REGULATION DOES NOT PREVENT FRAUD

Regulating "unenrolled" tax preparers, while a good idea which I support, will not prevent tax fraud. Regulating CPAs does not prevent tax fraud.

Here is an example of the tax advice given by a CPA from a recent blog post by a tax attorney (highlights are mine) -

“Recently we represented a New York night club owner who was undergoing a state tax audit. After analyzing the taxpayers Z-tapes and bank statements we determined that it had failed to report upwards of $1,000,000 in gross receipts in 2006, 2007 and 2008.

When I called the taxpayer’s New York CPA preparer to alert him to the underreporting he said that he was aware of it and called us idiots for recommending that the taxpayer voluntarily amend its S corporation and individual tax returns to correct the underreporting. Here’s was his justification:

Nobody reports all of their cash receipts. That’s the way we do things in New York.

Believe it or not, the taxpayer, on the advice of this crooked preparer, fired us and hired a New York tax attorney to represent it.

Presumably, this tax attorney agrees with the CPA preparer that it is no crime to intentionally underreport cash receipts.”

It also appears that regulating attorneys does not prevent tax fraud either.

“Nuff said!

MORE CURE FOR BUZZ-WITHDRAWAL

Since I have been too busy with GDEs to “wander the web” in search of BUZZ for the regular Wednesday installment I suggest you get your "tax info fix" from Kay Bell’s “Tax Carnival #75: TaxtoberFest 2010” over at DON’T MESS WITH TAXES.

TTFN

I LOVE IT!

I love it! Further proof that those who appear on so-called “reality” tv shows are total idiots – and that they are chosen to appear on these shows by the producers for just that very reason.

From TAX GIRL Kelly Phillips Erb’s post “Note to Game Show Contestants: Big Brother Really *Is* Watching” (highlight is mine) -

“Jasinksi, the winner of CBS’ ‘Big Brother 9’ pleaded guilty today to failing to file a tax return for 2008, the year that he won the $500,000 grand prize. Of course, he may have been a bit dazed and confused that year. It seems that Jasinski also has a drug problem. He was arrested last year and charged with attempting to sell 2,000 oxycodone pills; he had previously sold drugs to a cooperating witness. According to an affidavit filed in court, Jasinski told a DEA (Drug Enforcement Administration) agent that he used some of his game show winnings to buy the pills so that he could resell them.”

.

Remember reality-show idiot and tax-cheater Richard Hatch? Maybe they can share a cell!

I am still waiting for someone of normal intelligence to tell me exactly what “entertainment value” there is in watching self-absorbed brain-dead fools acting like self-absorbed brain-dead fools.

A BELATED HAPPY BIRTHDAY TO THE FEDERAL INCOME TAX!

The federal income tax celebrated its 97th birthday on October 3rd?

In February of 1913 the 16th Amendment was ratified by the required 3/4 of the states. The amendment gave Congress the power to “lay and collect tax on incomes, from whatever sources derived, without apportionment among the several states, and without regard to any census or enumeration.” On October 3, 1913, Congress passed the Revenue Act of 1913, which created the first permanent federal income tax.

Here are some facts about the very first Form 1040:

• The tax applied to salaries and wages, interest, dividends, rents, royalties, pensions and annuities, income from estates, trusts, sole proprietorships and partnerships, and gains from the sale of most types of property.

• The salaries and wages of state and local government employees were exempt from income tax.

• Interest from federal, as well as state and local, government bonds were exempt from income tax.

• Deductions were allowed for “personal” interest, federal excise taxes, taxes paid to state and local governments, casualty and theft losses, bad debts, business expenses, and depreciation of property used in business.

• There was an exemption of $3,000.00 for single persons and $4,000.00 for married couples.

• A “normal” tax of 1% was applied to the first $20,000.00 of taxable income. Dividends were exempt from this “normal” tax. An additional or “super” tax of from 1% to 6% was applied to income, including dividends, in excess of $20,000.00.

• The return was due “on or before the first day of March”.

• There was only one page of instructions.

• In the first year of the income tax only 1 out of every 271 American citizens were taxed and $28 Million in revenue was raised.

Over the past 97 years the federal income tax evolved into the mess that it is today. The Tax Code, which was 400 pages long in 1913, has swollen to over 71,000. The instruction booklet for the 1040 now has 44 pages (it was only 14 pages in 1987). According to former Treasury Secretary Paul O’Neill, “Our tax code is so complicated; we’ve made it nearly impossible for even the Internal Revenue Service to understand.” Here are some of the landmarks of this evolution.

• A personal exemption allowance for dependents and a deduction for charitable contributions were added in 1917.

• Capital gains were singled out for preferential treatment in 1922, although profits on the sale of certain types of property received special tax treatment as early as 1918.

• A deduction for medical expenses was introduced in 1942.

• The Standard Deduction was added in 1944 as an alternative to requiring taxpayers to itemize qualified expenses.

• An Income Averaging method of tax computation was initiated in 1964, to be taken away by the Tax Reform Act of 1986.

• A “minimum” tax on specified “tax preference” items first appeared in 1970, and was replaced by the dreaded Alternative Minimum Tax (AMT) in 1979.

• An Individual Retirement Account for taxpayers not covered by an employer pension plan was introduced in 1974.

• The refundable Earned Income Credit for low wage earners with dependent children was created in 1975.

• Unemployment compensation was made partially taxable in 1979, and was eventually made fully taxable. I remember saying at the time, “The next thing you know they will be taxing Social Security”.

• Social Security and Railroad Retirement benefits became partially taxable in 1984.

• Taxpayers were required to list the Social Security number of dependent children, age 5 and over, for the first time in 1987. Eventually Social Security numbers were required of all dependent children, and are now applied for at birth.

By the way, if you who think taxes are too high today, from the end of World War II through the early 1960s the top tax rate was more than 90%!

TTFN

FYI

On August 17th I prepared an amended 2009 Form 1040 to claim the First Time Homebuyer Credit for a “long-time” homeowner who purchased a home in 2009 within the guidelines of the extended credit. I attached copies of all requested documentation with the filing.

I just got a note from the client dated September 30th to tell me that he received his check.

There had been some talk that these claims were being seriously delayed. However in this case the client received his refund check within 6 weeks.

Just thought you might be interested

KEEP IT SIMPLE

I am still working away on the GD extensions – and making progress. I actually had time to write this post!

