as the preparer identifier on returns prepared in 2011. The IRS also announced plans to identify preparers who do not sign the returns they prepare (“ghost preparers”) by sending letters later this year to taxpayers who appear to have had assistance with their returns informing them how to file complaints against non-signing preparers. News Release IR-2011-74 .

  5. Payroll surtax meant to be temporary is finally expiring

    A 35-year-old “temporary” payroll tax on employers is expiring. The 0.2% surtax was enacted after a recession in the mid-1970s, and then extended eight times. Ending it will cut taxes by $14 per employee. Hill, The (06/30)