Friday, September 19, 2014


I had a great trip to Wellsboro PA (about 160 miles away on Route 6W) earlier this week.  I will post about it on Anything But Taxes Sunday. 

Today’s BUZZ is rather meaty – to make up for Monday’s abbreviated installment.

* Are there still tax pros out there who have not yet read the September “issue” of THE TAX PROFESSIONAL?  I am waiting to hear your comments on the items discussed in this issue!

* Jason Dinesen asks the question “Will Software Really Replace Accountants?” at DINESEN TAX TIMES.

I agree with Jason’s answer - “there will ALWAYS be a need for tax preparers and accountants”.

Jason correctly points out -

Anyone can prepare their own taxes. Businesses can, too. The software will accept whatever the user puts into it … but it doesn’t mean it’s done correctly.”

And -

“. . . business owners can keep their own books but it doesn’t mean they’re doing it right.”

Remember – garbage in, garbage out.

And more important, when it comes to a business owner doing his/her own bookkeeping using software –

. . . once a business reaches a certain size, keeping the books will become a big drag on the owner. No software solution can overcome the crunch of time.”

I do not, however, share Jason’s concerns for the “tax-preparation business that relied on preparing a high volume of simple tax returns”.

Regardless of how easy it may become to submit a basic tax return, there will always be taxpayers who don’t want to be bothered doing it.  And, of course, those who want to make sure they do not miss anything.

I have always said that if I did nothing but 1040As all day during the tax season, I would make more money, experience less agita, and substantially reduce the number of extensions.

* Joshua D. McCaherty reports on “The Cost of Tax Compliance” at the Tax Foundation’s TAX POLICY BLOG.

According to the IRS, filing taxes will take taxpayers an average of 8 hours and cost $120 for each nonbusiness return.”

The post also points out that the number of pages in the CCH Standard Federal Tax Reporter has more than tripled (almost quadrupled) since I began preparing 1040s in 1972 for 1971 – from less than 20,000 to more than 70,000!

Josh’s obvious bottom line –

A simpler, transparent tax system can greatly reduce the cost of compliance for U.S. taxpayers. A complicated tax system creates not only a huge time and money expenditure for taxpayers, but also for government officials verifying returns, which can lead to higher tax burdens later.”

* Ever wonder “How the Government Became ‘Uncle Sam’”?  Find out at the USA.GOV blog.

* Take a “Quiz: 7 Surprising 2014 Tax Facts” at CNN MONEY.

One interesting fact -

15 states and the District of Columbia impose an estate tax. New Jersey exempts the lowest level of money from estate taxes ($675,000) while Washington imposes the highest estate tax rate (19%). Both New Jersey and Maryland also impose an inheritance tax.

So don’t die in New Jersey.

* Speaking of NJ and death taxes, Ashlea Ebeling tells us about the “Renewed Push To Kill New Jersey Estate Tax” at FORBES.COM.

* This week’s ABOUT BUSINESS LAW / TAXES: US newsletter from Jean Murray focuses on her most asked questions about business travel.

* JK LASSER in a double-play.  First it answers the question “I inherited HH bonds and want to redeem them now. Will I owe any taxes?” (hint - the answer is “it depends” – what else?).

* And “he” lists “7 Deadly Tax Sins” – “actions to always avoid”.  

I would add another action to always avoid – using Henry and Richard or another fast-food tax preparation chain to prepare your tax returns.

* “You Borrowed From Your 401(k) for What?  Matthias Rieker shows the reasons why employees borrow from their plan – and why this is not a good idea – at the Wall Street Journal’s TOTAL RETURN blog.

Borrowing from a 401(k) is better than taking an actual distribution – but it can be treated as one if you do not pay it back in time. 

* It appears the State of NJ is offering what they call an “Easy and Convenient Way to Resolve Unpaid Tax Liabilities”.

The Division of Taxation will send letters to individuals and businesses who have unpaid New Jersey tax liabilities from tax periods 2005 through 2013. The Division is offering interested taxpayers an easy way to resolve those outstanding tax liabilities and reduce or even eliminate their accumulated penalties and fees — if they pay the full amount due by Nov.17, 2014.”

If you do not receive a letter you can visit a Regional Office or call the DOT to discuss reduced payments.

* BARBARA’S BLOG asks “What Does the IRS Have Against Food?”.  The post does a good job of summarizing many of the rules for businesses concerning deducting meals as a tax-free benefit to employees.

* The Tax Foundation addresses the question “How High Are Sales Taxes in Your State?”.

I am a bit confused.  The map shows the NJ sales tax as 6.97% when it is actually 7%, and the PA tax as 6.34% when it is actually 6%.  I am not aware of any local sales tax in PA.


