Thursday, January 8, 2009

A LITTLE THIS-A AND A LITTLE THAT-A – WITH THE EMPHASIS ON THE LATTA

A few items that I felt worth commenting on:

* I made my first tax forms run this morning – and was surprised to find all the 2008 federal tax forms and schedules available at the local IRS office! I do believe this is the earliest in January that they have been available in several years.

I did good this morning, stocking up on 1040As, Cs, Ds, and Es – though I will need to make several more trips in the next two weeks to get enough 1040s, Schedule As (there were not many available this morning) and the various “numbered” forms (i.e. 2106, 8606). I will also need more Ds and a large handful of D-1s – these are the Schedules I always run out of each year. For the less frequently used numbered forms I download what I need when I need it from the IRS website.

It looks like I will be limited to raiding IRS offices this year. While at the PO this morning I asked my contact if the tax forms had arrived yet and was told that he thinks the PO will not be getting tax forms for public distribution this year!

I didn’t see any NJ books at the IRS – I hope they will be forthcoming.

The word from New York is that IT-201 and IT-203 booklets, with forms and instructions, will no longer be mailed out to taxpayers. So I have to order my NYS tax forms and schedules from the NY Department of Taxation and Finance and pay for them – which includes a minimum $20 processing fee!

I recall fondly back during my first years as an apprentice tax preparer when I would drive to a federal warehouse in Newark with a suitcase and fill it up with federal tax forms and schedules!

* In case you haven’t noticed it – my sitemeter has exceeded the 100,000 mark! I had hoped to reach this milestone by the end of 2008 – but fell a couple of thousand short.

This means that I have had over 100,000 individual visitors to TWTP since I signed up for the sitemeter service shortly after returning to Blogger.com as my host in December of 2006.

Congratulations to me!

* There was a discussion on the radio this morning about the government coming in and limiting the dollar amount of salary and bonus that can be paid to corporate top management. Just thought I would add my 2 cents.

As a general rule I do not think that the government should have any say in the amount of executive compensation that can be paid. What I do think is that the IRS should possibly be allowed to do what they do with the owners of closely-held corporations – determine that a payment is “excessive compensation” and reclassify a portion as dividends, thus making a part of the payment subject to “double taxation”. Why should this concept apply only to private companies?

The IRS is not saying that the corporation cannot pay the individual what it deems appropriate, only that any payments that are considered to be excessive within the context of the individual facts and circumstances will be taxed more heavily.

I also firmly believe -

(1) It should be legislated that top-level executive compensation above a certain minimum standard, which is indexed for inflation, must be approved by at least a 60% majority vote of all stockholders at an annual meeting, either via proxy or in person, and that any bonus or other excess compensation be made only out of corporate earnings and profits.

(2) In a situation where the government provides taxpayers’ money to a corporation (such as with the current bail-outs) either as a loan, the purchase of an equity interest, or a flat out gift it has the right, and the obligation, to protect its “investment” by limiting top-level executive compensation. Uncle Sam must be able to say, “Here is $10 Billion to keep your business from going under. You can use the money for a, b, and c, but you damn well cannot give a penny of it as salary or bonus to your CEO or other corporate officers!”

* The conversation also covered whether the government should bail-out any industry for any reason, in light of the recent announcement that Larry Flynt is going to Washington to ask Congress to bail out the porn industry.

For one, I agree with TAXGIRL Kelly Phillips Erb when she says in
today’s postIt’s rare that I find myself in Larry Flynt’s corner but today I do. I get the absurdity of it all - which is exactly the conversation that he’s trying to start.” I do believe that LF has his tongue in his cheek with this action – although if Congress is stupid enough to give the porn industry money (other than what they have already given as individual consumers of the product) he will certainly take the money and run.

Kelly goes on to echo my sentiments – “The string of bailouts at the expense of taxpayers. . . is making us weary. The numbers are starting to blur. What’s $5 billion anymore? We don’t even blink at those kind of numbers now that Congress is handing out $700 billion ‘virtually no strings attached’ checks - remember, that’s our money. Ours.”

I do not believe any corporation or industry should be bailed-out for any reason. Period! Unless, perhaps, it can be shown that direct government action or requirements caused the corporation or industry’s losses. If a business or industry chooses greed over common sense and prudence then they deserve to go under. That is capitalism. Only then will business and industry in general learn any lessons. The old phrase from the 50’s “What’s Good for General Motors is Good for the USA” be damned!

I do like Kelly’s final word on the subject of bailing out the porn industry – “So maybe we should spend it on things that make us happy - the folks at AIG certainly did.”

* In the AS THE CONGRESS TURNS category – the CCH daily headline email newsletter reports today that “
Senate Democrats Outline 2009 Legislative Agenda”.

The Democrats pledged that “middle-class tax relief would come in the form of increased college tuition tax credits and elder care credits, tax breaks for the purchase of college textbooks and, to enhance savings, an increase in the allowable IRA contributions”.

On the environmental front, “Democrats plan to invest heavily in renewable energy and energy efficiency through tax credits aimed at business owners”.

There will also be “a heavy emphasis on affordable health care, with promises to lower costs, protect existing coverage and extend coverage to the some 46 million Americans who have none”.

I can’t find much to argue about in these lofty goals. We will just have to wait and see what Congress will do in the next few months.

Your comments on any of the above items are welcome!

2 comments:

Bruce said...

You know I use software in my preparation of returns.

Yet I am a bit confused by the "run for forms" to the IRS office.

The software I use has forms. Like those less used you can download and print forms from the IRS web site. If you need four hundred, print them.

I useally get forms sent to me. (one of each) in three ring binder form. If I need a particular form i just make a copy.

I understand the money savings for your run for forms, I just find it all to time consuming.

As for state forms - basically the same thing. As for the ones on hand for quick copy, I down load them. the copy as needed.

The post office here has it posted that they won't be getting forms this year. On that I think the government is trying to cut cost, just like everyone else.

I would agree that the gov shouldn’t have any say as to any amount of compensation an exec gets.
To me if the company wants to over pay so be it. Who is to say what is excessive anyway? I mean there is a person at a plant somewhere making $35.00 an hour to use a screw gun. His main job, to put four screws in a part that someone else already assembled. To me that is excessive. To the person doing it, probably not enough. So what is excessive and who is to regulate it? The person doing the job? An average of similar situations? Humm. Sounds like I just found where the new prez is going to get new jobs for America.

As for all the bail out crap, in my opinion, when they can't make it as a company then let them shut down. Let others learn from the mistake/s.

Robert D Flach said...

Bruce-

As you know I do not use software - and prepare about 400 sets of returns manually. That comes to about 2000-3000 individual forms and schedules. That adds up to a lot of paper and ink if I were to make a photocopy each time I needed a form.

I would rather use original IRS forms.

It is my opinion that if Uncle Sam wants my client's money he can at least provide me with the forms and schedules necessary to give it to "him".

As for $35.00 per hour to install a screw - that is a long way off from being paid $100 Million to run a company into the ground. How much were these greedy CEOs taking for themselves in salary, bonus and entitlements?

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