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

Here it is – the last BUZZ of 2011!

+ If you have not already done so - check out the December issue of LOIS.

+ And check out my “9 Tax Breaks Set to Expire This Week-End” slide show at MAINSTREET.COM.

+ Have you visited THE MISSOURI TAXGUY’s “Store” page yet.  There is an entire section of items “From Robert F”!

+ TAX PROF Paul Caron has an interesting video that tells us “Patriotic Millionaires Support Higher Taxes, But Won't Donate to Treasury”.

Clearly these fools are just looking for publicity and are not willing to put their money where their mouth is. 

+ Bill Bischoff teaches a brief course in “Tax Literacy 202”.

His post makes some good points –

On tax extenders:  “If all these breaks are really such great ideas, Congress should make them permanent. That would mean taking their true long-term cost into account for federal budgeting purposes instead of continuing to conceal the true cost by extending them for a year or two at a time. If Congress is unwilling to embrace honest accounting for the extenders, they should eliminate them.”

He also explains why refundable credits and targeted tax breaks are bad tax policy.

For the basic tax course check out my “Taxes 101 for Politicians”.

+ STATELINE.ORG reports “Minimum Wage Set to Rise in Eight States” –

“Workers in Arizona, Colorado, Florida, Montana, Ohio, Oregon, Vermont and Washington will see their salaries rise by anywhere from 28 to 37 cents an hour, according to the National Employment Law Project, which advocates for low-income employees and keeps track of minimum wages in all 50 states.”

+ Peter Reilly tries to catch-up at year-end by discussing “5 Neglected Tax Developments of 2011” at FORBES.COM.

“When I say they were neglected, I mean neglected by me.”

+ Pete’s fellow FORBES.COM blogger Kelly Phillips Erb, aka THE TAX GIRL, is running a year-end contest, which she explains in “Congress Needs Some Advice in 2012”.

“Clearly, {the idiots in Congress} need a little direction for 2012 so I thought I’d ask you, my readers, what you hope to see happen next year and we’ll make a contest out of it.”

What can you win?

“So since Congress is so fond of pork… the prize is a small box of BBQ shipped directly to you.”

I told Kelly what I would like to see happen next year – every single idiot in Congress who runs for re-election in 2012 is voted out!

+ Over at OUR TAXING TIMES Trish McIntire talks about what to do “If Your Preparer Won't Do EITC".

In discussing the Earned Income Tax Credit she explains (highlight is mine) -

“Unfortunately, it is a fraud magnet. According to TIGTA’s May 2011 report to the House Ways and Means committee (download), The IRS estimates between 23% and 28% of the EITC payments are improper. In 2009, this resulted in $11 to $13 billion in improper payments. As part of a program to reduce the bad EITC claims, the IRS has begun to put more pressure on the tax professional community. If a paid preparer doesn’t do adequate due diligence to make sure a client does qualify for EITC, they could face a $500 fine for each client they qualify but shouldn’t have.”

I do not accept new clients, but will “do” EITC if it applies to an existing client (I have less than a handful of EITC claims each year).  I can clearly understand why a tax pro would refuse to “do” an EITC claim if he/she questions whether a taxpayer qualifies – but if I were still accepting clients I would not refuse any EITC out of hand.

However I can understand why a preparer would not want to be involved with the additional agita and potential liability.  I have been a vocal opponent of having the EITC, and other refundable credits, in the Tax Code, and forcing tax preparers to add to their responsibilities the job of determining of a client qualifies for a federal welfare program.  We are tax preparers – not Social Workers!

+ Karen L Ryan EA exclaims that “We’re Number 1” – when it comes to tax cheats that is – in her post at YOUR TAX COACH.  (And Congress is Number Two - I couldn't resist)

“A recent study by the Tax Justice Network, a British think-tank dedicated to transparency in international finance, shows the U.S. government lost $337 billion annually to tax evasion. We're followed by Brazil ($280 billion), Italy ($238 billion), Russia, Germany, France, Japan, China, U.K., and Spain. Overall, the study finds that worldwide tax evasion tops $3 trillion, or 5% of the world's economy.”  

I echo her bottom line -

“The irony here is that there are so many legal ways to pay less tax that nobody needs to cheat. Proactive planning is the key to paying less tax without having to hide in the shadows.”   

+ USA TODAY tells us “Prison Inmates Register With the IRS As Tax Preparers”.

“A total of 331 inmates were serving prison terms when they got active or provisional tax preparer tax identification numbers from the IRS, according to an audit issued Thursday by the Treasury Inspector General for Tax Administration.”

We are also told –

“Prisoner registration as tax preparers is a new twist in a long history of tax scams involving inmates.

For instance, USA TODAY reported in February that prisoners in three states — Florida, Georgia and California — led the nation's inmate population by using false or fraudulent tax returns to scam nearly $19 million in IRS refunds during 2009.

That total was part of $39.1 million in unmerited federal tax returns the IRS issued to jail and prison inmates nationwide, according to an IRS report to Congress that was included in a Treasury Inspector General for Tax Administration audit released in January.”

I can’t wait for Joe Kristan’s reaction!

+ Jim Wang gives the correct answer to the question “Should I Take Money Out of My Retirement Account to Pay Off Credit Card Debt?” at the TURBO TAX BLOG.

Jim advises -

“In many cases, taking money out of your retirement account has the potential to cost a great deal. Consider the viability of putting together a debt reduction plan before you withdraw money from your retirement account. If you do decide to take the money from your account, make sure you repay it as quickly as you can, and try to avoid penalties and taxes.”

Hey – just because I do not use flawed and expensive tax preparation software like Turbo Tax, or recommend the use of such software as an alternative to engaging the services of a competent tax professional, does not mean I don’t read their tax blog when they have something good to say.

TTFN