WHAT’S THE BUZZ, TELL ME WHAT’S A HAPPENNIN’

“A tax loophole is something that benefits the other guy. If it benefits you, it is tax reform” — Russell B. Long   

* Check out the January “issue” of THE TAX PROFESSIONAL – the last word from TTP until after the tax filing season.   

And fellow tax pros, PLEASE send me your comments on my editorials.

* Did you see this week’s post at BOB’S BABBLINGS yet?  Why not?  

* MainStreet.com continues with my filing season Tax Tips –

ü “Don't Be Too Early or Too Late With Filing Your Taxes to the IRS”,

ü “Tax Time Means It's Necessary to Stock Up on Grains of Salt”, and

ü “Your Tax Forms Are In the Mail: A Guide to Deciphering Your IRS Paperwork”

They were behind, but have been catching up this week.

* Jean Murray gives us the “7 Most-Asked Business Tax Questions – Answered” at ABOUT.COM.

I have a different answer to Jean’s #4 - “Do I need a CPA to prepare my business taxes?”  The answer is a definite NO.  You do not NEED a CPA to prepare any income tax return.  You only NEED a CPA if you must submit audited or reviewed financial statements to a third party.

You may want to engage a particular CPA to prepare your business tax returns because of the ability of and other factors applicable to that particular CPA.  However you can also engage an EA (Enrolled Agent) or a Public Accountant (non-certified), or even an “unenrolled” tax preparer – again because of the ability of and other factors applicable to the specific EA, accountant, or preparer.

I also disagree with her statement – “A simple service business (no products) filing Schedule C can use a tax software program.”  No tax preparation software is a substitute for knowledge of the Tax Code.  And no tax preparation software is a substitute for a knowledgeable and experienced tax professional.  You should not trust something as important as your businss tax return to a “box”.

I do agree that “a corporation or complicated partnership probably needs a tax expert.”  But a CPA is not necessarily a “tax expert” – certainly not simply by virtue of possessing the initials “CPA”.  And there are plenty of other “tax experts” from which to choose, most less expensive (without sacrificing quality) than a CPA.

I could not find a way to submit the above as a “comment” to Jean’s post at ABOUT.COM.

* Is a puzzlement.  According to Kelly Phillips Erb, FORBES.COM’s TaxGirl, “Walmart Says 'Skip The Check' & Pick Up Tax Refunds In Cash” -

“Customers can opt in to Direct2Cash using software or at specific tax preparation locations: there are more than 25,000 participating sites, including some in-store locations staffed by Jackson-Hewitt. . . .

After filing, customers will receive a confirmation code for their federal and/or state tax return via email (customers who file a federal and state tax return will get two confirmation codes). Customers will then go to the Walmart MoneyCenter or customer service desk at their local Walmart store, show their confirmation code, confirm their identity, and then receive their refund in cash. Walmart does not charge customers a fee when refunds are claimed in a store.”

KPE points out that –

“This isn’t a RAL (refund anticipation loan). It’s not a loan at all. It’s more of a e-check/check cashing service all in one.”

I do not understand.  Just because a tax preparer like Jackson Hewitt says you are going to get a refund of $XXX does not mean that the IRS is going to send you a refund of $XXX.  And what happens to the actual refund check?  How can taxpayers get money that is not a loan before the amount has been verified and issued by the IRS.

Kelly – please explain further.

The fee, charged by the tax preparer, for this “convenience” will be at most $7.00.  However if you must use Jackson Hewitt to get the service it may cost you a lot more than $7.00 in the long run.

My advice – avoid this program.

* The website of the NJ Division of Taxation now announces - “The Division will begin mailing 2014 Property Tax Reimbursement applications to homeowners and mobile homeowners in mid-February”.

They are talking about the PTR-1 and PTR-2 forms.  The original deadline will probably be announced as June 1^st, as it is every year.  But, again as it is every year, the deadline will eventually be pushed to October.

And, also as usual, the income threshold for 2013 (80,000+) will be reduced to $70,000 to balance the budget on June 30^th.

Look for a post on the PTR program here at TWTP before I begin my tax-season hiatus.

* A good suggestion from Trish McIntire of OUR TAXING TIMES – “Savings Bonds from Refunds”.  

* Trish also discusses “myRA - A Retirement Alternative”.

This account was first discussed by BO in his 2014 State of the Union address – but it was soon forgotten.  Apparently, as Trish reports –

“The Treasury Department has the program up and running now.”

This is something I need to do more research about myself.

* Michael Cohn reports at ACCOUNTING TODAY that “IRS Scammers Net $14 Million from 3,000 Victims” –

“The pervasive IRS impersonation phone scam has claimed nearly 3,000 victims who have collectively paid over $14 million, according to a new warning from the Treasury Inspector General for Tax Administration.

As the 2015 tax filing season begins, TIGTA reminded taxpayers to beware of phone calls from individuals claiming to represent the IRS while intending to defraud them.”

Remember – the IRS will NEVER EVER make first contact by telephone.  And, as the item states –

“The agency {IRS} will not ask for payment using a pre-paid debit card or wire transfer. IRS employees also will not ask for a credit card number over the phone.”

TTFN