Here are some highlights from the May 1970 issue. Click here to view an interactive timeline of tax and other events from the past 50 years.
The average taxpayer who itemized on his 1968 federal income tax return had deductions totaling $2,158 (8% higher than 1967), according to a report issued on May 7 by the IRS. By contrast, the average standard deduction in 1968 was $534.
— The Tax Adviser editors, "Average Itemized Deduction Is $2,158, IRS Report Shows," p. 316.
The question occurs as to whether the 10% tax on so-called tax preference income (Secs. 56—58) must be covered by estimated tax payments. The answer is "no." The definition of estimated tax, for both individuals and corporations, was revised so that "estimated tax" does not include the 10% minimum tax imposed by Sec. 56.
— Corey E. Lyon, CPA, "Tax Clinic: Minimum Tax Excluded From Estimated Tax," p. 318. Lyon was with Peat, Marwick, Mitchell & Co., which contributed the May Tax Clinic column.
How the Federal Tax Deposit System works
Federal Tax Deposit Forms, as preprinted, pre-punched, and mailed to taxpayers, will show the taxpayer's name, address, employer's identification number, tax period, name control (part of taxpayer's name for IRS purposes), district office code, and a three-digit serial number. Taxpayers use the appropriate Federal Tax Deposit Form, fill in the amount of tax due, and send or bring the proper payment to a local commercial bank authorized to receive federal tax deposits or to a Federal Reserve Bank. Commercial banks stamp the received date on the form and forward it to the Federal Reserve Bank serving the area. The Federal Reserve Bank key-punches the payment amount, payment date, and other data such as commercial bank code for control purposes. The Federal Reserve Bank then sends the completed and perfected Tax Deposit Forms to the Treasury Department where the data is converted onto magnetic tape. Tapes are then sent to the IRS National Computer Center in Martinsburg, West Virginia, where payments are posted to the taxpayer's account on the Business Master File.
— Gordon T. Stine, CPA, "Working With the IRS: The Federal Deposit System," p. 328. Stine was with Ernst & Ernst in Los Angeles.