More On Tax Planningfrom The Advisor's Professional Library
- Taxation of Real Estate Real estate may be used to shelter income and may offer certain tax benefits. However, the type of real estate investment may result in different tax treatment. Learn how to use these investments to help your clients.
- Health Insurance: Health and Medical Savings Accounts A Health Savings Account is a trust created exclusively for the purpose of paying qualified medical expenses of an account beneficiary. Although they are popular, they are not without their pitfalls and the regulations can be complicated. Learn more about how to avoid federal taxation on the accumulation and distributions of HSA.
For many advisors, especially those who are not accountants by trade or education, the federal tax code with its constant updates and private letter rulings is a black hole. Even those who keep their hand in the tax return preparation business find it a challenge to stay current. For those without the letters "CPA" after their name, it can be mindboggling.
To help shed some light into that black hole, Investment Advisor arranged with the editors of The CPA Journal, the official publication of the New York State Society of CPAs, to reprint an article from its July 2005 issue that lists in 20-question format various online resources.--James J. Green
1. What resources for tax information exist on the Internet? There are three basic sources: subscription-based Web sites, online professional discussion groups, and specialty sites in taxation.
Fee-based tax research sites available to paid subscribers include the following:
- Bureau of National Affairs (www.bna.com)
- Commerce Clearing House (http://tax.cchgroup.com/default)
- Kleinrock (www.kleinrock.com/taxsuite/Index.aspx)
- Lexis/Nexis (www.lexis.com)
- Practitioner's Publishing Company (http://ppc.thomson.com/sitecomposer2/)
- Research Institute of America (ria.thomson.com)
- Tax Analysts (www.taxanalysts.com)
- Westlaw (www.westlaw.com)
With the increasing popularity of the Web, tax professionals have developed a forum for interaction, including the posting of questions and answers for peers to provide feedback and opinions. For example, Taxsites (http://taxsites.com) has a grid of topics for tax, accounting, and payroll issues. Another site, Accountants World (www.accountantsworld.com/default.aspx), is open to anyone, but only members may post questions. Specialty sites featuring legislative and regulatory resources, government-sponsored and proprietary, are discussed below.
2. What does the IRS Web site offer? The IRS's Web site (www.irs.gov) provides several resources. Any federal tax form (from 1992 onward) can be downloaded, with accompanying instructions, as well as the IRS's publications, Treasury Regulations, weekly Internal Revenue Bulletins (IRB), and the audit technique for various businesses. Users can use the IRS Newsstand feature to subscribe to the IRS Daily Digital e-mail newsletter. The IRS Newsroom provides briefings and recommendations on tax-related topics. The IRS's Web site can also be searched from the U.S. government's official Web portal (www.firstgov.gov), which allows access to other federal agencies' Web sites.
3. Where can the Internal Revenue Code and Treasury Regulations be found? The site www.fourmilab.ch/ustax/ustax.html outlines the code sections in sequential order and has a word and phrase search feature. Title 26, the Internal Revenue Code, can also be found within the general legislative site (http://uscode.house.gov) or on the site http://straylight.law.cornell.edu/uscode/html/uscode26. Treasury Regulations can be searched on the GPO Access site (www.access.gpo.gov/nara/cfr/waisidx_03/26cfrv1_03.html).
There is an IRS Index for the tax regulations (www.irs.gov/individuals/article/0,,id=98137,00.html) and for the plain-language regulations (www.irs.gov/taxpros/content/0,,id=103728,00.html).
4. Where can information on proposed tax bills in Congress be found? Tax-related legislative information pending in the U.S. House of Representatives and the Senate can be found at the House Ways and Means Committee (http://waysandmeans.house.gov), Senate Finance Committee (http://finance.senate.gov), and the Library of Congress's "Thomas" legislative portal (http://thomas.loc.gov). Because the two houses of Congress work independently, differences in proposed legislation will be forwarded to the Joint Committee on Taxation (www.house.gov/jct/) for reconciliation. Recent legislative highlights are at tax.cchgroup.com/news/legislation.
5. What sources offer access to IRS administrative pronouncements? Tax Links (www.taxlinks.com) contains links to published IRS Revenue Rulings from 1954 through January 2003 and Revenue Procedures from 1995 on. For private letter rulings go to (www.irs.gov/foia/lists/0,,id=97705,00.html) and Internal Revenue Bulletins (www.irs.gov/businesses/lists/0,,id=98230,00.html). Other resources for pronouncements include www.legalbitstream.com and www.smbiz.com.
6. What reference resources exist for estate and elder planning? Two proprietary sites for estate planning can be found at www. estateplanninglinks.com and www.estateattorney.com. The U.S. Government Administration on Aging (www.aoa.gov) has published a public service site for elders. Another resource is the National Association of Financial & Estate Planning (www.nafep.com).
7. What sites are recommended for state tax information? Two all-inclusive sites are Tax Sites (www.taxsites.com/state.html) and Sister States (www.sisterstates.com). The Federation of Tax Administrators (www.taxadmin.org) and links on the IRS's site (www.irs.gov/businesses/small/article/0,,id=99021,00.html) can assist also.
8. Where can one look when researching tax strategies for investment and business real estate holdings? If seller financing is involved, for applicable federal rate information, www.pmstax.com/afr/index.shtml can be utilized. When one looks for calculators for mortgages in various payment forms, useful locations are www.bankrate.com/brm/amortization-calculator.asp and http://ray.met.fsu.edu/~bret/amortize.html. If a section 1031 exchange is being considered, http://1031exchangetax.com can be a useful site.