I have received many “friend” requests over the past few months from clients, colleagues, actual friends, and readers.  I have not accepted any.

This does not mean I do not want to be your “friend”.  I do not want to be anyone’s “friend”.  Please do not be hurt or offended by my rejection of your request.

I once vowed that I would never join MY FACE or SPACEBOOK or any other such “social media” site (other than TWITTER).  I did not, and still do not, see the need to make my personal life and details available to the great unwashed.  If I want to share updates, stories, and pictures with friends and family I will send them an email.  You will notice that there is absolutely no personal information on my SPACEBOOK page, other than a picture of my cat.

Since I no longer solicit, or accept, any new tax clients I do not need to use SPACEBOOK as a marketing tool.

The one and only reason I joined SPACEBOOK was to be able to participate in a closed “group” consisting of members of the NJ chapter of the National Association of Tax Professionals. 


Wednesday, September 17, 2014


Here are some items of interest or note that were discussed in the educational sessions at last week’s NATP Tax Forum in Atlantic City.


These 2 sessions were the most popular of the Forum.  They were probably attended by every registrant.  Perhaps they should have been offered together in one “general session” on the first day.

If there was ever any question these sessions verified the fact that, while the basic concept of “Obamacare” – attempting universal health insurance coverage without resorting to UK-like “socialized medicine – is sound, the Affordable Care Act (ACA) is without a doubt a complex and convoluted mucking fess.  Like the Earned Income Credit, and the distribution of other government social benefits, the administration and enforcement of ACA does NOT belong in the US Tax Code!  Like the excessive due diligence requirements for claiming the EIC, the ACA causes tax preparers to become Social Workers.

The “individual mandate” for health insurance coverage took effect in 2014.  If you and your family did not have “ACA-compliant” health insurance coverage, via either an employer-provided plan or direct purchase, for all of 2014 you may be subject to a penalty.  This penalty is not easy to calculate and could be expensive.

However many taxpayers who were not properly covered for all of 2014 may be exempt from the penalty under the “individuals who cannot afford coverage“ exemption.  This exemption applies of the cost of “ACA-compliant” health insurance is more than 8% of the modified Adjusted Gross Income of the “household”.

Individuals who acquired insurance via the Obamacare Marketplace and were granted an “advance premium credit” to reduce the monthly out-of-pocket premium payment will be issued new IRS Form 1095-A.  Related IRS Forms 1095-B, issued by insurance providers, and 1095-C, issued by employers, are not required to be sent to taxpayers for 2014.  But the instructor believed that many insurance providers will be issuing Form 1095-Bs for 2014.

And only those who acquired insurance through the Obamacare Marketplace, and receive a 2014 Form 1095-A, will be eligible for a “premium tax credit”.  The amount of the advance credit applied to the premiums, which was based on anticipated 2014 income, will be reconciled to the credit to which the taxpayer is entitled using actual 2014 income on the 2014 Form 1040, and excess advances are paid back, any additional credit is applied to tax liability and can be “refundable”, or one can “break even”.    

The “employer mandate” does not take effect until 2015 or 2016, depending on the total number of employees.


There was a separate session for each.  However, with the exception of the ACA-related items, discussed in more detail in separate sessions (see above), there have been no new developments.   

The 2 “New Development” sessions listed the various temporary tax items that expired on December 31, 2013, and have not yet been extended.  Many items, in both categories, will probably be extended, but not until after the November elections.  So, once again, there will no doubt be delays in the 2015 start date for IRS processing of 2014 income tax returns.

One of the business items that is currently in limbo concerns pre-tax treatment of employer-provided mass transit employee benefits.  There is a good chance this will be extended at year end, and I expect that I will need to once again deal with a few corrected W-2s sent to clients in late spring, resulting in amended returns, as I did a year or so ago.

In the Individuals session we were told that a net Schedule D loss can be used to reduce net investment income subject to the Net Investment Income Tax (NIIT).  Apparently when the NIIT was taught by NATP last year it was stated that this could not be done.


A partner, whether general or limited, can NEVER also be an employee of a partnership entity.  A partner should NEVER receive both a K-1 AND a W-2 from the same partnership entity.  A partner NEVER receives a salary; he/she may receive a “guaranteed payment” from the partnership, regardless of the amount of profit or loss, in exchange for services provided to the partnership, which is a deductible item for the partnership (and reduces net taxable income or increases the net deductible loss passed through to partners) and reported on the Form K-1 of the partner receiving the payment.

