WHAT’S THE BUZZ, TELL ME WHAT’S A HAPPENNIN’ – TUESDAY EDITION

“We piddle, twiddle, and resolve.  Not one damn thing do we solve!”

John Adam’s observation about Congress from 1776 is perhaps more applicable today than in revolutionary times.

The idiots in Congress continue to demonstrate their total incompetence.  It is less than 2½ months till the end of the year and the idiots have still not addressed the issue of the “tax extenders”. 

Shit or get off the pot!

It is very, very important that one “extender” is extended - if it is going to be extended - before the very last minute.  I speak of the direct tax-free transfer from an IRA to a charity in satisfaction of an RMD.  By waiting till the end of December it will be too late for most taxpayers who would benefit from this to take advantage of it. 

BTW – I finally broke the 1000 followers mark at Twitter.  Are you following me (rdftaxpro)?

* Chris Edwards and Veronique de Rugy of THE CATO INSTITUTE took a close look at the Earned Income Tax Credit, and have reported their findings in “Earned Income Tax Credit: Small Benefits, Large Costs”.

The conclusion that Chris and Veronique came to after their examination of the program agrees with what I have been saying for years (highlights are mine) -

“We conclude that the costs of the EITC are likely higher than the benefits. As such, the program should be cut, not expanded. Policymakers could better aid low-income workers by removing government barriers to investment, job creation, and entrepreneurship.”

Some items of interest from the article (highlights are mine) –

·      “In 2015 it will provide an estimated $69 billion in benefits to 28 million recipients.  The EITC is the largest federal cash transfer program for low-income households.”  {said another way -  “the biggest federal welfare program” – rdf}

·      “The Internal Revenue Service reports that the EITC error and fraud rate in 2014 was 27 percent – which amounted to $18 billion in overpayments.”

·      “The EITC generates a large bureaucratic cost. . . The credit is so problematic that 39 percent of all IRS audits under the individual income tax are done on EITC filers.”

·      “The EITC is primarily a spending program. . . . 88 percent of the benefits - $60 billion a year – are payments to people who owe no income tax.”

The Earned Income Tax Credit, any “refundable” credit, does not belong in the Tax Code.  The Tax Code should not be used to distribute federal welfare and other social benefit programs.

* The latest TAX FOUNDATION map answers the question “How Do Property Taxes Vary Across The Country?”.  It shows “the average property tax deduction taken on the Schedule A, per tax return, for each county in the United States”.

This was not news to me (highlight is mine) –

“The most heavily-shaded state is New Jersey, which has the highest property tax collections per capita.”

* Some startling news from Millie Dent at THE FISCAL TIMES – “Taxpayers Lose $23 Million in IRS Phone Scam” -

“Roughly 4,550 people have paid more than $23 million over the past two years to scammers claiming to be employees of the Internal Revenue Service (IRS), according to a news release from the Treasury Inspector General for Tax Administration.

The Treasury Inspector General, J. Russell George, reports that while progress has been made in the investigation of ‘the largest of its kind’ scam, the case is still underway and taxpayers are urged to remain on ‘high alert’.”

What to do? (highlight is mine)

“George advises to hang up immediately if you receive a phone call from somebody claiming to be from the IRS demanding immediate payment. An estimated 736,000 people have reported receiving these calls since October 2013.”

* Russ Fox paraphrases my annual “That Was The Tax Season That Was” post title with an early review of “That Was the Year that Was” (can anyone identify the source reference of these post titles?).  It is actually a belated (although not if you consider 10/15/15 as the end of the filing season) review of the 2015 tax filing season (for 2014 returns), at TAXABLE TALK.

He agrees with me somewhat, stating “This definitely wasn’t the best tax season but it also wasn’t the worst” yet adding “(but it was close to the bottom)”.  For me it was not close to the bottom.

We agree on most points –

"·      Tax extenders were passed late, but there weren’t any surprises. Thus, the impact to the 2015 Tax Season was minimal.

·      For the most part ObamaCare did not impact many of my clients.

·      The same can’t be true for the IRS budget cuts. This probably impacted me more than any of the other issues I faced.”

However, my issue with the budget cuts was not “Calling the IRS was almost a joke” (I never call the IRS or any state tax agency), but the serious delays in sending out client refunds.

Russ also felt “The property regulations almost had a huge impact”.  This was not true for me, I expect to the differences in our client make-ups.

TTFN