Professor Annette Nellen quotes a 9/29/10 article from The Hill in her post “Tax Reform Discussions in 2011?” at 21st CENTURY TAXATION –

“’Rep. Levin seeks early action on tax reform next year’ reports that the House Ways & Means Committee chair wants to have lots of tax reform hearings in 2011. He says: ‘We're serious about looking at our tax code’. The Hill also reports Congressman Levin saying that reform needs to happen in a non-election year.”

I am truly glad to hear this. I have previously posted on several occasions that 2011 is the year that Congress must buckle down and act to make true reforms to the mucking fess that our Tax Code has become and replace it with a much simpler system. Levin is correct when he says that reform needs to happen in a non-election year.

Some people may wonder why a tax professional would call for a simpler tax system. Does not each new tax law, and each complexity added to the Code, put money in my pocket? Is not the more confusing the Tax Code the better it is for business?

As I have said many times in the past – I do not believe that a simpler tax system will hurt my business at all. I sincerely believe that if I did nothing but 1040As all day during the tax season I would make more money, experience less agita, and substantially reduce the number of GD extensions. I also believe that my clients will not decide to do their own returns if the tax system is simplified; they will continue to come to me.

Fellow tax blogger Professor Mary O’Keefe of BED BUFFALOES IN YOUR TAX CODE has, like Professor Nellen, long been a champion for simplifying the Tax Code, and continues her crusade in two recent posts.

In “Pointed Questions--for Bankers AND Tax Policymakers”, which talks about the standards Elizabeth Warren, President Obama's choice to organize the new Bureau of Consumer Protection expects from bankers, Mary says -

“Can customers (taxpayers) understand a product (our tax laws)? Do they know the risks? Can they easily figure out what it really costs?

Plumbers and law professors ought to be able to understand the terms of the tax policies our lawmakers are debating.

The evidence is clear that they do not, because the standard of clear and straightforward use of language that Elizabeth Warren wants to demand from the banking industry is sorely lacking in our tax code.

The financial documents produced by the banking industry, opaque and byzantine as they currently may be, are still a model of transparency compared to our convoluted tax code.”

And in “Is It Reasonable for Congress to Demand 'Plain Talk' From the IRS?”, which discusses the Plain Language Act of 2010 that recently passed in the Senate, she says –

“Bottom line: if we Americans want a tax code that we can understand, we need to demand it directly from Congress.

So far, Congress has written a convoluted and constantly changing tax code with bed buffaloes hidden in every nook and cranny, and this bill gives the IRS the Sisyphean task of doing their best to help Americans to understand their tax obligations.

Before Congress can expect the IRS to describe our tax obligations in 'plain talk', they need to clean out the Augean stables they have created in our tax code.”

The IRS is hoping that the new regulation regime for tax preparers will reduce tax fraud, 1040 errors, and the “Tax Gap”. While the regime is a positive move, and I have been a vocal supporter sine the beginning, it will not reduce tax fraud, 1040 errors, or the Tax Gap. As many of my fellow tax bloggers have joined me in saying over and over again – the best way to reduce tax fraud, 1040 errors, and the Tax Gap is to simplify the Tax Code!

The recent report of the President’s Economic Recovery Advisory Board attested to the fact that “the Tax Code is complex”. See my post “Some Facts and Figures About the Federal Tax System”. Let us hope that this report will be used as a starting point for the Congressional hearings and discussions – and not simply sent off to gather dust in the archives (as the report of Dubya’s tax reform panel was).

The Hill article unfortunately points out –

“However, if Levin keeps the chairmanship remains an open question.

.

Some Democratic panelists would like to challenge him for the position."

Let’s hope that (1) Levin does keep the chair and follows through with his promise and that (2) if he does not his successor will also see the great need for serious tax reform discussions early in 2011.

Based on past history it is difficult to believe that the cafones in Congress will ever do anything positive to substantially fix the Tax Code mess (or any other serious problem, for that matter) – but I can dream, can’t I.

TTFN

A CURE FOR BUZZ WITHDRAWAL

If you are suffering from BUZZ-Withdrawal check out "A Week In Perspective" from Bruce the MISSOURI TAX GUY.

Back to the GDEs!

TTFN

A TAX FIX

I am working away on the GD extensions -hence the lack of posts (and BUZZ installments).

If you do need a "tax fix" check out my article "Self-Employed Taxpayers Get a Break" at MAINSTREET.COM.

Now - back to the GDEs!

TTFN

WHAT A MUCKING FESS!

On Tuesday (September 28th) I made my first attempt to “fabreze” my PTIN online as part of the new tax preparer regulation regime.

Before I could submit the PTIN application I first had to create an “account”. I completed this process and was “told” that I would receive an email from the IRS with a temporary password for my account.

It never came!

Two hours later I went online to try again, stating that I needed help with my password when “logging in”. After properly answering the security question I had established in my initial try I was again “told” that I would receive an email with a new password.

It never came!

I gave up for the day.

On Wednesday morning I repeated what I had tried on Tuesday – began the log-in process and indicated that I needed help with my password. I was again told that an email was forthcoming – and this time it promptly arrived in my in-box!

I could now successfully log-on to my account to begin the process of the PTIN application.

However this time, no matter how I configured my name and address, I was told the information did not match my 2009 income tax return. I finally came to the conclusion that this was because I had entered my full middle name – David – when creating my account, as I had been asked, but had used only the middle initial – D – on my 2009 tax return. I made the change to my account and tried again – but this time I was told that I had used up my allotted attempts to register and would have to try again in 24 hours.

It is now Thursday – the third day of my attempt to register online.

I logged in successfully and continued on with the previously failed application – but again, no matter how I configured my name and address I was told that what I had entered did not match. I double-checked, and my Social Security number and date of birth was entered correctly in the correct format.

One of the problems concerned how I was asked the address used on my 2009 tax return. The first question was “Street Name” – not “Street Address”. I entered the name of the street on which I live without any number. The next line asked for the 1st line of my street address – and I provided both the street number and the street name. I also tried this configuration by entering the full street number and name on the line that asked for only the “Street Name”.

After my third unsuccessful re-attempt to properly configure the address from my tax return I just gave up. I have decided to submit a written application via the new Form W-12.

I am not alone in my frustration. Russ Fox of TAXABLE TALK fame also did not get an email with his temporary password until the second day of trying – although he was finally able to submit the application. See his posts here and here. There are also several “Discussion Boards” at the National Association of Tax Professional’s “Member2Member” talking about application FUs.

Trying to register for a PTIN online has been a real PITA!