In the past I have on at least two occasions had a client give me a K-1 and a W-2 from the same partnership entity.  On these rare occasions the Form 1065, and Form K-1, for the partnership and the W-2 were prepared by a CPA firm.

Included in the guaranteed payment to a partner reported on Form K-1 can be health insurance premiums paid by the partnership for the partner’s individual or family coverage.  This is included in the income of the partner reported on Schedule E Page 2, and is deducted out as a “self-employed health insurance deduction” adjustment to income on the bottom portion of Page 1 of Form 1040.  So for income tax purposes it is a wash.  However, because the insurance premium payment is included in “guaranteed payments” it is subject to self-employment tax.

This is different to the treatment of health insurance premiums paid for a more than   % owner of a sub-S corporation who is also an employee.  The premium payments are included in Box 1 or Form W-2 and deducted as an adjustment to income.  However these payments are NOT subject to FICA tax and are not included in wages reported in Box 3 or Box 5 on the W-2.


If you owe a substantial amount of back taxes to the IRS or state tax authorities NEVER contact an agency that advertises on television, whether or not the ad actually says they can get you “off the hook” for “pennies on the dollar”.  Contact an independent tax professional.  If they do not personally deal with collection issues they can refer you to a legitimate source that does.  To be honest, this is my personal advice and not that of the seminar leader.


The session attempted to make the attendees “NIIT wits”.

This component of ACA began with 2013 returns, and had impacted a few of my clients.  Luckily the investment income of these clients was limited to interest, dividends, and investment-related capital gains so the income subject to the tax was easily identified. 

The NIIT is a “surtax” because it is a tax on income that has already been taxed.  It is a tax that is in addition to the regular income tax and the dreaded Alternative Minimum Tax (AMT).  It has no impact whatsoever in the calculation of the dreaded AMT.

The actual legislation creating the NIIT was only 2 pages long, but those 2 pages have generated about 270 pages of IRS regulations so far, most of which was first published on 12/13/13.  Because of the “newness” of the tax there is much of its application that has not yet been decided by the IRS and areas of it are subject to interpretation.

The NIIT income thresholds at which the surtax kicks in - $200,000 if “unmarried”, $250,000 if married filing jointly, and $125,000 if married filing separately - are fixed and are not indexed for inflation.  So it will affect more and more taxpayers each successive year as incomes grow.

Any questions?


Tuesday, September 16, 2014


Last week I attended the National Association of Tax Professionals Tax Forum in Atlantic City.

The NATP Tax Forums are formatted the exact same way as the IRS Nationwide Forums (except that the IRS Forum is 3 days while this event was on 2), copying both what was good and what was bad.  My main complaints with the IRS Forums was the fact that the individual educational topics were limited to a single “50-minute hour” presentation (often not enough time to properly cover a topic and take questions from the “audience”), there were no tables set up in the “classrooms” (forcing us to take notes on our knees), and the overcrowding in the popular classes, and these complaints also applied to NATP’s offering. 

The locations of the two Forum offerings by NATP, Atlantic City and Las Vegas (Sept 23 and 24), were chosen to take the place of the IRS Forums that had in past years been held in these cities, with New York City alternating with AC (the northeast location is now National Harbor, MD and the west coast location is San Diego).  The AC or NYC and Las Vegas IRS Forums were usually the best attended of the 5 offerings.

The one thing unique to the IRS Forums that NATP could not provide was hearing the IRS voice on various issues.  While the Forums included presentations from NATP, NAEA, NSA, NSTP, and other organization’s instructors, many were given by IRS personnel. 

Each day’s sessions in AC, 7 “50-minute hour” classes with a selection of 6 topics per “hour” (each topic was offered twice during the two days), began at 8AM and ended at just after 6 PM, with 11AM - 2PM off for lunch and strolling on the Boardwalk and through the vendor booths in the “Expo” area.  Of course the list of session topics included the obligatory 2 hours (100 minutes) of repetitive ethics preaching.  I passed on the first class of each day, allowing for an extra hour of sleep, and the last class of the first day and the last two of the second day, and, of course, the ethics preaching, attending a total of 9 sessions and earning 9 CPE.

I am always hearing about “blue-haired ladies”.  There actually was one (a very bright blue) at a session I attended on Thursday.

I was not given an all-inclusive workbook at check-in (at the Annual Conference we get a loose-leaf binder of all of the session workbooks at check-in, and at the IRS Forums, at least in the past, we received a workbook containing sections for all of the educational offerings).  I discovered at the first session that we had to download and print it ourselves.  Apparently an email had been sent to registrants a while ago explaining this.  I seem to recall getting some kind of reminder email from NATP, but I guess I misunderstood or did not completely read it.  When I get back home to internet access I will download a copy to my word file.

