Tuesday, December 22, 2015


A rather “meaty” pre-Christmas BUZZ.    

* Just a reminder – the PATH Act of 2015, which permanently extends many of the popular “tax extenders”, has been passed and signed into law by BO.  All of the extenders are available for 2015 returns.  The PATH Act also contains some other good news.  Click here to see my earlier TWTP post “A New Path”.

* In my analysis of the PATH Act I say about those items that were extended through 2016 - “These include a laundry list of industry-specific business tax benefits that were bought and paid for by lobbyists lining the pockets of legislators.”

Unfortunately one of the problems with the current complicated and convoluted Tax Code is the fact that it includes a “reality tv-load” of pork.

Kelly Phillips Erb expands on my comment by identifying some of the pork in the PATH Act in her listing of “10 Breaks In The Tax Extenders Bill That Probably Won't Help You At All” at FORBES.COM.

I do take exception to items #9 and #10 on Kelly’s list –

9. IRS employees prohibited from using personal email accounts for official business.

10. Duty to ensure that Internal Revenue Service employees are familiar with and act in accordance with certain taxpayer rights.”

Anything that attempts to increase the competence and ethical behavior of IRS employees will help taxpayers.

* The passage of the PATH Act also assures that, as Kay Bell reports at DON’T MESS WITH TAXES, “Tax Filing Season 2016 Should Start on Time”.

Kay quotes IRS Commissioner John Koskinen’s announcement that "The normal start of the filing season would be January 19”.

The PATH Act also makes the job of the IRS easier in the future.

Of course, while I can actually begin to prepare 1040s on January 1st, the tax filing season always begins for me on February 1st - by which time taxpayers should have received their W-2s and many 1099s.  I can count on the fingers of one hand the number of 1040s or 1040As, other than my own, that I have prepared over the past 44 tax seasons prior to February 1st.  

* Did you know that the "PATH Act Expands Penalty-Free IRA Distributions for Education"?  Sarah Brenner tells us at THE SLOTT REPORT.  
* Russ Fox gives us his take on the PATH Act in “The Great, the Good, and the Bad of the Extender Legislation” at TAXABLE TALK.

I most certainly agree with his “bad” items, and join him in saying –

I strongly dislike welfare being done through the Tax Code. It causes the Tax Code to be complex, and puts the IRS in a mission it shouldn’t be in. Second, I dislike refundable tax credits; they lead to fraud and are difficult for the IRS to manage.”

* I don’t want this to be an “All PATH Act Edition” of the BUZZ, so let me at least get a plug in –

Attention Tax Professionals.  Click here to learn about some great resources for use in your practice during the upcoming tax filing season.

* And tax pros, while I have your attention let me return to Kay Bell and her suggestions for “Christmas Gifts for Tax and Financial Geeks”.

One of the shirts she mentions excellently summarizes my tax filing season routine.

* Final entry in a tax pro trifecta - the blog of the NATIONAL SOCIETY OF ACCOUNTANTS (the “other” NSA) reports “The IRS will be mailing the following letters to return preparers on Tuesday, Dec. 29”.

* Professor Annette Nellen continues her series at 21st CENTURY TAXATION on the “Top Ten Items of Tax Policy Interest for 2015” with "#2 - IRS Funding Challenges” -

Despite an aging workforce resulting in many retirements, a tax statute that is made increasingly more complicated each year, and the need to modernize operational and technology practices, the IRS budget has been cut by over $1.2 billion from FY2010 to FY2015.”

I agree with the Professor that this is a problem.

On one hand the idiots in Congress continue to force unnecessary and extraneous jobs on the IRS – joining tax preparers in becoming Social Workers by having to administer government benefit programs like the EITC and Obamacare – without providing sufficient additional funding.

Yet on the other hand there is certainly mismanagement of the reduced funding by the Service.

The IRS needs proper funding and new top management.

* Joe Davidson asks “Will Scammers Hide Behind New Law for Private Tax Collectors?” at THE WASHINGTON POST.


Passing the PATH Act, despite the customary lateness, showed some signs of intelligence on the part of the idiots in Congress.  However, requiring the IRS to use outside collection agencies is so idiotic it solidifies the overall reputation of the fools in Washington as true idiots.

* During the holidays Jason Dinesen will be showcasing posts “From the Archives” at DINESEN TAX TIMES.  He begins with some good advice from 2013 that is still relevant – “Insolvency and Canceled Debt: Make Sure You Can Prove It!”.

* Let me end by announcing that Kelly Phillips Erb begun her annual “12 Days of Charitable Giving 2015” with the charity “Wounded Warrior Project” - certainly one worth supporting now and throughout the year.


I will be engaged in my annual Christmas Eve Day tradition again this year – typing W-2s and 1099s!  I also spend New Years Eve Day each year typing W-2s.

Best wishes for a Merry and “Successful” Christmas!


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