* No surprise
here. THE HILL reports that “IRS Overpaid Up to $13.6B in Low-Income Tax Credits, Report Finds”.
“The Internal Revenue Service (IRS) overpaid
between $11.6 billion and $13.6 billion in tax credits designed to help low-income
families in fiscal 2012, the Treasury Department announced in a report released
Monday.
The overpayments account for 21 percent to 25 percent
of the tax credits issued under the Earned Income Tax Credit (EITC), the IRS
estimated.
The report from the Treasury Inspector General for Tax
Administration, the department's IRS watchdog, highlights the difficulties
faced by the agency in properly issuing refunds and credits under the popular
program.
Though the fiscal 2012 overpayment was among the
agency's lowest in a decade, since 2003, as much as $132.6 billion has been
improperly distributed as part of the EITC.”
How many times do I
have to say it? Refundable credits are
bad fiscal and tax policy. The Earned
Income Credit should NOT be in the Tax Code.
* I have always
told clients and readers to keep the hard copy of their Form 1040 (or 1040A)
and all attached schedules and forms forever, most recently in “Tax Tip: How Long Should I Save My Tax Records" at MAINSTREET.COM. As I say in the TT – “You never know when the information on a prior year’s return will come
in handy for a variety of tax or financial reasons, or just to satisfy personal
curiosity”.
Fellow tax blogger
“Tax Mama” Eva Rosenberg apparently agrees with me, and over at MARKETWATCH.COM
she lists in detail several reasons why you should “Never Throw Away Your Tax Returns”.
* Kay Bell, the
yellow rose of taxes, warns “Don't Become a Charity Scam Victim in the Wake of This {now Last} Week's Terrible Events in Boston and West, Texas” at DON’T MESS
WITH TAXES.
Good advice!
* Claudia Buck
discusses what could happen if you fall victim to one of those “pennies on the
dollar” so-called “tax resolution” companies who advertise on tv in “Personal Finance: When Tax 'Help' is Just a Mirage” at THE SACREMENTO BEE.
* Joe Kristan
agrees with me this time! In his post “Robot Returns?” at the ROTH AND COMPANY TAX UPDATE BLOG he shares my concerns about
the proposed “autofill” return. And he
offers the following comment on my bottom line –
“That would actually make sense.”
See, as I always
say, great minds to think alike.
* We have a friend
in Taxpayer Advocate Nina Olsen! At the
website of the Office of the Taxpayer Advocate we are told –
“The National Taxpayer Advocate reiterates
her longstanding recommendation that the individual AMT be repealed.”
Hey, idiots in
Congress. Are you listening?
* Fellow tax
blogger TAXGIRL Kelly Phillips Erb is interviewed in “Enterprising Lawyer: Kelly Phillips Erb” at ATTORNEY @ WORK.
* Kelly’s fellow
FORBES.COM blogger David John Marotta asks the question “Is A $3 Million IRA Sufficient For Retirement?”
He is talking about
BO’s proposal to cap the accumulation in tax-preferred retirement accounts at
$3 Million.
He answers his own
question (and suggests BO’s “understanding
of financial planning is fundamentally flawed”) with the correct answer
(highlight is mine) -
“You may believe the government needs to
collect more money in taxes. But this
proposal is an awful way to do it. Money in traditional retirement accounts
may grow tax free. However the entire amount is ultimately taxed during the
withdrawal phase.
During that delay, the government’s portion grows at
market rates of return. Were the government to collect its portion early, it
would forgo years of growth. Government revenues have benefited greatly from
these tax-preferred accounts. To suggest that collecting tax and spending this
tax more quickly collects $9 billion over 10 years is a suspect claim.”
Savings is good. The more savings the better for the
economy. Capping retirement account
accumulation ain’t going to raise taxes or help the economy. As someone else pointed out, the wealthy will
just find other ways to invest tax deferred.
David continues to
show his wisdom when he concludes –
“No legislation should inhibit individuals
from taking care of their own retirement. Government officials know very little
about retirement planning. They haven’t even had the foresight to keep Social
Security solvent.”
TTFN
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