In my opinion, having to print-out a workbook of such size “in-house” takes up too much of my time and is too expensive in terms of wasted paper and ink.  I would prefer to pay $5.00 or so more in the registration fee to have NATP print the workbook in bulk and hand it out upon check-in.     

As usual, the NATP instructors were excellent and well informed on their individual topics of presentation.  Only one was new to me.

Since I will be attending the NATP National Conference in New Orleans next summer, and will be in Atlantic City as usual at year end for the NATP Tax Symposium, I will not be registering for the NATP Tax Forum if it is offered again next year.  And, judging by this year’s attendance, I expect it will be.

Tomorrow I will continue with items of interest from the educational sessions I attended.


Monday, September 15, 2014


There was no free wi-fi in the guest rooms at Bally’s in Atlantic City ($12.99 for 24 hours) - so no internet access during the NATP Forum.  I had to wait until I could stop at a McDonald’s on the way home to check emails.  Hence no Friday BUZZ last week and this special, albeit abbreviated, Monday edition.  Posts on the NATP Tax Forum will appear tomorrow and Wednesday.

I get free in-room wi-fi at just about every motel (at every price level) I stay at – but not at a “higher class” casino hotel.  Go figure.                          

BTW – I returned home to northeast PA early Friday afternoon, and headed out again on Saturday morning to Wellesboro, PA (2 hours west on Route 6 outside of Scranton).  I will be heading back home tomorrow afternoon.  Back at my desk, and the few remaining GDEs, on Wednesday.

* Jason Dinesen adds his more than 2 cents to a discussion I began in “What Is Our Legal Responsibility” in the September issue of “The Tax Professional” in his blog post “What Responsibilities Do Tax Preparers Have in Assessing ACA Penalties?”.

I thank Jason for his contribution to the discussion, and look forward to hearing what other tax pros have to say.

* The CCH week-day daily Tax Headlines email newsletter tells us “Senate Faces Abbreviated Schedule for Remainder of Session” -

Congress returned to work on September 8 with inversion transactions, the extension of expired tax incentives, retirement security and internet access taxes all awaiting action, but little time to accomplish everything prior to the November 4 midterm elections. Congress may be in session for as little as two weeks before recessing for election campaigns, returning in early December for a very short lame-duck session.”

These idiots have done virtually nothing for the first 8 months of the year.  Do you really think they will accomplish anything in two weeks?

I expect that the “tax extenders” will once again be extended in December – once again causing delays to the start of processing 2014 tax return.

* Kay Bell, the yellow rose of taxes, suggests “IRS Direct Pay One of Many Ways to Pay Estimated Taxes”, which are due today.

* CPA James Lange warns us to “Beware of the Pro Rata Rule for Roth Conversions” at his ROTH REVOLUTION BLOG.

This is something that higher-income taxpayers do not take into consideration when attempting a “back-door” ROTH contribution.  They make a non-deductible traditional IRA contribution of $5,500 and turn around and convert this $5,500 contribution to a ROTH and assume that there will be no income tax on the conversion.  But, as Mr Gershwin wrote, “it ain’t necessarily so”!  In a not uncommon example provided by James in the post $4,750 of the conversion is taxed!


Is it mere coincidence that a highly touted broadcast tv series of the new fall season, with a primo time slot, is about a female Secretary of State – just 2 years before the next Presidential election?


Sunday, September 14, 2014


Here is another post that has nothing to do with taxes that I originally wrote for another publication, but apparently was not accepted.

I finally got myself back to the garden – to the Bethel Woods Center for the Arts, located on the site of the iconic 1969 Woodstock Music and Arts Fair, that is.

I have been living in northeast Pennsylvania for two years now, and had visited the area just about every summer for decades before the move, but had not yet been to the Bethel Woods Center, about 30or so miles from my new home in Hawley located just off Route 17B between Fosterdale and Monticello NY, whose 15,000 seat outdoor amphitheater opened in 2006 and museum opened in 2008.

The Museum at Bethel Woods is an immersive and captivating multi-media experience that combines film and interactive displays, text panels and artifacts to tell the story of Woodstock and the Sixties.  It is open April thru December, including most holidays.  From May 1 to September 1 the hours are 10 AM to 7 PM, 7 days a week.   From September 2 – October 13 the hours are 10 AM to 5 PM, also 7 days a week.   

I chose as my introduction to the Center the (David) Crosby, (Stephen) Stills, and (Graham) Nash concert held on Saturday evening, July 5th – specifically because CSN, and Y (for Neil Young), had appeared at Woodstock almost 45 years earlier at the beginning of their collaboration. 

