Saturday, May 8, 2010


* Elizabeth P. Rosen provides an excellent post titled “Buying vs. Renting: Tax Benefits” at the US TAX CENTER blog.

She begins the post with the following –

If you’re considering buying a home, ask yourself these questions first:

1. Are you financially prepared?
2. Can you commit to living in one place for at least 5 years?
3. Is it the right time to buy?
4. Are you psychologically prepared?

If more Americans had asked themselves these questions, or reviewed Elizabeth’s “bad reasons to buy a house” at the end of the post, before buying a home our economy would not be in the mucking fess that it is today!

* I do not agree that one should “never say never” – and have posted about some tax-related “nevers” in the past.

The IRS HITMAN gives us his “Top 3 Thing You Should NEVER Do With Your Taxes”. I agree with all of them.

* The specific example discussed in the third item of a recent “A Little This-A . . .” post at my NJ TAX PRACTICE BLOG underscores important advice for taxpayers who receive a balance due notice from the NJ Division of Taxation, or, for that matter, the IRS or any other state tax authority –

If you receive any kind of notice from the NJ Division of Taxation it is more likely than not that it is erroneous. Do not be scared or intimidated by the notice and automatically pay the balance requested. Check it out. Send a copy of the notice to your tax professional immediately.”

This falls under my list of tax “nevers” –

3. NEVER assume that a notice you receive from the Internal Revenue Service or a state tax authority is correct. More often than not it is wrong. To repeat, when you get a letter or notice from “Sam” or any of your other “Uncles” give it to your tax professional immediately.”

* CNNMONEY.COM reports on “Health Care Law's Massive, Hidden Tax Change”.

Section 9006 of the health care bill -- just a few lines buried in the 2,409-page document -- mandates that beginning in 2012 all companies will have to issue 1099 tax forms not just to contract workers but to any individual or corporation from which they buy more than $600 in goods or services in a tax year.”

We have never been required to issue 1099s to corporations in the past – and also never had to issue 1099s for purchases of goods. This creates a lot of additional work for small businesses.

* First there was “Cash for Clunkers” (the clunkers referred to were automobiles and not members of Congress). Now CNNMONEY.COM reports that “House Approves $6 Billion 'Cash for Caulkers'”.

But this is not law yet – “The Senate is expected to take up the legislation this summer and determine how to pay for the program, which is likely to be controversial.”

* Did you see my item on “Teens, Summer Jobs, and Taxes” at MAINSTREET.COM?

* While I truly believe that fellow tax blogger Joe Kristan of THE ROTH AND COMPANY TAX UPDATE BLOG is sincere in his objection to the new tax preparer regulation regime, I continue to be skeptical about the AICPA’s official opposition, as discussed in Joe’s post “Pushing Back at the IRS Preparer Regulation Plan”.

Joe tells us that the AICPA feels “regulation beyond assigning preparer ID numbers is not needed”.

The real reason that the AICPA is against creating a certified or licensed tax professional “credential” is that CPAs will then no longer “own” tax preparation – as they have told one of their own they feel they currently do. That is to say CPAs will no longer be erroneously thought by the public to be tax experts by virtue of their initials – and taxpayers will go to previously unenrolled but newly licensed tax preparers instead of CPAs for tax preparation.

The newly licensed preparers will have demonstrated via testing and required CPE in taxation that they are true tax experts, while possession of the CPA “credential” has absolutely nothing to do with one’s knowledge of or experience with federal individual income taxes.