TTFN

ARE WE BEING RUN BY ARSEHOLES?

I managed to take time off between GD extensions to write a post (I am making progress on the GDEs).

While I was in Long Beach Island THE DAILY SHOW had a bit that asked the question “Are We Being Run By Arseholes?”. The answer they came up with was an obvious “Yes”. This is something I have known for quite some time now.

The bit concerned the attempt to repeal the “Don’t Ask, Don’t Tell” policy of the military. But it could just have easily referred to extending the AMT patch.

The bottom line – Congress cannot do anything simply. If they want to pass a popular bill – say to repeal DA/DT (according to TDS supported by 82% of Democrats and 64% of Republicans) - instead of drafting and voting on a bill that simply says “The policy of Don’t Ask, Don’t Tell is repealed” they have to tack it on to another bill, in this case a military spending bill, have one party’s attempt to add 20 less popular amendments blocked by the other, add an even less popular provision regarding illegal immigrants, and filibuster.

The bottom line – with all this mucking fess the bill did not pass and DA/DT is still in place.

We are being run by arseholes!

Further proof of this, and the fact that these arseholes are not confined to the halls of Congress –

Professor Annette Nellen’s post “Make Room on the Shelf - One More Tax Reform Report” at 21st CENTURY TAXATION discusses the recent report of BO’s blue-ribbon tax reform panel –

“the 100+ page report won't get much attention and it really doesn't add anything new to the tax reform debate.”

True this new report really did not say anything new – but at least it highlighted (or re-highlighted) the problems with the Tax Code and could have been used as a starting point for a serious discussion of tax reform by the Administration and Congress.

But no, just like the report issued by Dubya’s blue-ribbon panel, the report of BO’s panel will now gather dust on the shelf in the archives – never to be seen or heard of again. The members of the panel’s valuable time was totally wasted – as was mine, and many others like me, who prepared and submitted serious and lengthy comments on tax reform proposals to the panel.

Why do they ask for reports like this if they are going to totally ignore them? We are being run by arseholes.

TTFN

WHERE THE FAKAWI?

While I have said it before – I must deal with my bout of “manana” disease and, like Winsocki, buckle down and finish the GD extensions – this time I really must, as the deadline is less than 3 weeks away!

Like the author with writer’s block who locks himself away with nothing but his typewriter and a supply of canned food in a cabin in the woods I must go off to a place where I cannot be disturbed, and where there are minimal distractions, to get ‘er done.

There will no posts here at TWTP– including Wednesday or Saturday BUZZ installments – until I have finished the GDEs.

While I am working I suggest you check in regularly with Joe Kristan, Kelly Phillips Erb, Kay Bell, and others for your tax info fix.

TTFN

I AM RIGHT - BUT A LOT OF GOOD IT WILL DO ME!

As requested, I received many comments on my post “The New E-File Mandate” from fellow taxpros and tax bloggers.

Joe Kristan was the first to weigh in on the subject in his post “A Line in the New Jersey Sand” at the ROTH AND COMPANY TAX UPDATE BLOG.

“I think Robert is right as a policy matter, and the IRS shouldn't require e-filing unless it provides a reliable and cheap mechanism for it. As a practical matter, though, I think Robert will lose this battle. The IRS is bent on forcing through more e-filing, and they are bigger than he is.”

Russ Fox, an EA from California, discusses my opinion in the post “It Depends on What the Meaning of the Word ‘Is’ Is” (referring to Slick Willy) at TAXABLE TALK.

“Technically, he’s likely correct that he does not have to file returns electronically.”

However Russ feels, and I agree, that it would be expensive for me to prove I am correct in court – which I have no intention of doing.

Peter Reilly, author of the blog PASSIVE ACTIVITIES AND OTHER OXYMORONS, submitted the following comment at TWTP –

“Interesting problem. I appreciate your distinction between preparing and filing. I'm worried it may be lost on Congress though. The Committee report says:

Explanation of Provision

The provision generally maintains the current rule that regulations may not require any person to file electronically unless the person files at least 250 tax returns during the calendar year. However, the proposal provides an exception to this rule and mandates that the Secretary require electronic filing by specified tax return preparers. ‘Specified tax return preparers’ are all return preparers except those who neither prepare nor reasonably expect to prepare ten or more individual income tax returns in a calendar year. The term ‘individual income tax return’ is defined to include returns for estates and trusts as well as individuals.”

Professor Mary O’Keefe, of BED BUFFALOES IN YOUR TAX CODE, also submitted a comment-

“I agree with Riles. You make an important distinction between preparing and filing.

(The confusing reference to who is "filing" the return reminds me of the word play in Shakespeare's Much Ado About Nothing in the interchange with the friar about who is "marrying" who. Does the friar marry the bridge and groom or do they marry one another.)

The legal usage of the term "filing" to refer to what the preparer does when he submits a return on behalf of a taxpayer does appear to require more clarification.”

Enrolled Agent Elizabeth R commented -

“You do make an interesting distinction in your post. I wonder, do you plan to have all your clients sign the electronic filing opt out that is supposed to be available?”

The answer is yes, if I cannot receive an exemption from the IRS. Or look for an E-Filing service that will submit all my returns electronically for a small fee, passed along very vocally to the client.

Bruce MacFarland, aka the MISSOURI TAX GUY, also submits a comment agreeing with me-

“Your interpretation of the wording of this new requirement is just and in my own mind sound.”

However he also agrees with our colleagues concerning practicality-

“Sadly, my friend, ‘playing the game’ is just what you will have to do.”

He suggests an alternative to an E-File mandate-

“Hey, Mr. Congress person and IRS man. Instead of going at it the way you are why not try mandating ERO status, thus prepares being able to offer E-file but leaving the choice up to the individual taxpayer.”

Bruce also comments on my manual preference-

“I agree on certain fronts it {tax preparation software – rdf} is ‘potentially flawed and expensive’, however there is software out there that is inexpensive and would suit your needs and allow you to comply with the new coming rules. You would basically prepare your clients returns by hand has you always have, then type your numbers into your software and transmit.”

In such a situation software would not reduce the time it took me to prepare a return but increase it by adding an additional unnecessary step to the process.

A word to Bruce – my 50th tax season is 10 1/3 years away and not 1. I am not that old yet!

Hal Leahy, an Enrolled Agent from Florida, provided a history of the mandate to show –

“There is a very good case to be made that by Congressional intent – ‘file’ includes ‘prepare’.”

Please take the time, at your leisure, to read through all of the comments submitted to my post in full.

