Saturday, October 25, 2008

WHAT’S THE BUZZ? TELL ME WHAT’S A HAPPENNIN’

* Thank the Lord! Kelly TAXGIRL Erb reports that “Pelosi Confirms Tax Rebates ‘Unlikely’ Before New Year”. Kelly says – “In a move that should surprise very few, House Speaker Nancy Pelosi confirmed yesterday that Congress is ‘unlikely’ to approve an economic stimulus package that included tax rebate checks during this calendar year.”

Kay Bell also touches on the topic in her post “So Long to Second Tax Rebate”. Kay echoes my sentiments when she says of another rebate, “The immediate economic aid, to both individual taxpayers as well as our struggling economy, would be limited. And the costs could cause more problems by adding to our ginormous federal deficit.”

The Yellow Rose of Taxes quotes from an excellent post titled “Will There Be A Second Stimulus Check? I Hope Not” by David of MY TWO DOLLARS - "We do not have the cash to be throwing good money after bad; we are already doing that with the bailout."

But, unfortunately, it continues. Subsequent posts at the above and other blogs indicate that there may be some support for a second “stimulus” rebate check. However I doubt if any more tax legislation will be passed during 2008 – mainly because, as one blog post mentioned, I doubt that Congress, now adjourned for the year to campaign, wants to come back to Washington and do any more real work.

* Before we leave DON’T MESS WITH TAXES you should check out her post “
401(k) Do's and Don'ts”.

The most important Don’t is “Don't take early distributions”! I just dealt with a client whose $19,000 premature 401(k) distribution cost $7,700 in federal income taxes – or 40.5%! And that did not count the state income tax cost. If you must take money from your plan prematurely borrowing is better than an actual distribution.

* And speaking of Kelly of TAXGIRL, she begins a series of very detailed posts on state taxes with “State Tax Primer from A to W: Alabama”. I hope she hasn’t forgotten about my ASK THE TAXGIRL question!

* According to a Buffalo newspaper article titled “Tax Forms Not Coming in the Mail” that according to the New York State Department of Taxation and Finance they “won’t be mailing tax forms directly to individuals anymore.” This means that the IT-201 and IT-203 packages will not be mailed out to resident and non-resident taxpayers. New York “expects to save $1 million in mailing, printing and processing costs”. For me, a tax professional who still prepares tax returns by hand, this means additional expense.

* Another blog list! Roni Deutch gives us her “
Top 10 Common Misconceptions About Taxes” at her TAX HELP BLOG. I have discussed many of these misconceptions in the past at TWTP.

Roni makes a good point in her introduction – “Since most people have their tax returns prepared by a specialist, they usually do not feel it necessary to educate themselves on tax issues. However, this can result in grossly inaccurate returns, and can even lead to IRS fees and penalties. While many tax myths have been dispelled in recent years, there is still a lot of confusion out there.”

* The Tax Foundation has updated the Presidential Candidate Tax Plan Comparison section of our website to reflect recent changes and clarifications in Sen. McCain's and Sen. Obama's tax policies. The most significant changes: both candidates have recently outlined short term tax policies designed to help taxpayers deal with the current economic troubles. Check it out
here. You will note that Obama continues to push “refundable credits” – which are currently probably the largest source of tax fraud.

* Last week it was Joe the Plumber. This week the most prolific tax news story concerned Sarah Palin’s $150,000 “make-over”. Kay Bell of DON’T MESS WITH TAXES, Joe Kristan of THE ROTH AND COMPANY TAX UPDATE BLOG, Richard Close of IRS HITMAN, Paul Caron of TAX PROF, Linda Beals of A TAXING MATTER, Dan Shaviro of START MAKING SENSE, and the Tax Foundation’s TAX POLICY BLOG all add their 2 cents worth on this “tax kerfuffle”. As for me, I have more important things to deal with at the moment. Just one question – who is paying for Michele Obama’s wardrobe? Maybe I’ll blog about it when I have more free time.

* Michael Rozbruch of the TAX RESOLUTION UNIVERSITY blog provides some good advice in his post “
How to Hire a Tax Resolution Company You Can Trust - 7 Ways to Ensure That Your IRS Tax Problems Are in Good Hands”.

Of course the first rule to remember in hiring a Tax Resolution Company is to never hire a firm that promises they can resolve your IRS debt for “pennies on the dollar”!

* Condolences to blogger June Walker on the loss of her brother. We are glad that June is back blogging again. Her blog deals with tax issues for the self-employed (like my former THE FLACH REPORT blog used to) and often contains some excellent advice and information.

I hope all is well with fellow tax-blogger Ryan Ellis (the former TAX PLAYA) of the TAX INFO BLOG. He hasn’t posted in over a month.

* Here is a new one – instead of “I didn’t file my taxes because the dog ate my 1040” a New York State politician is claiming he did not file because he was a victim of “Non-Filers Syndrome”! You have got to be kidding! Check out TAX PROF Paul Caron’s post “Embattled NY Official Raises 'Non-Filers Syndrome' as Tax Defense". What an idiot!

Maybe Dick Wolf can use this as a defense on LAW AND ORDER for a “perp” who kills a tax auditor.

* Peter Pappas poses three interesting questions at the end of his post “In Their Own Words: McCain v. Obama on Taxes” over at THE TAX LAWYER’S BLOG – questions that you may want to take the time to answer. I did.

The questions are – (1) How do you define “rich?”, (2) Is imposing higher taxes on “rich” people “punishing success?”, and (3) Do “rich” people have a civic duty to help the middle class and the poor?

* This week’s TAXPRO WEEKLY email newsletter from the National Association of Tax Professionals brings us two items of interest.

First up - "IRS has $266 Million in Undeliverable Refunds and Stimulus Payments: The IRS is urging taxpayers to make sure their mailing address is up-to-date. If a taxpayer has moved since he or she last filed a tax return, Form 8822, Address Change Request, should be filed with the IRS. It is critical that taxpayers who are due a stimulus check update their addresses with the IRS before year-end, because by law, economic stimulus payments must be sent out by December 31 this year."

Let me preface the second item by quoting from the opening lyrics to Lerner and Lowe’s “I’ve Grown Accustomed to Her Face” from MY FAIR LADY – “Damn, damn, damn, damn!” - "Reminder - Brokers’ Statements to Arrive Later Beginning in 2009: The recent bailout bill extends the date by which brokers must furnish information forms to customers. This includes Form 1099-B and also other forms from brokers, including realtors. Beginning with statements furnished in 2009, brokers will avoid penalties if they furnish these forms on or before February 15, as opposed to the previous due date of January 31."

I suppose I shouldn’t complain – what with the often multiple “corrected copies” of Consolidated 1099 Statements from brokerage houses these last few years the final information is rarely provided until mid-March – which is a real PITA and often the cause of a GD extension.

* I will be glad when the election is finally over. I don’t think I can take One Day More. It certainly makes you think. If we just look at the issue of taxes – in many cases, based on what they have said, neither candidate really knows his arse from a hole in the ground when it comes to the Tax Code (I hope all four of the candidates have read my post “Taxes 101 for Politicians”). And, judging from the constant posts about lies and discrepancies in ads and the debates at the Tax Foundation’s TAX POLICY BLOG and other blogs, neither have any clue as to what either the tax changes of the Bush years have actually done or what each other has proposed regarding tax policy. If these guys are so clueless when it comes to the issue of Taxes are they just as clueless when it comes to other important election issues? Oi vey!

* Always leave them laughing. I got this in an email forward on Monday: Best stock market trader quote of the week: “This is worse than divorce. I've lost half my money but I still have my wife!

TTFN

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