Is the economy getting better or worse? Well, it depends on who you ask. Two recent polls show that Americans are beginning to feel a bit better about the economy, while CEOs are feeling gloomy.

For the first time in almost a year, more Americans are saying the economy is better (28 percent) than those who say it’s getting worse (23 percent), according to a CBS News/New York Times poll of 1,154 adults. Since October, the percentage of Americans who say the economy is getting better has increased 14 percentage points. Poll analysts say the increase in optimism may be related to the drop in the unemployment rate, combined with recent positive economic news. For example, jobless claims dropped, inflation has been trending lower, and global stocks have been gaining ground over the last few weeks.

Before this poll, the last time Americans had a net positive outlook on the economy was last February. They’re not exactly upbeat as a whole, however. Four out of five American say the economy is bad.

CEOs aren’t too pleased either. According to a new annual survey by PricewaterhouseCoopers, nearly half of 1,258 CEOs polled think the global economy will sink in the next year. Only 15 percent think it will improve.

The poll shows that while the global economy as a whole may not be inspiring confidence, CEOs are saying their own businesses should grow. In fact, CEOs are nearly three times more confident in their own company’s growth prospects than they are in the growth of the global economy.

“The optimism that had been building cautiously since 2008 has begun to recede,” said Dennis Nally, Chairman of PwC International Ltd., in a statement. “The ongoing debt crisis in the European Union, along with other lingering economic uncertainties, has deflated confidence in business growth around the world.” The biggest decline in confidence was in Western Europe. In the United States, CEOs are showing “measured optimism,” the survey says, with 60 percent planning to hire this year.

Full Article: http://www.accountingweb.com/topic/cfo/economy-americans-feeling-better-ceos-feeling-gloomy

The Internal Revenue Service (IRS) is bracing for one of the biggest challenges it has faced in years: the implementation of the massive new health care legislation.

A few select provisions in the Patient Protection and Affordable Care Act of 2010 – the Affordable Care Act (ACA) for short – have already taken effect; however, the most controversial sections of the new law are not scheduled to kick in until 2014. According to a new report released by the Treasury Inspector General for Tax Administration (TIGTA) on January 5, 2012, the IRS Appeals Office is gearing up for the anticipated onslaught.

The TIGTA report indicates that the new law’s impact on appeals should be minimal for the next two years, but it expects the floodgates to open in 2014. The IRS Appeals Office has made some initial preparations, including reassigning some of its staff to the IRS ACA division, as well as creating an internal website with links to ACA-related IRS training, guidance, and other resources.

“Because of the potential for the ACA to affect most taxpayers, effective planning is critical to ensuring Appeals’ readiness to prepare for this legislation and resolve taxpayer requests in a timely and effective manner,” said J. Russell George, Treasury Inspector General for Tax Administration, in a press release.

The latest TIGTA report follows up on a mostly positive audit conducted last year. In that audit, TIGTA determined that the IRS appears to be on track in meeting the new technological challenges it can expect to face as a result of the health care legislation.

Under several key provisions in the new law, individuals who are not eligible for Medicare or Medicaid must obtain minimum health coverage, while businesses are generally required to offer minimum coverage to their employees. The IRS bears the burden of collecting penalties from taxpayers and business entities that fail to live up to their responsibilities. In addition, health insurance coverage will become available through exchanges operated by the individual states.

Currently, a qualified small business can claim tax credits for providing health insurance coverage to its employees. For 2014 and thereafter, an employer may benefit from tax credits offsetting part of the cost of offering coverage through one of the state-run exchanges.

The IRS expects to face numerous appeals on these issues as both individuals and employers grapple with the new ACA rules. In the meantime, what can you do? Tax professionals are advised to educate themselves well in advance of 2014 in order to be responsive to their clients’ needs.

Full Article: http://www.accountingweb.com/topic/fitness/irs-gears-health-care-law-appeals

Lindsay Lohan has found herself in compromising positions before, and now she’s landed in another one. A report has surfaced that the twenty-five-year-old actress, who rocketed to fame in the 2004 film Mean Girls, is on the hook for almost $100,000 in back taxes owed to the Internal Revenue Service (IRS).

According to entertainment outlet TMZ, the IRS just filed a lien against Lohan for $93,701.57 because she never paid her income taxes for 2009. If Lohan fails to clean up this latest mess, the IRS could go after her worldly possessions – including bank accounts, real estate, and any other personal property – in its efforts to collect the debt.

Lohan has been in the news recently for all the wrong reasons. She pleaded guilty last May to stealing a $2,500 necklace from a Venice, California, jewelry store at a time when she was already on probation stemming from two drunk driving convictions in 2007. As per a judge’s order, Lohan is currently performing community service and attending therapy sessions after violating her probation. Prosecutors said that she missed twelve of twenty scheduled community service days, and cancelled fourteen of nineteen of her therapy appointments.

