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

* See my article "A Letter From the IRS?  Uh-Oh.  But Don't Panic!" at THE STREET. 

* Peter J Reilly tells how a gambler was able to take advantage of the “Cohan Rule” in Tax Court in “Weekend Slot Player Wins A Dandy Yankee Doodle Victory In Tax Court” at FORBES.COM.

* Also at FORBES.COM – Robert W Wood provides “Five More Tips To Make Your Hobby Tax Deductible”.

* And Robert W Wood completes a FORBES.COM trifecta with “Three (Incredibly Simple) Rules To Keep The IRS Away”.

Three excellent rules they are.  If I may add a 4^th - DON’T ACCEPT TAX ADVICE FROM ANYONE OTHER THAN A PROFESSIONAL TAX PREPARER.  

FORBES.COM is on a roll.  TaxGirl Kelly Phillips Erb doesn’t want to be left out.  She reminds us “Ponying Up for Politics: Campaign Contributions Are Not Tax Deductible”.

Specifically –

“You cannot deduct contributions made to a political candidate, a campaign committee, or a newsletter fund.”

And -

“Advertisements in convention bulletins and admissions to dinners or programs that benefit a political party or political candidate are not deductible.”

* Professor Nellen continues the debate on the mortgage interest deduction in “Equity, Improve Investment and Reduce the Mortgage Interest Deduction” at 21^st CENTURY TAXATION.  

I am still awaiting comments on geographic inequity in the Tax Code.  See my post “What About the Mortgage Interest Deduction”.

* Joe Kristan states the obvious in discussing a court case at his Monday “Tax Roundup” installment at the ROTH AND COMPANY TAX UPDATE BLOG – “Being a landlord is so much easier without tenants.”

But there is a downside –

“If you have a Schedule E property that year after year shows little or no rental income and lots of expenses, the IRS computers are likely to notice.  That’s especially true if you find a way deduct those losses, which will normally be non-deductible “passive” losses absent other passive income.

Of course, there are times in real life when commercial properties go a long time without being rented.  Residential rental properties, though, aren’t likely to sit empty for three years in most markets.”

* TAX PROF Paul Caron quotes the “Tax Planks in 2012 Republican Platform”.

There is much here that I agree with.

* TAX MAMA Eva Rosenberg states the obvious at Market Watch’s TAXWATCH - “IRS Tax Credits Make Tempting Fraud Targets”.

Eva tells us that –

“Within the past month, the Treasury Inspector General for Tax Administration (TIGTA) has released two reports revealing billions of dollars of tax fraud by criminals using identity theft and fake identities.”

Why is there so much fraud?  Eva explains –

“Because of all the tempting free money available from refundable tax credits. Whenever there are refundable tax credits on the table, criminals try to tap into them. Some of them even do it right from jail.”

Both TIGTA and Eva have suggestions on how to reduce this tax fraud.  But both have missed the most obvious solution – do away with refundable credits! 

If the idiots in Congress want to provide welfare assistance and incentives for continuing education, home purchase, and energy efficiency it should do so directly via the appropriate government agencies and NOT through the Tax Code.

In discussing this item in a daily TAX ROUNDUP at the ROTH AND COMPANY TAX UPDATE BLOG Joe Kristan correctly reminds us –

“Just remember that they aren’t ‘IRS’ tax credits.  It’s Congress that enacts them, and it’s Congress that makes the multi-billion dollar industry of stealing from you via tax credit fraud possible in the first place.”

* TAXPRO TODAY referenced one of my THE TAX PROFESSIONAL posts in "Boost or Burden? Enrolled Agents Debate Taking the RTRP Test".
 

TTFN