A fellow member of the National Association of Tax Professionals had the following to say about my post over at the Association’s Member2Member site –

“If you are still preparing returns manually, I don't believe you will be required to submit them electronically. I believe there will be an exception for non-computer produced returns.

Most states requiring e-file have taxpayer 'opt out' forms. The taxpayer just gives a good excuse. Right now my excuse for all California returns is "preparer not set up to EF California returns." Maybe you can come up with a 'conscientious objector' status for all of your clients.”

I hope he is right about an automatic exception for non-computer produced returns.

My sincere thanks to my fellow tax pros who have provided me with their thoughts on the issue. As always I value your opinions. And I apologize for leaving Monica, Stacie and Michael out of my blogroll call for comments – I would love to hear your opinions.

The consensus seems to be that what I have said in my post is right. I am technically correct in my interpretation of the law as written – but that this doesn’t matter in the long run.

The bottom line is simple. It is obvious that, regardless of how the law was worded, it was the intent of Congress to force tax preparers to submit their clients’ returns electronically.

The IRS would not be able to enforce an e-file mandate placed where it should be placed – on the individual taxpayer. So it tries to get its way by aiming the mandate where it can be enforced – on the tax preparer. They require that we submit our returns electronically because they can. The IRS has the taxpro by the balls – it a preparer does not comply the IRS can fine him/her and, with the new regulation regime, threaten to take away his/her PTIN.

To be honest, most tax preparers do use tax preparation software, no matter how expensive and flawed, and can very easily submit the completed return electronically at no, or minor, additional cost. I expect that most taxpros using software already do submit as many of their returns as possible this way.

But I don’t – and therefore I can’t. I hope the IRS exempts from the requirement those few of us left who still do it the old-fashioned way.

TTFN

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

I am off to Long Beach Island for the rest of the week. FYI – there will be no BUZZ post this coming Saturday. I have scheduled a post for Thursday (tomorrow) on the responses to my post on The New E-File Mandate.

* Have you seen my piece on “12 Tax Myths Debunked” at MAINSTREET.COM?

* After reading my piece be sure to read Kelly Phillips Erb’s excellent post “Does Congress Understand Who Works in Small Businesses?” at TAX GIRL.

We all know that Congress is basically lazy - reacting to problems to get quick headlines rather than responding to situations with understanding and intelligence - and that their primary, if not only, interest is not the proper running of the country but getting re-elected. Lately the more I read about Congress and the laws they pass the more it seems the cafones have absolutely no clue as to what they are doing or what they are voting on.

* “IRS to Hold Special Open House Saturday, Sept. 25 for Veterans and Persons with Disabilities.” No need to add a comment.

* TAX MAMA Eva Rosenberg answers a question I have often thought about in her post “IRA Attached for Bad Debt”.

* Kay Bell, the Yellow Rose of Taxes, had a great post last Wednesday in which she properly explained that, in addition to many of its members being actual tax cheats (like Chuck Rangel), “Congress Creates Tax Cheats” at DON’T MESS WITH TAXES.

* MISSOURI TAX GUY Bruce’s most recent weekly Sunday BUZZ-like post was titled “The Week In Review” instead of “Reads From Last Week”.

TWIR is chock-a-block full of great posts from tax and personal finance bloggers. He also has a listing of links to recent posts on the Bush tax cuts.

* Joe Arsenault has joined Bruce and I with his regular posting of “Blogroll Beans”, a listing of “recent web browsing that caught my eye”, over at CAFÉ TAX.

* According to the National Association of Tax Professionals weekly email newsletter TAXPRO WEEKLY –

“We have been told by the IRS that the online PTIN registration system would be available mid-September. As of today, there is nothing from the IRS indicating it is available. If the online registration system becomes available within the next few days, NATP will send you a separate e-mail detailing how to log onto the IRS website to register and either obtain or refresh your PTIN.”

If I receive an email from NATP, or any other source, stating that the online registration system is up and running I will let you know in a TWTP post.

* TAXPRO WEEKLY also reported that the new per diem rates for travel within the continental United States (CONUS) for the fiscal year beginning October 2010, which can possibly be used as a tax deduction, are now available on the U.S. General Services Administration website.

Click here for the new rates.

* Megan Hughes has written a series of posts on LLCs and asset protection at DIANE KENNEDY’S US TAX AID blog, the most recent being “Why LLCs are Better than Corporations for Asset Protection”.

* The Senate has passed by a vote of 61-38 the Small Business Jobs Act of 2010 (H.R. 5297). It now goes on to the House. The Somerset CPAs’ TAX POLICY blog does a good job of itemizing the bill’s provisions and revenue offsets in the post “Senate Passes Small Business Jobs Bill”

One provision that I am especially happy to see is –

“For a tax year beginning after Dec. 31, 2009, but before Jan. 1, 2011, when calculating self-employment taxes, the deduction for health insurance costs of a self-employed taxpayer under Code Sec. 162(l) could be taken into account (i.e., could be deducted) in computing net earnings from self-employment.”

I am only sorry that it is temporary.

* I couldn’t resist this one. At THIS WAY TO CPA, “Bean Counter, Shmean Counter: Five reasons the CPA stereotype is supremely ridiculous” tells us -

“PREPOSTEROUS MYTH #3: CPAs are for doing taxes.

Wow. Taxes are just a fraction of the accounting industry, and many CPAs have nothing to do with them.”

TTFN

STATUTORY EXEMPTION ???

I think I am beginning to get a hold of the “statutory exemption” from additional requirements on attorneys and CPAs that top level IRS officials are using as the excuse for allowing those so designated to avoid the “meat” of the new tax return preparer regulation regime.

I have been told that -

“the regulations governing the practice of Attorneys, Certified Public Accountants, Enrolled Agents, Enrolled Actuaries, Enrolled Retirement Plan Agents and Appraisers before the Internal Revenue Service are published in 31 CFR Part 10 and reprinted in Treasury Department Circular 230. As for the statute itself, the legal cite for Attorneys and CPAs is:

Section 500(b) and (c) of title 4 of the United States Code, which provides:

(b) An individual who is a member in good standing of the bar of the highest court of a State may represent a person before an agency on filing with the agency a written declaration that he is currently qualified as provided by this subsection and is authorized to represent the particular person in whose behalf he acts.

(c) An individual who is duly qualified to practice as a certified public accountant in a State may represent a person before the Internal Revenue Service of the Treasury Department on filing with that agency a written declaration that he is currently qualified as provided by this subsection and is authorized to represent the particular person in whose behalf he acts.”

