Friday, July 1, 2011


Lots of BUZZ since the last installment – so I am a day early.

FYI – blogging, and wandering the web, is one excuse I have used to avoid finishing the GD extensions that I can. So I will do neither until the GDEs are done! While I will be attending a holiday cook-out this week-end, the rest of the time will be devoted to GDEs (I promise!). The next time you see a post at TWTP you can be assured that there is a smile on my face and that the GDEs are up-to-date.

* Last week the Senate Finance Committee held a hearing on the relationship between the complexity of the tax code and the $345 billion annual “tax gap,”

The Committee’s official press release quotes Chairman Max Baucus (D-Mont.) -

The tax code has grown far too complex, and it’s becoming much too difficult for honest Americans to calculate and pay their tax bill. We should make determining a taxpayer’s responsibility as easy as possible so we are able to collect more of the $345 billion in taxes that are owed but unpaid each year. Especially in these tough economic times, $345 billion is far too much to waste. A simpler tax code will ease the burden of compliance on honest Americans and help them meet their responsibilities.”

Hey, it’s a start! Though I am among those who do not have high hopes for any substantive action. Once I have completed my series on re-writing the Tax Code, and have organized and reformatted it, I will, however, send a copy to the Committee.

* Click here for a chart of scheduled State Sales Tax Holidays from the Federation of Tax Administrators.

* Trish McIntire gives a good overview of the “Office In Home” deduction at OUR TAXING TIMES.

I am a perfect example of a qualified home office. I work at home. I have no other place of business. My home office is used exclusively for business (I have a separate desk and filing area for personal “stuff” elsewhere). I occasionally (as little as possible) meet with clients in my home office.

Trish points out -

If a small business qualifies, the Office in Home deduction can be a great benefit to the business owner. It allows him/her to deduct for the use of their home. But even better is the effect it has on commuting miles. Without the OIH, the miles to the first job or errand are commuting and not deductible. A valid OIH allows the business owner to log and deduct the miles they drive for business when they leave their home. Their commute is a very short walk.”

And very wisely advises –

Office in Home can be very confusing and as mentioned in this post, there several sets of rules. So, please check with your tax professional to see if you qualify.”

* TAX GIRL Kelly Phillips Erb provides some timely tax tips in her post “Ten Tips For Claiming Summer Camp Expenses On Your Taxes”.

* I certainly do! Joe Kristan reports that “Preparers Support Higher Penalties on Negligent and Fraudulent Taxwriters” at the ROTH AND COMPANY TAX UPDATE BLOG.

Joe suggests the following penalties –

“- For any effort to "solve" a problem with a new tax credit or deduction: a choice between two hours in the stocks in every county seat in the congresscritter's home state, or riding a bike naked across Iowa in January.

- For every bill drafted with the fraudulent title of 'temporary' to game the budget score keeping process, like the dozens of 'extenders' passed every year or two, a choice between public flogging or resigning from office and permanent exile to a monastery, subject to an eternal vow of silence

Yes, these are too lenient, Joe! To those who suggest tar and feathers I will not say “nay”.

* Here is the word from “National Taxpayer Advocate Submits Mid-Year Report to Congress;Identifies Priority Challenges and Issues for Upcoming Year” -

National Taxpayer Advocate Nina E. Olson today {June 29th – rdf} released a report to Congress that identifies the priority issues the Taxpayer Advocate Service (TAS) will address during the coming fiscal year. The report expresses particular concern about the impact of IRS budget cuts on taxpayer service and tax compliance and about IRS lien filing practices.”

The press release points out (highlight is mine) –

The last few years have been particularly challenging for taxpayers and the IRS, as the recently enacted Economic Stimulus Payments, First-Time Homebuyer Credit, and Making Work Pay Credit, among other tax benefits, have proven complex to claim or substantiate and have led to a significant increase in taxpayer inquiries and problems.”

On the subject of “Tax Reform and Tax Complexity” -

The National Taxpayer Advocate will continue to engage the taxpaying public in a dialogue about fundamental tax simplification. To help advance this process, TAS has established an electronic suggestion box to solicit comments from taxpayers regarding which tax breaks they would be willing to give up to achieve a simpler tax system and which tax provisions they consider to be particularly unfair. To date, TAS has received some 1,500 comments.”

Click here to download the report.

* TAX PROF Paul Caron quotes from “
Spending in Disguise" by Donald P. Marron in his post “Tax Reform and Tax Expenditures”.

Donald tells it like it is (the highlight is mine) -

A great deal of government spending is hidden in the federal tax code in the form of deductions, credits, and other preferences — preferences that seem like they let taxpayers keep their own money, but are actually spending in disguise. Those preferences complicate the code and often needlessly distort the decisions of businesses and families. The magnitude of these preferences raises the possibility of a dramatic reform of the tax code — making it simpler, fairer, and more pro-growth — that would amount to simultaneously cutting spending and increasing government revenue, without raising tax rates.”

* First it was TAX GIRL Kelly Phillips Erb. Now Forbes has frequent TWTP commenter Peter Reilly of PASSIVE ACTIVITIES AND OTHER OXYMORONS. His first post at his new home is “New York Marriage Equality – Tax Implications”.

Peter correctly points out –

What complicates same sex marriage is the Defense of Marriage Act. According to Section 3 of DOMA, in order for a marriage to be recognized for purposes of any federal law it must be between a man and woman and a spouse has to be someone of the opposite sex.”

Hey, Forbes. I’m available for the right price!


1 comment:

Peter Reilly said...

I'm going to try to keep the blogspot going at a slower pace. Not sure how guest posting would work with Forbes. The Boston Tax Institute material will stay on blogspot and I'll probably do my round-ups there maybe once a week. I appreciate your being so welcoming in the tax blogosphere. If you have some NY same sex married couples in your client base, it may tempt you to try software just to check the possible scenarios.