I was in the area, spending summer vacation at “Dellwood Acres” in Beach Lake, during the original festival – but was only 15 and too young to attend.  I do remember seeing overhead shots of the crowds in the Sunday News.

My family had driven to Lake Huntington NY, less than ten miles from Yasgur’s farm, where my mother grew up, and we stopped at a local general store.  The proprietor told my father he had nothing to sell him because the “hippies” had bought everything in the store.

I saw Crosby, Stills and Nash in concert twice before in the 1970s.  The first time was at Roosevelt Stadium in Jersey City, NJ on the night Richard Nixon resigned as President.  One of the three announced to the audience that he had just been told of Nixon’s resignation and the band immediately went into “Ohio” (“Tin soldiers and Nixon coming”).

The second time was in the gymnasium at Georgetown University.  I was visiting a friend from high school who was attending the University.  The tickets were for Crosby and Nash, but after a few numbers surprise guest Stephen Stills joined David and Graham onstage for the rest of the concert.

A word of advice to anyone planning to attend a concert at Bethel Woods – pay the additional $25.00 for premium parking!

I had joined the Bethel Woods Center as a member, and assumed that I could park in the Members Parking Lot.  However when I arrived that evening I discovered that this lot was only for those of higher-level memberships, so I had to park in the grass in one of the free lots located behind the premium, and paved, lots.  While there was staff on hand to guide the free parkers on the way in, there were none on the way out. I was glad to have been able to find my car easily when it was over, but it was an hour before I finally got back on Route 17B.

It was a long walk from the parking lot to the Pavilion, especially for someone of my girth, but the route was well marked and there were frequent rest stops, souvenir shops, and expensive concession stands along the way.  While there were “traditional” rest rooms, I also noticed a bank of “Port-O-Sans” along the way – a hat tip to the 1969 festival.

As I queued up for the Mens’ Room during the 20-minute intermission I noticed staff members “guarding” the surrounding grounds to make sure nobody decided to avoid the long lines and seek relief among the trees.

The guys opened with “Carry On/Questions”, ended the first Act with “Déjà Vu”, and their encore was “Teach Your Children”.  They also gave us during the course of the 2½ hour concert “Marrakesh Express”, “Our House”, “Just a Song Before I Go”, “Southern Cross”, “For What It’s Worth” (“There's a man with a gun over there”), and “Love the One You’re With.

If I am 60 they are at least in their late 60s – and have aged well.  Time has not diminished their musical skills – with Stephen Stills still nimble on the electric guitar.  Although their harmonies were not quite as melodious, they did hold up well.

The politics of the group has not changed.  Stephen Stills reminded the audience that this is an election year and emphasized the importance of getting out there to vote so that we can "empty the clown car".  And Graham Nash dedicated “Military Madness” to Bush, Cheney, Rumsfeld, Wolfowitz, and all of the other prominent players in the Iraq War.

Conspicuously, and surprisingly, missing from the evening’s set list was “Wooden Ships”, which they performed at the original Festival and was featured in the documentary movie, “Suite: Judy Blue Eyes” (also song at Woodstock), “Ohio”, and, most surprising of all, despite frequent calls for it from the audience, “Woodstock”.  I had expected them to either open with this classic number or use it as their encore.  

Each member had a “solo” segment in the second Act, which featured some new, at least to me, material.  There were also a few new numbers performed as a group.  While the new numbers were good, I personally would have preferred more of their “oldies”.

I was also surprised that the group did not discuss, or even acknowledge, their previous appearance at this location 45 years ago.  The only reference to the original Woodstock festival came from Graham Nash, who early on suggested, "If we try very hard, maybe we can stop this rain!!"

While I left somewhat disappointed at the omissions and angered at the “exit strategy”, I can honestly say that I enjoyed the show, and was glad that I finally made it “back to the garden”.


Tuesday, September 9, 2014


I am off to the Boardwalk in Atlantic City for the National Association of Tax Professionals’ TAX FORUM.  Depending on the availability of sufficient free time, and if I get free internet access at my hotel room, I may post on items of interest learned or reminded of at the Forum during the week, and provide a Friday BUZZ.  If I encounter a problem, I will post on the Forum when I return.

* Tax pros – please check out the September “issue” of my free online newsletter “The Tax Professional” – and spread the word to your colleagues.

* Kelly Phillips Erb reports that “IRS Hit With Class Action Suit Over Tax Preparer User Fees” at FORBES.COM.
The suit, Adam Steele, Brittany Montrois et al versus United States of America, challenges the Internal Revenue Service ability to charge an excessive “user fee” to tax preparers each year to renew their required PTIN (Preparer Taxpayer Identification Number).

