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.
Archive for the ‘IRS’ Category
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 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, firstname.lastname@example.org. 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.
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 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:
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 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 by taxguru on September 26, 2016
It’s not bad enough that people have had to deal with scammers posing as IRS personnel via threatening phone calls and emails. Now IRS has enlisted the services of four private sector collection agencies to squeeze money out of delinquent tax(non)payers. They tried this approach a few years ago and quietly dropped it as unsuccessful. I have no idea why they expect better results this time.
How long do you think it will be before scammers will be impersonating these companies and trying to harass people into paying them for bogus tax debts? I’m guessing those scumbags will be on the prowl within days from now.
The IRS promise to protect taxpayers from abuses by these outside collectors fails to instill any confidence after the agency’s continuing inability to protect us against criminal abuses by their own employees, such as Lois Lerner and John Koskinen.
Posted by taxguru on September 21, 2016
The new euphemism for perjury is “faulty testimony.”
I’m sure he is thinking, “Everybody lies in DC. Why should I be singled out for punishment?”
Posted in IRS | Comments Off on IRS Commissioner tries to defend his perjury to Congress…
Posted by taxguru on September 13, 2016
Something to ponder during this Tax Season, leading up to the October 17 extended due data for 2015 1040s.
Hopefully, this is the first of many similar headlines we will be seeing. Everyone knows that there is no shortage of flagrant lawbreakers in the current (second term) and previous (first term) bHo Regimes.
Posted in IRS | Comments Off on A headline I never expected to see…
Posted by taxguru on August 14, 2016
and it will get a hundred times worse if the Clinton Crime Family gets back into the White House.
Posted by taxguru on July 28, 2016
Here’s a perfect example, in today’s news, of how insane it is to expect the IRS to seriously investigate the crimes of the Clinton Family Crime Foundation.
Judicial Watch has been doing the job that the elected Republican leaders should have been doing. While it is extremely unlikely that anyone at IRS will ever be punished for any of the crimes they committed in persecuting opponents of the DemonRat Party, the exposure of the extent of those crimes is helpful in understanding how the ruling class functions in Washington DC, the District of Corruption.