Friday, November 29, 2013


Happy Black Friday!  I will not be stepping foot in any retail establishment today.

I trust you had a successful Thanksgiving.  I dined at the “Settlers’ Inn” in Hawley with my sister, who came up from New Jersey.

* Let’s start off with a Thanksgiving-related non tax post by Brad Plumer from the Washington Post’s WONKBLOG – “The Turkey Pardon is America’s Dumbest Tradition”.

* It’s almost time for the December “issue” of THE LAKE REGION SOMETHING.  Have you read the November “issue” yet?

* “Who Speaks for the Tax Preparer?”  That’s what I ask at TAXPRO TODAY.

Tax pros – what do you think?  So far the response has been positive – but would like more of your comments.
* If you have not begun your year-end tax plan yet, now is a good time to review my suite of year-end articles at MAINSTREET.COM - 

* JK LASSER talks in detail about “Family Giving Before Year-End”.

I am often asked if the recipient of a gift has to report the gift as income on their tax return.  As the item points out, it is important to remember –

Your family and others can receive gifts of cash and property in any amount without any immediate tax consequences. However, if you give them property, they need to know your tax basis and holding period; this will impact whether they have gain or loss when they sell the property, and whether the gain or loss is long term or short term.”

So if you are, for example, gifting shares of stock or a mutual fund from your portfolio be sure to give the recipient a copy of your original purchase confirm, or let them know when you purchased the investment you are gifting and how much you paid for it.

And, as the recipient of the gift is not taxed on the amount of the gift, the giver cannot claim a tax deduction for the gift.
* THE SLOTT REPORT suggests that you “Contribute to BOTH Your 401(k) and IRA in 2013”.

* I’m sorry, but I just couldn’t pass by this item from TaxGirl Kelly Phillips Erb at FORBES.COM – “This Man's Nuts: Plan To Sell Testicle For New Car Is Taxable”.

The apparent sale price in question is $35,000.  At that price it is certainly not brass!

* Barbara Weltman reviews and comments on some of Max Baucus’ business tax proposals in “My Take on the Latest Tax Reform Proposals” at BARBARA’S BLOG.

* Let me end with “Holiday TV 2013: When to Watch Holiday Specials, Movies, Classics” from the CHICAGO TRIBUNE.

There are certainly some “specials” that I will be missing.  And I am thankful there is no Blake Shelton “special” this year – last year’s was the worst Christmas “special” in history.  


There are 2 reasons I will not be seeing the new THE SECRET LIFE OF WALTER MITTY movie in theatres this Christmas.

1)  While I love the work of his parents, I avoid movies with Ben Stiller and his contemporaries.  For the most part they are excessively juvenile, written for an audience with the wit and maturity of a 5th grade boy.  Their unsuccessful attempts at humor often feature frequent examples of or references to a variety of bodily excretions and secretions.  To be fair, however, on balance the films of Ben Stiller are not as bad as those starring or produced by Adam Sandler, clearly the biggest offender in the group.

2)   The film is totally unnecessary.  It will most certainly be far inferior to the original 1947 Danny Kaye movie.  Ben Stiller is obviously not in the same class as Danny Kaye.  I wonder if the “remake” will actually have nothing to do with the original story or movie, but does nothing more than steal the title and basic idea of the movie, like the Steve Martin CHEAPER BY THE DOZEN movies of a few years back.

Take my advice and, instead of wasting your money at the box office, rent the original on DVD.     


Thursday, November 28, 2013

Wednesday, November 27, 2013


This year the National Association of Tax Professionals returned to the Boardwalk for their annual Atlantic City TAXPRO Symposium year-end tax updates.  It was held at Resorts Casino Hotel. 

For the past few years the classes were at the Sheraton across from the Convention Center and blocks away from the Boardwalk.  The room rate was higher, it cost $10.00 per day plus tax to park (instead of the $5.00 total parking fee for my entire stay at Resorts), and had limited dining options.  The only positive was the hour or so per day of free wifi provided at their computer lounge near the meeting rooms (there was no wifi available anywhere I could find at Resorts).

