* Joe Kristan provides another example that the “Turbo-Tax Defense” – aka the “Geithner Defense” does not work in Tax Court in “Garbage In – Garbage Out” at the ROTH AND COMPANY TAX UPDATE BLOG.
The bottom line, as Joe puts it – “just because TurboTax lets you put capital losses on Schedule C doesn't make it right”.
* Trish McIntire reminds us that “You have one week left to take advantage of the First Time Homebuyer's Credit. Then it is gone - hopefully, forever gone.” in her post “Last Chance – Final Week” at OUR TAXING TIMES.
As usual, Trish makes some good points in her post –
- “There have always been people who have cheated on their taxes but now there seems to be a cottage industry in tax fraud. The frauds which gain the most attention, and are the most lucrative, are based in the credits. Inflating Sch A deductions could get a taxpayer more of their own money back, but the refundable credits let you tap into other people's money for a big take.”
- “If Congress insists on using the tax system to social engineer, they need to approach new credits and deductions from a cheater's point of view. Then ask what needs to be built into the law to deflect some of the fraud.”
- “Even if there is little chance of fraud, Congress needs to think a law through. Not just benefits and administration but who is it going to hurt. Collateral damage should not be a tax term. If you doubt me, ask all the people who got hurt by the Making Work Pay Credit.”
* Professor Nellen ended the tax season with two interesting posts on April 14 and 15 – “Time to Demand a Simpler Income Tax System” and “Signs of Tax System Problems - Serious Ones!” at 21st CENTURY TAXATION.
I agree with her when she says –
“. . . the federal income tax will only get simpler if we honestly demand it of lawmakers. They have no incentive to do it on their own. I think the public has come to expect and perhaps admire politicians with campaign promises of new tax breaks. Such breaks just complicate the system and usually are not needed. A lower rate without the special tax breaks would be a lot easier and save us a lot of time and money preparing returns and keeping records.”
* Jean Murray provides a brief overview of the Value Added Tax (VAT) in “Is a European-Type Value Added Tax Coming to US?” at Jean's Business Law / Taxes: U.S. Blog.
FYI – I am against a VAT.