FEDERAL

US Manufacturers Call For Tax Cuts, by Mike Godfrey
Tax-News.com, Washington Lobbyists for the United States manufacturing sector are calling for policymakers to stimulate economic growth by reducing the capital gains tax on business. 

In a panel discussion moderated by economist and CNBC host, Larry Kudlow, National Association of Manufacturers President and CEO, John Engler on Monday joined Loews CEO, James S. Tisch in outlining a proposal to reduce the current 35% long-term capital gains rate to 15%, which they said would unleash trillions of dollars in the economy that are otherwise “locked in” because of the current rate. 

“The current 35% rate on corporate capital gains, which has been in effect since 1986, creates a ‘tax wedge’ that makes many potential transactions uneconomic,” Engler explained. “Reducing the capital gains tax on business will allow corporations to take what are often stale assets and move them into the hands of other businesses who will put them to more efficient use.” 

“The result of a tax reduction would mean potentially billions of additional tax dollars flowing into the federal Treasury,” Tisch added. “Simply put, 15% of something is a lot better than 35% of nothing.”

Nearly Two-Dozen Groups Warn Congress: Avoid 'Stimulus Fairy Tales,' Pass Tax- Rate Reductions ALEXANDRIA, Va., Jan. 29 /PRNewswire-USNewswire/ -- As the U.S. House of Representatives rushed to vote today on so-called stimulus legislation, an open letter to lawmakers from 23 citizen groups cautioned that the current package appeared to "favor wealth redistribution over true economic expansion."  The joint statement was organized by the 362,000-member National Taxpayers Union (NTU).  "Despite claims by its proponents, this plan will not lead to the kind of economic stimulus that has been advertised," the signatories noted.  "Congress has no mechanism for 'creating' additional wealth in America over the short term, as 1970s experiments in tax rebates and spending increases proved.  This plan amounts to taking a bucket of water from the deep end of the pool and pouring it in the shallow end; the result yields neither new water nor a larger pool."  Organizations supporting the statement represent millions of Americans in the conservative community, and included the Council for Citizens Against Government Waste, Americans for Prosperity, the National Tax Limitation Committee, and the Family Research Council. State-and local-level groups, from California to Virginia and points in between, were also signatories.  The letter argues that most elements of the stimulus plans before the House and Senate are not likely to achieve major economic growth, even in the near-term. Among the contentions:

Tax rebates don't translate to an actual tax reduction, and generally amount to a reshuffling of resources the Treasury has already extracted from Americans.

Schemes to allow government agencies or government-sponsored enterprises to expand their mortgage-debt capacities will only increase taxpayer risk in the future.

Tax incentives for small businesses such as enhanced expensing and carryback provisions are praiseworthy, but their temporary nature means their impact will likely be less than advertised.

"If Congress seeks true stimulus that is economically sound, it ought to reduce tax rates and avoid bailing out the housing market," the letter concluded. "Making the lower capital gains tax rate permanent and reducing inordinately high corporate taxes would have a much more stimulative effect than any rearrangement of existing tax revenue."

IRS Warns of New E-Mail and Telephone Scams Using the IRS NameINDIANAPOLIS/LOUISVILLE -
The Internal Revenue Service today warned taxpayers to beware of several current e-mail and telephone scams that use the IRS name as a lure.  The IRS expects such scams to continue through the end of tax return filing season and beyond. 

The IRS cautioned taxpayers to be on the lookout for scams involving proposed advance payment checks.  Although the government has not yet enacted an economic stimulus package in which the IRS would provide advance payments, known informally as rebates to many Americans, a scam which uses the proposed rebates as bait has already cropped up. 

The goal of the scams is to trick people into revealing personal and financial information, such as Social Security, bank account or credit card numbers, which the scammers can use to commit identity theft. 

People whose identities have been stolen can spend months or years - and their hard-earned money - cleaning up the mess thieves have made of their reputations and credit records.  In the meantime, victims may lose job opportunities, may be refused loans, education, housing or cars, or even get arrested for crimes they didn't commit. 

