Wednesday, July 27, 2011

WHAT’S THE BUZZ? TELL ME WHAT’S A HAPPENNIN’ – WEDNESDAY EDITION

Sorry no posts so far this week. I spent Saturday through Monday night at Jersey shore for three great performances (XANADU, SOUND OF MUSIC, and John and Bucky Pizzerelli), about which I will post on Sunday. When I got back the GDEs were still in the box – and I have been working on the last of them.

* If you still haven’t done so, also check out the premiere issue of my new FREE monthly (except February and March) newsletter
LOIS (Lots Of Interesting Stuff). It is full of, well, lots of interesting stuff. While it says it is dated 2010 this is a FU – it is really dated 2011.

* Kelly Phillips Erb’s fellow blogger at FORBES.COM, Robert W Woods - THE TAX LAWYER, tells us that a “Kinder Gentler IRS Lifts Innocent Spouse Barrier

But now the IRS says its rigid two-year rule for equitable relief is out the window. (The two-year rule for innocent spouse claims under other provisions continues to apply.)

Innocent Spouse relief is not to be confuses with Injured Spouses (although it often is). As an item at ehow.com explains –

An injured spouse can get relief when the IRS withholds a joint refund due to debts or obligations of the other spouse. An innocent spouse can get relief when the other spouse makes false reports on a joint return.”

* Scott Hodge asks a good question at the Tax Foundation’s TAX POLICY BLOG – “Shouldn't Nonpayers Also Share in Cost of Deficit Reduction?” (highlight is mine) -

During his speech {Monday} night, President Obama spoke about the need for shared sacrifice in any plan to reduce the nation's debt. He insisted that some taxpayers were not paying their fair share of taxes and that they should pay more taxes as part of a balanced approach to deficit reduction.

While the target of the President's remarks were those taxpayers earning over $250,000, he could have just as well been talking about the record 51 percent of Americans who now pay no income taxes and, thus, contribute nothing to the basic cost of government. While some of these households don't earn enough to file a tax return, millions of others have been knocked off the income tax rolls because of the generosity of the credits and deductions that have been created in recent years to help ‘middle-class’ taxpayers.

IRS data for 2009, the most recent available, shows that more than 50 million tax filers had no income tax liability after credits and deductions. This amounts to 36 percent of all filers
.”

I have been saying for years that (1) these credits do not belong in the Tax Code, and (2) there should be a true “minimum tax” of at least $100.00 for every non-dependent taxpayer over the age of 21.

* Another good question asked, and answered, by the “Show Me” state’s TAX GUY – “Are You Enjoying a Hobby – or Running a Business?”.

* A belated few items that may be of interest to some taxpayers (and tax preparers) from NATP’s weekly membership email newsletter -

High-Low Method Discontinued:
In
Announcement 2011-42, the IRS announced that it is discontinuing the high-low method for substantiating lodging, meal and incidental expenses incurred while traveling away from home. Last year, the IRS asked for comments on this method and it received none. Later this year the IRS will publish a revenue procedure that provides guidelines for substantiating travel expenses; it will then no longer publish annual updates.”

And -

Extension for Highway Vehicle Use Tax:
We mentioned in the last TAXPRO Weekly that we were waiting for news on the Heavy Highway Vehicle Use Tax and this week the IRS provided
IR-2011-77 in which they announced the Form 2290, Heavy Highway Vehicle Use Tax Return due date was extended three months from August 31 to November 30, 2011. The IRS issued this extension in an attempt to alleviate any future confusion. Currently, the highway use tax is scheduled to expire on September 30, 2011, and the extension should prevent multiple filings if Congress decides to reinstate the credit or modifies the tax.”

FYI, in 40 tax seasons I have never used the high-low method nor have I ever filed a Form 2290.

TTFN

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