It seems to me the problem arises with the definition of the term “practice”. The IRS, it seems, has proposed that the term “practice” include not only representing clients before the IRS and in Tax Court, but also “preparing” tax returns. The Service, under the new regime, would extend the right of limited “practice”, limited to the specific practice component of “tax return preparation”, to those who will eventually be the newly designated Registered Tax Return Preparers. But Attorneys and CPAs have been previously permitted the right to apparent unlimited “practice” before the IRS based solely on their state credentials.

However, the wording I was quoted does not say that attorneys and CPAs are authorized to “practice before the Internal Revenue Service” but “may represent a person before an agency” or “may represent a person before the Internal Revenue Service of the Treasury Department” and are “authorized to represent the particular person in whose behalf he acts”. So I see no problem here with requiring attorneys and CPAs who want to prepare 1040s to take the test and the annual CPE in federal taxation.

If the “statutory exemption” is found elsewhere in federal law, perhaps buried in the humongous Administrative Procedure Act as has been suggested, I would appreciate it if someone could tell me exactly where (chapter and verse, so to speak).

If CPAs and attorneys are exempt due to statutory language I certainly hope that the IRS, in its public education campaign, emphasizes the fact that only Enrolled Agents and the new Registered Tax Return Preparers have proven competence and currency in 1040 preparation by being tested and required to maintain mandatory annual CPE in federal taxation.

TTFN

THE NEW E-FILE MANDATE

Every US citizen and resident is required to file a federal income tax return, regardless of age (a subject for another post), if the individual/couple has gross non-exempt income in excess of a certain threshold, based on the individual’s, or married couple’s, filing status and situation.

An individual with income below the appropriate filing threshold may still need to file a tax return to get a refund of federal income tax withheld, or to claim an Earned Income, Additional Child Tax, American Opportunity or other refundable Credit. And a person may also be required to file a federal income tax return to calculate and pay an additional federal tax or penalty other than income tax.

An individual or couple may engage a tax professional, such as me, to prepare the federal income tax return that he/she/they is/are required to file. While, as is the case with just about every situation where a person or company provides goods or services for compensation, the preparer has certain legal and ethical responsibilities regarding the preparation of the return, the tax pro is hired by the taxpayer to simply prepare the return.

My obligation as a paid tax preparer ends when I complete the return properly and, upon being paid, give the finished return to the client for signature and filing. The taxpayer client is responsible for filing the return. The client may choose not to file the return I have prepared, opting to get a “second opinion” from another preparer if not satisfied with my result, and may actually file a return prepared by another tax professional.

A taxpayer may decide to file his/her/their return electronically instead of mailing a paper return. In order to file electronically most taxpayers must use tax software (although the IRS does offer a Free File program through outside vendors for certain low-income taxpayers with simple returns). A professional tax preparer may have the capability, via the expensive tax preparation software package he/she uses, and by registering as an “Electronic Return Originator” (ERO), to submit returns electronically, and the taxpayer client may request that the tax pro submit the return he/she has prepared electronically as an additional service.

But the bottom line is that the requirement to file a return lies solely with the taxpayer. A professional tax preparer has absolutely no obligation to file a client’s tax return. If a required return is not filed, or filed late or incompletely, it is the taxpayer, not the tax preparer, who is responsible to and penalized by the Internal Revenue Service (although there may also be preparer penalties is part or all of the “incompleteness” is proven to be the fault of the preparer).

As a paid tax preparer the only federal income tax return that I am required to file (and the only return that I actually file) is my own!

What am I getting at here?

Congress passed a law, via an amendment to the Worker, Homeownership, and Business Assistance Act of 2009, that says. “The Secretary shall require that any individual income tax return prepared by a tax return preparer be filed on magnetic media if (i) such return is filed by such tax return preparer, and (ii) such tax return preparer is a specified tax return preparer for the calendar year during which such return is filed”. It goes on to say that, “For purposes of this paragraph, the term ‘specified tax return preparer’ means, with respect to any calendar year, any tax return preparer unless such preparer reasonably expects to file 10 or fewer individual income tax returns during such calendar year”.

The probable intent, and popular interpretation, of this law is that professional tax return preparers are required to submit all returns they have prepared electronically. Presumably if the return is not submitted electronically it is the preparer, and not the taxpayer, who will be penalized. This is wrong!

The text of the law states – “if (i) such return is filed by such tax preparer”. To reiterate what I discussed above, as a professional tax preparer I do not “file” any tax return other than my own. I “prepare” a tax return, and may, as a convenience for and at the request of the client, actually put the signed return in an envelope addressed to the IRS, seal and stamp it, and deposit the envelope in the outgoing mail slot at the Post Office. But the taxpayer client is the one who actually “files” the return. To be sure no “such return” is ever filed me, the “such tax preparer”.

So as I read this law, the requirement to electronically file a federal income tax return that has been prepared by a tax preparer falls on the taxpayer and not the tax preparer.

This is as it should be. If Congress wants federal income tax returns to be filed electronically then the responsibility to do so should fall on the individual whose responsibility it is to actually file the return – the taxpayer.

I certainly understand, and agree with. the reasons why Congress and the IRS, and the state tax authorities, want tax returns filed electronically. It is cheaper and more efficient to process returns that have been submitted electronically. I have no problem with submitting tax returns electronically, although some of my clients do not completely trust the process of electronically filing anything.

Prior to the passage of the federal law many states, New Jersey included, required resident paid tax preparers to file state income tax returns electronically. While I have not counted, I expect that I “submit on behalf of my clients” (I do not file) about 2/3 of my NJ returns electronically. I do it because I can do so free of charge directly on the NJ Division of Taxation website using the state’s NJWebFile system. The 1/3 that are still submitted via postal mail are done so because of the restrictions of the system (all NJ-1040s cannot be submitted via NJWebFile) or because the client specifically does not want me file electronically.

Filing NJ returns electronically, while certainly beneficial to the State of New Jersey, also has a benefit for the taxpayer. Only electronically submitted returns can request direct deposit of a refund – so the taxpayer gets his money quicker. There is really no additional benefit to the taxpayer for filing federal returns electronically, as refunds on paper-filed returns can request direct deposit.

I do not file federal income tax returns electronically because I do not use expensive and flawed tax preparation software to prepare returns. I prepare all my federal income tax returns manually – always have and always will. Tax return software is really the only option for submitting returns directly to the IRS electronically. The current “traditional” FreeFile program offered by the IRS, which I pointed out is extremely limited, and an apparently very flawed “Free File Fillable Forms” option, use outside vendors to submit the return.

