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| February 15, 2004 | The
Monthly Newspaper of the NYSSCPA |
Vol.
7, No. 3 |
Breakfast of Champions
Expert Serves Up Tax Menu at Morning Committee Meeting
By Lois Whitehead, Public Relations Manager
A guest speaker at a recent Cooperation with Bankers and Other Credit Grantors Committee meeting gave a broad and in-depth presentation on the developing impact of the Jobs and Growth Tax Relief Reconciliation Act of 2003.
Stephen Valenti, chair of the New York State Society of CPAs’ Tax Division Oversight Committee, spoke on the alternative minimum tax (AMT), enforcement activity at the Internal Revenue Service, and other issues during the Jan. 14 meeting.
He noted that when the legislation was announced the Society issued a position paper on tax simplification from a special subcommittee headed by Alan Weiner.
Sudden Impact
Reviewing the key areas of the legislation, Valenti discussed the marriage penalty, dividends and the AMT, which he estimated would expose a total 32 million people by 2008.
“This is a real problem to a lot of unexpecting people,” Valenti said.
He also reviewed deductions on sport utility vehicles (SUVs) and deductions for people who want to stop smoking, lose weight or have laser or cosmetic surgery. He spent time on the advantages of the flexible spending plan on nonprescription drugs and the concern that has been expressed by the Department of the Treasury regarding amounts claimed by taxpayers for charitable contributions of cars.
The IRS, he said, has a new commissioner who is concentrating on revenue collection and cracking down on abusive tax shelters. Valenti recommended that all CPAs “become more astute in the market segment guides available on the IRS website.”
He further reviewed the pension area, highlighting news on catch-up contributions, guidance on 60-day rollovers and 401(k) rules, matching contributions and cash balance plans. On the latter, he discussed recent cases involving Xerox and IBM.
Turning to New York state, Valenti expressed concern with the new requirement on New York income tax returns to report unpaid state and local use tax on purchases made outside of New York, whether the purchases were made in person or using such tools as the Internet or mail-order houses.
Valenti noted that he and members of the Society’s New York, Multistate and Local Taxation Committee met with New York State Department of Taxation and Finance Commissioner Andrew Eristoff (see story on page 1) to relay concerns of practitioners regarding the complexities of this new provision, with its nine pages of instructions for a single line on form IT-201. The objective of the meeting was to outline the need for the state to issue further guidance to help preparers during tax season.
Valenti concluded his presentation with a look ahead to pending legislation concerning foreign tax provisions, energy, lifetime savings accounts (a Bush administration priority), charitable contributions, new laws for SUVs and Internet taxation, among other issues.
