Friday, February 13, 2009


* From an item on - “Nearly 1 of every 6 tax returns filed so far includes errors in reporting last year’s federal stimulus payments, the Internal Revenue Service said, blaming confusion among professional tax preparers and early releases of tax software.” Hey Congress, and the IRS – I told you so!

* Kay Bell quotes from a guest editorial in the Cincinnati Enquirer by former IRS attorney Howard Levy in her post “A National Amnesty is the Answer”.

Right on, Howard! I have been calling for a Federal Tax Amnesty Program for years. I discussed it in my post “Tax Amnesty”.

I wrote to my Congresspersons about the issue. As usual Senators Menendez and Lautenberg totally ignored my correspondence, but I did hear from Representative Albio Sires, who apparently actually read my letter –

Nevertheless, the Congressional Joint Committee on Taxation has expressed reservations about the prospect of an amnesty. The Committee released a report in a previous Congress concluding that amnesty would ultimately hinder tax collection and reduce net revenue. The reasoning is that individuals would become less likely to pay their taxes in future years, perhaps in expectation that the government would once again write off interest and penalty fees.”

I do not agree. The concerns expressed by the JCOT regarding reduced payment in anticipation of a future amnesty have not proven to be a problem with the various state programs.

As I have proposed, the legislation creating the Federal Tax Amnesty Program would state that the federal government would not be able to institute another Amnesty for at least ten (10) or fifteen (15) years after the end of the current amnesty period.

IRS collection activity would not cease or slack off once the initial program has completed in anticipation of future amnesties. If anything the Service should be more aggressive in its collection efforts after the amnesty period ends.

Kudos to Kay for bringing up this issue for discussion.

* No time to post on the newly passed “Stimulus” Package. As usual, TAX PROF Paul Caron is on top of things with lots of links to info on the tax provisions of the package. Click here.

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