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Archive for the ‘IRS’ Category

A necessary prerequisite for Tax Reform

Posted by taxguru on August 11, 2017

Ever since the amazing election of Donald Trump, there has been debate as to whether or not he and the GOP controlled Congress will be able to enact any substantial reform of our wild and wacky Tax Code in the near future.  We in the Tax Practitioner community would love to know the answer to this question so we will know what to advise our clients.  The uncertainty surrounding this issue is very frustrating for us all.

Basing predictions of what our rulers in DC will do on their blustery talk is insane and ludicrous. However, if we look at what actual advance preparations are being made by our rulers for such reforms, it doesn’t look promising. 

As these others have noted, it’s pretty much impossible to clean up the IRS Swamp when its crooks are allowed to continue running it  and nobody is punished for their flagrant crimes.  How can we have anything resembling a fair tax system when we can’t trust those in charge of it?

IRS head Koskinen hurting tax reform, Rep. Brady wants him fired

The IRS is STILL toying with conservative nonprofits. When will Trump jump in and drain this swamp?

Posted in Crooks, IRS, TaxReform | Comments Off on A necessary prerequisite for Tax Reform

IRS Condones Employees’ Criminal Activities

Posted by taxguru on August 1, 2017

It’s not bed enough that such IRS miscreants as Lois Lerner and John Koskinen have never faced any legal consequences for their blatant illegal activities while working at the IRS, there is this news item that IRS is rehiring employees who had been fired for criminal actions while working for IRS.

IRS Rehired Employees That Falsified Documents, Had Unauthorized Access to Taxpayer Information 

We all know that IRS has been suffering from low manpower due to attrition and budget restrictions, but are they this desperate for worker bees that they ignore and excuse prior criminal actions? What message does this send to other IRS employees, the tax practitioner community, as well as the American TaxPayers?  It is nothing less than  insane.

Update: Rush Limbaugh discussed this issue in his Morning Update on 8/7/17.

Posted in Crooks, IRS | Comments Off on IRS Condones Employees’ Criminal Activities

Facing Off With IRS Auditor

Posted by taxguru on May 27, 2017

The third season of the TV version of Fargo has been very amusing.  This scene from a recent episode, where a cash bank withdrawal of a tiny bit over $10,000 brings in a pushy IRS auditor, is funny in the way that the villain’s henchman handles the auditor.

 

The henchman cites "Section 41(c) of the U.S. Tax Code" as dealing with the taxpayer’s right to have licensed  representation.  That citation sounded strange to me, so I looked it up in the actual Internal Revenue Code that is included in my main tax reference, TheTaxBook’s WebLibrary.  Section 41 actually deals with  Credit for increasing research activities.  There are paragraphs (a) and (b) under Section 41, but no (c).

Posted in Fargo, IRS, video | Comments Off on Facing Off With IRS Auditor

IRS Reputation Still Sullied

Posted by taxguru on April 6, 2017

Can the top brass at IRS pull the agency’s reputation for corruption out of the hole they dug themselves into?  Punishing the lawbreakers we already know about would surely be a good start.  The fact that Lois Lerner and John Koskinen have yet to suffer any repercussions from their flagrant violations of the law makes it difficult to trust the Service’s desire to rehabilitate the taxpayers’ trust in them.

Bribery: New Documents Show IRS Targeting Scandal Was More Expansive

GOP calls for IRS Commissioner Koskinen to be fired

Posted in Crooks, IRS | Comments Off on IRS Reputation Still Sullied

Let’s not forget the IRS crimes under Obama

Posted by taxguru on February 21, 2017

Now that there is a new occupant in the White House, there is a tendency not to want to dwell on the misdeeds of the previous tenants, such as the many criminal acts of the Clinton Organized Crime Family.  To consider those unpunished acts as water under the bridge and not worth pursuing at this time sends a dangerous message to the public and undermines our faith in the fairness of the laws we are all supposed to obey and live under.

