Saturday, October 23, 2010

WHAT’S THE BUZZ? TELL ME WHAT’S A HAPPENNIN’

* Some excellent news – according to the IRS, the deadline for filing the 2010 Form 1040 (and 1040A) is Monday, April 18, 2011!

I am somewhat confused. I am looking at a 2011 calendar and April 15th falls on a Friday, not on the week-end. So why April 18th? Does it have something to do with a holiday observed in several states?

Actually I am not looking a gift horse in the mouth - I will gladly take the three extra days! So for me the tax filing season will end on Sunday, April 17th (I no longer do 1040s on April 15th – or whatever the last day is).

* Great minds think alike! Roger Russell tells us at WEBCPA that “Former Commissioner Blasts IRS’s Social Mission”.

It seems Mortimer Caplin, the IRS Commissioner during the terms of Presidents Kennedy and Johnson, “believes the Internal Revenue Service is currently facing a tougher task than it did back when he was commissioner as a result of the additional roles handed it by Congress through the enactment of new social programs”.

Russell writes –

However, IRS responsibilities today revolve not only around tax collecting, but also include policing social and economic policies with limited resources. The passage of the health care bill add exponentially to an already packed list of administering homebuyer credits, economic stimulus disbursements, and work pay credits, among others, he noted.”

Caplin, correctly, points out –

Even the Earned Income Tax Credit could have been handled by Health and Human Services. What has happened is that there are a tremendous amount of fraud and deficiencies associated with the program. This has produced a great loss of revenue, because the Service has to focus attention on the wrong returns. Rather than looking at high-income returns, with, say, foreign investments, they have to examine the EITC. Their mission has been watered down.”

Most important -

And instead of having an annual appropriation, which gets examined yearly, the programs get into the Tax Code but never get out. ‘Congress has to be more selective,’ said Caplin. ‘They’re leaning more on giving credits than on appropriations’.

And adding credits to the Tax Code is like getting trapped in a roach motel — you can check in, but you can’t check out.

‘It’s more difficult to amend the Internal Revenue Code than cut an appropriation,’ he observed. ‘Congress should not be in the habit of just automatically adding another credit to the code.’


Amen! I have been saying this for years now.

*Here is some more good news. The NY State Society of CPAs’ CPA BLOG reports that “H&R Block Sues HSBC Over RALs”.

H&R Block would be unable to offer RALs and refund anticipation checks for the 2011 tax season if the bank fails to carry out its contractual obligations within the next two months, the filing said.”

If Henry and Richard won’t be able to offer RALs then thousands of lower-income individuals will avoid being screwed! Unfortunately they will probably find some other greedy preparer willing to offer a RAL at usurious rates.

I found this item through the CPA POLICY DAILY NEWS, a digest of online items of interest to accountants, which I discovered via a “tweet”.

* Kay Bell discusses “10 Ways Uncle Sam Can Cut Spending” over at DON’T MESS WITH TAXES.

Unfortunately raising taxes and fees is always the first answer to a government budget shortfall – never cutting expenses. Politicians are afraid of losing entitlements or offending a generous lobby. Ultimately the items that get cut are usually in the area of essential services where there is minimum pork involved.

The cost-saving measures suggested by CNBC that Kay talks about are just ways of being more efficient. But you know that government, and politicians, hate efficiency. If there is a more expensive way to get something done they always seem to find it.

* And as we are counting the days until the election is over so we can see what, if anything, the cafones in Congress will do to extend the expired tax benefits for 2010 and the “Bush” tax breaks for 2011, check out “How Expiring Bush Tax Cuts Will Affect You”, a “slide show” by Kay Bell at BANKRATE.COM.

* Janet Novack brings the disturbing news that “Retirement Plan Participation Falls To 16-Year Low” in her TAXING MATTERS blog as Forbes.com.

The share of employees participating in retirement plans at work fell to 39.6% in 2009, its lowest level since 1993.”