I brought up this issue last November in my editorial “Why Is There Still an Excessive PTIN Fee?” at TAXPRO TODAY.

In my editorial I suggested that -
Once the mandatory RTRP regulation regime has been finally declared truly dead, the tax preparer membership organizations should actively lobby the IRS to reduce, or eliminate, the initial and annual PTIN fees.”
Well the RTRP scheme has been officially dead for some time now – and this is the first I have heard of any attempt to address the excessive PTIN fee.

* Here is something I came across reading a local paper while having Sunday breakfast at the Milford Diner.

Professional stager Claudia Jacobs deals with the question “Are Home-Staging Costs Tax Deductible –Part I” in her Claudia’s Corner column at the TIMES HERALD RECORD.

Of course, as with any other tax question, the answer is “it depends”.

* In a truly rare occasion I agree with a state CPA representative and disagree with Prof Jim Maule.

In his post “Placing Blame for the Tax Mess” Jim quotes a letter to the editor of the Philadelphia Inquirer, titled “Rewrite, Don't Blame”, by Michael Colgan, chief executive officer of the Pennsylvania Institute of CPAs.

The letter says that President Obama “missed the mark” by placing “blame for corporate inversions on ‘accountants going to some big corporations . . . and saying we found a great loophole.’’ Colgan also stated, “The real blame lies at the feet of the president and Congress for not tackling the long-overdue rewrite of the U.S. tax code.”

I agree with these statements from Mr Colgan.

Jim says –

Though Colgan is correct that inversions are not illegal, including the president, or any president, among those deserving of blame for the mess that is the Internal Revenue Code totally misses the mark.”

The Prof is correct that “the Internal Revenue Code is a product of the {idiots in} Congress”.  But Colgan is not blaming BO for the complexity of the Tax Code, but for “not tackling the long-overdue rewrite of the U.S. tax code”.  This is true.  The 1986 tax reform only happened because of the leadership of then President Ronald Reagan.  BO has shown no interest in rewriting the mucking fess that is our Tax Code.  The President’s various proposals for “tax reform” only add complexity to the already ultra-complex Code.
A popular phrase from my younger days stated - "If you are not part of the solution you are part of the problem".

Jim, Mr Colgan, and I do all agree that –

“. . . the Internal Revenue Code needs to be fixed and that doing so is a ‘monumental, yet critical, initiative’.”  

* Jean Murray, provides a primer onCapital Contribution” at ABOUT.COM.  

* I realize this item is a bit late, but FYI Kay Bell brought us the news, and it was not good, about “Gun Sales Tax Holidays Sept. 5-7 in Louisiana and Mississippi”.

I can understand sales tax holidays for back to school shopping, but sales tax holidays for gun purchases is totally ridiculous!  We should NOT be encouraging the sale of guns – just the opposite!

At least the sales tax forgiveness is for hunting guns and equipment only.  So if the idiot father of the 9-year old who in a tragic accident killed her instructor with an uzi decided to travel to Louisiana to buy his daughter her own gun he would still have to pay sales tax.

Speaking of the father of that 9-year old – has he been arrested for child endangerment yet?  Why not? 

This story has apparently died out.  I am truly surprised that more people, especially parents, were not “up in arms” (pardon the pun) about the fact that a 9-year old could legally learn how to use an uzi, or that a sane and responsible parent would allow such a thing.


Sunday, September 7, 2014


Let me continue my series of Sunday posts that are more “wandering” than “tax pro”.

My program for the performance of “LA CAGE AUX FOLLES” at the Forestburgh Playhouse in, where else, Forestburgh NY (about 50 miles from my home in Hawley JUST OFF Route 42), the last musical of the 2014 summer season, included an order form for the Summer Season 2015.

Without further ado here is next summer’s line-up –

DAME YANKEES = June 16 - 28

YOUNG FRANKENSTEIN = June 30 – July 12

OLIVER! = July 14 - 26

THE MUSIC MAN = July 28 – August 9

42nd STREET = August 11 – 23

THE FANTASTIKS = August 25 – 30

DRIVING MISS DAISY = September 1 – 6

Two of the musicals selected have special meaning to me. 

THE MUSIC MAN was the first Broadway musical I saw, at age 5.  It began a 13+ year tradition of musical-going with my uncle, an avid theatre-goer, which included just about every “age appropriate” musical (including OLIVER! and 42nd STREET) that opened.  All but two occasions (the opening nights of GIGI and JESUS CHRIST SUPERSTAR) were Saturday matinees, and for most performances we sat in the first row of the mezzanine.

