Some folks have more creative options for dealing with tax collectors than do the rest of us.

Outsourcing Sparks Returns – I’ve discussed this trend of using accountants in India to prepare USA income tax returns on a number of occasions. From this article, as well as a lively discussion thread on the Kleinrock board, the trend is still growing, in spite of my explicitly stated opinions that this is a disservice to clients who are often unaware of the fact they are paying top dollar fees to their USA preparers, while those preparers are farming the actual work out to a third world country where pay rates are a small fraction of what they are here in the USA. The fact that most of the USA tax firms quoted in this article were unwilling to have their names used is a perfect indication that they know they are doing something seriously wrong and are too embarrassed by it.

Maybe it’s just a difference in operating philosophy. In my case, I have always considered each tax return I prepare to be an extremely customized work of art. I have also always charged strictly by the time spent in order to appropriately reward the organized clients and penalize the messy complicated ones.

Even when I had my multiple offices in the Bay Area with a staff of preparers working for me, they were all required to abide by the very strict standards and procedures that I had established. I also reviewed and signed each and every tax return. This was tough enough to do when they were working in my offices. How it would be possible to properly supervise people from a different culture living and working on the other side of the planet escapes me.

Based on the multitude of incompetent tax pros who were born and raised here in the USA, I have a very hard time accepting the claim that these outsourcing companies can adequately train people from such a different culture in how we do things here. I have met and worked with many Indian accountants over my career, and they are very well educated and intelligent. However great they may be in their own environment, it’s impossible for them to be as skilled when out of their element. It would be the same situation if I were to start preparing tax returns for people in other countries. As well versed as I may be here in the USA, I would be a fish out of water.

From the solicitations I have seen for these Indian outsourcing companies, their main market is with the assembly line tax services that charge fixed amounts for their returns. They base their appeal on the fact that the USA firms can still charge their clients the same amounts while cutting their labor costs down dramatically. Quality of the product isn’t generally of as much concern to these kinds of tax prep firms as is quantity; so they will probably continue to expand their use of Indian preparers. Client beware is all I can say for people who use these USA tax firms.

Bush plans leanest budget – It’s about time he started reining in Capitol Hill’s drunken sailors.

The IRS can wipe the smile off of anybody.

Pepsi iTunes Contest: The Tilt Still Works – Some easy, yet legal, ways to improve the odds of winning free goodies when buying sodas.

IRS Must Get Grip on Tax Gap, Taxpayer Advocate Says – As I’ve explained on several occasions previously, I have tried to track down how IRS calculates the “tax gap” and they have admitted that they make the numbers up in order to justify more money and power for themselves.  Since such a gap is by definition unknowable, they claim that their guess is as good as anyone else’s. 

Having been in the tax profession for 30 years now and having reviewed the tax returns of thousands of people, I know that the popular wisdom that everybody cheats on their taxes is flat out wrong.  Most people are so frightened of the IRS, as well as incapable of understanding the insane tax code, that they actually over-pay their taxes and don’t claim all of the deductions to which they are legally entitled.   

Feds To Lotto Winner: Pay Up – In a sane world, where people are responsible for their actions, this wouldn’t even be debatable.  Someone who recently skipped out on $45,000 of debts should have no hesitation in making good on those debts from the $60 million lottery check he received.

Social Insecurity? – Thomas Sowell takes on the DemonRats’ asinine argument that there is no Social Security crisis.

It’s time to reform Social Security – George Will

You’re too stupid to manage your own money – The DemonRat philosophy in a nutshell.

Quiz: Are You Ready To Sell Your Own Home? – It’s not as easy as it often appears to be.

A Word to the Wise For Timeshare Buyers – I have no hesitation n proclaiming that buying timeshares at full retail price is the biggest rip-off in the real estate market.  It’s not such a bad deal, however, when you pay only $1,000 on the secondary market for an interest that someone else paid over $20,000 for.  Just don’t be the idiot paying the $20,000, regardless of what freebies the promoters give you.

Tax cuts will be meaningless if this were to come true:

Q:

Dear Sir,

I saw your advice on the net and really appreciate the work you have posted. I have a question I am hoping you can help with. I purchased a used BMW for the depreciation deduction at the end of 2004 to use in my
business, a vocational school, transporting books from the publisher to our school. It was 5,840 pounds, but when I added the necessary roof rack to carry the inventory it meets the 6,000 pound requirement. This works for the IRS
requirement, right?
Thank you in advance for your time.

A:

If the new rack becomes permanently affixed to the vehicle, you can add its weight to that of the vehicle to see if it is more than 6,000 pounds.  If it’s a removable stick-on rack, you will have a tougher time proving that its weight should be counted along with the vehicle’s.

This is no different than what some car dealers do when they sell their “tax upgrade packages” with various other features, such as towing equipment and racks installed to push the weight of an SUV or truck over that magical 6,000 pound threshold.

  Kerry Kerstetter