If the IRS offered a system for electronically submitting federal returns equal to the NJWebFile system I would gladly, as a convenience for my clients, “submit on their behalf” finished 1040s and 1040As electronically, unless they specifically chose to “opt-out” as they apparently will be permitted to do.

Many states, again NJ included, now require that all business filings and returns be done electronically. The only way to submit these filings and returns, and applicable payments, is online. There are no longer any more paper, for example, WR-30s, NJ-927s, NJ-500s, or ST-50s or 51s. And these states provide a free way to directly submit all filings and payments online. The business is not required by the state to purchase potentially flawed and expensive commercial software.

In these cases the requirement is placed on the individual business owner, and not on the outside accountant or tax professional for the business. As it should be. I gladly “submit” the payroll and sales tax filings and payments for my few remaining business clients via the NJ Division of Taxation website as a service.

So I believe that, as the law is written, I am not required to submit the 2010, and subsequent, federal income tax returns that I prepare for clients electronically.

I am very sincerely interested in the comments of my fellow tax professionals, and especially my fellow tax bloggers (are you listening Annette, Kay, Kelly, Mary, Trish, Bruce, Dan, Jim, both Joes, Russ, etc?) on this post. You can respond “on the record” by submitting a comment, or “off the record” by email to rdftaxpro@yahoo.com.

TTFN

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

* Check out my piece “IRS Sets New Rules for Tax Preparers” at MAINSTREET.COM.

* OOPS! An item that missed Saturday’s BUZZ installment – “Dead People Need a Place to Live Too” from Joe Kristan at the ROTH AND COMPANY TAX UPDATE blog.

* Professor Nellen adds her voice to the debate on the regulation of tax return preparers in “Regulating Paid Tax Return Preparers” at 21st CENTURY TAXATION.

She makes an excellent point when she correctly says –

“If Congress and the IRS want to reign in these unscrupulous preparers, they really need to (unfortunately) add a very large penalty to the tax system to be imposed on taxpayers who file a return they paid someone to prepare and did not get that preparer to sign the return and list his identifying number. Such a penalty would keep taxpayers away from unscrupulous preparers who would then go out of business.”

* Check out the WALL STREET JOURNAL’s article on “Tax Wars: Washington Is Bracing for a Historic Battle Over U.S. Tax Law. Here's What You Should Do Now”.

* Kay Bell reminds us that the poor souls, with poor timing, who purchased a new home when the first homebuyer credit (actually not a credit, but an interest-free loan) was in effect will need to begin to repay the loan on their 2010 Form 1040 in her post “Homebuyer Tax Credit Payback Chaos?” at DON’T MESS WITH TAXES.

Kay expects, as do I, that as the entire credit/loan history has been full of trouble, and tons of fraud (i.e. the almost 800 dead people who claimed the credit) the payback will be no less chaotic.

* A special thanks to Kay for mentioning the BUZZ in her post “Week-End Tax Round-Ups”.

* Like, in addition to TWTP, I also write on taxes for MAINSTREET.COM, Kay Bell, in addition to DMWT, also writes on taxes for BANKRATE.COM. She has an extensive explanation of “What To Do If Bush Tax Cuts Expire” there.

* Just as my BUZZ is a “must read” for a Saturday morning – so Bruce the MISSOURI TAX GUY’s “themotaxguy.com/reads-from-last-week-12” is a “must read” for a Sunday morning. I had never heard of a “Virtual Assistant” until I read Sunday’s installment.

* “The New Threat To Your IRA: An IRS Crackdown” by Ashlea Ebeling at FORBES tells us that “The IRS is cracking down on violations of the picky rules around IRAs”.

* From YAHOO FINANCE (via BANKRATE) – “5 Little-Known Facts About Social Security” by Marilyn Bowden.

How Broke Is Social Security? Here are some answers -

“According to many studies, the Social Security trust fund will be able to cover its retirement and disability obligations for the next 30 years or so, after which there will be a shortfall of about 22 percent. The Senate Special Committee on Aging figures funds will fall short in 2037.”

* I feel your pain, Trish McIntire. I wish all my clients would read her post “Tax Maid” at OUR TAXING TIMES.

* Trish follows up with a contribution to the discussion on tax preparer regulation in “Take A Snap-shot”.

* And Bill Perez reminds us that today is the due date for 3rd Quarter estimated tax payments in “Reminder: Estimated Tax Payments Due September 15th” at WILLIAM’S TAX PLANNING BLOG.

I am off to PA for the rest of the week. There will be no BUZZ installment this coming Saturday.

TTFN

TAX COURT MORAL – SAVE THOSE RECORDS!

A Tax Court case emphasizes the need to keep good records of all financial transactions and related correspondence – especially if there is a dispute involved.

The current issue of NATP’s TAXPRO MONTHLY discusses William Jon McCormick, et ux, v Commissioner TC Memo 2009-239.

The taxpayers in question had a loan account with Citi Financial Services and a credit card with Chase. They paid Citi $7,500 to settle a loan balance of $8,042.00 and Chase $1,000 to settle a credit card balance of $2,875. They received a Form 1099-C for $542 from Citi Financial and $1,875 from Chase. The McCormicks did not report the full $2,417 in 1099-C income on their 1040.

Prior to the pay-off settlements the McCormicks had challenged the Citi Financial balance, indicating that a $492 insurance refund to which they were entitled but not paid should be applied to the outstanding balance, and had also questioned the Chase balance, feeling the true balance due was only $1,000, which they paid.

It seems the couple did not use the “bankruptcy exclusion” to avoid paying tax on the Cancellation of Debt income.

The IRS assessed the taxpayers the tax, and penalty, based on the full 1099-C amounts, and the issue ended up in Tax Court (which sort of surprised me considering the relatively small amount of tax liability involved – unless this was not the only issue).

The article tells us –

“Referring to {Code Section} 6201(d), if the taxpayer asserts a reasonable dispute with respect to any item of income reported on the return and has fully cooperated, the Commissioner shall have the burden of producing reasonable and probative information concerning the deficiency.”

The taxpayers presented in evidence sufficient credible documentation for the Court to find that “a bona fide dispute existed regarding the $492 insurance refund on the CitiFinancial debt and the balance of the Chase amount over $1,000.” All the IRS had to show was the Form 1099-Cs.

