What is she talking about?
“I'm sure most tax people know by now that last week the AICPA conned a bunch of Congress people to send a letter to Secretary Geithner about the upcoming tax preparer licensing.”
All CPA firms – and all CPAs – should be subject to the exact same rules and regulations as any other tax preparer. This includes making all CPAs who want to prepare 1040s, and their underlings who in most cases actually prepare the 1040s, take the same competency test as everyone else and be subject to the same required CPE in federal taxation to maintain their authorization to prepare 1040s!
Unfortunately the AICPA has lots or money to buy, excuse me “lobby”, Congresspersons – so it may get its way. We poor “unenrolled” preparers, and EAs, do not have lobbyists or a pot of money to spread around.
If these Congresspersons are concerned about the ability of the IRS to test so many preparers they should support a “grandfathering” measure and not call on the IRS to do away with the test altogether.
* Robin Bal gives us “Some Amusing Money Quotes For The Weekend” over at FORTUNE WATCH (“money is power”). Here are two that I especially liked -
“I made my money the old fashioned way. I was very nice to a wealthy relative right before he died.” – Malcolm Forbes
A man explained inflation to his wife thus: “When we married, you measured 36-24-36. Now you’re 42-42-42. There’s more of you, but you are not worth as much.” – Lord Barnett.
* Kay Bell breaks the news that “White House Tax Reform Panel Report to be Issued on Aug. 27” at DON’T MESS WITH TAXES. Finally! I wonder if it includes any of my recommendations.
As Kay says – “The board's report has been slower than anticipated, and we can only hope that means its findings will be worth the wait”.
But I tend to agree with Kay’s bottom line – “I don't really expect much to come of their findings”.
* In case you are interested ATLANTIC.COM lists “The Net Worth of the U.S. Presidents: Washington to Obama”. The authors have “calculated the net worth figures for each in 2010 dollars” so the comparison is apples to apples.
And - “Because a number of presidents, particularly in the early nineteenth century, made and lost huge fortunes in a matter of a few years, the number for each man is based on his net worth at its peak.”
* Holy withholding! Did you know that Saturday, April 14th was the 75th birthday of Social Security? As a Presidential Proclamation states – “On August 14, 1935, President Franklin D. Roosevelt signed into law the Social Security Act to protect ordinary Americans ‘against the loss of a job and against poverty-ridden old age’.”
For a history of Social Security click here. Click here for a table of the maximum taxable earnings and contribution rates over the years.
* MISSOURI TAX GUY Bruce includes some good items in his weekly Sunday “Reads from Last Week” that I missed in my “wanderings”.
“Understanding Annuities: Why They Should Be Part of Your Financial Plan For Retirement” from SAVING TO INVEST gives a good overview of annuities. I have always disliked this type if investment – but brokers love to sell them because they provide a big commission.
“How Credit Unions Differ from Banks and What It Means to You” at CASHMONEYLIFE does the same with Credit Unions.
You have to go to Bruce’s “Reads” to link to these posts.
* Thinking of starting a business? Check out “Starting a Business Quickly - A Short Checklist” at Jean's Business Law / Taxes: U.S. Blog.
Jean left out the most important item – consult a tax professional!
* Kelly Phillips Erb, the internet’s TAX GIRL, reports that “DC Offers Tax Amnesty”.
“Washington, DC is offering a tax amnesty program through September 30 (that means there’s just 44 days left). That means that individuals, and businesses with unpaid DC tax liabilities can receive an abatement of penalties and fees for almost all taxes. Included in the list of eligible taxes? Individual income taxes, business and franchise taxes, sales and use taxes and estate taxes, to name a few.”
Click here to go to the Capital’s amnesty website.
* Steve Trojan, of SMT & Associates, Inc. asks “Do You Qualify for an Offer in Compromise?” at his BETTER BUSINESS BLOG and proceeds to do into detail on how to do so.
The post rightfully advices (the highlight is mine) –
“Don’t be misled by those “pennies on the dollar” promotions that lead people to believe that all tax liabilities can be negotiated. The IRS adheres to their RCP guidelines and generally won’t give the store away. In fact, in the last few years, the IRS’ offer in compromise acceptance rate has been less than 25%.”
* Someone has finally addressed the issue of “regional inequality” in the federal tax rates. EXUBERANT ACCOUNTANT Scott Heintzelman tells us about the “Tax Equity Act – Making Tax Brackets Fair for All?”.
Representative Jerrold Nadler’s proposed legislation, discussed in the post, would "require the IRS to adjust tax brackets proportionally in regions where the average cost of living is higher than the national average".
The post quotes Nadler as saying - "The basic costs of life in the New York region are much steeper than in most parts the country. The reality is that a dollar in New York isn't worth nearly as much as a dollar in Spokane or Knoxville or Topeka. It's time for our tax code to take reality into account when assessing someone's tax liability."
It appears that Scott is not sold on the concept. He correctly points out that “the higher cost of living in large urban areas has a lot to do with higher sales and property taxes” and “Mr. Nadler fails to mention that the federal tax code already benefits high-cost states through the deductibility of state income, local income and property taxes”.
The issue of regional inequity has never been seriously considered. It is certainly something that needs to be included in any discussion of tax reform.
* One can never say this too much - “Keeping Good Records Reduces Stress at Tax Time”! This time it is being said by the IRS. Check out this “Summertime Tax Tip”.
* Bill Perez joins the IRS in “Saying Farewell to the Advance Earned Income Credit” over at WILLIAM’S TAX PLANNING BLOG.
In my 39 tax seasons in the business I do not ever recall coming across the Advance EIC in practice – either with a payroll client or on a W-2 from a 1040 client.
* As I have often “said” in the past – it wouldn’t be a BUZZ without an item from Joe Kristan of the ROTH AND COMPANY TAX UPDATE BLOG. Joe provides a good lesson in “Why It's Tough to Have ‘Non-Passive’ Real Estate Activities”
* I began this installment of the BUZZ with a post by Trish McIntire of OUR TAXING TIMES. Let me end with another gem from Trish. Her comment policy, as outlined in “Just So You Know”, echoes my comment policy here at TWTP.