Wednesday, November 3, 2010

WHAT’S THE BUZZ? TELL ME WHAT’S A HAPPENNIN’ – WEDNESDAY EDITION

* Apparently the Democratic Party is all for taxing everyone except itself, as Russ Fox points out in his post “Taxes Are For The Other Party”.

* Do I really need to remind you to check out Sunday’s “A Week in Perspective” by Bruce, the MISSOURI TAX GUY?

* “BlogRoll Beans” is back at Joe Arsenault’s CAFÉ TAX. Hey, look - Joe has included two of my posts!

* The question “Is that Mint Tea Deductible?” is answered at the MAKING SENSE OF THE NUMBERS blog – a new blog, to me at least.

* Kay Bell reports on the top dozen dead celebrities (there is a tie for #11) on Forbes’ 10th annual list in “Scary! Dead Celebrities Still Make Money; Plus, Will Estate Tax Stay Dead?” at DON’T MESS WITH TAXES. Michael Jackson tops the list, earning over $200 Million then his former father-in-law, who was #2.

Some of the others on the list are a big surprising. WTF is Stieg Larsson? I seem to recall that Marilyn Monroe used to be on the list – but not this year.

* I am not the only tax pro who doesn’t like New York State’s requirement that all tax preparers (who use tax preparation software - thankfully) MUST file NYS returns electronically, without regard to the wishes of the client. Russ Fox, who started off today's BUZZ above, puts in his 2 cents on this issue in “You Will eFile in New York” at TAXABLE TALK.

Russ tells us, “I have a few clients in New York (about 20). I have one client who strongly dislikes efiling. It appears he won’t have a choice for his 2010 tax return if I prepare his return”.

I agree with Russ when he says, “it’s the client that should have the final say in this matter”.

* TIGTA, the office of the Treasury Inspector General for Tax Administration, has produced some interesting reports lately.

In “Verifying Eligibility for Certain New Tax Benefits Was A Challenge for the 2010 Filing Season” TIGTA discovered -

While the IRS received about 132 million individual income tax returns and issued approximately 101 million refunds totaling $291.7 billion through May 28, 2010, those returns contained nearly 23.7 million errors, an increase of 7.1 percent over the same period last year. TIGTA identified inadequate controls and incomplete and inaccurate programming resulting in 125,762 individuals receiving nearly $111.4 million in erroneous Recovery Act-related tax benefits, including:

• 10,581 individuals claiming $65.6 million in erroneous First-Time Homebuyer Credits (IRS prevented 2,363 of them from receiving some $11.3 million in credits);

• 109,665 individuals erroneously received $29.7 million in Making Work Pay and Government Retiree Credits;

• 5,345 individuals erroneously claimed $15.6 million in plug-in electric vehicle credits; and

• 171 individuals claimed $453,220 in erroneous non-business energy property credits.

TIGTA also identified 2,933 individuals with more than $95.8 million in Qualified Motor Vehicle Tax deductions on individual income tax returns (Form 1040, Schedule A) that exceeded the dollar amount the IRS uses to identify a potentially erroneous claim. The IRS has not developed a process to identify these potentially erroneous claims on Schedule A
.”

And “Actions Can Be Taken To improve the Identification Tax Return Preparers Who Submit Improper Earned Income Tax Credit Claims” reports that -

The EITC was created in 1975 to offset the impact of Social Security taxes for individuals who work but have low incomes. The refundable nature of the EITC and the complexity of eligibility requirements increase the likelihood of taxpayer error and fraud. The IRS estimates that between $11 billion and almost $14 billion in erroneous EITC claims are paid annually. For Tax Year 2008, individuals claimed $49.2 billion in EITC; 66 percent of the returns were prepared by tax return preparers.”

FYI, the above quotes are taken from TIGTA’s press releases and not the actual reports – while the links take you to the actual reports.

* Here is a good post to end on – Trish McIntire’s plea to her clients “Please Ask Me Before . . .” at OUR TAXING TIMES

Too often, I have had to give clients bad new about a loss of a credit or big balance due at tax time because they didn't talk to me and get all their options before they acted. Sometimes the knowledge wouldn't effect their actions but it would give them an idea what to expect. Other times, however, it gives them a chance to alter their plans and save some tax money.”

TTFN

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