Saturday, October 29, 2011

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

+ Don’t forget to check out the NOVEMBER issue of LOIS.

+ William O’Keefe correctly tells us that we must make “Job One: Tax Code Rewrite” in an op-ed piece at Investor’s Business Daily.

O’Keefe points out that Obama’s current $447 Billion “stimulus” plan, like the previous one, “fails to address one of the fundamental factors hindering investment and hiring: uncertainty.”

The solution -

Bottom line: We need systemic reforms to our tax code and regulatory policy.” 

The piece provides some interesting statistics -

"During the last major tax code rewrite in 1986, the IRS instructions for Form 1040 totaled 52 pages. For tax year 2009, those same instructions more than doubled — weighing in at 105 pages.

According to the Tax Foundation, the Internal Revenue Code plus all IRS regulations grew from 5.7 million words in 1986 to 9.1 million words in 2005. And both the Code and regulations have expanded significantly since. Going back further, in 1955 the Code and all IRS regulations totaled just 718,000 words.”

+ An article titled “Top American Earners Paying More Tax” by Leroy Baker of TAX-NEWS.COM tells us –

The income earned by the top 1% of United States taxpayers has declined for the second year in a row while their average tax rate has increased, according to a study by the Tax Foundation (TF).”

The article tells us -

The TF's analysis is based on new data from the Internal Revenue Service on individual income taxes for the calendar year 2009, and shows that the average federal tax rate for those reporting at least $344,000 in income has increased from 22.5% in 2007 to 24.0% in 2009, while the average income for the top 1% has declined from $1.4 Million to $1 Million over the same period.”

And -

The TF discovered that, in 2009, the top 1% of tax returns earned 16.9% of adjusted gross income and paid 36.7% of all federal individual income taxes.”

+ Forbes.com’s TAX GIRL Kelly Phillips Erb is worried about a possible change of attitude at the IRS based on a recent client-related telephone interaction with a representative of the Service, and talks about her concerns in “IRS Gone Bad: Are Things About to Get Even Worse?

It was the first of a number of incidents that I would have previously considered to be out of character for IRS.  Shocked by what appeared to be a change of direction from the ‘kinder, gentler IRS’ in the 90s, I asked my colleagues on twitter whether they had noticed a difference in the IRS treatment of taxpayers:

The answer was a resounding yes.”

In my almost 40 years in the business I can count on the fingers of one hand (and have fingers left over) the number of times I have discussed a client issue with the IRS over the phone.  I do not trust what I am told via telephone.  I respond to client issues by written correspondence only.  It takes more time to resolve the issue, but I have found that I get “satisfaction” most of the time.

+ Russ Fox reminds those of us who do e-file (I do not – because I cannot do so without purchasing flawed and expensive tax preparation software) that “Irene E-File Deadline is Halloween Morning”.

+ Daniel Stoica quotes an old IRS “Summertime Tax Tip” in his post “Five Tax Tips for Recently Married Taxpayers”.

The first item of the STT is especially important, and timely, if you got married in 2011 and changed your last name to take that of your spouse.

Notify the Social Security Administration. Report any name change to the Social Security Administration, so your name and Social Security Number will match when you file your next tax return.”

+ The Tax Foundation’s TAX POLICY BLOG reports “The Latest on Property Taxes”.

The post includes a chart of the average annual change in state and local tax revenue since 2007 from the U.S. Census Bureau.  Property taxes show the highest increase – at 5%.

This is obviously no surprise for residents of the Garden State of New Jersey.

+ Bruce, the MISSOURI TAX GUY, “tweeted” a great quote from Albert Einstein -

The difference between genius and stupidity is that genius has its limits.”  

For some reason it makes me think of Congress (and they certainly do not fall into the category of genius).

+ Check out the interview with fellow tax blogger Prof Annette Nellen of 20th CENTURY TAXATION – “TAX MAVENS:  Annette Nellen: Tax Reform Advocate” – in the Summer 2011 issue of “The Contemporary Tax Journal” published by the San Jose State University Masters of Science in Taxation (MST) Program in the Lucas Graduate School of Business

The issue also has a good article on “Real Estate Professionals Beware”. 

+ Some “horn tootin’” - I just discovered that THE WANDERING TAX PRO is on Prof Jim Maule’s list of “Mauled Again's 10 Favorite Tax Blogs”!  Jim is a Professor of Law at the Villanova University School of Law.

Thanks for including me, Jim!

+ Over at the MISSOURI TAX GUY we learn that “Small Business Retirement Benefits Will Face Trouble With New Tax Reform” in a guest post by Tim Chen of NERDWALLET.

The post also takes a look at some of the most common choices for small business owners.

+ Just an observation – Kelly Phillips Erb mentioned in one of her posts last week that “Romney is rich. As in ├╝ber rich. Romney’s net worth is estimated to be northwards of $250 million. He is thought to earn close to $10 million in income per year with some speculation that the number is closer to $40 million”.  Why would someone with all that money want all the agita that comes with running for office, and if winning actually having to be President? 

JHC – if I had $250,000 Million in investments, and made $10 Million per year in income, the last thing I would want to do is be President.  I would just enjoy myself.  If I had 1/10th of that in investments and annual income - i/20th even - I would do nothing but just enjoy myself.

If I had Romney’s money I would probably start a foundation for animal welfare and arts charities to keep me busy. 

TTFN

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