Although I personally do not gamble (at most $20.00 in the slots), I could never understand why an organization would hold an event in a gambling town and not stay at a gambling hotel.  I learned that the reason is because the casino hotels do not consider “tax preparers” to be gamblers, and therefore do not compete for our business.  I disagree – every time we sign a client’s tax return we are gambling! 

The Sheraton had been chosen because it provided the least expensive (to NATP) “amenities” (i.e. continental breakfast, afternoon snack).  I could understand this “inexpensiveness” during the one symposium I did attend at the Sheraton.  The “continental breakfast” provided by the hotel was, at that time, the skimpiest I had ever encountered in my almost 30 years of attending tax CPE classes.  However the offering from Resorts on the first day of this year’s symposium beat out Sheraton and holds the title as the worst continental breakfast ever (although it did improve a bit on the second day).   

A problem with being at Resorts on Monday through Wednesday is that all of the in-house dining options are not open – limiting one’s choices for lunch and dinner.  Of course the most reasonably priced of the options was one that was closed.  There was no desk, and no “This Week In Atlantic City” magazine or any hotel promotional literature or information in my room.  And no tv channel listing the day’s events and meetings.  I found the meeting room for the symposium only by luck. 

While, for me, Resorts was an improvement over the Sheraton, I would prefer that the symposium return to Caesar’s or Bally’s, or maybe change to the Tropicana.

One other odd thing about my stay at Resorts.  The advertised “conference rate” was $79.00 per night (of course this did not include the various taxes and fees).  However I booked my room online a few weeks before the symposium for $59.00 per night (plus taxes, etc).  The room was clean and comfortable and well located. 
So a word of advice - before booking a hotel for a seminar or conference at the "conference rate" go online, either directly to the hotel or to a booking site like Expedia or, and see what rate you are given.  The "special" conference rate may not always be the best. 

Enough about the venues – on to the class content.  I will list some of the items of interest from each day.

The first day was devoted to the topic “Starting and Liquidating a Business”.

·   The text referenced a special IRS Audit Technique Guide titled “IRC Section 183: Activities Not Engaged in For Profit” that can be downloaded at the IRS website.  The IRS uses this guide in audits to determine if an activity is a hobby or a business.

·   We were reminded that owners of a one-person LLC should not pay his/her personal bills from the LLC checking account.

·   I learned of Form 8881 “Credit for Small Business Employer Pension Plan Startup Costs”, used to claim an annual credit for 50%, up to a $500 maximum, of the first 3 years of costs to set up and administer an employer plan.

·   When it comes to selling your business via an asset sale, and not a sale of the corporate stock, it is much “more better” to be a sub-S corporation than a regular C corporation.  This is a factor to consider when starting a business.

The second day was the annual 1040 update class “The Essential 1040”, which reviewed what is new for the federal Form 1040 for 2013, and included the obligatory, but time-wasting, 2 hours of ethics preaching.  This is always the best attended of the three days of the symposium, and the room was truly “chock-a-block.  But the total attendance seemed to me to be less than the past few years – possibly because mandatory CPE is no longer required of “previously unenrolled” preparers due to the death of the IRS’s RTRP program.

·   In order to claim an above-the-line adjustment to income for tuition and fees the parent of a dependent college student must actually pay the tuition and fees.  When it comes to the American Opportunity Credit it does not matter who pays the tuition and other allowable expenses.

·   We were reminded that the Form 1098-T as it is currently prepared by educational institutions is truly the equivalent of tits on a bull – totally useless!

·   When it comes to the additional .9% Medicare Tax net gains from self-employment will increase the amount of income subject to tax, but self-employment losses do not reduce wage income subject to the tax.

·   Even a so-called “simplified method” for claiming a tax deduction, like the new safe harbor home office deduction, adds more complexity to the Tax Code and more work for tax pros.  Tax preparers must now calculate the deduction under both the safe harbor and the actual expense method and determine which will provide the greater tax benefit.