At age 8 my father took me to my first football game (by then I had seen the original Broadway productions of MY FAIR LADY, CAMELOT, and THE SOUND OF MUSIC, among others).  I was totally bored.  Where was the music?  Where was the dancing?  I am forever thankful that my uncle got to me first. 

While THE MUSIC MAN was the first Broadway musical I saw in the twentieth century, the revival with Craig Bierko and Rebecca Luker was the first Broadway musical I saw in the twenty-first century.

And, in my early twenties I produced several performances of THE FANTASTIKS during my tenure as a local producer via the HUDSON COUNTY PUBLIC THEATRE, a non-profit community theatre group I founded.

There has been theatre at the converted 100-year old barn in Forestburgh for almost 70 years.  The “Forestburgh Summer Theatre”, as it was originally named, opened on July 8, 1947, with a production of BLITHE SPIRIT.

I first discovered the Playhouse in 2011 when I attended a production of the musical IDAHO, a wonderful parody of OKLAHOMA.  I returned in 2012 to see Loretta Swit of tv’s M*A*S*H in the thriller MURDER AMONG FRIENDS.  In 2013 I saw 9 TO 5 and SPAMALOT, both for the first time.  And for 2014 I subscribed to the 5 musical productions. 

The summer of 2014 was the first season for new Producer Franklin Trapp, a former southern lawyer, taking over from retiring Norman Duttweiler, who had run the Playhouse since 1992 (and who appeared as Mr. Banks in the production of MARY POPPINS). 

Franklin began his theatrical career at the Forestburgh Playhouse in 2001 as a Resident Company member.  He remained at the Playhouse every summer through 2004, earning his equity card, writing and directing children’s shows, directing cabarets and directing Mainstage productions such as the Playhouse’s first production of THE SOUND OF MUSIC. 

This summer’s musicals were all top-notch, with experienced equity members in the leading and most featured roles, and made the most of a relatively small and limited stage.  Loretta Swit returned as MAME and Miss Mona in THE BEST LITTLE WHOREHOUSE IN TEXAS.  The first musical of the season, MY FAIR LADY, was as good as any professional revival of the classic I have seen over the years.  

And you certainly cannot beat the price – less than $30 for a matinee and $35 for an evening performance with a subscription.

My program for LA CAGE also contained a flyer for the fall series of Friday and Saturday night cabaret, with a couple of “Game Nights” thrown in, at the Forestburgh Tavern adjacent to the theatre building, which runs through October 11th.  I plan to attend at least the LET’S GO TO THE MOVIES cabaret of favorite songs from the silver screen on Friday, October 10th. 

The Playhouse also runs pre-show, with a buffet, and after-show cabarets during the summer season.   


Friday, September 5, 2014


* Once again THE WANDERING TAX PRO is a finalist for a PLUTUS AWARD for “Best Tax Blog”.  The PLUTUS AWARDS honor the best of the personal finance blogosphere.  The winners will be announced live at the FinCon Expo in New Orleans on September 20, 2014.  I will not be there (I am going to NOLA next year for the NATP Annual Conference).  Maybe I will ask Kay Bell to accept on my behalf if I win (and if she is going this year).

Click here for a list of all the nominees and here to vote for the People’s Choice Award.

Wish me luck!

* Tax pros – have you seen the new September “issue” of my free online newsletter “The Tax Professional”?  If no, why not? 

I sincerely want to hear your comments on the topics I discuss therein.

And if you liked the issue, please spread the word to other tax pros.

* Have I told you about this yet – “Massachusetts Launches 2-Month Tax Amnesty Program” (via WCVB.COM)?

Labor Day marks the launch of a two-month tax amnesty program in Massachusetts.

The state Revenue Department says residents who owe taxes face no penalties if they pay during the period that begins Monday and ends Oct. 31.

* This week’s “Guide to Business Law / Taxes: U.S” from Jean Murray at ABOUT.COM deals with Employer ID numbers –

. . .  we'll sort out the confusion about the different types of tax ID numbers, discuss when you need an EIN, and how to get one fast online.”

* Professor Jim Maule provides “The Frequent Flyer Flap Follow-Up” about a recent court case at MAULED AGAIN -

The narrow holding of the case simply confirms a position the IRS expounded several years ago, namely, that frequent flyer miles received for opening a bank account were taxable.”

The Court in this decision treats miles received for opening a bank account, and subsequently used for air travel, like any other “premium” received for opening a savings or checking account.  If you receive a free toaster when you open an account, or a $10.00 cash bonus deposited to the account, the value of the toaster or the $10.00 is reported to the depositor on a Form 1099-INT and must be included in taxable income.