9. Where can judicial information be researched for tax cases? The United States Tax Court Web site (www.ustaxcourt.gov) allows users to search cases from May 1986 to the present. Links to different federal and state courts can be found at www.uscourts.gov. Legalbitstream (www.Legalbitstream.com) features a database to federal tax-related cases. U.S. Supreme Court decisions can be searched from www.findlaw.com/casecode/supreme.html.
10. What professional accounting organizations have tax-related resources on their Web sites? The AICPA (www.aicpa.org/members/div/tax/index.htm) and the NYSSCPA (www.nysscpa.org/taxresourcesa.htm) have sections devoted to taxation resources, as does the National Association of Tax Professionals (www.natptax.com).
11. Which Web sites offer international tax information? To develop a working knowledge of foreign government tax information, visit http://inter-lawyer.com/tax/laws. This site provides direct access to foreign tax departments. An alternative approach is to translate foreign-language Web sites (e.g., the German Tax Department) into English through an online translation tool found at www.babelfish.altavista.com. Money magazine's online currency converter can be helpful in converting foreign currency to U.S. dollars (http://money.cnn.com/markets/currencies).
12. What tax material is available from law school libraries? Internet users can access vast sources of information from numerous law school libraries, such as the Washburn University School of Law (www.washlaw.edu/subject/taxation.html), the USC Law Legal Journals Listing (http://lawWeb.usc.edu/library/resources/journals.html), and the Villanova University School of Law Library (www.law.villanova.edu/library/researchguides/taxdocuments.asp. A recommended tax resource is the Legal Information Institute of Cornell University (www.law.cornell.edu).
13. Where can information be found about specific charitable organizations when a donation is being considered? Philanthropic Research, Inc. (www.guidestar.org/search/index.jsp), provides specific financial and tax information about charitable organizations to evaluate an organization before donating (see also www.charitynavigator.org). The comparable IRS site is www.irs.gov/charities/contributors/index.html. An annual publication from the New York State Attorney General's Office, "Pennies for Charities" (www.oag.state.ny.us/charities/charities.html), outlines the portion of income received by specific charities after administrative expenses. The Better Business Bureau runs www.give.org, while the National Center for Charitable Statistics (http://nccsdataWeb.urban.org/FAQ/index.php?category=31) makes useful data available.
14. When preparing IRS Form 433-A (Collections Statement for Individuals), where are the tables of IRS allowances for expenses located? When negotiating an offer in compromise or an installment payment arrangement, the IRS has established maximums for the following expense categories:
- Transportation, divided into two subcategories: ownership or lease of a vehicle is (used to generate earnings), and the operational costs of the automobile (www.irs.gov/businesses/small/article/0,,id=104623,00.html).
- Housing and utilities (www.irs.gov/businesses/small/article/0,,id=104696,00.html).
- Miscellaneous expenses, such as apparel and services; food; housekeeping supplies; and personal care products or services (www.irs.gov/businesses/small/article/0,,id=104627,00.html).
The IRS TRAC Web site (http://trac.syr.edu/tracirs/) provides detailed data about IRS civil and criminal enforcement.
15. Where is information about asset valuation located? There are several suggested sites:
- For historical price data on stocks, visit http://bigcharts.marketwatch.com/default.asp or http://finance.yahoo.com.
- For the valuation of tangible assets such as motor vehicles, boats, and planes, visit www.nadaguides.com/autohome2.aspx?
Lnk=1&wSec=10&wPr=0&wPg=2111 or www.kbb.com.
- For collectibles, visit http://collectibles.about.com/library/articles/blpriceguideindex.htm, www.orionbluebook.com/orion/
index.asp, or http://search.sothebys.com.
16. Where can information about the laws affecting the formation and operation of not-for-profit organizations be found? The following Web sites address the legal and tax issues facing exempt organizations:
- An "online compendium of federal and state regulations" for nonprofits is at www.muridae.com/nporegulation/index.html.
- Pfau Englund nonprofit law is at www.nonprofitlaw.com
- New York State Law Department: Charities Bureau is at www.oag.state.ny.us/business/not_for_profit.html.
17. What online tax resources are available from the Government Printing Office (GPO)? The Federal Register (www.gpoaccessgov/fr/index.html) is an authoritative source of information for proposed tax regulations from 1994 to the present.
18. What accounting publications can be read online? The list includes:
- Journal of Accountancy (www.aicpa.org/pubs/jofa/joahome.htm).
- The CPA Journal (www.cpaj.com).
- The Practical Accountant (www.Webcpa.com).
- The National Tax Journal (http://ntj.tax.org) contains an online database, although the most recent articles are available only to members.
- The site www.findarticles.com includes the aforementioned publications and others which contain periodic tax updates.
19. Which Web sites could be considered the best tax links? The following are some of the best:
- Accountants World (www.accountantsworld.com/default.aspx).
- American Bar Association (www.abanet.org/tax/sites.html).
- ELA Web Portal (home.att.net/gallgosp/tax.htm).
- Findlaw (www.findlaw.com/01topics/35tax/index.html).
- Legalbitstream (www.legalbitstream.com).
- Quickfinder (www.quickfinders.com/links.asp).
- Tax and Accounting Sites Directory (www.taxsites.com).
- Tax Topics (www.taxtopics.net).
- Tax World (www.taxworld.org).
- Virtual Chase-Tax (virtualchase.com/resources/taxation.shtml).
20. What other qualities should be considered when checking tax resources on the Internet? Stability and consistency. Some organizations have created and promoted Web sites only to abandon them. Even some of the 90 sites listed above may not exist in six months. The best advice is to always check the date of the last revision, particularly at proprietary sites.
Peter A. Karl III, CPA, JD, is a partner with the law firm Paravati, Karl, Green & DeBella, in Utica, New York, professor of law and taxation at the State University of New York--Institute of Technology (Utica-Rome), and author of www.1031exchangetax.com.