Tuesday, January 6, 2015


* ATTENTION TAX PROFESSIONALS – Getting ready for the upcoming tax filing season?  Check out my compilation of TAX PROFESSIONAL FORMS, SCHEDULES, WORKSHEETS, AND CLIENT MEMOS!

* My 2015 annual series of Tax Tips have begun at MARKETPLACE.COM.  It started off with “Essential Tax-Planning Tips to Start the New Year Off Right”.  

* New at BOB’S BABBLINGS – “Not the First Choice”, about actors originally sought for or offered iconic movie and tv roles.  And it includes some fine whine, too.

* Brian Stoner reports that “BBB Says IRS Scam is One of the Biggest of the Year” at his CPA MUSINGS blog -

The Better Business Bureau of West Virginia is commenting that the IRS telephone scam is the biggest scam of the year.  This has to do with someone calling taxpayers, claiming they owe money to the IRS, then trying to get them to settle using a money order ETF transfer service.  If you hang up, they call back and threaten to send the police or sheriff to your house.”   

Brian ends with a warning that bears constant repeating -

Just remember that in all cases the IRS doesn’t ask for money over the phone.  The only time they will call you is to schedule an audit of your return after sending you a written request or return a phone call.  So keep your guard up and above all, don’t send money.”

I have had two clients who I know of who received scam calls.  Both were initially concerned that the calls might be real – but thankfully did not provide the caller with any information and contacted me to find out what was going on.

* Claudia Hill offers some “Filing Season 2015: Observations and Predictions” at FORBES.COM.

The ones I found most interesting were -

“4. Affordable Care Act: Provisions affecting lower and middle-income taxpayers cause confusion for those taxpayers not covered by medical insurance under employer plans or Medicare. Probably most frustrating about these provisions is that the complexity of the law is showered on those least likely to have the means to pay for competent tax assistance.

6. U.S. tax preparers find themselves questioning the risk/reward aspects of working with lower-income taxpayers in response to continual incursions by IRS and Congress to micro-manage due diligence requirements and threaten preparers with penalties for making errors based on interpreting taxpayer-provided information.

10. The overly complex and burdensome aspects of working with taxpayers with foreign investments may cause some preparers to choose not to do so. In an effort to protect themselves, some practitioners will draft multi-page engagement letters filled with “CYA” statements and disclosure statements to be signed by their clients.

Item #4 also applies to the Earned Income Credit.  The taxpayers who cannot afford to pay for health insurance and truly need the Earned Income Credit are forced to pay higher fees to tax preparers because of the increased complexity and due diligence requirements of the ACA penalty and applying for the EITC.  In the case of the ACA taxpayers must pay a preparer to charge them a penalty, and with the EITC taxpayers must pay a preparer to apply for federal welfare.

And, as #s 6 and 10 discuss, because of the complexity, additional work, and higher potential for penalties, tax preparers are deciding not to accept clients in these areas.  While I do not accept ANY new 1040 clients, if I did I certainly would not take on any with EITC claims or foreign income issues.

* Kay Bell lists her choices for the “Top 10 Tax Stories of 2014” at DON’T MESS WITH TAXES.

Her summary of the year –

The one word that best sums up the tax world last year was combative.

Political groups, especially conservative ones, fought with the Internal Revenue Service.

IRS personnel, including the agency's head honcho, fought with Congress.

Members of Congress fought with each other over what was or was not discovered in myriad IRS investigations.

Heck, Congressional committees helmed by the same party even fought with each other over which one had more jurisdictional status when it came to IRS inquiries.”

And her bottom line –

That's no way to do business, on Capitol Hill or anywhere. But that's how the House and Senate have been doing business for years. We'll see if our federal lawmakers can break this bad habit in 2015.”

Don’t count on it, Kay.

* Russ Fox reminds us that “It’s Time to Start Your 2015 Mileage Log” at TAXABLE TALK.

Actually the time to begin the log was January 1st.  You should record the beginning mileage on your car on the first day of the year.  FYI, the odometer reading on my car (not pencil, Joe) on January 1, 2015 was exactly 97,000.

Russ tells us why and how to maintain a mileage log for business travel, and points out –

And yes, your trip to the office supply store to buy a small memo pad is business miles that can be deducted.”

BTW – if you itemize you should also keep track of mileage related to medical care (back and forth to doctors, dentists, therapists, hospitals, clinics, etc) and mileage related to volunteer work for a church or charity.

* Russ also reminds those of us with small businesses that it is “1099 Time (2015 Version)”.

* Jason Dinesen continues his series detailing 5 Things You Didn’t Know About EAs, with “#4: The SEE Isn’t a Tax Prep Exam”.

This entry in the series talks about the Special Enrollment Examination.

* Maria Koklanaris explains that “January Ushers In Sweeping State Tax Changes” at TAX ANALYSTS.


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