Wednesday, October 19, 2011

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

+ Don’t forget to check out the OCTOBER issue of LOIS!

+ TAX PROF Paul Caron brings us some not really surprising news in "TIGTA: 41% Error Rate in $30 Billion First Time Homebuyer Tax Credit Program."

According to the report by the Treasury Inspector General for Tax Administration –

The IRS issued incorrect notices or did not send notices to 61,427 households due to notice programming errors or incorrect information on tax account. ... [O]ur review of the third-party vendor’s research results for a statistically valid sample of 97 taxpayer accounts determined that for 40 (41%) of the taxpayer accounts, the information provided to the IRS had incomplete or inaccurate information.”

The report indicated that “a total of $29.7 billion in Homebuyer Credit claims were made by more than 4 million individuals as of May 7, 2011”.  You do the math.

Just another example of why credits like this do not belong in the Tax Code.


You can click here to find the current (and past year) rates in the continental United States ("CONUS Rates") by city and state or ZIP code.

+ And the CCH daily headline email newsletter tells us “Senate Republicans Unveil GOP Jobs Plan”.  The highlight below is mine.

The GOP bill, which is unlikely to pass the Democratic-controlled Senate, would require a balanced-budget amendment, 25-percent tax rates for businesses and consumers, repatriation of foreign earnings and a repeal of the 3-percent withholding tax on federal contractors. The measure would also repeal the Patient Protection and Affordable Care Act (P.L. 111-148), the health care reform law, which Republicans have dubbed “Obamacare,” and repeal the Dodd-Frank Wall Street Reform and Consumer Protection Act (P.L. 111-203).”

+ The Tax Foundation’s tax policy blog has a map of “Percentage of Itemizers by State”.

Maryland is home to the most itemizers.  Rounding out the top five are Connecticut, New Jersey, Virginia and Massachusetts.

43.9% of NJ taxpayers (and, I expect, some “non-taxpayers”) itemize on their Form 1040.  Why such a high percentage?  Is it because NJ tax preparers are more competent and dig for every deductible expense to which their clients are entitled?

Or is it because the Garden State’s real estate taxes, state income taxes, and sales taxes are among the highest in the country, and homes cost much more in NJ resulting in higher mortgage interest deductions, and health insurance is more costly than most other states?

FYI, West Virginia has the least amount of itemizers – only 18.4%.

+ NJ.COM gives NJ employees some good news – “Christie Lowers Payroll Tax”.

Workers in New Jersey will have about $87 a year less deducted from their paychecks for the state’s disability insurance pool beginning in January, Gov. Chris Christie announced Monday.

Currently, the state withholds $148 from those earning $29,600 a year or more. Starting on Jan. 1, the state will withhold $61 for those who make more than $30,300.”

+ A “tweet” from fellow “twit” David Fazio E.A. provided some good advice –

If you refinanced your home, business or rental prop mortgage - give your tax pro a copy of your HUD-1 Settlement for potential deductions.”

TTFN

3 comments:

Knobby said...

I know how the IRS can fix the 41% error rate - all they need to do is pay $64.95 yearly for a number, pay $90 to take a test and get fingerprinted, yup that should do it.

Knobby said...

Here's something you'll love - AICPA Pushed for Disclaimer in Tax Preparer Ads - http://www.accountingtoday.com/debits_credits/AICPA-Pushed-Disclaimer-Tax-Preparer-Ads-60506-1.html

Robert D Flach said...

Knobby -

Thanks for the word! I do love it.

I am glad that the AICPA is worried that the new RTRP initials will help to dispel the "urban tax myth" that CPA = tax expert.

TWTP