Saturday, June 30, 2012
WHAT’S THE BUZZ? TELL ME WHAT’S A HAPPENNIN’
* SMARTMONEY.COM’s Bill Bischoff, aka The Tax Guy, lists “The 5 Best Tax Changes We Won't See”.
Bill starts out by identifying the obvious problem - “Our 4,000-page (and growing) Internal Revenue Code is a horrible mess that needs to be cleaned up”. And then goes on to offer “five changes I believe would be huge steps in the right direction -- and the reasons why I doubt we will see them anytime soon”.
He is spot on, and I agree 100%, with numbers 2 through 5. I am not against eliminating the taxation of Social Security (I do not believe there is double taxation of SS benefits, as Bill asserts) – but I would have benefits taxed the same as any other pension to which employees contribute after-tax dollars.
Regarding eliminating refundable credits Bill hits the nail on the head when he says –
“If Congress wants to create welfare programs without any monitoring, that is a political decision that the populace can take into account when they vote. But Congress should not be allowed to sneak welfare payments through the tax system. That's deceptive and non-transparent.”
And he correctly identifies the various “phase-out” rules for certain deductions and credits as - “disguised tax rate increases that Congress never has to admit to”.
He correctly goes on (highlight is mine) –
“If higher tax rates are deemed necessary, the politicians should raise them in a straightforward and transparent way. Of course, many probably fear that such transparency would hurt their re-election chances. They might be right about that, but it's no excuse. Deception and lack of transparency make for horrible tax policy and, unfortunately, elected representatives won't change their behavior until voters make them.”
* Bruce, the Missouri TAXGUY and host of the weekly “McTax Hangout” show, has a guest post by Jonathan of mydefaultedloans.com on “The Helping Hand of the Student Loan Assistance”.
While you are there be sure to check out Bruce’s “store”.
* And Bruce himself discusses “Hiring the Right Accountants for Your Business”.
* Kay Bell explains that the “IRS' Third Offshore Amnesty Brings Total Recovered Funds to More Than $5 Billion”.
“The tax agency says that its latest offshore voluntary disclosure program, or OVDP which is the term the IRS prefers instead of tax amnesty, has pushed the amount collected in all its efforts to more than $5 billion.”
Hey, if they did so well with this tax amnesty – how about a general federal tax amnesty program like those successfully offered by many state over the years?
* The WASHINGTON TIMES reports that “Tax Cheats Got $1.4 Billion in Stimulus Loans”
“Tax cheats were given $1.4 billion in government-backed mortgage loans under President Obama’s economic stimulus, and the government doled out at least an additional $27 million in tax credits to delinquents who took the first-time-homebuyer tax break, according to a government audit released Tuesday.
Under government rules, delinquent taxpayers are supposed to be ineligible for the mortgage insurance program unless they have reached a repayment agreement with the Internal Revenue Service. But the Federal Housing Administration didn’t have the right controls to weed out bad applications, said the Government Accountability Office, Congress‘ chief investigative arm.”
* Trish McIntire reminds us that there is no such thing as a “Magic Refund Pencil” at OUR TAXING TIMES.
Taxpayers please pay attention -
“When you sign your tax return, you are agreeing with what is on the return. You are the responsible party should there be problems. Take the time to review and question that return before you sign. If you see a deduction that you didn’t give the preparer or you don’t understand, ask questions. Ask why deductions weren’t used.”
* Peter Reilly was the first to tell me that the “Individual Mandate In Obamacare Is Constitutional” at his FORBES.COM “Passive Activities” blog.
“According to Scotusblog the individual mandate has been upheld. It survives as a tax. The entire bill is upheld with some limitations on the federal government’s power to terminate state Medicaid funds.”
And according to a tweet by Dana Andrews (the EA and not the actor) –
“Well, my job and many others just got reaffirmed to be even more complicated. Thanks to the Supreme Court and Obamacare.”
It didn't get more complicated - it just didn't get less complicated.
Joe Kristan’s latest Tax Roundup at THE ROTH AND COMPANY TAX UPDATE BLOG, appropriately titled the “Supreme Court Frenzy Edition” provides links to detailed coverage of the decision.
If you are a glutton for punishment you can click here to read the text of the decision.
To be honest I have nothing much to say on the subject. It is not a new tax law – just the upholding of a previously enacted one. Just another example of the idiots in Congress further complicating the mucking fess that is the US Tax Code to deal with non-tax social issues.
* Have you taken advantage of my "Special Summer Savings for Tax Pros" yet?