Friday, February 27, 2009


As I have mentioned back at the beginning of February, I barely have enough time to relieve myself let alone blog during the tax filing season (Feb 1 – April 15). Any ASK THE TAX PRO questions submitted via email and any Comments that include a specific question are stored away in a file for response sometime AFTER April 15th!

While you can’t ASK THE TAX PRO your pressing tax questions during the season (unless you are a client - and read my lips NO MORE CLIENTS) you can turn to fellow tax-blogger Roni Deutch, aka THE TAX LADY, and ASK THE TAX LADY.

Roni has become a weekly contributor on CNBC's "On the Money" program in a segment called "Ask the Tax Lady," where viewers get to call in and get their questions answered.

You can submit your question online at
See - I am thinking about you!


Friday, February 13, 2009


* From an item on - “Nearly 1 of every 6 tax returns filed so far includes errors in reporting last year’s federal stimulus payments, the Internal Revenue Service said, blaming confusion among professional tax preparers and early releases of tax software.” Hey Congress, and the IRS – I told you so!

* Kay Bell quotes from a guest editorial in the Cincinnati Enquirer by former IRS attorney Howard Levy in her post “A National Amnesty is the Answer”.

Right on, Howard! I have been calling for a Federal Tax Amnesty Program for years. I discussed it in my post “Tax Amnesty”.

I wrote to my Congresspersons about the issue. As usual Senators Menendez and Lautenberg totally ignored my correspondence, but I did hear from Representative Albio Sires, who apparently actually read my letter –

Nevertheless, the Congressional Joint Committee on Taxation has expressed reservations about the prospect of an amnesty. The Committee released a report in a previous Congress concluding that amnesty would ultimately hinder tax collection and reduce net revenue. The reasoning is that individuals would become less likely to pay their taxes in future years, perhaps in expectation that the government would once again write off interest and penalty fees.”

I do not agree. The concerns expressed by the JCOT regarding reduced payment in anticipation of a future amnesty have not proven to be a problem with the various state programs.

As I have proposed, the legislation creating the Federal Tax Amnesty Program would state that the federal government would not be able to institute another Amnesty for at least ten (10) or fifteen (15) years after the end of the current amnesty period.

IRS collection activity would not cease or slack off once the initial program has completed in anticipation of future amnesties. If anything the Service should be more aggressive in its collection efforts after the amnesty period ends.

Kudos to Kay for bringing up this issue for discussion.

* No time to post on the newly passed “Stimulus” Package. As usual, TAX PROF Paul Caron is on top of things with lots of links to info on the tax provisions of the package. Click here.

Monday, February 9, 2009


Some comments on comments -

If you have submitted a comment that includes a tax question and it has not been published this does not mean that I have ignored you. During the tax filing season I barely have time to relieve myself let alone deal with tax questions from non-clients that require some thought, research or verification. I am “stockpiling” these questions in an “inventory” and will answer them, if appropriate, in ASK THE TAX PRO posts after the end of the season. So if you are looking for an answer to a question about the 2008 tax return you are working on don’t expect me to answer it in time for the April 15th deadline – ask your tax pro the question.

FYI, THE WANDERING TAX PRO is not a substitute for your software’s technical support department. For one thing – I have never in 37 years used tax software to prepare a return, so I have no knowledge of any tax software package and wouldn’t know how to help you even if I wanted to. And anyway, software technical support people get paid good money to deal with your questions, and in most cases the help is free.

While I do welcome comments in which you disagree with either my personal opinion or interpretation or application of tax law, I will only post comments that actually add to the discussion and not ones that are nothing but negative criticism.

Friday, February 6, 2009


It has been a quiet beginning to the season – no deluge yet, barely more than a trickle.

I had some time, and I couldn’t resist posting this info on a recent TIGTA study of the Earned Income Credit. The highlights below are mine -

The Treasury Inspector General for Tax Administration (TIGTA) today publicly released its most recent review of the Internal Revenue Service's (IRS) Earned Income Tax Credit Program (EITC).

The report concludes that the IRS has successfully developed processes to identify erroneous EITC payments prior to their issuance to taxpayers. However, the IRS estimates that between $10 billion and $12 billion in erroneous EITC payments were made in Tax Year 2006. This estimate was based on data for Tax Year 2006, which was the latest data available at the time the audit was conducted. The IRS received $43.7 billion in EITC claims during that time. (A Tax Year for individuals is the calendar year used to compute a taxpayer's taxable income.)

Reducing erroneous and improper payments has been previously identified by TIGTA as an IRS major management challenge. The current findings are the latest in a series of audits issued by TIGTA since 2002 identifying problems with the EITC.

TIGTA's new report concluded that while the IRS has improved its oversight and management of the EITC program, it is still unable to stop the majority of erroneous EITC claims. The report found that the IRS's compliance resources are limited and additional alternatives to traditional compliance methods have not been developed, resulting in the majority of the potentially erroneous EITC claims identified being paid in error


Sunday, February 1, 2009


Joy to the world - tax season’s here.
I’ll soon be flush with cash!
Let every client be organized,
and give me all I need, and give me all I need,
and give me all I need to prepare their returns!

My 38th tax season has officially begun - the floodgates have been open!

And now for what will be a February 1st tradition here at THE WANDERING TAX PRO - “The Twelve Days of Tax Season” -

On the first day of tax season my client gave to me a Closing Statement for the purchase of a home.
On the second day of tax season my client gave to me 2 W-2 forms.
On the third day of tax season my client gave to me 3 mortgage statements.
On the fourth day of tax season my client gave to me 4 Salvation Army receipts.
On the fifth day of tax season my client gave to me 5 Form K-1s.
On the sixth day of tax season my client gave to me 6 1099s for dividends.
On the seventh day of tax season my client gave to me 7 cancelled checks.
On the eighth day of tax season my client gave to me 8 useless items.
On the ninth day of tax season my client gave to me 9 medical bills.
On the tenth day of tax season my client gave to me 10 stock sale confirms.
On the eleventh day of tax season my client gave to me 11 employee business expenses.
On the twelfth day of tax season my client got from me a finished tax return, 11 employee business expenses, 10 stock sale confirms, 9 medical bills, 8 useless items, 7 cancelled checks, 6 1099s for dividends, 5 Form K-1s, 4 Salvation Army receipts, 3 mortgage statements, 2 W-2 forms, and a Closing Statement for the purchase of a home.
And, of course, on the thirteenth day of tax season the client gave to me a corrected Consolidated 1099 from Wachovia Securities!


As is my custom, due to the demands of the filing season I will be taking my annual “tax season hiatus” from posting to THE WANDERING TAX PRO and the NJ TAX PRACTICE BLOG. Between now and April 15th I barely have time to relieve myself let alone blog! However, in order to maintain my spot on Alltop’s Tax Page I will be posting every 20 days or so. I most likely will be doing “re-runs” – unless there is breaking tax news to report.
Please do not send me any email tax questions for answer in an ASK THE TAX PRO entry between now and April 20th - any such emails will be stored away in "inventory" unread for possible answer after April! Similarly I will not have time to respond to questions posed in "comments" to earlier posts until after the tax season. Any comments submitted with questions will also be put in "inventory".

I realize that I am abandoning you at a time when you may need me the most – but I need to make a living, and my blogs certainly don’t pay any bills!
My clients should visit the WHERE THE FAKAWI Page on my
tax practice website to keep up-to-date on my progress during the season and to learn of any changes or additions to my tax season policies and procedures.

“Talk” to you when it is all over!