The shutdown is over! The Republic is saved! That means the IRS can resume sending nonsensical notices and attempting to run the small players out of the tax-prep business. Audits can resume. Didn’t you miss them?
It’s all good for the Tax Update, as the Tax Court will resume issuing cases and the IRS will issue new guidance — the grist for this mill. It will be interesting if we see large batches of cases issued today and early next week, or if the Tax Court really stopped altogether.
Howard Gleckman, The Un-Default: Congress Has Become A Seinfeld Episode. That explains why the show was cancelled. (TaxVox)
Linda Beale, Senate passes debt increase/shutdown ending bill
Paul Neiffer, Watch Out for Distributions from Coops:
A qualified distribution is treated as a deduction on the cooperative return and the producer picks up the income amount. On the contrary, the cooperative does not get a tax deduction when a non-qualified distribution is given and the producer does not pay tax on that amount.
Extending the dividends-paid deduction for co-ops to all dividends from all corporations is an obvious method of tax reform that nobody but me seems to support.
Jack Townsend, Supreme Court Denies Certiorari in Coplan
Kyle Pomerleau, Obamacare’s Shaky Funding Sources (Tax Policy Blog)
These include a new 3.8 percent “unearned income Medicare contribution” (UIMC) and a new tax on “Cadillac” health insurance plans. The income thresholds for the UIMC are not indexed for inflation, so under law most workers would eventually be subject to the tax-over 80 percent of workers within 75 years, according to the Medicare trustees.”
Due to the fact that the income threshold for the new Medicare tax on unearned income will remain static and incomes will continue to rise, more and more people will eventually be hit by this tax. It will no longer be a tax just on the rich.
You can’t fund a mass welfare benefit with a class tax.
There’s a new Cavalcade of Risk up at Terms + Conditions! The Cavalcade is a roundup of insurance and risk management posts. As you might expect, there’s lots of Obamacare there. Meanwhile Insureblog has been all over this, including Adventures On The Marketplace, on one man’s attempt to enroll.
Oh, boy. Happy Centennial, Income Tax! (Benjamin J. Gehlhausen, Tax Policy Blog): “There is nothing simple about a work that approaches 74,000 pages and currently requires 6 billion hours of work by professionals to prepare return forms and comply with tax laws.”
The Critical Question: Are States Addicted to Revenue from Unclaimed Property? (Cara Griffith, Tax Analysts Blog). “According to the COST score card, revenue from unclaimed property is the state’s third largest revenue source, generating 16 percent of the general revenue fund in fiscal 2013.” So they have to modify the old joke about the economist explaining why he left a $20 bill on the ground. The old punchline is “if that really were money, somebody would have already picked it up.” The new version is “If it really were lost, the State would have it already.”
News you can use. When Liberals Preach Fairness, Hold On to Your Wallet (David Brunori, Tax Analysts Blog) ”I am sure those hardworking, middle-class wage earners who will pay more are very happy that the bored liberal billionaires are looking out for them.”
TaxProf, Freakonomics: Is Charitable Giving Affected by the Attractiveness of Tax Preparers? Come on. If that were true, all of my clients would have contribution carryforwards.
News from the profession. Accounting Career Conundrums: Aspiring CPA Concerned Background Check Will Uncover Revealing Past (Going Concern). It’s about a former stripper. I suspect she already knows more CPA firm hiring partners than she realizes.