The most recent scams brought to IRS attention are described below.

Rebate Phone Call
At least one scheme using the word "rebate" as part of the lure has been identified.  In that scam, consumers receive a phone call from someone identifying himself as an IRS employee. The caller tells the targeted victim that he is eligible for a sizable rebate for filing his taxes early.  The caller then states that he needs the target's bank account information for the direct deposit of the rebate.  If the target refuses, he is told that he cannot receive the rebate. 

This phone call is a scam.  No legislation has yet been enacted that would allow the IRS to provide advance payments to taxpayers or that determines the details of those payments.  Moreover, the IRS does not force taxpayers to use direct deposit.

Refund e-Mail
The IRS has seen several variations of a refund-related bogus e-mail which falsely claims to come from the IRS, tells the recipient that he or she is eligible for a tax refund for a specific amount, and instructs the recipient to click on a link in the e-mail to access a refund claim form.  The form asks the recipient to enter personal information that the scamsters can then use to access the e-mail recipient's bank or credit card account. 

In a new wrinkle, the current version of the refund scam includes two paragraphs that appear to be directed toward tax-exempt organizations that distribute funds to other organizations or individuals.  The e-mail contains the name and supposed signature of the Director of the IRS's Exempt Organizations business division. 

This e-mail is a phony.  The IRS does not send unsolicited e-mail about tax account matters to individual, business, tax-exempt or other taxpayers. 

Filing a tax return is the only way to apply for a tax refund; there is no separate application form.  Taxpayers who wish to find out if they are due a refund from their last annual tax return filing may use the "Where's My Refund?" interactive application on the IRS Web site at IRS.gov.  The only official IRS Web site is located at www.irs.gov.

Audit e-Mail
Another new scam brought to IRS attention contains features not seen before by the IRS.  Using a technique calculated to get almost anyone's attention, the e-mail notifies the recipient that his or her tax return will be audited.  This is the first scam of which the IRS is aware that uses this to get the victim to respond. 

Unusual for a scam e-mail, it may contain a salutation in the body addressed to the specific recipient by name.  Most scam e-mails seen by the IRS are sent using the same technique used by spammers, in which hundreds of thousands of messages are sent to potential victims based on Internet address.  Because of the volume, the typical scam e-mail is not personalized. 

This e-mail instructs the recipient to click on links to complete forms with personal and account information, which the scammers will use to commit identity theft.

Changes to Tax Law e-Mail
This bogus e-mail is addressed to businesses, accountants and "Treasury" managers.  It instructs them to download information on tax law changes by clicking on a series of links to publications on businesses, estate taxes, excise taxes, exempt organizations and IRAs and other retirement plans.  The IRS believes that clicking on a link downloads malware onto the recipient's computer.  Malware is malicious code that can take over the victim's computer hard drive, giving someone remote access to the computer, or it could look for passwords and other information and send them to the scamster.  There are other types of malware, as well. 

The urls contained in the link are not legitimate IRS Web addresses.  All IRS.gov Web page addresses begin with http://www.irs.gov/ <http://www.irs.gov/>. 

Paper Check Phone Call
In a current telephone scam, a caller claims to be an IRS employee who is calling because the IRS sent a check to the individual being called.  The caller states that because the check has not been cashed, the IRS wants to verify the individual's bank account number.  The caller may have a foreign accent.

In reality, the IRS leaves it entirely up to the individual to choose to cash or not cash a paper check.  The IRS has no business need to know, and does not ask for, bank account or similar information, except when taxpayers indicate on their tax return that they are opting for the direct electronic deposit of their refund.  In that case, however, it is the individual's responsibility to provide the IRS with the correct bank routing and account numbers on the tax return; the IRS does not contact taxpayers to verify the information. 

What to Do
Anyone wishing to access the IRS Web site should initiate contact by typing the IRS.gov address into their Internet address window, rather than clicking on a link in an e-mail or opening an attachment. 

Those who have received a questionable telephone call that claims to come from the IRS may also use the phishing@irs.gov mailbox to notify the IRS of the scam.