Friday, May 30, 2014
WHAT’S THE BUZZ, TELL ME WHAT’S A HAPPENNIN’
“Be yourself; everyone else is already taken.”
* Who would have guessed that I would agree with a group of CPAs? We are told by ACCOUNTING TODAY that “NCCPAP Opposes Plan for IRS Private Debt Collection”.
The National Conference of CPA Practitioners joins many other voices in the know, including mine, to oppose using private collection agencies to collect unpaid tax debts on behalf of the IRS.
NCCPAP Tax Policy Committee chair Steven Mankowski has rightfully stated that –
“Only federal employees, who have been screened and vetted through the Internal Revenue Service, should be permitted to represent the federal government in matters pertaining to individual taxes.”
* JK Lasser’s ASK JK feature provides a reader with the correct answer, but probably not the one the poser is hoping for, to a good question.
“I inherited an annuity from my cousin. He paid $100,000 but it was worth $109,000 when he died. Is this taxable to me?
Sorry about your personal loss. The inheritance isn’t taxable, but receiving funds from the annuity is because your cousin never paid tax on this income. Sounds confusing, but it’s the same thing when inheriting an IRA—receiving the inheritance isn’t taxable but when distributions from the account are taken, the distributions become taxable. Unlike property that gets a stepped-up basis when the owner dies so that appreciation is never taxed, there is no similar rule for ordinary income; it remains taxable to heirs and beneficiaries.”
Distributions from these kinds of inherited investments, including IRAs, are taxed to the beneficiary the same way they would have been taxed to the deceased if they had been taken prior to passing.
* I can understand being frustrated and angry with an IRS auditor – but do not do what this guy did. ACCOUNTING TODAY reports “Man Convicted of Threatening to Kill IRS Agent and His Family”.
Here is the story -
“In April 2013, while continuing to work on the audit, the IRS revenue agent requested that Calcione and his ex-wife sign a consent form to extend the time to assess their taxes. Calcione signed the form, but his ex-wife did not. On July 12, 2013, the revenue agent left a voice mail message for Andrew Calcione asking about the status of the executed form.
Three days later, the revenue agent received two voice mail messages from Calcione. In the first message, Calcione allegedly threatened that if the agent called him again, he would show up at the agent’s home and torture him, rape and kill his wife and injure his daughter while the agent watched, before killing the agent. A second message left by Calcione requested the agent to disregard the first message, which Calcione said was left in error.
Knowingly and intentionally threaten to assault and murder an IRS revenue agent with intent to interfere with the official in the performance of official duties, and knowingly and intentionally threaten to assault and murder a member of the immediate family of an IRS revenue agent are each punishable by statutory penalties of up to 10 years in federal prison and a fine of up to $250,000.”
* ONLINE ACCOUNTING DEGREE PROGRAMS has an “infographic” on “Taxes Around the World” with some interesting “info”.
* Roger Wohlner, THE CHICAGO FINANCIAL PLANNER, lists “Six 401(k) Investing Mistakes to Avoid”.
I always thought TDF stood for Theatre Development Fund.
* ABOUT.COM’s William Perez wants to know if you have “Received Form 5498 in the Mail?”
Form 5498 is an information form only. It is not a correction of previously reported information - and it is not late. You do not have to file an amended return, or necessarily mail it to your tax pro.
* The following statement appears on the NJ Division of Taxation website on the “homepage” for the Homestead Benefit Program (the internal highlight is mine) –
“2012 Homestead Benefit. The filing deadline for 2012 Homestead Benefit Applications was January 31, 2014. Eligibility requirements and benefit amounts for 2012 will not be finalized until the completion of the State Budget for FY 2015, which must be adopted by July 1, 2014. Homestead benefits for 2012 are expected to be applied to May 2015 property tax bills. Additional information on the 2012 homestead benefit will be posted when it becomes available.”
* And while we are talking about NJ property tax relief programs –
“Gov. Chris Christie is expanding access to tax relief for New Jersey residents by extending the filing deadline for applications to the Senior Freeze (Property Tax Reimbursement Program) to Sept. 15, 2014.”
Click here to read the press release.
Each year the initial deadline for the PTR applications is announced as June 1st (or, as was the case this year, June 2nd). And each year the cafones in Trenton eventually extend the deadline to October 15 or 31. Why don’t the idiots just make the original deadline October 15?
I expect the reason is so that the governor can look like a hero by deciding to extend the deadline so no senior or disabled homeowners miss out on the reimbursement.
* Before leaving New Jersey – the NJ chapter of the National Association of Tax Professionals has released its schedule of CPE for tax preparers for the rest of the year. Click here to view the offerings.
NJNATP, of which I was a founding member, is celebrating its 25th “birthday” in 2014 – and will hold a special “Night to Remember” on the evening before its October 2nd Annual Conference.
The chapter’s annual “Famous State Tax Seminar” will be held on January 10, 2015. This is a “must-attend” seminar for all tax pros who prepare NJ state payroll and income tax returns.
* Over at GETTING YOUR FINANCIAL DUCKS IN A ROW, Jim Blankenship continues his series on “Mechanics of 401(k) Plans” with a post on “Distribution”.
* KIPLINGER.COM provides an excellent article by Susan B Garland highlighting the importance of proper tax planning when deciding where and when to take money from various tax-deferred, tax-exempt, and current, or “taxable”, accounts during retirement, reminding retirees to “Tap Your Portfolio With Taxes in Mind”.
* FORBES.COM’s TaxGirl Kelly Phillips Erb brings us the word that the "Supreme Court Agrees To Hear Landmark Case On Whether States May Tax Income Earned In Other States”.
As Kelly tells us, the case asks the question -
“Does the United States Constitution prohibit a state from taxing all the income of its residents — wherever earned — by mandating a credit for taxes paid on income earned in other states?”
* According to Jason Dinesen, and similar to the case with many NJ state tax returns for married couples but perhaps more so, it is “more better” for two income spouses to file separate Iowa state income tax returns.
However there are specific rules for claiming deductions that do not follow the federal return, as he explains in “From the Archives: Filing Separately on Your Iowa Return? Don’t Forget to Allocate Deductions” at DINESEN TAX TIMES.
A question for Jason – does Iowa tell separate filers how to allocate dependent children?