Janet goes on to explain -

But let’s not blame short-sighted or cash-strapped workers for this one. Fewer workers are participating because fewer workers are being offered retirement plans. And we’re not just talking about defined benefit plans where the employer guarantees a fixed monthly pension. Those are mostly toast. (Even such big employers as IBM, Verizon, Motorola and DuPont have fully or partially frozen their defined benefit plans.) We’re talking about employers not even sponsoring plans that allow employees to save their own money in 401(k)s, with the employer maybe kicking in a match of 3% of salary. The share of full-time, full-year workers whose employers even sponsored a plan fell from 69.1% in 1999, to 61.8% in 2009.”

* Jean Murray reminds us in “Higher Section 179 Limits - Don't Count on Your State To Agree” that cash-strapped states may very likely “decouple” from the new higher Section 179 limitations, as they have done in the past.

* The Tax Foundation’s TAX POLICY BLOG tells us that “Voters to Consider Hundreds of Tax-Related Ballot Initiatives” when they go to the polls next month.

The post lists some of the key initiatives - including Denver Initiative 300, which “would set up a UFO study commission, but no tax dollars would be used”.

* Jean Murray has begun a series of “10 for '10 - 10 Ways to Save on Business Taxes in 2010” at JEAN’S BUSINESS LAW/TAXES: US BLOG.

Over the next 10 weeks, I'll give you a tax-saving tip each week. 10 tips in 10 weeks for 2010.”

This week – Fund a Retirement Plan.

*Kelly Phillips Erb brings us “up to speed” on the status of the movement to repeal the federal Estate Tax in “Permanent Federal Estate Tax Repeal: Making a Comeback?” at TAXGIRL.

* And Kelly kicks off in her “Tax Talk 2010” series of interviews with local political candidates, in which she asks 6 tax-related questions, with Jon Runyan, the Republican candidate for New Jersey’s Third Congressional District.

* From the “WTF? Department” – the title of Joe Kristan’s post “Esogetic Colorpuncture: A Deductible Expense for Mortgage Brokers” at the ROTH AND COMPANY TAX UPDATE BLOG certainly piqued my curiosity. See Joe’s post if you are as curious as I was.

* Speaking of Joe – he presented a minimal response to my Final Words – Really on tax return preparer registration and regulation in “The Flach Defense of Preparer Regulation”. Be sure to read the comments to his post.

* Daniel Stoica from Illinois, a fellow twit, has a series of basic informative posts on the subject of the LLC at his blog. It starts out, appropriately, with “What is a Limited Liability Company (LLC)?”.

Thanks, Daniel, for spreading the word about my TWTP posts via “retweets”!

* The National Association of Tax Professionals’ TAXPRO WEEKLY email newsletter reports-

IRS Announces New Deputy Commissioner -
The IRS announced today that Beth Tucker will be the new deputy commissioner for Operations Support. Mark Ernst will be leaving the IRS later this year to return to the private sector
.”

As I recently commented in a post – I always wondered WTF a former CEO of Henry and Richard was doing at the IRS.

* The daily “News and Tip of the Day” offering for Friday, October 22nd at SMALL BUSINESS TAXES AND MANAGEMENT correctly tells us – “If you're an employee and could have been reimbursed for a business expense but did not seek reimbursement, you can't deduct the expense on your individual tax return as an unreimbursed business expense” – and cites a related Court case.

TTFN

4 comments:

mok said...

The April 18 deadline is apparently due to Emancipation Day, a holiday in the District of Columbia, which falls on Saturday April 16, but will be observed on Friday April 15. See this IRS press release from 2007. Apparently, the recently enacted holiday caught them by surprise that year, but the final sentence of the press release anticipated that 2011 would be the next year when Emancipation Day would move the deadline.

Robert D Flach said...

MOK-

Thanks for giving us the word!

TWTP

Daniel Stoica said...

Thank You Robert for mentioning my posts on LLCs.

Robert D Flach said...

DS-

Always glad to bring attention to an informative post or series of posts.

TWTP