1. Only one penalty for overstepping the bounds.
A tax exempt charitable ("501(c)(3)") organization is prohibited
from allowing any part of its net earnings to inure to the benefit of
a private party. In the past, a violation of this provision could result
in revocation of the organization's tax exempt status. In 1996, Congress
enacted "intermediate sanctions" to punish and therefore deter
engagement in "excess benefit transactions" by imposing excise
taxes on such transactions. In a recent Tax Court case the IRS sought
to impose both the penalty tax and revocation of exempt status. The
Court affirmed the intermediate sanction but rejected revocation, finding
that such a result would be "unusual".
2. IRS reaching out.
IRS has announced two initiatives for better communication with taxpayers.
One is a system for tracking tax refunds online, currently in trial
stage and expected to be fully operational for the 2003 filing season.
Check "Where's My Refund" on the IRS home page (www.irs.gov).
Second, IRS is making it easier to make an appointment with Taxpayer
Assistance Center staff by providing local telephone numbers on its
website (click on "Individuals", then on "New Telephone
Listings for your Local IRS Taxpayer Assistance Office") (The Boston
number is (617) 316-2850). An appointment can be made by leaving a message
for "Everyday Tax Solutions" assistance.
3. New Adjustments to Income
Did you know that there are two new "above-the-line deductions"?
These are adjustments to income which are used in the calculation of
Adjusted Gross Income, like the deductible IRA contribution. They don't
require the use of itemized deductions (Schedule A) and they don't have
any "floor" like Miscellaneous Itemized Deductions. These
two new ones are for: