Showing posts from March, 2006

2006 Auto Depreciation Limits

Guidance Issued on Vehicle Depreciation Deduction Limits (Rev. Proc. 2006-18)

Tables indicating limitations on depreciation deductions for owners of passenger automobiles, including electric automobiles, trucks and vans first placed in service during calendar year 2006, have been issued by the IRS. Also provided are tables indicating the amounts to be included in income for vehicles first leased during calendar year 2006.

For passenger automobiles first placed in service in 2006, the depreciation limitations for the three tax years are $2,960, $4,800 and $2,850, respectively and $1,775 for each succeeding year. For trucks and vans first placed in service in 2006, the depreciation limitations for the three tax years are $3,260, $5,200 and $3,150, respectively. The limitation is $1,875 for each year thereafter. For electric automobiles first placed in service in 2006, the depreciation limitations for the three tax years are $8,980, $14,400 and $8,650, respectively, and $5,225 for each yea…

IRS Audits up 21% report that just over 1.2 million individual income tax returns were audited in fiscal year 2005, according to a report released March 17, 2006 by the Internal Revenue Service.

That represents a 21 percent increase from a year earlier. That follows a 19 percent increase in audits in 2004.

The IRS also noted that the number of audits of high-income taxpayers -- defined as those with income of $100,000 or more -- reached 219,208, the highest figure in 10 years.

A table detailing individual return audits showed that the income groups with the highest percentage of audits were taxpayers who reported income under $25,000 and taxpayers who reported income between $100,000 and $200,000. Approximately 1.5 percent of returns reporting income under $25,000 were audited; while 1.41 percent of returns reporting income between $100,000 and $200,000 were audited.

IRS Hires Collection Agencies

Collection Agencies to Hassle Taxpayers

The Internal Revenue Service awarded contracts on March 9, 2006 to three firms to participate in the first phase of its private debt collection initiative.

The firms are:

The CBE Group Inc., Waterloo, Iowa.
Linebarger Goggan Blair & Sampson, LLP, Austin, Texas.
Pioneer Credit Recovery, Inc., Arcade, N.Y.

The Linebarger firm has been collecting money for the government and prides itself in tenacity. Any taxpayer contact by these collection agents should reveal nothing and hang up the telephone.

HR Block Sued by NY Attorney General

HR Block Sued by NY Attorney General

More than half a million eager savers signed up for H&R Block's Express IRA product in recent years, and plenty of them are probably wondering how to unravel that decision now.

With its steep fees and low interest rates, H&R Block's retirement-savings product generally depleted account balances instead of building nest eggs, New York Attorney General Eliot Spitzer charged in a lawsuit filed Wednesday. See full story.

The product's fees exceeded the interest paid for 85% of Express IRA customers overall, the lawsuit said.

NJ Supreme Court rules to limit rent-to-own interest rates to 30%

NJ Supreme Court rules to limit rent-to-own interest rates to 30%

The state Supreme Court ruled on March 15, 2006, that the rent-to-own industry is subject to the state's 30 percent interest rate cap.

Groups such as New Jersey Public Interest Research Group have contended the rent-to-own industry charges customers, mostly the urban poor, as much as 152 percent interest per year, though state law prohibits charging more than 30 percent interest.

The court mulled whether the rent-to-own industry was subject to that 30 percent cap and decided that based on the law's language and established principles of statutory interpretation, that Rent-A-Center's rent-to-own contracts are subject to the law.

The ruling reinstates a lawsuit filed against the company by a Camden County woman.

Supreme Court Debates Tax Giveaways for Business

The Supreme Court considered on March 1, 2006 whether taxpayers can challenge lucrative tax breaks that elected officials give businesses as incentives to expand or relocate. The Court's decision in the case brought by DaimlerChrysler could have a significant effect because nearly every state uses billions of dollars in tax breaks to attract companies. At issue is whether taxpayers who lost their homes and businesses have a right to bring a lawsuit and, if so, whether an investment tax credit is constitutional.
Click Here for the full Associate Press article.