·   The calculation of the “Obamacare” penalty for not having health insurance coverage, which begins in 2014, is a convoluted mucking fess that also unnecessarily creates more work for the tax preparer.  Obamacare should not be administered by the IRS through the Tax Code!  In listening to the explanation of the penalty calculation I became even more convinced that the idiots in Congress do not actually read the legislation they vote on.

On the third day we went “Beyond the 1040”, discussing casualty and theft losses, “delinquent” taxpayers, and selected Schedule C issues.  "     

·   The amount you can deduct as a casualty loss is the lower of the cost basis or the reduction in the fair market value of the item damaged and not the replacement cost.  The cost of repairs to bring a home back to the same condition it was in before the damage occurred is an appropriate measure of the reduction in the fair market value of the home and can be used to determine the amount allowed as a casualty loss deduction.

·   Do not prepare and submit for processing a Form 1040X in response to a change proposed on an IRS CP2000 notice. 

·   The IRS acknowledges that 40% of all CP2000 notices are wrong.  From my experience the reality is more like 80%!

As usual the NATP presenter, a new one to me from Kentucky, was good, covering the contents of the workbooks thoroughly and adequately.  And the workbooks had lots of examples and resourced.

FYI, I earned 24 hours of CPE credit at the symposium, which, added to the 12 hours I will earn at NJ chapter offerings this year, is more than double the 15 hours that had been required under the RTRP program.

And, by the way, I did not lose anyting in the casino.  Because I did not play – not even slots.  You gotta be in it to lose it.


Tuesday, November 26, 2013


* November is almost over.  Have you checked out the November “issue” of THE LAKE REGION SOMETHING yet?  

* Keep an eye out for my editorial “Who Speaks for the Tax Preparer” later this week (or perhaps later today) at TAXPRO TODAY.  I am interested in your opinions on the subject.

* And there is not much time left to take advantage of my special November Birthday Bonus Offer 
* Peter J Reilly reports that “Judge Declares Tax Exclusion For Clergy Housing Payments Unconstitutional” at FORBES.COM –

The Freedom From Religion Foundation has won a stunning victory in the United States District Court For The Western District Of Wisconsin where Judge Barbara Crabb has ruled that a substantial tax benefit enjoyed by many thousands of clergy – ministers, priests, rabbis, imams and others – is unconstitutional.”  

The clergy have historically been able to “double dip”.  The housing allowance they receive from their congregation is not subject to federal, and often state, income tax (although it is subject to self-employment tax), and they can deduct real estate taxes and mortgage interest paid on Schedule A, even though the taxes and mortgage payments are “reimbursed” by the congregation via the housing allowance.

In the past, as Peter pointed out, most congregations owned the “parsonage”, usually next door to the church, and provided free housing to the pastor and his family.  This was certainly the case in the Methodist Church, where I was raised, because the pastor was assigned to a particular congregation for a limited number of years, moving from parish to parish several times during his career.  However today it is more common for the pastor to purchase a family residence and receive a cash housing allowance.

I used to do several Protestant ministers, mostly Lutheran, but am down to only one.  This decision will substantially increase his tax liability – more than the “few thousand dollars” Peter suggests.  I assume he must now include in taxable income the cash housing allowance he receives, although he would still be able to deduct his real estate taxes and mortgage interest.

For me, the problem, if any, was in the ability to deduct the taxes and interest, which were, in effect, “reimbursed” by the employer.  But I can see that the exemption of the cash housing allowance was a very unique tax benefit specifically for the clergy, and possibly a violation of the separation of church and state. 

I do see some logic for the original exemption of the value of the free housing in the days of the parsonage, as the pastor was required to live there as a condition of employment “for the benefit of the employer”.

Peter followed up his initial post with an all inclusive “Clergy Housing Tax Break Declared Unconstitutional - Everything You Want To Know And More”.

As Joe Kristan pointed out in his discussion of this development -
“The decision ‘shall take effect at the conclusion of any appeals… or the expiration of [the] deadline for filing an appeal,’ so for now there is no effect.”

So this should not affect 2013 returns.

* Max Baucus’ proposed changes to the deduction for depreciation are discussed in “Baucus Proposes to Wipe Out Decades’ Worth of Depreciation Rules” by John D McKinnon at the Wall Street Journal’s WASHINGTON WIRE blog.

