Tuesday, September 25, 2007

Notes: Federal Tax Research

Tax compliance
Tax compliance consists of the gathering of pertinent information evaluation and classification of such information, and the filing of necessary tax returns.
Tax compliance also includes other functions necessary to satisfy government requirements, such as representation at a client’s IRS(Internal Revenue Service) audit.

Tax planning
Tax avoidance: the legitimate object of much of modern tax practice
Tax evasion: constitutes the illegal nonpayment of a tax and cannot be condoned.
Open transactions: tax practitioner maintains some degree of control over the attendant tax liability because the transaction is not yet completed.
Closed transactions: all of the pertinent actions have been completed; therefore, tax planning may be limited to the presentation of the facts to the government in the most favorable legally acceptable manner possible.

Tax litigation:
Litigation is the process of settling a dispute with another party(IRS) in a court of law(Federal court).

All tax practitioners are regulated by Circular 230, Regulations Governing the Practice of Attorneys, CPAs, Enrolled Agents, Enrolled Actuaries, and Appraisers before the IRS.

Who May Practice:
1. Attorneys
2. CPAs
3. Enrolled Agents (EA)
4. Enrolled actuaries (精算師)

EA is someone who has either passed a special IRS examination or worked for the IRS for five years. EAs have the same rights as attorneys and CPAs to represent clients before the IRS. An EA must renew his/her enrollment card on a three-year cycle.

More EAs:

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