Friday, November 28, 2014
WHAT’S THE BUZZ, TELL ME WHAT’S A HAPPENNIN’
BUZZ installments have “book-ended” this holiday week. A “meaty” BUZZ today.
I trust you had a “successful” Thanksgiving.
FYI, I will not be shopping today.
* The December “issue” of THE TAX PROFESSIONAL will be out in a couple of days. Did you see the November “issue” yet?
* As the title of the post suggests, Manasa Nadig answers the question “What If I Own Real Estate In a Foreign Country? Answers Here!” at the well-titled THE BUZZ ABOUT TAXES.
I have one client who owns real estate in a foreign country, and I learned something I did not know from this post.
* Looking for “stocking stuffers”? How about my $1.00 each tax guides? Check out my Dollar Store.
* A GETTING YOUR FINANCIAL DUCKS IN A ROW post by Jim Blankenship from 2013, discovered via a “tweet”, deals with the issue of “Per Stirpes/Per Capita–What Does it Mean?”.
The distinction had meaning for me in the will of a recently deceased uncle.
* Another “blast from the past” from GETTING YOUR FINANCIAL DUCKS IN A ROW, this one by Sterling Raskie, discusses the “alphabet soup” of financial planners (as I discuss the “Alphabet Soup” of tax preparation at FINDING A TAX PROFESSIONAL). The post is titled “A Note About Designations”.
You will note that Sterling correctly says (highlight is mine) “CPAs may be qualified to prepare tax returns” and not that they are qualified to prepare tax returns. That “may” is very important to note. Thanks to Sterling for getting it right.
* Robert W Wood of FORBES.COM reports “Jersey Shore's Mike 'The Situation' Sorrentino Tax Evasion Trial Delayed” again –
“Jersey Shore TV star Mike “The Situation” Sorrentino and his brother Marc were supposed to go on trial for tax evasion and fraud on December 2nd. But the judge has granted Marc’s request to delay the trial until March 2015. The case involves voluminous records, and this gives both of the Sorrentino brothers more time. They are free on $250,000 bail.”
If only “The Situation” had spent as much time developing his brain as he did his body. But then if he had he would have never appeared on a reality tv piece of excrement.
* Joe Kristan took the words out of my mouth when he said in Tuesday’s Tax Roundup “Administration complicates extender negotiations. And: Instant Tax Service has to stay dead” at the ROTH AND COMPANY TAX UPDATE BLOG - .
“Extenders as extortion. The administration yesterday complicated the negotiations on the extension of the perpetually-expiring tax provisions by demanding an extension of the refundable child credit and a permanent expansion of the fraud-ridden earned income tax credit, the New York Times reports.
It’s obnoxious to throw a new welfare program into the extender negotiations at this late date, but a lame-duck administration that will never again face the voters has nothing to lose. While I still think the $500,000 Section 179 deduction will be extended retroactively to January 1, this makes me a lot more nervous.
If anything good comes of this extortion attempt, it’s that it highlights the unwisdom of passing tax provisions temporarily if you don’t really want them to be temporary. Every time you need to re-enact them, you open yourself up to just this sort of shakedown.”
Right on, my brother!
We must also recognize and acknowledge the “unwisdom” of refundable tax credits and distributing welfare benefits through the Tax Code.
* And Joe also provides some excellent advice in another item in the same Roundup (highlight is mine) –
“Wait for your W-2 before filing. Don’t try to file off of your pay stub. And if your preparer offers to prepare a return without waiting for your W-2, find another preparer.”
* Interesting information from Michael Cohn at ACCOUNTING TODAY – “Individual Retirement Plan Ownership Trending Down as Assets Climb” –
“The share of families with an individual account retirement plan such as an IRA or 401(k) is decreasing, but the assets in those plans are increasing, according to a new study.”
* TIGTA (the Treasury Inspector General for Tax Administration) has issued a report titled “Prisoner Tax Refund Fraud: Delays Continue in Completing Agreements to Share Information With Prisons, and Reports to Congress Are Not Timely or Complete” (now that’s a mouthful).
“TIGTA's report is the third in a series of audits it has conducted since 2010 that have documented alarming growth in prisoner tax refund fraud. The number of fraudulent tax returns filed using a prisoner's Social Security Number that were identified by the Internal Revenue Service (IRS) increased from approximately 37,000 tax returns in Calendar Year 2007 to more than 137,000 tax returns in Calendar Year 2012. The refunds claimed on these tax returns increased from $166 million to $1 billion.
Reports issued by TIGTA in December 2010 and December 2012 identified concerns with the IRS's efforts to identify and prevent prisoner tax fraud. The objective of TIGTA's latest audit was to evaluate the effectiveness of corrective actions the IRS has taken to address conditions identified in a prior TIGTA review of prisoner tax fraud.
‘Since TIGTA first began documenting this fraudulent activity four years ago, refund fraud committed by prisoners has grown to become a billion dollar problem,’ said J. Russell George, Treasury Inspector General for Tax Administration. ‘While the IRS has agreed with four of our six recommendations, more needs to be done, as is explained in our report. It is incumbent upon the IRS to act aggressively to prevent tax fraud wherever it occurs, particularly behind bars.’”
The highlight above is mine. Click here to read the full report.
A serious problem that needs to be fixed promptly. IRS budget cuts do not help.
* Kay Bell speaks about IRS budget cuts in “IRS Taxpayer Service Outlook, Short- and Long-Term, is Bleak" at DON’T MESS WITH TAXES -
“Continuing cuts to the Internal Revenue Service budget could have deleterious long-term effects on the agency's knowledge transfer, according to one IRS official.”
On the short-term front –
“National Taxpayer Advocate Nina Olson also is worried about a bumpy 2015 filing season. Her main concern, however, is the problem that budget cuts have caused in the customer service area.
Both individual filers calling the IRS for help filling out their forms, as well as tax professionals looking for guidance on their clients' returns could see even longer wait times, warned Olson.”
* Russ Fox has already seen firsthand “tax professionals looking for guidance on their clients' returns could see even longer wait times”, and shares his recent experience with us in “One Ringy Dingy, Two Ringy Dingies…” at TAXABLE TALK (highlight is mine) –
“I was on hold for two hours today on the IRS Practitioner Priority Service before my call was picked up.”
THE FINAL WORD-
A man asks his wife what she wants for Christmas. Her reply = A divorce?
The man responds, “I wasn’t planning on spending that much”.