This decision does not apply to true “frequent flyer miles” received via a program like Continental’s

* And the Professor takes a look at corporate taxes, one of many tax messes, in his post “Fixing Tax Messes”.

I agree with Jim’s bottom line –

The lesson here is simple. Let’s stop with the special treatment for a favored few. Though those favored with special tax breaks can throw together arguments why they are so much more important to the economy than anyone else, careful consideration and thought generates the conclusion that they’re no special than anyone else. If the citizens of this nation stand up to demand an end to the economic bullying that afflicts federal, state, and local tax systems, as well as the not-so-free free market, the nation will thrive in ways that presently are unattainable.”

* Did legalizing marijuana provide the tax windfall that was predicted?  FOX 13 tells us “Colorado’s Missing Marijuana Taxes” –

Pot smokers are still buying on the black market: The state thought more people would migrate out of the black market. But only 60% of people who want pot in Colorado this year will buy it through legal channels, according to an estimate from the Marijuana Policy Group.

One big reason: Legal pot costs a lot more than illegal pot — mostly because of taxes and fees.

Legal retail marijuana is taxed more than 27%, so it’s easily cheaper on the black market.”

* Attention NJ tax pros – click here to find out about upcoming evening CPE events sponsored by the Essex-Hudson-Union chapter of the NJ Association of Public Accountants.

FYI, the speaker providing the NJ Update on September 30th, Jacob Foy, is an excellent, effective, and well informed instructor.

And click here for information about the 2014 Tax Practitioner Institutes held in various counties throughout NJ.

* Jim Blankenship answers “8 Questions: Social Security Survivor Benefits” at GETTING YOUR FINANCIAL DUCKS IN A ROW.


Thursday, September 4, 2014


I recently came across a press release from the NJ Department of Treasury from earlier this summer titled “Christie Administration Reunites New Jersey Residents with Record $125 Million in Unclaimed Property and Funds During Fiscal Year 2014”.

The release bragged -

The Unclaimed Property Administration, a division of the State Department of the Treasury, returned a record amount of money to New Jersey residents during the last three years.

During Fiscal Year 2014, the UPA paid a record $125.1 million in claims, eclipsing last year’s record of $107.5 million. The number of claimants also reached a record 70,762, up from 61,978 the previous year. During Fiscal Year 2012, the UPA paid out $95 million, which was a record at the time, to 55,206 claimants.

The State recently surpassed the $1 billion mark in funds reunited with rightful owners during the program’s history.

“Millions of dollars in personal assets become lost or abandoned every year,” said State Treasurer Andrew Sidamon-Eristoff. “The purpose of the Unclaimed Property Administration is to protect the property rights of all New Jersey residents. By securing and safeguarding these funds, we can reunite them with New Jerseyans so they can reclaim what is rightfully theirs.”

Some of this year’s claims included:

·         $1.3 million received by a Hudson County family for an estate claim;

·         $553,000 received by a Passaic County man mostly for certificates of deposit;

·         $424,000 received by an Ocean County man for bank checks,

·         $377,000 received by a Bergen County woman mostly for healthcare policy benefits and bank accounts.”

I did not do as good as those mentioned in the press release, but in 2006 I was able to get over $4,500 for my family via the NJ Unclaimed Property Administration.  Click here and here for the story.  I also received another $700+ for my family in a subsequent search.

The National Association of Unclaimed Property Administrators explains –

Unclaimed property refers to accounts in financial institutions and companies that have had no activity generated or contact with the owner for one year or a longer period. Common forms of unclaimed property include savings or checking accounts, stocks, uncashed dividends or payroll checks, refunds, traveler's checks, trust distributions, unredeemed money orders or gift certificates, insurance payments or refunds and life insurance policies, annuities, certificates of deposit, customer overpayments, utility security deposits, mineral royalty payments, and contents of safe deposit boxes.”

I have found that much of the unclaimed property currently held by the states is the result of the demutualization of insurance companies. Companies are required by law to turn "abandoned" funds over to the state, which then makes an effort to find the owner or heirs. Unclaimed funds are held until the owner or current heir is found — the money does not revert to the State Treasury after a period of time.

In most cases you will not necessarily receive the actual property (i.e. stocks, mutual fund shares, bonds, etc).  The State will sell the stocks, bonds or other property upon receipt and deposit the proceeds to the fund.

Each of the 50 states has an Unclaimed Property fund.  You can access your state’s fund directly via the NAUPA website.  Or you can go to  Perform a search on your name and the names of your family members, both living and deceased. You may find that somewhere out there someone is holding money that belongs to you or your family!