This also applies to the unpunished criminal acts by various IRS employees, such as Lois Lerner and  Commissioner John Koskinen, who used this all too powerful government agency to harass political opponents of the bHo Regime and then blatantly committed perjury when they testified about it before Congress. 

We the people, as lowly taxpayers and servants of our IRS masters, are required to reveal to them every tiny detail of our personal finances under the presumption of a level of fairness, privacy and confidentiality that we can’t reasonably expect any more, as long as we know that nobody at IRS has been punished for their crimes.  We do need to keep the pressure on our rulers in DC to continue to pursue real justice, including dismissal, prosecution and prison time for the lawbreakers inside the IRS so that we can trust that all too powerful agency. 

There are a lot of good, honest people working at IRS.  I would hope that they would do everything they can to help clean house of the miscreants who have given them such a bad reputation.  Firing the perjuring Commissioner would be a good place to start so that everyone could see that such crimes will no longer be tolerated. 

Here’s a good look at this issue from the American Spectator:

Who Will Hold the IRS Accountable?

Posted in Crooks, IRS | Comments Off on Let’s not forget the IRS crimes under Obama

Loose Lips…

Posted by taxguru on December 23, 2016

With holiday parties and adult beverages loosening people’s inhibitions, it’s a good time for another warning that if you have tax or other secrets that you don’t want the IRS to know about, keep your mouth shut.  Just as with people confessing to all kinds of nefarious acts on social media, there are also numerous cases where IRS agents catch people who feel safe bragging about their abilities to cheat on their taxes, while trying to impress people at parties.  There is a name for those folks; idiot blabbermouths.

IRSAgentAtParty(12-23-2016)

Posted in IRS | 1 Comment »

Lower IRS Mileage Rates for 2017

Posted by taxguru on December 13, 2016

The recently lower fuel prices have caused IRS to reduce their standard rate per mile deductions for business, medical and moving in 2017.  Only Congress has the power to modify the per mile cost that can be claimed as a Schedule A Charitable Donation from the 14 cents per mile rate that they cemented into the Tax Code rather than allow it to fluctuate with current costs as calculated by IRS.

From the IRS press release:

Beginning on Jan. 1, 2017, the standard mileage rates for the use of a car (also vans, pickups or panel trucks) will be:

  • 53.5 cents per mile for business miles driven, down from 54 cents for 2016
  • 17 cents per mile driven for medical or moving purposes, down from 19 cents for 2016
  • 14 cents per mile driven in service of charitable organizations

While these rates are for 2017 miles driven, to be claimed in 2018 when preparing 2017 1040s, having this info now is very useful for employers who use the IRS rate for their own employee reimbursement policies.

My Standard Reminders in regard to deducting vehicle expenses:

Most State tax agencies synchronize their allowable deductions with what IRS allows; but some don’t.

For heavy business use of vehicles, it’s a good idea to keep track of actual operating costs.  In many cases, it is possible to switch back and forth between standard rate and actual expenses from year to year. 

The IRS rate is based on average costs that may not represent your actual operating costs.  For example, if you are like many motorcyclists and owners of older cars, who use the much more expensive Ethanol Free gasoline to prevent the expensive carburetor problems that Ethanol causes, your fuel costs will be much higher than what IRS has built into their standard rate. 

 

Posted in IRS, Vehicles | Comments Off on Lower IRS Mileage Rates for 2017

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

One way to deal with IRS imposters…

Posted by taxguru on September 29, 2016

Sherry found this hilarious video of a guy turning the tables on a telephone scammer who can barely speak English and wants the victim to pay delinquent Federal taxes to IRS by purchasing Target gift cards. There are too many obvious signs that this call is a scam to even count; but some people still fall for these.

   

 

There is one very interesting twist to this phone call that I have never seen described in any other accounts of similar scam IRS calls.  After the intended victim reveals that  he is screwing with the scammer, the scammer basically claims to be a Pakistani terrorist follower of Osama Bin Laden.  Has our FBI looked into the possibility that the IRS imposters are funding Islamic terrorist organizations?

Posted in Crooks, IRS, video | Comments Off on One way to deal with IRS imposters…