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Archive for October, 2016

Catching the Scammers

Posted by taxguru on October 27, 2016

There has been a lot of press coverage about the scumbags who call or write to people, impersonating IRS agents and demanding payments of fictitious tax debts.  We have received plenty of those communications, as have some of our clients.   So far, nobody that we know has fallen victim to these sleazebags.  However, it appears that many people have forked over some serious amounts of money to those a-holes.

When I receive a scam email from an IRS imposter, I forward the entire email, including any attachments, to the IRS’s special email address, phishing@irs.gov.  Some times I receive an acknowledgement back from IRS, and some times, nothing back.  What we never receive back are details of how well they are doing at tracking down, stopping and prosecuting those criminals. 

Every so often, a story pops up in the press about the progress against the scammers, such as this in USA Today.

Feds charge 56 in fraud scheme that siphoned $300M from 15,000 victims

With the ease of setting up these kinds of scams, it would be foolish to let our guard down just because these particular gangs have been caught.  For every internet criminal who is nabbed, dozens more pop up to take his/her place.

It is interesting to scroll through the actual indictment of these crooks.  Most of the people named are in India, so who knows how many of them the USA can actually catch and prosecute.  There are a fair number of names with USA locations, including several from here in Florida. Hopefully, they are not donors to Hitlery, the Clinton Crime Family Foundation, or the DemonRat Party so they can be prosecuted and severely punished.  

 

Posted in Crooks, IRS | Comments Off on Catching the Scammers

IRS’s 2017 Inflation Adjustments

Posted by taxguru on October 26, 2016

As anyone who follows the tax systems in this country knows, they consist of a crazy quilt of thousands of different provisions.  Some of the provisions have dollar amounts that are never changed without an official Act of Congress.  As a result, many of these have been in the system at the same amounts for decades and have not kept up with inflation.

One of the biggest such unchanged figures is the $250,000 per person tax free exclusion of gain from sales of primary residences, under Section 121. This has been the exemption amount when this provision took effect on May 7, 1997 and is still that exact same amount today.  While that amount does cover the gains that most people have when they sell their homes, especially in “fly-over” parts of this country, it is far from adequate to cover the gains sellers in expensive areas have, such as on the coasts.

Other provisions of our tax systems have been written with annual inflation adjustments in order to keep up with the cost of living.  The most important area is with the “progressive” (aka “soak the rich”) tax rate structure that we have that assesses much higher percentages on taxpayers who earn more money than others.  Before our rulers in DC added annual inflation adjustments to where these tax brackets begin and end, many people were victims of what was called “Bracket Creep.”  Their income was growing at the pace of inflation, but they were finding themselves pushed into the higher percentage brackets.  With annual inflation adjustments of the brackets, taxpayers whose income only rises at the same rate as the CPI should stay in the same marginal brackets.

Interestingly, the inflation adjustments for tax rates only apply to individual taxpayers.  The tax rate structure for C corporations has been pretty much the same for decades and does not change until our all powerful rulers in DC so decree.

This is a longer than normal introduction to the IRS’s official calculation and announcement of the inflation adjusted amounts for 2017.  These are very handy for tax planning purposes. 

Some States also have similar kinds of inflation adjustments for their state level taxes, but they are normally announced much later than IRS’s timetable.  For example, the California Franchise Tax Board just announced its 2016 inflation adjustments on Sept 7, 2016.

IRS Summary of 2017 Changes:

In 2017, Some Tax Benefits Increase Slightly Due to Inflation Adjustments, Others Are Unchanged

IRS Details of Changes: 

Revenue Procedure 2016-55  (30 page PDF)

 

Annual Gifting Exclusion:

The amount that is exempt from Gift Tax reporting is not adjusted every year.  It is only adjusted when the cumulative CPI change since the most recent change is close to $1,000 so the amount can always be an even multiple of thousands and not some odd looking number.  Since I constantly receive questions about gifting, I want to point out that the 2016 inflation has been so low that the annual exclusion will remain at the same $14,000 per donor per donee amount for 2017 as it has been since 2013.

 

 

Posted in 2017, inflation, IRS | Comments Off on IRS’s 2017 Inflation Adjustments

Late Filing 2015 1040s Without Penalties

Posted by taxguru on October 17, 2016

Today, October 17, is the expiration of the automatic six month extensions that were filed with IRS and the States back in April.  While most people have been able to get their tax returns in by now, many have not.  For those folks, it’s not as serious a situation as it may seem, as I explained earlier today in this email exchange with a client.   

From the client:

Subject: Extension for personal taxes

We are still dealing with S’s medical issues and have not been able to finish getting all the information together for our personal taxes. Would you be able to file another extension for us?

Thanks much,

 

My Reply:

IRS no longer has a form to request additional time to file after the first six month extension expires. 

Late penalties are based on the amount of taxes due with the return.  Nothing due, no penalty.

If you do end up owing money, IRS & DFA will waive the late penalties for Reasonable Cause.  The most common Reasonable Cause that is acceptable justification for late filing is health problems of the taxpayers and/or their family.  As cold-hearted as their reputation is, IRS is actually very compassionate when it comes to waiving late penalties due to health and medical situations.

So, you should focus on getting S well and then worry about your 2015 tax returns. 

Good luck.

Kerry 

TaxCoach Software: Are you giving your clients what they really want?

Posted in Uncategorized | Comments Off on Late Filing 2015 1040s Without Penalties

Hitlery’s Tax Hiking Plans

Posted by taxguru on October 12, 2016

It’s no secret that the Marxist candidate for President wants to continue the destruction of the private sector by converting more of it to government ownership.    

Tax Foundation has actually taken the time to do a detailed study of Hitlery’s plans for our tax systems. 

Details and Analysis of Hillary Clinton’s Tax Proposals, October 2016

Since it has been proven on countless occasions that everything out of Hitlery’s mouth is a lie, I doubt that the actual details will match these.  However, we can be assured that, if the Clinton Crime Family succeeds in retaking the White House, there will be a huge increase in the amount of money that will be stolen from those of us who try to make money honestly and given to those who agree to trade their votes for money from the criminals in DC. 

Even though tax policy and legislation are technically the responsibility of Congress, there is little doubt that the  GOP eunuchs in DC will be just as scared of opposing the first female president as they have been the last eight years with the first African-Indonesian pResident.

 

Posted in Hitlary, TaxFoundation, TaxHikes | Comments Off on Hitlery’s Tax Hiking Plans