"The United States is the only country where it takes
more brains to figure your taxes than to earn the money to pay it." –
former Florida Senator Edward J Gurney
* Tax pros – the
July 15th issue of TAXPRO BUZZ is here! Click here to download.
* In “Tax Expenditures and Oversight” at 21st CENTURY TAXATION Professor Annette Nellen discusses the recent
Government Accountability Office (GAO) report on “Tax Expenditures:
Opportunities Exist to Use Budgeting and Agency Performance Processes to
Increase Oversight” (GAO-16-622). Click
here for the highlights and here for the full report.
Annette says
(highlight is mine) –
“It looks at the estimated $1.23 trillion
annual cost of special tax deductions, exclusions, credits and preferential
rates AND how there is basically no
oversight of these costs relative to discretionary budget items.”
According to the
report highlights the $1.23 trillion in tax expenditures distributed via the
1040 is “an amount comparable to
discretionary spending”.
This lack of
oversight is one of the reasons that government welfare and other social
program benefits, like the Earned Income Credit, the refundable Child Tax
Credit, the various educational benefits, the residential energy credits, etc,
should not be distributed via the
Tax Code.
See my TWTP post
“The Tax Code Needs to be Rewritten from Scratch”.
* Speaking of
federal social welfare programs that don’t belong in the Tax Code - in “Illustrating the Earned Income Tax Credit’s Complexity” the TAX FOUNDATION talks about
another GAO report from earlier this year (highlight is mine) –
“The Government Accountability Office (GAO)
published a report in May of this year. It found that the program suffers from
a high improper payment rate. For the
fiscal year 2015, they found that $15.6 billion of the EITC’s $68.1 billion in
total payments were considered improper, meaning the filer over claimed or
wasn’t eligible. That’s almost a fourth of the entire program’s payments.
The GAO says that the program’s high payment error is a
result of the program’s complex eligibility requirements.”
Once again the
solution – take the EITC and other federal social benefit programs out of the
Tax Code!
* A trifecta - NO! NO! A million times NO! The million and two NOs is my response to “Senator Seeks to Revive First-Time Homebuyer Tax Credit” from Michael Cohn at ACCOUNTING TODAY.
This credit, being
refundable, was, as refundable tax credits are, a fraud magnet when it was in
effect in the past.
As Michael explains
(highlights are mine):
“The original credit was fraught with
erroneous claims, and Congress had to add antifraud protections to the final
extension of the tax break. A report in 2012 by the Treasury Inspector General
for Tax Administration found the
Internal Revenue Service disallowed nearly $1.6 billion in erroneous claims
but said there was likely much more
fraud that could have been caught if the IRS had been given expanded math
error authority from Congress.”
If the idiots in
Congress want to encourage homeownership via subsidies let the subsidy be
provided as a direct government payment at the closing of the qualifying home
purchase.
Read my lips – NO
REFUNDABLE CREDITS! NO DISTRIBUTION OF
FEDERAL SOCIAL BENEFIT PROGRAMS VIA THE 1040!
* Kay Bell tells us
that “NJ looking at ending Pennsylvania tax reciprocity” at DON’T MESS WITH
TAXES.
As Kay explains –
“With reciprocity, the taxpayer files a
return and pays the tax only in the state where they live.”
So NJ resident
taxpayers who work in PA do not pay any PA non-resident state income tax on
their PA-source wages – and do not have to file a non-resident PA state tax
return. The PA employer withholds (or is
at least supposed to) and remits NJ Gross Income Tax from the PA source
wages. And, of course, vice versa with
PA residents working in NJ.
While this creates
some extra work for the employer, and at times some extra work for the taxpayer
or tax preparer when the PA employer erroneously withholds PA state income tax
instead of NJGIT, I have always liked this arrangement and hope it continues.
* At her BANKRATE.COM
tax blog Kay suggests “10 midyear tax moves to make now”.
#10 is “Hire a Tax
Professional”. Begin your search To find
a tax professional click here.
*
Jason Dinesen continues his tour of the 1099 forms with “A Little About 1099s:Types of 1099s (1099-LTC thru 1099-SA)”.
*
It seems that the infamous “47%” is not 44%.
The Tax Policy center’s TAX VOX blog gives us “A Closer Look At Those Who Pay No Income Or Payroll Taxes”.
* Forbes.com’s TAXGIRL Kelly Phillips Erb
reports that “Back To School State Sales Tax Holidays Start Soon”. Kelly provides “a quick list of states offering taxpayers a break this year”.
* Jim Blankenship deals with the issue of
taking an “RMD from an Inherited IRA” at GETTING YOUR FINANCIAL DUCKS IN A ROW
-
“If
you have inherited an IRA you are required to begin taking distributions from
the account according to a set schedule.”
* Michael Cohn from ACCOUNTING TODAY
reports that a new “Group Plans to Audit the IRS” –
“The
Tax Revolution Institute— a Washington, D.C.-based nonprofit that says it
promote ‘justice and integrity in the tax system’—has created a new website,
AuditIRS.com, where it hopes to collect personal experiences from taxpayers
about their encounters with the IRS.”
* From THE HILL “Activists to deliver petition urging {dangerous buffoon} Trump to release tax returns” –
“Democrats
have suggested that Trump is trying to hide something by refusing to release
his returns. Some Republicans, including 2012 Republican presidential nominee
Mitt Romney, have also said that Trump should release his returns.
Trump
has said that he will release his returns once the IRS is finished auditing
him, but the agency has said that an audit does not prevent taxpayers from
releasing their own information.”
Of course he has something to hide – he
does not make as much as he says he does, and he gives next to nothing
(proportionate to his income) to charity.
* And, returning to Kay Bell’s BANKRATE.COM tax
blog, we also hear that someone has offered a “$5M ‘reward’ for Trump tax return” –
“An
anonymous individual has offered to donate that amount to a veterans' charity
if the presumptive Republican presidential nominee will release his tax
returns.
The
inquisitive donor, who wants to keep his identity private, reportedly will even
let The Donald choose the charity.”
THE FINAL WORD
Does this sound
like anyone we know?
“The late Theodore Millon, one of the
co-developers of the Diagnostic and Statistical Manual of Mental Disorders,
devised the subtypes of personality disorders and described the attributes of
the “unprincipled narcissist” disorder as: deficient
conscience; unscrupulous, amoral, disloyal, fraudulent, deceptive, arrogant,
exploitive; a con artist and charlatan; dominating, contemptuous, vindictive.
These personality attributes shape behavior patterns which, in the unprincipled
narcissist, tend toward self-absorbed
egotism. Symptoms include an
excessive need for admiration, disregard for others’ feelings, an inability to
handle criticism, and a sense of entitlement.”
“We are just a few short weeks from when
Chief Birther Donald Trump, an unscrupulous, amoral, vindictive, con man,
sweeps into Cleveland and becomes the
scariest and most profoundly unqualified person to ever be nominated by a
political party in the history of the United States.”
From “’A Trump speech is just a story starring Trump’: Science proves The Donald is a textbooknarcissist”.
TTFN
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