* The Treasury Inspector General for Tax Administration (TIGTA) has discovered widespread noncompliance regarding Individual Retirement Accounts (IRA).
“In the report released today [A Service-wide Strategy Is Needed to Address Growing Noncompliance With Individual Retirement Account Contribution and Distribution Requirements (2010-40-043)], TIGTA found that 295,141 individuals made more than $1.5 billion in excess contributions to their IRAs in 2006 and 2007, resulting in an estimated loss of $94 million in excise tax and $17 million in income tax. In addition, TIGTA found that 255,498 individuals did not take the required minimum distributions totaling $348 million during that time, resulting in an estimated tax revenue loss of $174 million.”
I have been working on what will be a week-long post series on just about everything you need to know about IRAs, which should be up next week.
*Dennis Cauchon, writing in USA Today, tells us that “Tax Bills in 2009 at Lowest Level Since 1950”!
According to the item – “Amid complaints about high taxes and calls for a smaller government, Americans paid their lowest level of taxes last year since Harry Truman's presidency, a USA TODAY analysis of federal data found”.
Cauchon also tells us – “Taxes paid have fallen much faster than income in this recession. Personal income fell 2% last year. Taxes paid {excluding Social Security tax – rdf} dropped 23%.”
One of the main reasons (highlight is mine) – “Presidents Clinton and Bush pushed through a series of tax changes — credits, lower rates, higher exemptions — that slashed income taxes for poor and middle-class families. A drop in income now can trigger big tax breaks and sharply lower rates, sometimes falling to zero.”
And refundable credits, an open call for tax fraud, can often cause “non-taxpayers” to actually “make a profit” by filing a tax return.
* TAX GIRL Kelly Phillips Erb takes the words out of my mouth with the excellent advice in her answer to the question posed in her post “Ask the Taxgirl: Filing Late Tax Returns”.
* Trish McIntire talks about the difference between “may” and “can” when it comes to taxes in her post “Can or May? Casualty Losses” at OUR TAXING TIMES.
She correctly points out -“There are a lot of IRS Code sections where the taxpayer gets a surprise. They have the government's permission to make a specific deduction (may) but once the rules are applied to the issue, they can't deduct much or anything.” Her post provides one example – casualty losses.
There are many examples where an item “may be deducted but it can't always help you on your taxes”. May I deduct the contribution of a used car to charity? Yes you may. But can I? To begin with - only if you itemize.
* Yesterday’s (May 11) second news item at the Small Business Taxes and Management uses a Tax Court example to make an excellent point - “Recordkeeping can spell the difference between securing a deduction and losing it”.
* Monday’s AccountantsWorld.com daily headline news email took me to an update from BNA on the Registered Preparer designation titled “IRS Says No Registered Preparer Designation Without Competency Test”.
According to the update –
+ Registered tax professionals “will not be given their registration papers with IRS until they have passed a test to determine their competency”. IRS Electronic Tax Administration Director David Williams stated, “People who come in [early] will have three years before they have to take the competency exam,” he said. “Once you pass the test, we propose to call you an IRS registered tax preparer. We will give folks a certificate that says that.”
+ “IRS is working now on setting the user fee.”
+ Williams said the competency exam “is expected to be available in May 2011”.
+ “It will be several years before a database is up and running that will allow taxpayers to check to see what tests their preparer has passed.”
TTFN
“In the report released today [A Service-wide Strategy Is Needed to Address Growing Noncompliance With Individual Retirement Account Contribution and Distribution Requirements (2010-40-043)], TIGTA found that 295,141 individuals made more than $1.5 billion in excess contributions to their IRAs in 2006 and 2007, resulting in an estimated loss of $94 million in excise tax and $17 million in income tax. In addition, TIGTA found that 255,498 individuals did not take the required minimum distributions totaling $348 million during that time, resulting in an estimated tax revenue loss of $174 million.”
I have been working on what will be a week-long post series on just about everything you need to know about IRAs, which should be up next week.
*Dennis Cauchon, writing in USA Today, tells us that “Tax Bills in 2009 at Lowest Level Since 1950”!
According to the item – “Amid complaints about high taxes and calls for a smaller government, Americans paid their lowest level of taxes last year since Harry Truman's presidency, a USA TODAY analysis of federal data found”.
Cauchon also tells us – “Taxes paid have fallen much faster than income in this recession. Personal income fell 2% last year. Taxes paid {excluding Social Security tax – rdf} dropped 23%.”
One of the main reasons (highlight is mine) – “Presidents Clinton and Bush pushed through a series of tax changes — credits, lower rates, higher exemptions — that slashed income taxes for poor and middle-class families. A drop in income now can trigger big tax breaks and sharply lower rates, sometimes falling to zero.”
And refundable credits, an open call for tax fraud, can often cause “non-taxpayers” to actually “make a profit” by filing a tax return.
* TAX GIRL Kelly Phillips Erb takes the words out of my mouth with the excellent advice in her answer to the question posed in her post “Ask the Taxgirl: Filing Late Tax Returns”.
* Trish McIntire talks about the difference between “may” and “can” when it comes to taxes in her post “Can or May? Casualty Losses” at OUR TAXING TIMES.
She correctly points out -“There are a lot of IRS Code sections where the taxpayer gets a surprise. They have the government's permission to make a specific deduction (may) but once the rules are applied to the issue, they can't deduct much or anything.” Her post provides one example – casualty losses.
There are many examples where an item “may be deducted but it can't always help you on your taxes”. May I deduct the contribution of a used car to charity? Yes you may. But can I? To begin with - only if you itemize.
* Yesterday’s (May 11) second news item at the Small Business Taxes and Management uses a Tax Court example to make an excellent point - “Recordkeeping can spell the difference between securing a deduction and losing it”.
* Monday’s AccountantsWorld.com daily headline news email took me to an update from BNA on the Registered Preparer designation titled “IRS Says No Registered Preparer Designation Without Competency Test”.
According to the update –
+ Registered tax professionals “will not be given their registration papers with IRS until they have passed a test to determine their competency”. IRS Electronic Tax Administration Director David Williams stated, “People who come in [early] will have three years before they have to take the competency exam,” he said. “Once you pass the test, we propose to call you an IRS registered tax preparer. We will give folks a certificate that says that.”
+ “IRS is working now on setting the user fee.”
+ Williams said the competency exam “is expected to be available in May 2011”.
+ “It will be several years before a database is up and running that will allow taxpayers to check to see what tests their preparer has passed.”
TTFN
