Tax Roundup, 9/7/2012: Iowa income tax reform? Also: suing the IRS for ID-theft refunds.

September 7th, 2012 by Joe Kristan

Iowa Republicans hint at income tax reform.  Governor Branstad has pushed hard for property tax reform in the first two years of his term, but has done nothing about Iowa’s awful income tax.  At a press conference yesterday Iowa Republican leaders hinted that they might try do change that.  From Radio Iowa (via thebeanwalker.com):

House Speaker Kraig Paulsen, a Republican from Hiawatha, said tax reform is a key portion of the plan the call “Iowa Strong.”

Paulsen said property taxes aren’t the only focus. “We also need changes in our income tax code. We need to reduce both personal and employer income taxes,” according to Paulsen. “And we’re going to do this, we’re going to … lower out our extremely high rates so that all Iowans can keep more of their hard-earned money and that entrepreneurs can better compete on a worldwide basis, and encourage them to invest right here in the state of Iowa, invest in our workforce.”

So far it’s just talk, and no details were provided.   Still, this is at least the second time they’ve mentioned income tax reform.  If they are serious, there is a terrific plan on the shelf they could use.

 

A shortcut for refunds for identity fraud victims?  Taxpayers whose identities have been stolen have a tough time getting refunds out of Doug Shulman’s IRS.  A Clearwater, Florida lawyer is looking for a way to cut through the red tape. From TBO.com:

Clearwater lawyer Jim Staack may have found a way for frustrated identity theft victims to get their overdue tax refunds: Sue the IRS.

Last year, Staack represented James and Christine Gordon in their effort to pursue a class action on behalf of identity theft victims who were unable to obtain their rightful tax refunds. The Gordons got their refund 12 days after the suit was filed.

Then Staack added Crystal Lake as a plaintiff in the case. Twelve days later, she got her refund.

But the IRS says that the quick refunds were just a coincidence, and that suing won’t help.  Still, it’s easy to understand why taxpayers will give it a try:

People trying to get their tax refunds are forced to navigate a byzantine system of unreturned phone calls, conflicting regulations and unskilled Internal Revenue Service employees who give them incorrect information, according to the report.

Staack said that after he filed the Gordon lawsuit last year, his office was contacted by a steady stream of identity theft victims who all tell the same story.

“They get the runaround from the IRS. They make promises that are not kept. They’re told it will take 60 days. Nothing happens. Then they call back and are put off again.”

These frustrated taxpayers will find comfort in knowing that the IRS open-book tests for preparers are going strong.

 

William McBride, Obama’s Tax Rates on Investment would exceed Clinton’s Rates (Tax Policy Blog):

Source: Tax Policy Blog

 

David Cay Johnston asks Who pays the top income tax rate?

Playing the parsonage allowance: Phil Driscoll Petitions Supreme Court On Housing Allowance For Second Home (Peter Reilly)

Jim Maule, Using Taxes (or Money) to Measure Generosity (or Values).

Winter fodder for $200, Alex. What About Hay? (Paul Neiffer)

I’m skeptical, but maybe it’s worth a try:  If At First You Don’t Succeed, Just Waste The Tax Court’s Time Some More (Anthony Nitti)

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