Thursday, May 22, 2014
WHAT’S THE BUZZ, TELL ME WHAT’S A HAPPENNIN’ - SPECIAL THURSDAY EDITION
The BUZZ is particularly meaty already – so I decided not to wait until Friday.
* For once I agree with a lawyer – specifically Daniel M. Berman, a principal in McGladrey LLP’s international tax practice and adjunct professor at Boston University School of Law, who JOURNAL OF ACCOUNTANCY quotes in “Tax Lawyer: Code Reform Stymied by Dysfunctional Congress” (highlight is mine) -
“Consequently, Berman said, despite recent congressional committee hearings and several pending proposals to reform the Internal Revenue Code, ‘There’s just no productive legislating going on, and that means there aren’t going to be any major developments in the tax law passed until something major changes in the way Congress operates. That’s not happening in the next few years.’”
Did I tell you that the current members of Congress are idiots?
* It seems that May 19th was National Accounting Day. News to me. To celebrate YAHOO FINANCE republished “25 Jokes That Only Accountants Will Find Funny” from Business Insider.
Here are a few -
“What does CPA stand for? Can't Pass Again.” I always thought CPA stood for Constant Pain in the Arse.
“A fine is a tax for doing wrong. A tax is a fine for doing well.”
“Why did the accountant cross the road? Because she looked in the files and did what they did last year.”
“What's the difference between an accountant and a lawyer? The accountant knows he's boring.”
* Jason Dinesen of DINESEN TAX TIMES explains “If You’re a Sole Proprietor, There’s No Such Thing as a ‘Salary’ for Tax Purposes” -
“In a sole proprietorship, the proprietor is free to take money out of the business at any time, of course. People often refer to this informally as ‘taking a salary’. But it’s not really a salary. In tax terminology, it’s called taking a ‘draw’.
For tax purposes, draws are a ‘nothing’, meaning they are not accounted for on the tax return at all.”
* Jean Murray answers the question “What is the Benefit of Electing S Corporation Status?” at ABOUT.COM: US BUSINESS LAW/TAXES.
An LLC, which provides similar liability protection to incorporating, with two or more members can elect to file as a sub-S corporation (actually it elects to file as a corporation and then applies for sub-S status). But filing as a partnership, the default entity, can provide more flexibility in allocating profits and losses.
* A reminder from the CCH week-day daily Federal Tax Headlines – “IRS Taxpayer Advocate Criticizes Proposal for Private Debt Collectors”.
Nina Olsen and I are not the only ones who are strongly opposed to using outside collection agencies to collect tax debt.
‘The proposal has also drawn fire from consumer groups and civil rights organizations such as the NAACP, the National Council of La Raza, the Consumer Federation of America and the National Consumer Law Center. These groups cite ongoing problems with overaggressive private debt collectors used to rein in unpaid student loan debt. Their letter to lawmakers can be found at -
IRS Commissioner John Koskinen recently testified before a House Ways and Means Oversight Subcommittee hearing that the Service would have difficulty monitoring conversations between taxpayers and PCAs. IRS employees are held personally accountable, but PCAs present a more complicated oversight problem, he told lawmakers.’
I refuse to deal with outside collection agencies when it comes to federal or state income tax issues. I tell the collection agency I will only deal directly with the IRS or appropriate state Department of Taxation or Revenue.
* Over at PROCEDURALLY TAXING, a new (to me) tax blog I just discovered via Joe Kristan’s daily tax round-up post, Keith Fogg adds his voice to Nina’s and mine in opposing “Private Debt Collection – An Idea Whose Time Will Never Come”.
* In looking at recent posts at PROCEDURALLY TAXING I came across a very detailed guest post from my twitter buddy, and lawyer for the successful plaintiffs in Loving v IRS, Dan Alban that tells us “Loving Victory is Final And Why That Is a Good Result For Taxpayers and Preparers”.
The post also tells us why a voluntary RTRP program is a good thing.
Fellow bloggers Joe Kristan (CPA) and Jason Dinesen (EA) feel a voluntary RTRP designation will result in “destroying whatever is left of the Enrolled Agent brand”. But it does not have to if the IRS follows my advice from “What the IRS Should Do About the RTRP” and makes the RTRP credential part of a two-tiered program in conjunction with a newly named EA designation, and provides proper public education on the differences in the two tiers.
Of course better than the IRS offering a voluntary RTRP is what I suggested in “It’s Time for Independent Certification for Tax Preparers”. But an IRS-sponsored voluntary RTRP program would be easier and faster to get up and running.
* The other NSA, of which I am a member, provides a “Tax Prep Fee National Averages [Infographic]”
* Jim Blankenship provides help with GETTING YOUR FINANCIAL DUCKS IN A ROW by identifying the “Types of Rollovers Not Subject to the Once-Per-Year Rule”.
* It takes a big man. "I Was Wrong: We SHOULD Be Outraged About the New IRS E-File Requirements,” says Jason Dinesen of DINESEN TAX TIMES.
Check out the letter he sent to the IRS, which includes –
“In addition, I talked to my attorney and he’s not sure it’s even legal in Iowa to pull credit reports on people except for purposes of verifying their creditworthiness.
I would also like to tell you what my attorney said regarding these new requirements. He said, quote, ‘That’s just dumb.’ I agree. One could insert many different adjectives and expletives in place of ‘dumb’ to describe these requirements.”
Dumb is a good description.
See also Joe Kristan's Tax Roundup commentary on this nonsense.
As I have continually said, thank the Lord this does not affect me. Another reason why I will continue to prepare all my federal income tax returns manually.