I have another depreciation proposal, which I first put forward in 2007.  I discuss it in a 2011 guest post at FORBES.COM titled “Wandering Tax Pro Will Not Be Loved in Real Estate Community”.   What do you think?

* From Claire Berlin at “the other” NSA blog - “NSA Reminds Military Personnel to Take Advantage of Tax Breaks”.

* Nothing to do with taxes, but useful nonetheless – over at EQUIFAX.COM Diane Moogalian answers the question “How Do I Dispute Information on My Credit Report?

* Also not-tax related, but timely, Trent of THE SIMPLE DOLLAR lists “Twenty Simple Ways to Save Money This Holiday Season”.

* Jamaal Solomon, he of THE TAX FACTOR, beings us a new YouTube tax video - “Tax Implications of Marriage Part 2”.


Monday, November 25, 2013


In “Draft Tax Reform Proposals from the Senate Finance Committee” fellow tax-blogger William Perez from ABOUT.COM tells us –

Senator Max Baucus, chairman of the Senate Finance Committee, released three separate drafts of tax reform proposals this {actually last – rdf} week.

On November 19, Baucus released proposals for reforming how businesses are taxed on their international operations.
On November 20, Baucus released proposals dealing mostly with tax administrative issues.

And on November 21, Baucus released proposals to reform rules around depreciation.”

William does an excellent job of listing some of the more interesting of Max’s 72 proposed changes relating to tax administration.  The proposals cover a wide variety of issues around filing returns, dealing with identity theft, information reporting, electronic filing, tax collections, due dates, access to court systems on tax issues, and the sharing tax-return data among government agencies.  

Below is the list of proposed changes as outlined in William’s post, with my comments on the specific proposals in bold italics -

Proposals for Information Returns:

• Proposes that the deadline for filing Forms W-2 and W-3 with the Social Security Administration be moved to February 21 (rather than the last day of February for paper filers and March 31 for electronic filers).  Fine with me.  I usually have all of mine done by mid-January the latest.  The sooner the information can got into the federal system the sooner the IRS can match W-2 information to 1040 information.  I just want to be sure the deadline for getting W-2s to taxpayers remains at January 31st.

• Proposes that information documents (such as 1099 forms) do not need to be corrected if the error is $25 or less.  I don’t care either way.

• Proposes that the IRS set up a web site where businesses can prepare and file 1099 forms.  This sounds like a good idea to me.  Make it so.

• Proposes that if a tax return is mailed in on paper and the return was prepared electronically using software, that the tax return be printed with a scannable code so that the IRS can process the return more quickly by scanning it in.  I do not use tax preparation software, so this does not affect me.  I have no opinion either way.

• Proposes to eliminate the $10 minimum threshold for reporting interest income on Form 1099-INT and to require financial institutions to report the existence of deposit accounts even if no interest was earned.  This also sounds good to me.  Currently, due to the $10 minimum threshold, many taxpayers erroneously think that they do not have to report interest income if it is less than $10.00.

• Would require additional information be reported on Form 1098 mortgage interest statement. The additional information would be the outstanding loan balance, the address of the property, whether the loan was refinanced during the year, the amount of real estate taxes paid from an escrow account, and the date the loan originated.  Again -  sounds good to me.  Most 1098s already list the amount of real estate taxes paid from escrow. 

• Would require insurance companies to report the sale or transfer of life insurance policies along with the seller's cost basis in the policy.  I am not aware of any problem in this area.  Don’t insurance companies already issue 1099-R forms with this information if necessary?  

• Would require schools to report only the amount received from students for tuition on Form 1098-T, rather than the current rules that permit schools to report either the amount received or the amount billed.  Yes! Yes! Yes!  Please!  It should report ONLY the amount RECEIVED from ALL sources (including student loans and scholarships).  From this number the amount reported for scholarships on the 1098-T can be deducted when preparing the tax return.   99% of Form 1098-Ts that I see each year report only amount billed – so the current 1098-T is basically as useful as tits on a bull!

