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IRS Turns to CCH for Reliable Sales Tax Data
CCH ZIPSales, CCH IntelliConnect Enable IRS to Create Comprehensive Sales Tax Tables for 2010 Filing Season
(RIVERWOODS, ILL., June 8, 2009) – With the itemized deduction for state sales taxes extended through 2009, the Internal Revenue Service has again selected CCH to provide the sales tax data for use by all taxpayers who are eligible to claim the deduction. This marks the fifth consecutive year that CCH has been chosen by the IRS as its selected provider of sales tax information. CCH, a Wolters Kluwer business, is a leading provider of tax, accounting and audit information, software and services (CCHGroup.com).
The information for the IRS tables, which taxpayers use to determine their optional sales tax deduction on their tax return, is derived from numerous CCH workflow tools, including CCH’s CorpSystem ZIPSales® Database as well as customized research using CCH® IntelliConnect™.
“We are committed to providing the IRS with accurate rate and taxability information for every ZIP Code in the country, and every change that’s occurred since the beginning of the year,” said CCH President Mike Sabbatis. “Providing this multi-jurisdictional sales tax information strengthens our long-standing relationship with the IRS and provides us with the opportunity to directly support millions of taxpayers, as well as the tax professionals they rely on, in making informed decisions based on CCH’s authoritative information.”
The American Jobs Creation Act of 2004 allowed individuals to choose to deduct their state and local sales tax rather than their state and local income tax on their federal tax return for the 2004 and 2005 tax years. The provision was later extended by the Tax Relief and Health Care Act of 2006 to cover the 2006 and 2007 tax years, and further extended through December 31, 2009 with the Emergency Stabilization Act of 2008.
Using the IRS tables, taxpayers determine whether to deduct their state and local sales tax versus their state and local income tax without having the burden of saving all their receipts to tally the sales tax they actually paid. For the 2007 tax year, the most recent year for which data is available, about 11.8 million individuals claimed the general sales tax deduction. This is an increase of 7.4 percent from 2006.
IRS Relies on Several Key CCH Products
To furnish the IRS with comprehensive sales tax information, CCH provides the IRS with sales tax detail for all U.S. ZIP Codes using CCH’s CorpSystem ZIPSales Database. The IRS also relies on CCH data relating to the taxability rules for more than 500 Bureau of Labor Statistics spending categories.
Additionally, CCH tools used to collect sales tax information for the IRS tables include a taxability matrix to determine if specific products are subject to sales or use tax in each taxing jurisdiction, and CCH IntelliConnect, the industry’s most advanced tax and accounting research platform.
With this taxability and tax rate information for the various state and local jurisdictions, the IRS is able to determine the average amount of sales tax paid in each jurisdiction as a function of both income and family size. These averages appear in the IRS tables as a convenience for taxpayers who prefer not to rely on receipts to determine how much sales tax they pay.
About CCH, a Wolters Kluwer business
CCH, a Wolters Kluwer business (CCHGroup.com) is a leading provider of tax, accounting and audit information, software and services. It has served tax, accounting and business professionals since 1913. Among its market-leading products are The ProSystem fx® Office, CCH® TeamMate, CorpSystem®, CCH® IntelliConnect™, Accounting Research Manager® and the U.S. Master Tax Guide®. CCH is based in Riverwoods, Ill.
Wolters Kluwer is a leading global information services and publishing company. The company provides products and services for professionals in the health, tax, accounting, corporate, financial services, legal, and regulatory sectors. Wolters Kluwer had 2008 annual revenues of €3.4 billion, employs approximately 20,000 people worldwide, and maintains operations in over 35 countries across Europe, North America, Asia Pacific, and Latin America. Wolters Kluwer is headquartered in Amsterdam, the Netherlands. Its shares are quoted on Euronext Amsterdam (WKL) and are included in the AEX and Euronext 100 indices. Visit www.wolterskluwer.com for information about our market positions, customers, brands, and organization.
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