His first item reports “the Treasury Inspector General for Tax Administration (TIGTA) issued a report noting that over $1.6 billion in false refunds were estimated to have been issued in the 2006 and 2007 filing seasons”. I wonder if the report identifies how many of the $1.6 Billion in fraudulent refunds involved the Earned Income Credit?
* If you haven’t already done so check out my guest post on “Gift Tax 101” at THE TAX LADY BLOG
* An editorial from MarketWatch via NewsEdge titled “The Solution is Worse Than the Problem”, included in one of the week’s AccountantsWorld.com daily tax headline newsletters, began with some excellent words of wisdom for the “brains” in Congress (the highlights are mine) -
“One of many frustrations for investors during the current economic crisis has been watching a string of knee-jerk reactions and Band-Aid solutions from politicians, aimed at solving the headline-grabbing problem of the day and quelling investor anger.
It's not just that the quick fixes don't necessarily work; it's that they tend to be poorly thought out and good mostly for one special-interest group at the expense of others.
That's why the presidential candidates need to remember that all the king's horses and men could not repair the nation's broken retirement nest eggs overnight . . .”
Right on, brother!
* William Perez of WILLIAM’S TAX PLANNING BLOG at About.com deals in detail with the question “Should You Cash Out Your IRA in a Down Market?”.
As William puts it “The standard reply, of course, is not to over-react to market gyrations”. My response to the question would be the “standard reply”.
* WebCPA reports that “IRS Plans Tax Preparer Survey”. According to the item, “The IRS's Small Business Self-Employed Division will telephone a random selection of tax professionals between early November and January 2009 to gather their opinions on experiences with filing federal tax returns and dealing with the IRS on behalf of their clients”
This is apparently an annual program – although I have never been on “the list”. Perhaps this time – the item points out, “This year's survey has been expanded to capture feedback from unenrolled return preparers, in addition to CPAs, attorneys and enrolled agents”.
* On Election Day Howard Gleckman did a good job of listing his likes and dislikes of the Presidential campaign in “Campaign 2008: Taking Stock” at the Tax Policy Center’s TAXVOX blog.
Like Howard, I, too, “liked that Obama and McCain nearly engaged each other on the fascinating issue of how the tax code redistributes income. I didn’t like that it never got past McCain’s ridiculous claim that Obama is a socialist.”
I especially liked Howard’s ending comment - “I did not like that many people, including far too many journalists, seemed more interested in Joe the Plumber’s views on fiscal policy and Sarah Palin’s wardrobe than they were on the tough issues that will confront the next president.”
* Another blog list. At the request of a reader, TAXGUY Bruce provides us with 107 “Famous Tax Quotes”.
My all time favorite is from, of all people, Albert Einstein – “The hardest thing in the world to understand is the income tax.”
I also like this one from Arthur B. Laffer (noted economist and creator of the “Laffer Curve” - “You have to be oblivious to common sense to believe that taxing people who do work and paying people who don’t work results in more people working. That’s just not the way the world works.”
* Paul Caron, the TAX PROF, has compiled the opinions of 15 tax law professors on tax policy in the new Obama-Biden Administration in “Tax Policy in the Obama-Biden Administration”.
The only name on the list of professors that meant anything to me was James Maule of Villanova, who writes the scholarly blog MAULED AGAIN. While I hope he is wrong, I do agree with most of his predictions, especially these (the highlights are mine) -
“Those who thought that the tax law would be simplified will be proven wrong. If anything, the tax law will be even more complicated, as another pile of tax credits are rolled into the tax code.
Those who wished for tax law changes that would contribute to a reduction or elimination of the federal budget deficit will continue to be frustrated. Those who expected a tax cut for "95% of working taxpayers" will wonder how the 95% became a smaller number.
So how will the nation's tax law be different a year from now? It won't be what I want, or what any particular taxpayer or tax expert wants or thinks should happen. It will be some combination of compromise, a more complicated arrangement, and a system that will generate no less griping than what we now have.”
* Jim continues on the topic in his post “What’s Ahead for Tax Law”. Again I certainly agree with much of what he says in the post Here is a sample –
“Trying to predict what changes will take place in the tax law as we approach 2009 and the commencement of the Obama Administration is a fool's errand. No one knows. Barack Obama does not know. Members of Congress do not know."
And, from Jim’s mouth to God’s ears, “Tax return preparation and tax advising will continue to be growth industries”.
* I love it! The Tax Foundation’s TAX POLICY BLOG dissed, and rightly so, the junior of my state’s Senators (just about every Senator is junior to NJ’s other Senator) for a tax FU in the post “Top Ordinary Income Tax Rate Is Not the Same as Capital Gains Tax Rate, Sen. Menendez". According to the post (the highlights are mine) -
“On Monday, Sen. Bob Menendez was on Neil Cavuto's show discussing Sen. Obama's tax plan. Of course, like most campaign spokespersons, he was only able to recite the 50 words that the campaign staff taught him. It's rather entertaining yet frustrating at the same time to realize that a person this clueless is helping shape fiscal policy in the United States Senate. (He should ask Sen. Wyden to give him a 30-minute tutoring session on the basics of the tax code.)”
Hey Bob, you should read my post “Taxes 101 for Politicians”.
What an idiot!
* Not exactly tax-related, but TAX GIRL Kelly Phillips Erb discusses a “wrinkle” in the Fannie Mae and Freddie Mac bail-out in her post “In Defense of Madness”.
According to the post –
“In response to taxpayer demands, the Justice Department is currently investigating whether there was any wrong doing leading up to the collapse of the mortgage industry. And naturally, executives at companies like Fannie Mae and Freddie Mac are scrambling to hire defense counsel to protect them from potential criminal charges. So that’s their problem, right? Not exactly. Fannie Mae and Freddie Mac had promised to cover legal bills for those executives - and since the feds now 'own' Fannie Mae and Freddie Mac, taxpayers may be on the hook for those defense bills. Only those who are convicted of wrongdoing are required to give the money back, assuming of course, that they have it to give back.”
Be sure to check out the comment from Charles Thomas.
* Kelly also tells us that “As part of President elect Barack Obama’s transition, a new website has been created at www.change.gov.” You can click here for the site’s page on Obama’s tax policies. The site allows you to submit your comments and suggestions.
I have submitted my specific comments and suggestions regarding tax policy, much of which I have posted here at TWTP in the past. I am waiting to see if there will be any response – and will let you know if I hear anything.
* Roni Deutch gives those who want to start a business some good advice in her post “10 Tax Tips for Self-Employed Individuals” at her TAX HELP BLOG.
I especially like #3 – “Remember while you are making your day-to-day purchases to keep any business-related receipts. These expenses are tax deductible, and even the small meetings with colleagues at coffee shops add up! Also, taking the time to add up these receipts once or twice a month will save you a lot of time later on.”