Accounting Today visitors: The post about the convicted filmmaker is here.
Taxing employers at high rates? That’s OK, they’re rich! Pass-through Businesses can Face Marginal Tax Rates over 50 percent in Some States (Kyle Pomerleau, Richard Borean, Tax Policy Blog):
Today, Pass-through businesses pay a significant role in the United States Economy. They account for 95 percent of all businesses, more than 60 percent of all business income, and more than 50 percent of all employment.
Iowa ranks at about the middle, with a 47.2% combined top rate on pass-through income.
When lazy politicians think they can cover their incontinent spending just by sending the bill to the rich guy, they don’t tell you that they’re talking about leaving your employer that much less money to hire and pay you.
The Internal Revenue Service rehired hundreds of former employees with prior conduct or performance issues, including employees who failed to file their taxes, falsified official forms and misused IRS property, according to a new report.
The report, from the Treasury Inspector General for Tax Administration, acknowledged that most rehired employees do not have performance or conduct issues associated with prior IRS employment. However, TIGTA said it identified hundreds of former employees with prior substantiated conduct or performance issues ranging from tax issues, unauthorized access to taxpayer information, leave abuse, falsification of official forms, unacceptable performance, misuse of IRS property, and off-duty misconduct.
I like this “second chance” policy. I hope they roll it out to the rest of us. Robert Wood has more: IRS Rehires Hundreds Of Problem Former Employees.
Conformity update: The Iowa House of Representaties went home for the weekend without approving SF 126. The Iowa Senate approved the bill this week. SF 126 continues through 2014 Iowa’s practice of conforming to the extender provisions other than bonus depreciation. This will mean Iowans will be able to claim the $500,000 maximum Section 179 deduction on their state returns. I expect the House to pass it next week.
Tax Pros, the IRS isn’t your collection agent. That seems to be the implication of this item sent as an email by the IRS Office of Professional Responsibility to practioners yesterday. It addressed the idea of sending a 1099-C, reporting cancellation of debt income, to deabeats who fail to pay a tax return prep fee:
It is difficult to conceive of a situation in which a tax professional, principally engaged in providing tax services will be an “applicable entity” justifying the use of Form 1099-C to attribute income to an arguably scofflaw client for the nonpayment.
So it’s back to old standbys like cyberstalking and prank phone calls, then.*
*I kid! I kid!
TaxGrrrl, Minnesota Stops Accepting Returns Filed With TurboTax, Cites Fraud Concerns. It may be that Turbotax is just too popular with the wrong kind of customer. “Banned in Minnesota” can’t be good for Turbotax sales.
William Perez, Tax Refunds by Direct Deposit: How to Do It and Problems to Prevent. Some sage advice: “Triple Check Your Bank Account Information Before Filing Your Tax Return”
Paul Neiffer, Excessive Claims for Fuel Tax Credits Makes the IRS “Dirty Dozen List”. You mean you didn’t use 1000 gallons in your lawn tractor this summer?
Clint Stretch, Defining Tax Reform (Tax Anlaysts Blog):
To date, nearly everyone describing tax reform, from the U.S. Chamber of Commerce to the White House, has called for “a simpler tax code.” Not so the Senate Democrats. When they use the words “tax reform,” those words do not mean simplification but do mean many things conservatives would leave out of their own definition, such as progressive taxation.
It is tempting to think that whoever drafted the letter merely forgot simplification, or assumed it to be understood. But the Democrats’ proposal to have tax incentives “take into account the varying cost of living differences among States and regions” makes it clear: Simplification is not one of their core values.
Oddly, Mr. Stretch doesn’t seem to be a fan of simplification. He spent many years as a lobbyist for a national accounting firm I once worked for, so I suppose that’s unsuprising.
TaxProf, The IRS Scandal, Day 638
Howard Gleckman asks, How Will Jeb Bush Turn His Vision of Government into Tax Policy? Maybe by writing letters to his Congressman. It won’t be by becoming President, I’m pretty sure.
Peter Reilly has what seems to me an unnatural interest in the tax problems of “young earth creationist” Kent Hovind. In a long piece Peter explains his interest. It’s long, but this is worth noting:
Whenever I think about disputes that are really passionate, there is one thing that I never forget. If something really awful were to happen in my community there would be an outpouring of support from people across the country. Many of them would have views that I consider preposterous and dangerous. Regardless, we are still in it together.
I’m still puzzled at the interest in this particular sad case, but Peter comes across as thoughtful and humane all the way through.
Career Corner (?). Ex-Crazy Eddie CFO Now Judging Fellow Criminals on Their Criminal Talents or Lack Thereof (Adrienne Gonzalez, Going Concern), quoting Sam Antar on conviction of New York representative Michael Grimm:
My former bosses running Crazy Eddie would never have let an amateur like Grimm participate in our tax-evasion schemes! If you are to engage in any scheme to skim money and evade taxes, there is one golden rule: Never leave an audit trail.
Michael Grimm left behind a body of evidence in the most convenient places for the federal investigators to help bury him.
We discussed that very issue in our discussion of the Arrow Trucking tax plea yesterday. I hate to think I’m starting to think like Mr. Antar.