Saturday, April 28, 2012
WHAT’S THE BUZZ? TELL ME WHAT’S A HAPPENNIN’
* Over at the Bankrate.com MORTGAGES BLOG Polyana Da Costa asks if we “Remember the Homebuyer Tax Credit?”.
“More than 2 million homebuyers thought they were getting a great deal when they were offered up to $8,000 in tax credits in 2009.
But did the first-time homebuyer tax credit really help homebuyers? Not really, economist Dean Baker says in a recent study published by the Center for Economic Policy Research.
The credit mostly helped sellers and banks, as it lured buyers who ended up overpaying, he says.”
* An automatic federal extension, requested on Form 4868, is an extension of time to file your return, but not an extension of time to pay any tax due. The IRS will charge a minor penalty (.5% per month, or part thereof) and interest on any tax due with the eventual filing of the return.
However, in “IRS Waives Failure to Pay Penalty for Unemployed” FINANCE DIVA tells us that “for tax year 2011 taxpayers who file an extension can also have an extension to pay and avoid the failure-to-pay penalty. if they meet certain requirements. According to IRS tax tip 2012-48, the penalty relief is available to two categories of taxpayers.
■ Wage earners who have been unemployed at least 30 consecutive days during 2011 or in 2012 up to this year’s April 17th tax deadline.
■ Self-employed individuals who experience a 25 percent or greater reduction in business income in 2011 due to the economy.
In addition to the 2 categories above you must also meet the following adjusted gross income test and your 2011 balance due cannot exceed $50,000.
■ Adjusted gross income must be below $200,000 if Married Filing Jointly or
■ Adjusted grow income must be below $1000,00 if filing status is single, married filing separately, head of household, or qualifying widower.
The most important part of this initiative is while the failure-to-pay penalty is waived, interest will still accrue on any outstanding balance until paid in full and the amount owed, including interest, must be paid by October 15th, 2012 or all of the original penalties will be added onto the amount due; including any failure-to-pay penalty.”
* From a recent BUZZ-like “Tax Roundup” post from Joe Kristan at THE ROTH AND COMPANY TAX UPDATE BLOG –
“Payroll taxes are deadly serious. If you are tempted to “borrow” employee withholding, you should read Jack Townsend’s discussion of how that went very badly for one employer.”
* Will this idiot ever go away?
TAX GIRL Kelly Phillips Erb tells us that reality tv fool (as everyone who willingly appears on a reality tv show can be so described) and ex-con Richard Hatch is back in her post “Richard Hatch Wants You To Know That IRS Sends People To Prison”.
* Over at CAFÉ TAX Joe Arsenault explains “Types of Retirement Rollovers”.
* Good news from CNNMONEY – “H&R Block Stock Tumbles on Warning”.
“Shares of H&R Block tumbled 16% in premarket trading Thursday after the tax prep company announced significant staff cuts and office closings, and projected weaker-than-expected earnings.”
* The NATP’s weekly email newsletter reported on two recent developments -
“Supreme Court Case on IRS Audits:
Generally, the IRS has a three-year statute to audit a return; however, this changes to six years if there is a substantial understatement of income, when 25% of more of gross income is omitted. The definition of what it means to omit gross income is often up for debate as shown by numerous tax court cases.
In a recent court case, United States v. Home Concrete & Supply, the Supreme Court decided that despite overstated basis, the IRS can only audit the last three years. More details of this case will be featured in an upcoming edition of TAXPRO Monthly.
Local Lodging Expenses:
The IRS has issued proposed regulations that provide a safe harbor for taxpayers to deduct expenses for lodging when not traveling away from home (local lodging). These expenses include local lodging expenses when considered ordinary and necessary business expenses in appropriate circumstances. Some of these circumstances include:
• The lodging is necessary for the individual to participate fully in or be available for a bona fide business meeting, conference, training activity or other business function.
• The lodging is for a period that does not exceed five calendar days and does not recur more frequently than once per calendar quarter.
• If the individual is an employee, the employee’s employer requires the employee to remain at the activity or function overnight.
• The lodging is not lavish or extravagant under the circumstances and does not provide any significant element of personal pleasure, recreation or benefit.
Review REG-137589-07 for additional examples and details.”
* Bruce, the MISSOURI TAX GUY, brings us a guest post by Georgia attorney Jeff Fouts on “The Definitive Guide to Getting Your Offer in Compromise Approved by the IRS”
* Peter C Reilly still remembers F Lee Bailey, and asks “Did F. Lee Bailey Have A Fool For A Client?” over at FORBES.COM.