Tax Filing Proposals:

• Would require businesses and self-employed persons to separate out on their tax returns income that was reported on a 1099 versus income that was not reported on a 1099, and similarly to report expenses for which a 1099 was issued and expenses for which a 1099 wasn't issued.  I guess it couldn’t hurt – although I do not see a real need for this.

• Proposes new due dates for business returns: partnership returns would be due on March 15th, S-corporation returns would be due on March 30th, and C-corporation returns would be due on April 15th.  I support anything that will get Form K-1 in the hands of partners/shareholders earlier.  I would make partnership and sub-S returns due March 15th, and would support extending the filing date for C-corporations till April 15th. 

Proposals Related to Identity Theft:

• Would restrict access to the Death Master File.

• Would direct the IRS to assign a single point of contact for identity theft victims.

• Would impose new criminal penalties for stealing a person's identity and using that to file fraudulent tax returns.

• Would permit Social Security numbers to be truncated on Forms W-2 issued to employees.

• Would expand the IRS's access to the National Directory of New Hires database maintained by the Department of Health and Human Services.

• Would require the IRS to notify a taxpayer if the IRS suspects the taxpayer's identity was stolen and used to file a false tax return.

• Would direct the IRS to study whether the Indentity Protection Personal Indentification Number program could be expanded to taxpayers other than identity theft victims.

I would support anything to help prevent identify theft, and to make resolution of tax-related problems easier.  But I would want the Social Security number on the W-2 that a client gives me to continue to contain the complete number.

Proposals Relevant to Tax Professionals:

• Would require tax preparers to meet due diligence requirements on tax returns claiming the child tax credit.  No! No! No! No more unnecessarily excessive “due diligence” requirements for tax preparers!  We are NOT social workers!  Better idea – do away with the refundable Child Tax Credit.

• Would clarify that the IRS has the authority to regulate tax return preparers.  NO! NO!  A millions times NO!  Definitely not!

• Would require tax preparers to file returns electronically.  ONLY if the return  can be submitted DIRECTLY to the IRS online with NO CHARGE to the taxpayer or tax preparer – like the current NJWebFile system in New Jersey!!!  Or ONLY if the tax preparer uses tax preparation software to prepare returns!!!!  A tax preparer MUST NOT be forced to purchase flawed and expensive software in order to submit returns electronically.  I will NEVER use flawed and expensive tax preparation software to prepare 1040s – and if required to so do by the IRS I will be forced to retire prematurely.

Proposals Related to Tax Collections:

• Would permit the IRS to continuously levy up to 100% of payments by the federal government to Medicare providers.  I would support this as a way of collecting delinquent taxes from the providers.  I would allow the IRS to levy up to 100% of any payment to any government contractor with outstanding tax debt.

• Would waive the user fee for setting up an installment agreement if the taxpayer agrees to pay through automatic withdrawals from a bank account.  Sounds good to me.  Make it so.

• Would permit the State Department to revoke or deny passports to persons who owe more than $50,000 in unpaid federal taxes.  NO!  I do not support going this far.

Data Sharing Proposals:

• Would permit the IRS to share tax return data with the Bureau of Economic Analysis and the Bureau of Labor Statistics.  I do not see any problem with this.

So – what do you think about these proposals?


Friday, November 22, 2013


Sorry for not posting this week.  I was at Resorts in Atlantic City Monday through Wednesday attending the annual NATP year-end tax update classes.  There was no wifi available, so I could neither wander the web nor post until yesterday afternoon.  I will post on items of interest from the classes next week.

An FYI – I was surprised to find the 2013 W-2 and 1099-MISC forms available at Staples recently.  I do believe this is the earliest I have seen these forms available for purchase.  I purchased a supply, and will be ready for my annual ritual of typing 2013 W-2s on Christmas Eve and New Years’ Eve.  Of course, you can also order 2013 information returns and instructions from the IRS website, which I have also done.

* “Is an MBA Deductible?”  Find out in the November “issue” of THE LAKE REGION SOMETHING.  

* Finally!  The MAINSTREET.COM Tax Center has published my “What's New for Federal Income Taxes 2014?”.   

