Tax Roundup, 12/20/2012: Blizzard! And meeting interesting people via social media.

December 20th, 2012 by Joe Kristan

20121220-3Yes, the blizzard came.  It’s still snowing at 6 a.m., with up to 14 inches.  Here’s what happens next:

* WINDS/VISIBILITY…NORTHWEST WINDS WILL BECOME VERY STRONG AND CONTINUE THROUGH THIS AFTERNOON. SUSTAINED WINDS OF 30 TO 40 MPH WITH GUSTS OVER 50 MPH ARE LIKELY. BLIZZARD CONDITIONS WILL BE WIDESPREAD BY 6 AM WITH BLOWING AND DRIFTING SNOW LEADING TO WHITEOUT CONDITIONS AT TIMES THROUGH THE DAY.

* IMPACTS…LIFE-THREATENING BLIZZARD CONDITIONS ARE EXPECTED INTO THURSDAY MORNING. TRAVEL WILL BECOME DIFFICULT…IF NOT IMPOSSIBLE DUE TO BLOWING AND DRIFTING SNOW. THE IOWA DEPARTMENT OF TRANSPORTATION ADVISES NO TRAVEL! POWER OUTAGES MAY BECOME MORE PREVALENT BY MORNING AS HEAVY SNOW IS WEIGHING DOWN TREES AND STRONG WINDS BY MORNING AND AFTERNOON MAY FELL TREES ON POWER LINES…RESULTING IN POWER OUTAGES.

So, telecommuting.

Still dancing on the edge of the cliff.  The President has threatened to veto House Speaker “Plan B” tax bill (see yesterday’s Tax Roundup).  The House is planning to vote on the bill today.  The Wall Street Journal reports ($link):

The talks remained frozen Wednesday as both sides awaited the outcome of Thursday’s vote. Messrs. Obama and Boehner (R., Ohio) have not negotiated since Monday and continued to take shots at each other in public.

“There are a lot of gyrations, tensions and difficulties, and this could still go awry,” said Rep. Tom Cole (R., Okla.). “But we are closer on Wednesday than we were on Friday. All the other major budget deals were all last-minute deals.”

Peter Suderman has tweeted:

20121220-1

Maybe so.  Forgive me if I’m not reassured.  Not when the acting IRS Commissioner has this to say (my emphasis):

As I stated in my letter dated November 13, 2012, the IRS has maintained the programming of its systems assuming that the AMT will be patched as it has been in previous years. I also indicated that if an AMT patch is not enacted by the end of this year, the IRS would need to make significant programming changes to conform our systems to reflect the expiration of the patch. In that event, given the magnitude and complexity of the changes needed, I want to reiterate that most taxpayers may not be able to file their 2012 tax returns until late in March of 2013, or even later.

As we consider the impact of the current policy uncertainty on the upcoming tax filing season, it is becoming apparent that an even larger number of taxpayers — 80 to 100 million of the 150 million total returns expected to be filed — may be unable to file.

That would make tax season even more fun!

Fiscal Cliff Notes:

Nick Kasprak, How do Personal Income Tax Increases Affect Small Business?  (Tax Policy Blog).  The post shows how much income that will be taxed under the President’s proposals and “Plan B” will be business income.  In Iowa, 25.1% of the adjusted gross income on returns with AGI over $200,000 is business income; the percentage is 37.24% on returns with AGI over $1 million.  In other words, increases in taxes on “the rich” punish Iowa employers.

Elaine Maag, Toppling Over the Fiscal Cliff Could Cost low-Income Families $1,000 in Reduced Tax Credits (TaxVox)

Patrick Temple-West, Boehner’s backup tax plan shakes up ‘fiscal cliff’ negotiations, and more (Tax Break)

Year-end techniques from the edge of the Fiscal Cliff.  My new post at IowaBiz.com, The Des Moines Business Record’s blog for entrepreneurs.

 

Cara Smith, Just Do It. A bad idea when a big company comes to the state looking for a special tax break.

Russ Fox, “Tax Guys” Get Taxing Result.   It seems that two Michigan preparers specialized in inventing earned income for clients to commit earned income tax credit fraud.

Paul Neiffer,  Annual Exclusion Update  Paul explains the annual gift tax exclusion.

TaxProf, Ninth Circuit: NOL ‘Carryover’ Does Not Include NOL ‘Carryback’

Jack Townsend,  More Swiss Bank Enablers Indicted

Peter Reilly,  No Bankruptcy Escape From Bad Tax Shelter And Compound Interest

William Perez,  Tax Software for Planning Out Your Year-End Tax Moves.

Kay Bell, Donder says harvest investment losses; Reindeer Year-end Tax Games Tip #7

 

Oversharing.  Social media experts caution us to be discreet in what we share on our Facebook pages.  A Florida woman failed to follow that advice, reports Tampa Bay Times:

TAMPA — Rashia Wilson all but dared investigators to catch her, court records show.

“I’m Rashia, the queen of IRS tax fraud,” Wilson said May 22 on her Facebook page, according to investigators. “I’m a millionaire for the record. So if you think that indicting me will be easy, it won’t. I promise you. I won’t do no time, dumb b——.”

It’s also bad form to make promises you may not be able to keep:

Grand jurors apparently got the message and responded with a 57-count indictment charging Wilson, 27, of Wimauma and her boyfriend, Maurice Larry, 26, of Tampa with mail fraud, filing false tax returns, conspiracy, aggravated identity theft and theft of government property.

She is charged with stealing over $1 million.  If the case is like many others coming out of the Tampa area, it involves identity theft.  It shows that the IRS is just sharp enough to go after you if you go out of your way to tell the world that you are tax fraud royalty.

 

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