Today is the last day in office for IRS Commissioner Doug Shulman. He gave a validictory speech to the AICPA reciting what he sees as his accomplishments — primarily the crackdown on international tax evasion and alleged progress in IRS technology. He left out what I consider his most important achievements. These include:
Wasting IRS resources, practitioner time, and taxpayer money on a futile taxpayer regulation regime. The new program will expand IRS power over practitioners and help clear the field of competitors for H&R Block and Jackson Hewitt, which is the real goal. It will increase the cost for taxpayers to have their returns done, driving some to do their own returns without help and others to drop out of the system. It certainly won’t improve compliance by enough to justify the cost.
Identity theft refund fraud has become an epidemic on his watch. While he was busy grabbing regulatory power over preparers and beating up on Americans abroad (see below), street thieves learned that they could steal billions from the taxpayers through ID-theft fraud and debit cards. It’s a $5 billion annual problem, and only in the last few months has the service stirred itself to begin to address the issue.
The IRS crackdown on international tax fraud has ended up terrorizing thousands of innocent taxpayers. U.S. citizens employed abroad and accidental citizens who have long since set up residence in other countries — generally owing no U.S. tax — find themselves hounded and threatened with ruinous fines for failing to comply with busy-work paperwork requirements that they had never heard of.
There’s more, of course. The IRS Taxpayer Liaison office is being gutted and the Taxpayer Advocate office emasculated, taxpayer service only gets worse, the K-1 matching and self-employment income initiatives send millions of wrong notices to taxpayers, and it’s never been more difficult to get answers out of Washington. With his replacement to be appointed by a President who loves regulatory excess, taxpayers can only brace themselves for more of the same.
Martin Sullivan, Tax Reform 2.0 (Tax.com):
Get rid of the AMT. Simplify rules for pensions and retirement saving. Simplify education incentives. And in our effort to maintain distributional neutrality, don’t reinstate the Pease provision and personal exemption phaseout (as proposed by Obama). And don’t install new phaseouts of itemized deductions (as suggested by Romney). These are just hidden marginal rate increases.
Kay Bell, Tax compromise or coded tax talk?
Paul Neiffer, ObamaCare Here To Stay (At least 4 more years)
Especially those of GM, Chrysler, windmill companies… CEOs vow to work with Obama team, and more (Patrick Temple-West, TaxBreak)
Phil Hodgen, Fideicomiso private letter ruling offers some hope:
This is an immensely sane step in the right direction. Fideicomisos are title-holding mechanisms required by the Mexican Constitution. A Mexican bank holds title to your real estate but otherwise takes no responsibility whatsoever for anything. Trustees are required to protect and preserve assets for the beneficiaries. A fideicomiso does not behave like a trust at all.
Peter Reilly, Hurricane Sandy Tax Relief – More Than Meets The Eye
Today? Right now? RETIRE A MILLIONAIRE! (Robert D. Flach)
Have a great weekend!