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

“The difference between death and taxes is death doesn’t get worse every time Congress meets.”–Will Rogers

I decided to begin each BUZZ with a quote – to show that great minds think alike.

I guess it isn’t time for a change.  The very, very few of you who did weigh in on the title of this regular feature of TWTP voted to keep WHAT’S THE BUZZ.   

* Check out my Tax Tips “The Most Important Advice for This (or Any) Tax Season” and “Not Too Late for New Year's Tax Resolutions” at MAINSTREET.COM.

* I agree with an editorial in the CHICAGO TRIBUTE calls for “Next: Tax Reform”.

“In 1986, Congress passed and President Reagan signed a sweeping reform of the federal tax code to make it simpler and more rational. The measure abolished a horde of tax breaks, reduced the number of brackets and slashed rates. These changes were meant to reduce the time required to fill out a 1040 form while improving economic performance by diminishing the distortions caused by the tax code.

But here we are more than a quarter-century later, and things look much like they did before. What Reagan simplified soon became complicated again. The package agreed on by President Barack Obama and Congress to avert the fiscal cliff is no help.

In fact, it makes the whole tax system even more confusing. New limits on personal exemptions and various deductions among upper-income taxpayers add a labyrinth of complexity, piled on to such mysteries as the alternative minimum tax.”

And the bottom line –

“But it can be done. Reagan proved it. The need for tax reform is even greater today than it was then. In the deal that averted the fiscal cliff, our leaders managed only to avoid a disaster. It's time for them to aim higher.”

The only problem I see it that in order for serious and substantive tax reform to be enacted it takes leadership from the White House, as was the case with Reagan.  BO has given no indication, other than token lip service, that he is interested in serious and substantive tax reform.

* Along those lines – I hope they are right.  The Hill’s ON THE MONEY piece by Bernie Becker tells us “Tax Reform More Likely After ‘Fiscal Cliff’ Agreement, Say House Republicans”.

This item and the following recent quotes from House Ways and Means Committee Chairman David Camp (taken from other online news items) make me feel somewhat hopeful that at least the dialogue will continue, although I am skeptical about the actual results (highlights are mine) -

"Let me repeat that: we intend to move a comprehensive tax reform bill in 2013 - no matter what."

“As big as [the fiscal cliff package] is, it is only the first step when it comes to taxes.  Next, we need to make the tax code simpler and fairer for families and small businesses. And, we need to pursue comprehensive and fundamental tax reform to make American businesses and workers more competitive in the global marketplace.”

"Let's face it: the IRS tax code is still a nightmare. It is too complex, too costly and too unfair. There is something fundamentally wrong when roughly 60 percent of hardworking taxpayers have to hire a professional just to do their taxes. You shouldn't need an army of lawyers and accountants to understand our tax code. We need a simpler, flatter, fairer tax code that's designed for taxpayers."

I do not, however, see anything wrong with the fact that 60% of taxpayers use a tax pro.  It just makes good sense.  And I do not think this will change substantially with a simpler Tax Code.  I have always said that a simple Tax Code will not really affect my business.  I would rather spend my 12 hour work day during the season doing nothing but 1040As.

* The DALLAS MORNING NEWS “Editorial: Another Blown Chance for Tax Reform” has a lot of good things to say.

“Rasmussen {Scott Rasmussen, one of America’s leading pollsters – rdf} suspects the reason tax reform is less popular in Washington is, in fact, power. Remember Article I, Section 8: Congress is solely vested with tax-setting authority, which means it sets the rates and then decides who gets the breaks.

Deductions (or loopholes) are granted to favored groups. Those groups, in turn, lobby members to retain, extend or expand their favors. As circles go, it’s not always the most virtuous.

The people are not powerless, of course. We decide who serves in Washington. Until we make it clear what we want, we get the government we deserve.”

The editorial suggests a starting point for tax reform -

“Here are some of the tax reforms proposed in late 2010 by the president’s National Commission on Fiscal Responsibility and Reform, popularly known as Simpson-Bowles:

•Cut individual tax rates across the board. Reduce the top rate to between 23 and 29 percent.

•Limit ‘tax expenditures’ to those that promote work, homes, health, charity and savings.

•Establish a single corporate tax rate between 23 and 29 percent.

•Eliminate special subsidies for different industries.”

Sounds good to me.

* Kay Bell touches on “Congressional Triskaidekaphobia” at DON’T MESS WITH TAXES.

She starts with an old, but totally appropriate for today, political quote –

"No man's life, liberty or fortune is safe while our legislature is in session."

Kay goes on to say -

“And on both sides of the aisle partisanship still rules over policy making.

This doesn't bode well for the 113th Congress to fare much better than the 112th when it comes to public opinion. Of course, with a public approval of only 10 percent and most folks rating the last Congress as the worst ever, things have got to get better, right?”

Kay says she is hopeful and “going forward with a positive attitude about the new Congress”.  As for me, they are pretty much the same idiots as the 112^th Congress – and I do not hold out much hope for them accomplishing anything constructive.  Just more of the same nonsense (when they actually do anything).

* FYI – the CCH daily headline email provided us with the following statistic –

“The IRS Oversight Board released its Electronic Filing 2012 Annual Report to Congress, in which it reported that individual e-filed returns grew by 7 percent in 2012, breaking the 80-percent e-file goal set by the IRS Restructuring and Reform Act of 1998 (RRA 98) (P.L. 105-206 ) (TAXDAY, 2013/01/07, I.1 ). Approximately 119-million individual income tax returns, about 81 percent, were filed electronically in 2012.”

I was not responsible for any of the 7% increase in electronic filing.  I prepare all my 1040s (and 1040As) by hand (about 400 sets of returns each year) and have my clients mail them to the IRS.  I have been doing this for 41 years and will continue to do so this filing season as well.  It is not that I am against electronic filing.  I cannot file electronically because I will not use flawed and expense tax preparation software.  I do submit NJ returns online whenever possible.

One side benefit to preparing returns manually this year – I will not be delayed in starting the season (which, for me, begins on February 1^st).  I do not have to wait for the IRS to fix their software and be able to accept electronic returns.

* Bruce (the MISSOURI TAXGUY) McFarland gives us an overview of the Married filing status options in “Married Filing . . .”.

* TAXPRO TODAY has some advice for those who are “Getting Started in Tax”.

The best advice offered is –

“ . . . to join one of the professional organizations such as the National Association of Tax Professionals, the National Society of Accountants, the National Association of Enrolled Agents or the National Society of Tax Professionals, as well, of course, as the American Society of CPAs if the preparer is a CPA.”

I provided some advice in “Won’t You Take This Advice I Hand You Like A Brother” at THE TAX PROFESSIONAL.

* FYI, SBA.GOV lists the “Small Business Tax Incentives in the Fiscal Cliff Deal”.

THE LAST WORD –

Here are one my friend’s New Year’s Resolutions over the past years –

2010 - I will try to be a better husband to Marge.

2011 – I will not leave Marge.

2012 – I will try for a reconciliation with Marge.

2013 – I will try to be a better husband to Wanda.

Thanks, and a tip of the hat to the “Our Town” monthly advertiser.

TTFN