* Here is something I missed earlier this month that I learned of via a “tweet”.  The TAX FOUNDATION has published a special report on “The Distribution of Tax and Spending Policies in the United States”, in which they compare how much families paid in total taxes to the amount of government spending they benefit from for 2012.

Some of the key findings of the report are reported as (highlights are mine) –

“• The question of who benefits from government spending is just as important as the question of who pays taxes. In other words, how do tax and spending policies redistribute income?

American’s lowest-income families receive $5.28 worth of government spending (federal, state, and local) for every $1 they pay in total taxes. Middle-income families receive $1.48 in total spending per tax dollar, while America’s highest-income families receive $0.25 cents in spending for every dollar of taxes paid.

• As a group, the bottom 60 percent of American families receive more back in total government spending than they pay in total taxes.

• Government tax and spending policies combine to redistribute more than $2 trillion from the top 40 percent of families to the bottom 60 percent.

• The total amount of redistribution has increased slightly over the past 12 years. Middle-income and working lower-income families were the biggest beneficiaries.”  

In determining government support, William Perez explains in his post on this topic “How Much Government Do People Get Compared to How Much Taxes They Pay?” at ABOUT.COM -

Only some of this government spending is received by a person directly, as cash-in-hand, like Social Security benefits. And some of this government spending is received by a person indirectly, through the goods and services we share in common.”

Nothing surprising to me in the Foundation’s findings.

* A history lesson from Jim Blankenship at GETTING YOUR FINANCIAL DUCKS IN A ROW – “History of the 401(k)”.

* Barbara Weltman, author of the appropriately-titled BARBARA’S BLOG, takes on the issue of “Self-Employed Health Insurance for 2014”.

* TAX MAMA Eva Rosenberg provides us with a comprehensive “2014 / 2015 – Tax Calendar”.

* An interesting and resource-filled post for pet-lovers like me from Donald Kelley at WELATH MANAGEMENT.COM – “Estate Planning for Pets”.

* Jason Dinesen has an interesting question for fellow tax pros concerning amended same-sex returns in “Life After DOMA: What if You Amend One Year But Not the Next?”.   


It seems that the Dow Jones Industrial Index hit 16.000 on my 60th birthday!  I remember a Broadway musical back in the late 1960s titled HOW NOW DOW JONES whose story line was about the announcement that the Dow Jones hit 1000.

It starred Tony (then billed as Anthony) Roberts, Marilyn Mason, and Brenda Vacaro, who, if I remember correctly, spent the entire show wearing nothing but a towel.  The one semi-hit song from the show instructs, "Will everyone here kindly step to the rear and let a winner lead the way."

Friday, November 15, 2013


* November’s “issue” of THE LAKE REGION SOMETHING has an article on “Evaluating Tax Exempt Investments”.  Did you see it?

* Have you taken advantage of my special Birthday Bonus Offer yet?  What are you waiting for?

* Quentin Fottrell explains “How the Tax Code is Squeezing Parents” at MARKETWATCH.COM -

Child care costs grew at eight times the rate of household income over the last year, but child care tax credits haven’t changed in a decade.”

* Perhaps there is still hope - “Baucus Plans Release of Code Revision Drafts in Two Weeks: Taxes”.  So says BLOOMBERG.COM -

Senate Finance Committee Chairman Max Baucus said he intends to release his first draft for a comprehensive tax-code revision within the next two weeks.”  

But, like Professor Jim Maule, I am not holding my breath.

* Over at FREE ENTERPRISE, the Findlaw small business law blog, Betty Wang reminds us of the IRS’s “nifty list of factors” to help you figure out “if you've hired an independent contractor or an employee” in “Independent Contractor? IRS Looks at 20 Factors”.

* The Tax Foundation’s TAX POLICY BLOG tells us that “54 Million Federal Tax Returns Had No Income Tax Liability in 2011”.

IRS also plans to visit some tax preparers to provide education and outreach on meeting EITC due diligence requirements. More information about the IRS’s compliance initiatives and EITC due diligence can be found at EITC Central.”

