Courtesy of another Fark PhotoShop contest:
Posted by taxguru on January 15, 2004
What is Poverty? – It’s really hard for any objective person to not see how well off our citizens are who are considered to be below the poverty line. Their living standards, and the things they have, would have classified them as very well off not too long ago.
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Who didn’t see this coming?
Posted by taxguru on January 15, 2004
Tax Withholding Proposed for Independent Contractors – Here is the other shoe dropping after the recent tax gap propaganda. If this plan to deputize more people as government tax collectors doesn’t encourage more use of the corporate form, people are less intelligent than I thought. I have already seen plenty of businesses refuse to work with any service that isn’t incorporated just to avoid the potential for the workers being classified as employees. This new rule, if enacted, would push more business owners to the same conclusion because payments to corporations are not subject to the same 1099 reporting or tax withholding rules that apply to payments to unincorporated individuals and businesses.
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Avoid Premature Reaction
Posted by taxguru on January 15, 2004
With the constantly changing tax environment, it is important to distinguish between what are actual real life changes in the laws and what are just proposals. I’ve never done a scientific study of this; but my guesstimate is that there are at least 100 tax change proposals for each one that makes its way into actual law. Changing your behavior based on the proposed changes can be very counter-productive.
What also happens is that people, including many tax pros, hear about the proposed changes and go around spreading them as if they were true; as in this letter I received today.
I am in Baghdad, Iraq until March and have the opportunity to buy a vehicle for my business at a reduced cost (one perk to being activated) while I am here. I read that the Senate voted to reduce the SUV tax break from $100,000 back to $25,000. Is this true? If so, will that affect the 2004 deduction of $100,000? It may be a factor on whether or not I purchase a large vehicle.
My Answer:
I guess it’s good that you’re able to think about tax matters while in the battle zone. I don’t know if I would be able to even consider taxes while in such a dangerous situation.The rule limiting the Section 179 deduction for vehicles to just $25,000 did receive a lot of publicity; much more than it deserved. I never worried about it actually becoming law; so I didn’t spend a lot of time discussing it at the time.
As I had expected, that provision never got beyond the one Senate committee that passed it. It never reached the full Senate, any part of the House, or the President. The net effect is that restriction on deducting the cost of heavy vehicles is still nothing more than a wet dream for environmental wackos like Arianna Huffington and other busy-body hypocrites who want to tell the rest of us what kind of vehicles we can buy and drive.
I hope this helps resolve any confusion and lets you better plan your purchases.
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Posted by taxguru on January 14, 2004
Creativity of elite cheaters costs taxpayers billions
Preparing for the tax preparer can make all the difference
Protesters: Tax prep firm is deceptive about loans – This really isn’t anything new. The quickie refund anticipation loans (RAL) that tax prep firms like H&R Block provide have always been aimed at the same lower intelligence crowd as the other legal loan sharking operations, such as cash advance services. These people don’t mind paying the fees and huge interest charges that work out to be effective interest rates in the hundreds of percent.
National Taxpayer Advocate Releases Report to Congress, Cites AMT as a Top Problem Facing Taxpayers – Interesting that even IRS is admitting that the insane AMT is ensnaring more and more people who were never intended to be its victims by our rulers, who continue to keep their heads in the sand in regard to any remedy.
This report also cites a tax gap of $132 billion. As I’ve explained before, this number is no more than a SWAG and cannot be backed up by IRS. They use big numbers like that in order to try to get more money for their own operating budget from our rulers in Congress. The bigger the amount of supposedly uncollected taxes, the more readily the money hungry politicians are to fund and allow increased collection actions by IRS. It’s too bad none of our rulers, nor anyone in the media, has the guts to challenge the official IRS statistics on something that, by definition, is impossible to measure; as I have been doing for several years. In all of my efforts to track down the official IRS calculations of the infamous widely cited tax gap, IRS personnel at very high levels have actually admitted to me that it is nothing but a SWAG (scientific wild ass guess). Their rationale is that since the actual amount is indeterminable, their SWAGs are as genuine as any other number anyone else may want to come up with.
I do dispute the size of the IRS’s imaginary tax gap because it has been my experience that most people overpay their taxes by not claiming all of the deductions to which they are legally entitled. This is most often due to lousy bookkeeping, as well as the use of tax preparers who think their job is to maximize the IRS’s take.
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Posted by taxguru on January 13, 2004
Stephanopoulos Fails to Correct Dean’s False $304 Tax Cut Claim – Are there really viewers who expect true objective journalism from the Clintons’ former campaign manager?
Republicans target Virginia Governor Warner’s tax increases
Democrats Put Tax Proposals In Context of Systemic Change
Judge Grants Request of IRS Office of Professional Responsibility to Disbar CPA – Another tax protestor promoter gets nailed. This former IRS agent, Joe Bannister, has been trying to get support for his use of the same old completely discredited tax protestor scams. What’s surprising to me isn’t that he was disbarred; but that he isn’t looking at a long prison term.
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Posted by taxguru on January 11, 2004
Health Savings Accounts – More changes to an under-used tax deduction. I’m not a big fan of these kinds of plans because I find it a lot easier and more effective to use C corporations to cover all medical costs.
Who Says Eliot Spitzer Is a Hero? – I’ve had similar thoughts as Neil Cavuto has about the power-mad crusade Spitzer is undertaking in the name of saving investors from unscrupulous fund managers. Breaking the law or violating written contracts is a valid area of concern for him; but telling private businesses how much they can charge is overstepping his authority.
Wal-Mart Settles Insurance Policies Suit – Imagine that. Some people aren’t happy about Wal-Mart making money from dead former employees.
All Tax Talk, No Action? – Luckily, tax lawn are written by the Congress. So, even if George Bush were to follow in his father’s footsteps as a one term president, the GOP controlled House & Senate would hopefully not go along with the DemonRats’ plan to repeal Bush’s tax cuts and soak the “rich” (anyone earning over $25,000 per year).
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