Feb 2006 Tax Press Releases

Feb 27, 2006

Extra Day To File Taxes For Some

Patriot’s Day Gives Some Taxpayers an Extra Day to File and Pay Taxes WASHINGTON (IRS) — Individuals in six eastern states and the District of Columbia will have an extra day, until April 18, 2006, to file returns and pay any taxes due, according to the Internal Revenue Service. In formal guidance (Notice 2006-23) released today, the IRS said that these taxpayers, served by the Andover, Mass. IRS processing center, will receive an additional day to file and pay because April 17 is Patriot’s Day, a state holiday in Massachusetts. Thus, the April 18 deadline will ap...

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Feb 23, 2006

Tobacco Payments Reporting Clarification

WASHINGTON (IRS) —The Internal Revenue Service is clarifying the information reporting requirements for payments made to owners of tobacco quotas in exchange for the termination of the quotas. For tax purposes, the termination of a tobacco quota is treated as a sale by the quota owner of an interest in land. In exchange for selling their quotas, owners may receive payments over a period of 10 years. The United States Department of Agriculture reports the gross proceeds from the sale, including payments in later years, to the quota owner on Form 1099-S in the year i...

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Feb 21, 2006

Home Builders Energy Credit Guidance

WASHINGTON (IRS) — The Internal Revenue Service today provided guidance regarding the energy efficient homes credit available under the Energy Policy Act of 2005. Under the new provision, an eligible contractor who constructs a qualified new energy efficient home may qualify for a credit of up to $2,000. The credit is available for all new homes, including manufactured homes constructed in accordance with the Federal Manufactured Homes Construction and Safety Standards. The home qualifies for the credit if: · It is located in the United States; · Its const...

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Feb 21, 2006

Homeowners Energy Credit Guidance

WASHINGTON (IRS) — The Treasury Department and the IRS today have issued guidance (Notice 2006-26) on the certification that homeowners may rely on when they claim credits for purchases that make their homes more efficient. During 2006, individuals can make energy-conscious purchases that will provide tax benefits when filling out their tax returns next year. The credit will also be available for purchases in 2007. Manufacturers offering energy efficient items such as insulation or storm windows can assure their customers that their energy efficient items will quali...

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Feb 21, 2006

Coal and Gasification Project Credit Guidance

WASHINGTON (IRS) — The Treasury Department and the IRS today issued guidance for two credits created by the Energy Policy Act of 2005 – the advanced coal project credit and the gasification project credit. Each credit will be allocated by the IRS among applicants certified by the Department of Energy (DOE). The total amount of the coal project credit is $1.3 billion, of which $800 million will be allocated to integrated gasification combined cycle projects and $500 million will be allocated to other advanced coal projects. The taxpayer can claim a credit for 20 perce...

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Feb 17, 2006

Postponed Taxpayer Deadlines For Katrina Victims

Postponed Taxpayer Deadlines For Katrina Victims (Hardest Hit Areas) WASHINGTON (IRS) — The Internal Revenue Service is postponing taxpayer filing and payment deadlines for affected taxpayers hit hardest by Hurricane Katrina. Individual and business taxpayers in the most severely damaged parishes and counties of Louisiana and Mississippi automatically have through Aug. 28, 2006, to file returns and make certain tax payments that had a due date or extended due date on or after Aug. 29, 2005, and on or before Aug. 28, 2006. In addition, the failure to deposit penalty will be waived for tax...

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Feb 16, 2006

Business Taxes: Extension of Time to File

WASHINGTON (IRS) — The Internal Revenue Service has simplified the process for business taxpayers filing for an extension. All business taxpayers who previously filed extension forms 8800, 8736, 7004, and 2758 will now only need to file the revised Form 7004, "Application for Automatic 6-Month Extension of Time to File Certain Business Income Tax, Information, and Other Returns,” to request an automatic extension of time to file. The revised Form 7004 grants taxpayers an automatic six-month extension without the need to file intervening forms. For the 2005 fili...

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Feb 14, 2006

IRS Updates Tax Gap Estimates

WASHINGTON (IRS) — Internal Revenue Service officials announced today that they have updated their estimates of the Tax Year 2001 tax gap based on the National Research Program (NRP). The updated estimate of the overall gross tax gap for Tax Year 2001 – the difference between what taxpayers should have paid and what they actually paid on a timely basis – comes to $345 billion. This figure falls at the high end of the range of $312 billion to $353 billion per year, an estimate released last March. IRS enforcement activities, coupled with other late payments, rec...

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Feb 10, 2006

Hurricane Victims Have More Time to Claim Losses on Prior Year Returns

WASHINGTON (IRS) — Victims of Hurricanes Katrina, Rita or Wilma wishing to claim disaster-related losses on their prior year federal income tax return will have until October 16, 2006, to make this choice, the Internal Revenue Service announced today. Taxpayers suffering disaster-related losses in certain areas of Florida, Alabama, Mississippi, Louisiana and Texas due to the hurricanes can choose to claim those losses on their current or prior year return. The original deadline for choosing this option is the due date of the taxpayer’s current year return. For...

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Feb 08, 2006

IRS Certifies 2006 Toyota Prius Hybrid Vehicle for 2005 Deduction

Washington (IRS) - The Internal Revenue Service has certified the model year 2006 Toyota Prius Hybrid for the clean fuel vehicle deduction. This certification means that taxpayers who purchased a 2006 Toyota Prius new during calendar year 2005 may claim a tax deduction of up to $2,000 on line 36 of Form 1040. The agency stresses that the $2,000 deduction is for tax years 2005 and earlier. Starting in 2006 the deduction is replaced with a credit, which will require a different certification. The tax credit for hybrid vehicles applies to vehicles purchased on or after...

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