I’d like to think the majority of you have already heard about the 10% excise tax on tanning services that was pushed through with the health care reform bill.  No? C’mon, even Jersey Shore’s Snooki keeps up to date with her tax law.  (And apparently McCain watches Jersey Shore. Who knew.)

So here’s the deal.  Effective July 1 (just in time for season 2 premiere of the Jersey Shore 2), fees charged by indoor tanning salons specifically for tanning services will be subject to an excise tax of 10%.

Like to get your tanning on at the gym?  As long as your gym doesn’t charge you extra for tanning services, then the excise tax won’t affect you.

This tax is in addition to any excise tax assessed by a particular state. Which now means that New Jersey residents will pay a total of 17% since the garden state also charges a 7% excise tax on these services. < insert Jersey Shore joke here >

The excise tax was implemented in the hopes that it would be enough to persuade tanners get out of the tanning beds due to the associated health risks. But who are they kidding? It’s highly unlikely that the additional 10% will deter anyone from visiting a tanning salon. People that get tans aren’t necessarily choosing between tanning and groceries (dear God I hope not), so the 10% increase just isn’t a big enough jump in price for it to matter to a lot of people. Would you stop tanning if instead of $20 you were paying $22? Didn’t think so. After all, taxing cigarettes got people to quite smoking, right?

McCarthy was one of about 300 UBS clients whose names were turned over to the federal authorities this year as part of the federal court settlement. In this settlement, the bank agreed to provide financial data for clients whose accounts showed signs of tax evasion.

Since Mr. McCarthy agreed to plead gulity at his Sept. 14 hearing, he faces a maximum sentence of five years in prison and $250,000 in fines. He is still be liable for back taxes and penalties due on the unreported income.

With that being said, I think this is as good a time as any for other tax evaders to come clean using the IRS’ voluntary disclosure program.

Let’s take a look at the basic details surrounding this voluntary disclosure program. It essentially allows US taxpayers who are not currently under investigation (let’s face it, you can’t be under investigation and then decide to voluntarily disclose your offshore income) and have not reported taxable income in the past to come forward to avoid criminal prosecution and severe penalties. The tax liability relating to unreported offshore income that is voluntarily disclosed will be settled as follows:

• Taxes and interest due for the prior six years (2003 through 2008) will be assessed. The taxpayer must file or amend all returns and Form TD F 90-22.1, Report of Foreign Bank and Financial Accounts (FBAR). I realize at this point, if you’re aware of the statute of limitations when it comes to tax matters, you may be asking yourself, just how can the IRS assess taxes and interest for a six-year period, isn’t there a three-year statute of limitations? Simple; it’s one of the resolutions offered by the IRS in resolving the offshore voluntary disclosures. Also, if the IRS can prove fraud, then there is no statue of limitations. Oh joy!

• The IRS will assess an accuracy or delinquent penalty for all affected years.

• The IRS will assess a penalty equal to 20 percent of the amount in a foreign bank account or asset value. Under certain circumstances, the penalty can be reduced to five percent.

Apparently, some taxpayers have been doing what the IRS refers to as “quiet disclosures.” They are filing amended returns, reporting the previously unreported offshore income and are paying the related tax and interest on this income all while avoiding penalties. Of course, the IRS warns against this and also states that if the return is selected for examination, the 20 percent penalty offer would not be available. It should also be said that the IRS has identified and will continue to identify amended returns that have been filed with increased income.

Sept 23, 2009 is the last day the program’s settlement offer will be in effect. Taxpayers have until that date to enter into voluntary disclosure agreements. I’ve heard talks of the IRS possibly extending that deadline, but dare I say don’t count on it.

Please see here for a list of FAQs provided by the IRS.

How will this affect tax return preparers? Potentially, these recommendations could focus on a new model for regulation, service and outreach, education and training, and enforcement.

The first part of this effort will focus on fact finding and receiving input from a very large and diverse constituent community that includes those that are licensed by state and federal authorities, which includes enrolled agents, accountants, and lawyers, and even unlicensed preparers and software vendors. Input and dialog will also be sought from consumer groups and taxpayers.

The IRS plans to hold meetings in Washington and around the country later this year. The Commissioner is expected to submit his recommendations to the Treasury Secretary and the President by the end of the year.

Please see the “Tax Professionals” page of the IRS website for more information such as schedules and agendas for upcoming public meetings.

This news should come as no surprise to you since it is completely inline with the IRS’ initiatives to crack down on unethical and noncompliant tax return preparers; one of the first signs of this was the increased tax return preparer penalties. I suspect there will be more programs just like this one. I, for one, am anxious to see what the end result will be. Though I am anxious, I do have a few concerns; for starters, if taxpayers will have the ability to review tax return preparers, what exactly will their review be based on? Normally, taxpayers don’t know exactly what the IRS’ rules and regulations are, which, might I add, is why they employ us. In such a situation, would they simply be reviewing the services provided by the tax professional, just like a regular reviewer would on, say, yelp.com? With that said, what exactly will this review system be based on and who will be doing the review? What are your thoughts? Please share in the comments.