Red flags that might prompt an IRS audit of a wealthy taxpayer
The Internal Revenue Service is auditing wealthy taxpayers at a higher rate than the general population via it Global High Wealth Industry unit.  Among the red flags that could prompt an audit: property-transfer records without corresponding gift-tax returns and high mortgage-interest deductions. Barrons.com (9/17)        Wealthy taxpayers should consult with their CPAs before engaging in property transfers to insure gift tax returns are filed when necessary.  It is also important to remember that the mortgage interest deduction is only available on a primary residence and one second home and that the aggregate amount of mortgage indebtedness may not exceed $1 million.  Interest paid on indebtedness over these limits is non-deductible personal interest.

Hurricane Victim IRS Filing Extensions

IRS announces extensions and other relief to Hurricane Irene victimsSeptember 2, 2011 – The Internal Revenue Service is providing tax relief to individual and business taxpayers impacted by Hurricane Irene. The IRS has announced that certain taxpayers in North Carolina, New Jersey, New York, and Puerto Rico will receive tax relief, and other locations are expected to be added in coming days following additional damage assessments by the Federal Emergency Management Agency (FEMA).

The tax relief postpones certain tax filing and payment deadlines to October 31, 2011. It includes corporations and businesses that previously obtained an extension until September 15, 2011, to file their 2010 returns and individuals and businesses that received a similar extension until October 17. It also includes the estimated tax payment for the third quarter of 2011, which would normally be due September 15.

Senate finance panel considers retirement, 401(k) reform
The Senate Finance Committee hearing today will consider options for overhauling the retirement investment industry.  Among the options under consideration: the replacement of the 401(k) tax deduction with a flat-rate tax-break; an increase in retirement age; and a change in the method for calculating Social Security benefits. Reuters (9/13), ABC News (9/14)