* Another blog list, this time from MOTLEY FOOL – “The 10 Countries With the Highest Income-Tax Rates”.

FYI – “The United States ranked only 23rd”.

* Joe Cicchinelli and Jared Trexler of THE SLOTT REPORT discuss “Contributing to an IRA When You Are Married Filing Separately”.  

* And, at the same place, Jared Trexler joins with Jeffrey Levine to give us a “Year-End Roth Conversion Question-And-Answer”.

* Enrolled Agent Jason Dinesen admits “EAs Are Partly to Blame for Our Obscurity” at DINESEN TAX TIMES.

It’s time for all EAs to say enough is enough and start demanding some respect for our designation. It’s time for all of us to proactively explain to our clients what an EA is.”

* Peter J Reilly discusses a recent court case in “Intrafamily Home Mortgage Not Recorded Not Deductible” at FORBES.COM.

His advice –

Loaning money to your kids can be a great planning maneuver.  It is critical that you follow all the formalities to avoid nasty surprises.” 

* MISSOURI TAXGUY Bruce McFarland has a guest post by Audrey on “How To Write Off Travel Expenses As Business Expenses”.

* And Bruce’s “Tax Talk Tuesday” covered “2013 Biz Year End Tax Ideas”.


Tuesday, November 12, 2013


Happy 11/12/13!

* Did you know the November “issue” of my online “magazine” THE LAKE REGION SOMETHING has tax articles – “Is An MBA Deductible” and “Evaluating Tax-Exempt Investments”?  Check it out!  And be sure to see my editorial.

If you like the “issue” please tell your friends, family, and co-workers about it.  Your comments are welcomed.

* I never get tired of seeing these 4 words in print – “Robert is exactly right”!  This time around they were said by Joe Kristan in yesterday’s “Tax Roundup,11/11/13: Sheldon Edition. And: Masterminds!” at the ROTH AND COMPANY TAX UPDATE BLOG.  Joe was talking about my “I Hate K-1s” post.

* Disturbing news from the NEW YORK POST – “IRS Refunded $4B to Identity Thieves”.

Prompt refunds are nice – but avoiding fraudulent refunds is more important.  The IRS should not begin to process refunds until employer W-3 information has been submitted and can be matched to W-2 information on returns.  If this means refunds cannot be issued in January then so be it. 

For over 40 years I have not even begun to prepare tax returns until February 1st, with less than a handful of exceptions. 

And the IRS should have special matching safeguards for returns with foreign addresses. 

Russ Fox, who covers this story in his TAXABLE TALK post “Dear Mr IRS”, offered a good recommendation in his September 2012 post “A Modest Proposal on Tax-Related Identity Theft” –

The IRS should check the address of every filed return versus the address on file for the taxpayer {as it does with names and Social Security numbers – checking the name on the return with SSA records – rdf}. If the . . . return is filed with the same address as used last year, it’s likely the return is legitimate. If not, then the IRS should put a hold on processing the return, and send a letter to the taxpayers at the address used in the prior year (with forwarding requested). The letter would note that the IRS received a return from the taxpayers, but the address does not match the address on file with the IRS. The letter would further state that processing of the tax return is being held awaiting confirmation of the address change. (The post office does this with all submitted change of address forms; there’s no reason why the IRS can’t do this, too.)

* Kevin Hagen talks about the “Tax Consequences of Distributions from a Traditional IRA that Are Given to Charity” at YAHOO VOICES.  He quotes a popular veteran tax pro and tax blogger in his article.

* Please heed Jim Blankenship’s plea at GETTING YOUR FINANCIAL DUCKS IN A row – “C’mon America! Increase Your Savings Rate by 1% More!

Click here for more 1% solutions.

* Professor Jim Maule discusses the “Prospects for Tax Reform?” at MAULED AGAIN.

The Professor’s standard response when asked about such prospects –

““Don’t hold your breath.”

Sadly I agree with the Professor.