In addition, a member of the paparazzi is now suing Lohan, alleging that he was severely injured in 2010 when the vehicle she was riding in crashed into his car. The vehicle was being driven by Lohan’s assistant.

Ironically, the tax lien dates back to 2009, a year in which Lohan’s only cinema work was her appearance in Labor Pains. The movie, which was originally intended for theatrical release, went straight to TV, although it did run in theaters in a few foreign countries.

A representative for Lohan told TMZ that she was completely unaware of the tax problem, but she expects to resolve it quickly. The IRS hasn’t issued any official comment on the matter.

At least there’s some good news for Lohan: Thanks to posing in a popular men’s magazine for the January/February 2012 issue, she recently received a payday of close to $1 million. The cash might be used to pay off her tax debt. She is also in talks to portray Elizabeth Taylor in a new movie.

Full Article: http://www.accountingweb.com/topic/bad-guys-news/irs-being-mean-lindsay-lohan

If you are involved with a not-for-profit organization, you may wish to check out a Workshop for Small and Medium-Sized 501(c)(3) Organizations given by Internal Revenue Service and hosted by Central Indiana community Foundation. Cost is $20.  Registration deadline is Feb 22.   
Contact:  Central Indiana Community Foundation.
Date:             February 29, 2012. 
Time:              9AM-4:30PM  (lunch included)
Place:             Barnes & Thornburg
                          5^th floor Auditorium
                        11 S Meridian St
                        Indianapolis, IN 46204

WASHINGTON (AP) – If you earn less than $200,000 a year, there’s a strong chance you don’t have to worry about an Internal Revenue Service audit. But if you make more than $1 million annually, the odds have been rising that you’ll be hearing from the tax man.

The IRS released figures Thursday showing that 12 percent of millionaire earners were audited last year. That’s up from 8 percent in 2010 and 6 percent in 2009.

The data shows that for those making under $200,000, the rate has stayed steady at around 1 percent in recent years.

IRS officials said the growing audit rate for high earners is aimed at demonstrating that the tax code is being enforced fairly and is unrelated to President Barack Obama’s recent proposals to boost taxes on the rich. The White House and congressional Democrats are expected to continue taking similar populist stances with the approach of this November’s presidential and congressional elections.

Steven Miller, deputy IRS commissioner for services and enforcement, said in an interview that the higher audit rates for the highest earning individuals are designed to “assure that those at the lower end of the spectrum know that those at the higher end of the spectrum are subject to the same rules and enforcement as everyone else.”

“We base our audit decisions on tax issues, nothing else,” said IRS spokeswoman Michelle Eldridge. “We don’t play politics here.”

Four percent of individuals earning $200,000 and up were audited in 2011, up from around 3 percent the previous five years.

The IRS only provided data for three categories of individuals’ income: those earning under $200,000 annually, those making $200,000 and up and those earning $1 million and up.

Overall, the agency says, it audited nearly 1.6 million of 141 million individual returns in 2011, or just over 1 percent. That rate has been growing gradually and is almost double the 0.6 percent audited in 2001, the IRS said.

Only about a quarter of IRS’ audits involve dreaded meetings between taxpayers and agency officials. The rest are carried out using letters.

In 2010 — the most recent year available — more than 8 in 10 individuals audited ended up paying additional taxes.

Altogether, IRS enforcement efforts — including audits, legal action and other tactics — resulted in an extra $55 billion being collected. That’s down almost $3 billion from 2010, which Miller blamed on a falloff in estate taxes and corporations writing off their losses.

That $55 billion was a small part of the $2.3 trillion the agency collected in revenue last year.

The IRS also audited a greater proportion of large corporations than smaller ones, the data shows.

Last year, 1 percent of corporations with assets under $10 million were audited. Among corporations with assets of $250 million and up, 28 percent were audited.

The IRS figures also showed that:

— In 2011, the agency garnisheed wages or seized money from bank accounts 3.7 million times, put liens on property 1 million times and seized 776 pieces of property.

— Seventy-seven percent of individual returns were filed electronically last year, up from 69 percent in 2010.

— Seventy percent of callers to IRS taxpayer information telephone lines got through, slightly less than the 74 percent who reached someone in 2010. Miller attributed that to budget cuts to the agency.

— The information IRS officials dispensed over the phone to taxpayers was accurate 93 percent of the time, the same as the previous year.

— The IRS website, http://www.irs.gov, was visited 319 million times in 2011, a slight increase.

The data was presented by federal fiscal years, which begin on the previous Oct. 1.

Copyright 2012 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.