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Headliner Volume 191
February 5, 2007

The Internal Revenue Service has a program that allows about 95 million taxpayers with adjusted gross income under $52,000 to electronically file their federal tax returns for free over the Internet. Free File is available 24 hours a day, seven days a week starting January 16, 2007.

Free File is offered by the IRS in partnership with the Free File Alliance LLC, a group of leading private-sector tax preparation companies. A recent survey showed that of the 15.4 million taxpayers who have used Free File, 94 percent found it easy to use and 97 percent said they would recommend it to others.

Free File is an easy and secure way to file your taxes:

1. Go to IRS.gov and click on the Free File article on the font page.
2. Read the information about the program, then click “Start Now” at the bottom of the page. 
3. Choose a tax preparation company that best suits your specific needs from the list provided or use the interactive “Guide Me to a Service” option to help narrow down the list of companies to fit your tax situation.

 Free File benefits:

• Your return will be received and acknowledged by the IRS via e-mail within 24 hours.
• There is less chance for making errors since the math is done for you.
• Most Free File software guides you step-by-step through the preparation and filing process so you will be less likely to miss a deduction.
• You may get your tax refund quicker, usually within 10-12 days if you use the direct deposit feature.

 Some companies also offer State return preparation. There may be a fee for this service.

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Retailers who offer money services, such as check cashing, money orders, and wire transfers, may be defined as a Money Service Business (MSB) under the Bank Secrecy Act and are subject to reporting and recordkeeping requirements.

§    MSBs register by using FinCEN Form 107, Registration of Money Services Business. 

§    Many MSBs are required to file Suspicious Activity Reports (Form 109 effective 3/31/2007, previously TD F 90-22.56)  

§    All MSBs are required to have anti-money laundering compliance programs and to file Currency Transaction Reports (FinCEN Form 104) to report cash transactions of more than $10,000.

North Dakota

If you would like more information about MSB reporting, please call Cassandra Felton, IRS BSA Specialist at 281-721-7976, or visit these sites:  www.fincen.gov or  www.msb.gov.   For answers to questions about filing Bank Secrecy Act forms, call the IRS-Detroit Computing Center hotline at 1-800-800-2877. 

Minnesota

If you would like more information about MSB reporting, please call  Teresa McGill, IRS BSA Specialist at (630) 493-5190 or visit these sites:  www.fincen.gov or  www.msb.gov.   For answers to questions about filing Bank Secrecy Act forms, call the IRS-Detroit Computing Center hotline at 1-800-800-2877. 

Telephone Excise Tax Refund

** IR-2007-40.  A significant number of filers so far have not taken advantage of the   Telephone Excise Tax Refund. 

** IR-2007-60 Under the law, retailers and other businesses that sell prepaid phone cards for long-distance service usually qualify for the telephone tax refund.

* Fact Sheet 2007-14,  explains the rules for deducting rent and lease expenses as part of a trade or business.

**  W-2c can be filed Online, free. Visit www.socialsecurity.gov/employer. 

* The IRS’  41 Audit Technique Guides (ATG) and industry/profession web pages are excellent sources of tax information.  They are organized by industry group and cover a range of topics about many of the tax issues faced by businesses.

§    Audit Technique Guides include those on retail, auto sales, banking, construction, (dry wall, masonry),  laundromats,  farming, auto body/repair, scrap metal, and various compensation issues.

§    Industry and Profession pages include gas retailers, online auction sellers, real estate, restaurants, and manufacturing.

* Headliner 196: The Work Opportunity Tax Credit and Welfare-to-Work Credit have been extended.

* IR-2007-44 The IRS extended the 2007 deadline until June 30 for restaurant or beverage businesses to elect to participate in the Attributed Tip Income Program.

* Form 2290, Heavy Highway Vehicle Use Tax. In the case of vehicles used and subsequently sold in the same tax period of July 1 through June 30,  The person acquiring the vehicle during the tax period is required to report and pay the tax due for the remaining months of the tax period and is not required to provide the previous owner's Schedule 1. More information is in the Form 2290 instructions.

* FS-2007-15  More people in the U.S. have foreign financial accounts and may have to report their accounts to the government, even if the accounts do not generate any taxable income.  See Publication 4261 , Do You Have a Foreign Bank Account?

* IR 2007-058 IRS   Often imitated, never duplicated...  The IRS reminded taxpayers that the address of the official IRS government Web site is www.irs.gov. Taxpayers may be confused by Internet sites that contain some form of the Internal Revenue Service name acronym with a .com, .net, .org or other designation in the address instead of .gov.  These sites are not the official IRS Web site.  Also, Taxpayers who receive an unsolicited e-mail purporting to be from the IRS should never click on any links in the message, open any attachments or provide any personal or financial information to the sender.

* The U.S. Immigration and Customs Enforcement (ICE) and IRS Criminal Investigation Division announce the indictment of three executives on charges related to illegal aliens and taxes. Get details in the news release issued by ICE.