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The Court ruled that the McCormicks only had to report $50.00 in COD income from CitiFinancial ($8042 - $492 = $7,550 - $7,500 = $50) and none of the Chase COD income.

So when it comes to your financial life keep all those bills, records, and both ends of correspondence.

TTFN

TWO MORE VOICES HEARD FROM

A couple of tax professors have weighed in on the new tax return preparer regulation regime.

Professor Annette Nellen of San Jose University correctly observed in her post “Regulating Paid Tax Return Preparers” at her 21st CENTURY TAXATION blog (the highlight is mine) –

“I don't think the proposed system will cause unscrupulous preparers to change behavior. They will just become (or continue to be) paid preparers who do not sign the return so remain off of the IRS radar screen (until the taxpayer gets audited and leads the IRS to the preparer). . . If Congress and the IRS want to reign in these unscrupulous preparers, they really need to (unfortunately) add a very large penalty to the tax system to be imposed on taxpayers who file a return they paid someone to prepare and did not get that preparer to sign the return and list his identifying number. Such a penalty would keep taxpayers away from unscrupulous preparers who would then go out of business.”

Professor Nellen also has an excellent and detailed article on the history and rationalization of the new tax preparer regulation titled “Registered Tax Return Preparers: Beware of New Jargon and Compliance Obligations” at CPA2BIZ.

Professor Mary O’Keefe of Union College in upstate New York submitted the following comment on Professor Nellen's post –

“With current filing methods and the existing tax software, there are many practical barriers which make it unreasonable to burden taxpayers with the responsibilities of monitoring whether their preparers have 'signed' their returns.

I outline some of these difficulties in a response on my blog.”

As indicated in her comment, Mary discusses the issue, and outlines what she considers the “many practical barriers” in the post “Should Taxpayers Be Enforcing the New Preparer Regulations?” at her blog BED BUFFALOES IN YOUR TAX CODE.

Her suggestion -

“I'd like to see a requirement that paid preparers must authenticate their identity and their registered PTIN status to their clients BEFORE they are allowed to request any sensitive information including W-2s, bank statements, old tax returns, etc.

Instead of imposing a penalty system on taxpayers to enforce the preparer return-signing law, I suggest a taxpayer education program to inform taxpayers that return preparers who are unable or unwilling to authenticate their registered status prior to requesting their confidential financial documents are operating outside the law and therefore unworthy of their trust.

In addition, the government already sends out ‘secret shoppers’ to paid preparers to monitor whether they are behaving in an unscrupulous manner, including failing to sign a return and/or to include a preparer ID number. They should surely continue to do that.”

In a follow up post titled “A ‘PTIN Facebook’ for Registered Tax Preparers” Mary further suggests that –

“in this day and age of social network software, it should be straightforward for whatever company the IRS selects to run the PTIN registration system to host a secure site where registered preparers can upload their photos, so they can be linked to PTIN registration records.

The irs.gov website should provide a link to that website and the IRS should educate taxpayers that it is in their own best interest to verify the identity and registration status of their tax preparers before they give him any confidential tax documents or provide any sensitive financial or personal information.

In other words, when a taxpayer first approaches a potential tax preparer, she should be able to ask for his name and PTIN before she gives him any confidential information. She ought to be able to go to irs.gov and find a link to a webpage where she can type in his PTIN and see his name, photo, and contact information.”

I agree with Professor Nellen – the IRS should heavily penalize individual taxpayers who use unregistered persons to prepare their tax return. Crooked tax return preparers would not be able to exist for long without crooked taxpayers.

It may not be easy to identify these taxpayers. But if this is discovered in audit there should certainly be a large penalty, which would not be available for abatement in any negotiation. David Williams of the IRS has suggested that the IRS may sent out inquiries to selected taxpayers with “self-prepared” returns asking them to certify by signature, under penalty of perjury, that they did indeed prepare their own return.

Regarding the scenarios that Mary has discussed, the penalty should be assessed if a taxpayer pays an individual to either prepare in total, or prepare a “substantial” or “significant” portion (i.e. a Schedule C, D, or E) of a filed return.

I also agree with Professor O’Keefe that there should be an easily accessible database of registered tax return preparers searchable by name and by PTIN so that taxpayers can be sure the person can verify, if not the competence of the preparer (as in the case of CPAs and attorneys who do not have to provide any measure of competence in 1040 filing) at least that the preparer is duly registered and authorized by the IRS to prepare 1040s. The IRS has promised that this will be a component of the new regime in the future.

And the IRS should embark on a highly visible public education campaign to inform taxpayers that only those preparers who possess a PTIN (eventually only Registered Tax Return Preparers, Enrolled Agents, who have proven a degree of competence and are required to remain current through mandatory CPE, and CPAs and attorneys who have registered) are legally authorized to prepare, or assist in the preparation of, a Form 1040, or 1040A, for a fee.

This campaign should also highlight the fact that taxpayers who use unregistered preparers will be heavily penalized.

A public education campaign has also been identified by the IRS as an eventual component of the regime.

I do think that potential taxpayer clients should have the right to request and be given the PTIN of a tax preparer as part of a general inquiry before choosing to use that preparer – so they can check the IRS database up front. Perhaps a preparer’s PTIN should be required to be listed in any advertising.

As for Mary’s suggestion of continued “secret shopper” stings – I do think that such an operation should be done as a one-time “test” after the tax preparer registration regime has been fully phased-in, in maybe five years from now, but I do not believe the IRS should spend its time and money on this as a regular practice.

So what do you think?

TTFN

NEVER FORGET!

Police Officer Maurice Barry - PATH Emergency Service Unit - P.O. Shield #1038

A Port Authority officer for 16 years, Maurice "Moe" Barry, 48, was assigned to the PATH commuter train system. The resident of Rutherford, NJ, upon hearing the reports of the terrorist attacks, was one of the first on scene when he rushed from Jersey City to Lower Manhattan and then into the North Tower to help in the rescue efforts. As thousands fled the searing flames and smoke of the Towers, Officer Barry was attempting to reach trapped and frightened workers on the upper floors. The last time he was seen, he was on his way to the higher floors to get people out.
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Moe had a history of heroism - he was involved in rescue efforts during an airplane crash at La Guardia airport; he once climbed a bridge to retrieve the body of a person electrocuted there; he was involved in the rescue effort during the 1993 bombing of the World Trade Center; and he rescued a woman from her home, by boat, during Hurricane Floyd. Moe was also a volunteer for the Rutherford Ambulance Corps.
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Moe was a longtime friend and client. He would always come in on the last day to have his tax return prepared. We knew the season was over when Moe came in the door. One year he came in on April 10th and we told him to go home and come back on the 15th.
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In memory of Moe I no longer work on 1040s on April 15th (or whatever is the last day of tax filing season).