Here is what he had to say about the idiots in Congress-

As revealed in this calendar, the House of Representatives had scheduled 126 working days for the First Session of the 113th Congress, which meets during 2013. For 2014, according to the recently published legislative calendar, the House plans 113 working days. In comparison, the typical American fortunate enough to have full-time employment works, assuming a two-week vacation, 250 days each year. Or more. Tax reform requires a heavy investment of time. It is a major project. It’s not something that can be done, even in a slipshod manner, by a legislature that is absent most of the year.

If there ever was a need for proof that members of the Congress is more concerned with getting themselves re-elected than with buckling down to do what needs to be done for the common welfare of the American people, the legislative calendar is Exhibit A-One. There’s no denying that the Congress has become the servant of the moneyed interests, and in its present configuration and mentality, will bring nothing of value in terms of tax reform.”

If these idiots are working less than half the number of days of a normal full-time government employee why are they receiving the employee benefits of a full-time worker?

* THINKADVISOR offers its take on the “10 Best & Worst Tax States for Retirees”.  Some surprises on the lists.  Neither my former home state, NJ, or my current one, PA, made either list.    

* A great quote on tax reform and the idiots in Congress from FORBES.COM’s TaxGirl Kelly Phillips Erb from her post “GAO Evaluates Tax Deferrals & Graduated Tax Rates, Concludes: Its Complicated” –

Imagine that you took your car to the repair shop for a pervasive rattle. And let’s say that the mechanic took a good look under the hood and said that your best bet was to completely replace the engine. You know how much that’s going to cost. And you know that means you’ll be out of commission for a bit. And you know that it’s probably the best thing for the car. But you balk. Instead, you ask, what if I just replace the spark plug? Or the oil filter?

That, in a nutshell, sums up Congress’ latest approach to corporate {and individual – rdf} tax reform.”

Sadly, ain’t it the truth.

* Jessica Silver-Greenberg and Susanne Craig of the NYTIMES “Business Day” warns that “Con Men Prey on Confusion Over Health Care Act”.

* Kay Bell, the yellow rose of taxes, lists “12 Charitable Groups That Would Love to Take Your Tax-Deductible Typhoon Haiyan Relief Donations” at DON’T MESS WITH TAXES.

* CPA Ben Rugg warns of a local “Corporate Minutes Scam” at RUGGNOTES, which sounds similar to the corporate annual report scam I received in the mail and reported here earlier this year.

* My item on the IRS 2014 inflation-adjustments has still not been published at the Tax Center.  If you can’t wait for my piece, PARKER PUBLISHING gives us a good comprehensive summary of the “2014 Inflation-Adjusted Amounts and Pension Colas”, including some which I do not report in my item.


If you did not see the NY Philharmonic production of the Stephen Sondheim musical COMPANY on PBS’ “Great Performances”, with Neil Patrick Harris, John Cryer, and Patti Lupone (in the Elaine Stritch role), last Friday night do keep an eye out for a rebroadcast.

I saw both the original production (with Dean Jones) and the 2006 revival (with Raul Esparza) on Broadway.  It is a special favorite of mine because I produced it locally back in 1973, with a full orchestra of college music professors and students and a constructed bi-level set similar to the Boris Aronson original.

Stephen Sondheim said at a lecture series at NYU I had attended that he enjoyed seeing local productions of his shows, so I sent two tickets to SS as well as to Hal Prince, producer/director of the original.  I never heard from Prince, but I did get a note from Sondheim thanking me for doing the show and apologizing for being unable to attend, as he would be in London working on the Angela Lansbury production of GYPSY on the night of the performance.  I have the framed letter on display in my condo.

I lost money on COMPANY.  At the same time that I was mounting COMPANY I received an offering from Alexander Cohen to invest in the review GOOD EVENING with Peter Cook and Dudley Moore, a sort of sequel to their earlier BEYOND THE FRINGE.  If I had invested my money in GOOD EVENING instead of COMPANY I would have done quite nicely.  But the experience of producing a full-scale musical comedy, and receiving the letter from Stephen, was worth the money I lost.

Some trivia.  The song that ends Act One in the PBS production, “Marry Me A Little”, while written for COMPANY, was not in the original Broadway production.  It was added to the 2006 Broadway revival.