Friday, November 21, 2014


Once again I celebrated my natel day in Atlantic City while attending the National Association of Tax Professionals’ year-end tax update workshops.  I travelled to Bally’s Hotel and Casino in Atlantic City, where I had been earlier this year for the NATP Forum, for 2 days of the 3-day “Taxpro Symposium”. 

We were supposed to be at the Showboat, but that hotel and casino had closed its doors.  I paid the same rate at Bally’s that I had booked for the Showboat.  Once again I got a lower rate by booking independently online without using the NATP code.  What good is having a special conference rate if it is not cheaper than the “off the street” internet rate?  I expect this only happens with casino hotels.

One complaint about Bally’s (in addition to the $12.99 per day charge for wifi, which I passed on again) is there was not a chair in sight – not even in the hotel lobby, or on the restaurant/conference room floor (although you could sit in one of the few chairs a small enclosed smoking “closet”).  If you wanted, or needed, to sit down you had to do so at a slot machine in the casino.  I mentioned this in passing to one of the floor guards as I was heading to the elevator of my tower and he gave me directions to the one out of the way lounge area.  By the time I arrived at the lounge I really needed to sit down!

Sitting on the Boardwalk one morning I noticed that the arrogant and annoying Chef Tantrum (aka Gordon Ramsey) is opening a Pub and Grill in Caesar’s.  If I return here in the future that is one place I will avoid – I certainly do not want to put any money in that idiot’s pocket.

For Tuesday, my 61st birthday, the topic was “The Essential 1040”, which covered the “standard features of the inflation-indexed updates for preparing individuals’ 1040 tax returns, new tax laws applicable to 2014 and recent developments”.  And, of course, included the obligatory 2-hours of redundant ethics preaching.

To be honest, for someone like me, who has written frequently over the past year about the 2014 inflation-indexed numbers, and recently about the 2015 numbers, the basic update component is boring.  And, with one exception, there was really nothing of consequence in new developments (IRS rulings and regulations, court cases, etc.).  Any real value was in the discussion of the new capital vs repair regulations, a complicated issue that basically comes down to capitalize just about everything, and, of course, the new Affordable Care Act (aka Obamacare) individual shared responsibility and premium tax credit rules.

During the inflation updates the workshop leader did make a good point about the dreaded Alternative Minimum Tax.  It is not all bad – especially when it comes to year-end tax planning.  It can be looked at like a “bell curve”.  From the point where your situation causes you to enter “AMTland” up till the point that your applicable AMT exemption is fully phased out it is bad.  But from that point on, as long as you are still subject to AMT, it is good – because additional income is taxed at a maximum of 28% and not 33% to 39.6%.

One thing that I did learn on Tuesday is that if a taxpayer does not self-assess the Obamacare penalty where applicable, or if a taxpayer does self-assess the penalty but does not pay it, the only way the IRS can collect the amount of penalty due is by “garnishing” a future income tax refund.   

One item I use to judge the workshop location is the continental breakfast provided by the venue.  Bally’s offering was certainly not the best I have ever seen (there have been two or three hotels over the years that have laid out a true banquet), but it was also certainly not the worst.

I had originally planned an expensive meal at the high-end restaurant in nearby Caesar’s for my birthday dinner - but thought hey, why not celebrate by having what I really enjoy (and at a closer venue).  So I had a greasy cheeseburger, fries, and a banana shake at “Johnny Rocket’s”, home of the singing and dancing waiters.

Wednesday’s “Beyond the 1040” was more beneficial, at least to me, as it covered specific ongoing tax issues.  The topics included divorce, estimated taxes, foreign investment income (the foreign tax credit on Form 1116 and FATCA/FBAR – not to be confused with FUBAR, which is a technical term for the entire Tax Code), and the “Cohan rule” and documentation of travel, home office, and charitable contribution deductions.

Here are some items of interest from Wednesday’s workshop –

* This was not discussed during the workshop – but it is important to point out that there are many potential short-term, long-term, and future tax consequences of actions, payments, and property distributions set forth in a divorce degree about which neither spouse, nor many divorce lawyers, have no clue - so it is important to discuss them with, or have the decree reviewed by, a competent tax professional.  I realize I am showing my age - but while you would certainly want Arnie Becker as your divorce attorney, you should have the divorce agreement reviewed and approved by Stuart Markowitz before signing it.

* Your filing status for the tax year is determined by your marital status on the last day of the year.  If you are legally married on December 31st you are married for the entire year.  If you are legally divorced on December 31st you are unmarried for the entire year.  But under an “annulment” the marriage is treated as never having occurred.  If your marriage is annulled you have never been married – and you can amend any prior years’ returns that you filed as married, either joint or separate, to recalculate each individual “spouse’s” tax as unmarried (Single or Head of Household) and therefore void the marriage tax penalty.

* It is interesting that, when it comes to preparing a 1040, in one situation the divorce degree means absolutely nothing (claiming a dependency deduction) while in another what is stated in the document is very important (deducting/reporting alimony).

* While, for purposes of calculating any penalty for underpayment of estimated tax, income tax withholding is generally considered to have been paid evenly throughout the year, regardless of when actually withheld, you can, using Form 2210, elect to treat withholding as being withheld when actually withheld to avoid or reduce a penalty.

* At one point during the discussion of withholding the question “why is there a marriage tax penalty?” was posed.  The answer (my answer) is that the concept of filing status and the differing tax tables were created at a time in history, many years ago, when the husband worked and the wife stayed home and “kept house”.

Another set of well-done year-end sessions from NATP.  Next fall if they are offered again in Lancaster PA, as they were this year, I will not be returning to Atlantic City.


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