WHAT’S THE BUZZ? TELL ME WHAT’S A HAPPENNIN’

* Have you seen my item on the “New Rules on Flexible Spending Accounts” at MAINSTREET.COM?

* An email brought my attention to the post “10 Things Grads Should Know About Retirement Planning” at the BEST COLLEGES ONLINE blog.

It has some good advice for the recent graduate, beginning with perhaps the best –

“Start immediately: This is the most important thing to know, and the one that will jump-start the others. It’s never, ever too late to start saving retirement, but the sooner you start, the better off you’ll be.”

* Bruce, the MISSOURI TAX GUY (don’t be confused by his url address – the “mo” in motaxguy refers to the state and not “mo” tax, like “mo” money) has been publishing a lot of good non-tax posts lately. One of note is “Should You Invest In Life Insurance”.

I have no dependents or anyone who relies on my income, other than Nosey the cat, so I really don’t need life insurance – although I do have a small term life policy with AARP that provides enough cash to bury me if I spend all my dough before I go.

* Professor Nellen shares her thoughts on “President Obama's New Stimulus Proposals & Tax Policy" at 21st CENTURY TAXATION.

* Diane Kennedy has a post on “EA, CPA or Tax Attorney” at her US TAX AID blog.

She begins the post by saying – “Every so often I read an article making some outrageous claim about Enrolled Agents (EAs) being better than CPAs, or vice versa.”

Well, nothing else but initials known, Diane actually goes on to explain why an EA is better than a CPA, at least when it comes to 1040 preparation –

“In general, an Enrolled Agent (EA) is someone who has passed a rigorous tax test given by the IRS.” And - “So, a CPA doesn’t necessarily know about taxes.”

As for a tax attorney, I agree with almost everything she has to say here -

“You definitely need a tax attorney if:

• You have a taxable estate, need to make complex estate planning strategies, or need to file an estate tax return.
• You are engaging in international business and need help with contracts, tax treatment, and other legal matters.
• You plan to bring a suit against the IRS.
• You plan to seek independent review of your case before the US Tax Court.
• You are under criminal investigation by the IRS.
• You have committed tax fraud (such as claiming false deductions and credits) and need the protection of privilege.”

My only disagreement is in the first “bullet” – you don’t necessarily need a tax attorney merely to file an estate tax return.

The above are pretty much the only reasons you need a tax attorney. No one in their right mind would walk in to the office of a tax attorney off the street just to have a 1040 prepared. Hey, we all know that attorneys are extremely expensive. And, by the way, CPAs ain’t cheap either.

* Kay Bell lets us know that “Capitol Hill Workers Top Unpaid Tax List” at DON’T MESS WITH TAXES.

Kay tells us that –

“The Washington Post reports that Capitol Hill employees owed $9.3 million in back taxes last year. Even worse for the Washington workers, and their bosses, is that IRS data show tax debt among Hill employees has risen at a faster rate than the overall tax debt on the government's books.”

The Post item states that 638 of the 18,000 employees on Capitol Hill, or about 4%, owe money to their Uncle Sam. That percentage is slightly higher percentage than the 3% delinquency rate among all U.S. tax returns. The average unpaid tax bill of a Senate employee is $12,787, while in the House the overage overdue tax amount is $15,498.

Kay points out that this is nothing new. Each year a similar item appears in the press and the blogosphere.

The IRS information used as a source for the Post article does not “name names” or indicate which party is the bigger offender.

“So conceivably, some members of Congress could be tax delinquents. Admit it. You tax geeks and political wonks are wondering if former Ways and Means Chairman Charles Rangel (D-N.Y.) is on this latest list.”

* Howard Gleckman explains the “outlines of the Great Tax Debate of 2010” in “Tax Cut Smackdown: Obama v. Boehner (and Orszag)" at TAXVOX, the blog of the Tax Policy Center.

“President Obama insisted on permanently extending the 2001-2003 tax cuts for those making less than $200,000 while allowing those aimed at the highest earners to expire at the end of the year. By contrast, House Republican leader John Boehner (R-OH) said he wants Congress to temporarily extend the Bush-era tax cuts for everyone. Boehner took his cues from an op-ed in Tuesday’s New York Times by Peter Orszag, Obama’s former budget director, which included a similar proposal for the next two years.”

Gleckman prefers the temporary extension of the Republicans, as do I.

As Howard has pointed out, there is no such thing as “permanently” extending the tax cuts. Congress can change the Tax Code whenever it wants – so nothing is ever “permanent”.

By allegedly “permanently” extending the tax cuts for those under $250,000 BO is walking away from the problem. And, as Howard states, “It implies that the nation can solve its budget problems by simply raising taxes on the wealthy”.

Congress must sit down and rewrite the Tax Code. By extending the cuts for another year or two it is more likely that some kind of real change will occur before the next expiration date – hopefully in 2011 - unless the cafones in Washington just make it another of the “extenders” and continue to avoid their responsibility by regularly passing one or two year extensions

* I have been touting “bi-weekly mortgages” for decades now. Brian O'Connell outlines “4 Ways to Save With Bi-Weekly Mortgages” over at MAINSTREET.COM, where I regularly write about taxes.

“It’s not rocket science. When you pre-pay the principal on your mortgage loan, you knock down the total cost of your mortgage. The larger the pre-payments, the more you save. Plus, the sooner you begin to pay off your mortgage, the more you’ll save over the long term.”

* Kelly Phillips Erb, the internet’s TAX GIRL, reminds us that “Deadline Approaches for Public Comment About Forms 1099”.

“So you’re really fired up about those new 1099 reporting requirements for 2012, right? The ones that are going to cause all of those headaches for you and your small business?

You’ve bellyached about it on twitter. You’ve railed against it on a number of blogs. You’ve griped about it on Facebook. You’ve passed along chain emails complaining about how much effort it’s going to be to comply.

But, er, have you really done anything about it yet?”

The IRS wants to hear your comments on this new law – but time is running out. Kelly tells us that “The deadline for public comment is September 29, 2010”.

* Speaking of the TAX GIRL, let’s end with a bit on Romanian taxes from Kelly – “Ooooh… I See Taxes In Your Future!".

TTFN