kcjenkins

very funny ad http://www.youtube.com/watch?v=4_yL5KeNtUQ

Emails undercut the official IRS story on political targeting. Congress's investigation into the IRS targeting of conservatives has been continuing out of the Syria headlines, and it's turning up news. Emails unearthed by the House Ways and Means Committee between former Director of Exempt Organizations Lois Lerner and her staff raise doubts about IRS claims that the targeting wasn't politically motivated and that low-level employees in Cincinnati masterminded the operation. In a February 2011 email, Ms. Lerner advised her staff—including then Exempt Organizations Technical Manager Michael Seto and then Rulings and Agreements director Holly Paz—that a Tea Party matter is "very dangerous," and is something "Counsel and [Lerner adviser] Judy Kindell need to be in on." Ms. Lerner adds, "Cincy should probably NOT have these cases." That's a different tune than the IRS sang in May when former IRS Commissioner Steven Miller said the agency's overzealous enforcement was the work of two "rogue" employees in Cincinnati. When the story broke, Ms. Lerner suggested that her office had been unaware of the pattern of targeting until she read about it in the newspaper. "So it was pretty much we started seeing information in the press that raised questions for us, and we went back and took a look," she said in May. Earlier this summer, IRS lawyer Carter Hull, who oversaw the review of many Tea Party cases and questionnaires, testified that his oversight began in April 2010. Tea party cases under review are "being supervised by Chip Hull at each step," Ms. Paz wrote to Ms. Lerner in a February 2011 email. "He reviews info from TPs, correspondence to TPs etc. No decisions are going out of Cincy until we go all the way through the process with the c3 and c4 cases here." TP stands for Tea Party, and she means 501©(3) and 501©(4) nonprofit groups. The emails also put the targeting in the context of the media and Congressional drumbeat over the impact of conservative campaign spending on the 2012 elections. On July 10, 2012 then Lerner-adviser Sharon Light emailed Ms. Lerner a National Public Radio story on how outside money was making it hard for Democrats to hold their Senate majority. The Democratic Senatorial Campaign Committee had complained to the Federal Election Commission that conservative groups like Crossroads GPS and Americans for Prosperity should be treated as political committees, rather than 501©(4)s, which are tax-exempt social welfare groups that do not have to disclose their donors. "Perhaps the FEC will save the day," Ms. Lerner wrote back later that morning. That response suggests Ms. Lerner's political leanings, and it also raises questions about Ms. Lerner's intentions in a separate email exchange she had when an FEC investigator inquired about the status of the conservative group the American Future Fund. The FEC and IRS don't have the authority to share that information under section 6103 of the Internal Revenue Code. But the bigger question is why did they want to? After the FEC inquiry, the American Future Fund also got a questionnaire from the IRS. Ms. Lerner famously invoked her right against self-incrimination rather than testify under oath to Congress. The House Oversight and Government Reform Committee reported this summer that its investigation had found Ms. Lerner had sent official IRS documents to her personal email account, and many questions remain unanswered. Democrats want to pretend the IRS scandal is over, but Ms. Lerner's role deserves much more exposure. A version of this article appeared September 11, 2013, on page A18 in the U.S. edition of The Wall Street Journal, with the headline: Lois Lerner's Own Words.

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Ideas for tax planning as 2013 begins to wind up 09/01/2013 By Roger Russell Despite all the recent tax law changes, most taxpayers aren't aware of the steps they should take between now and the end of the year to improve their position. By taking appropriate measures, it is possible to minimize the effects of new taxes and higher rates. The problem isn't the same as last year at this time when no one knew what the tax landscape would be after the first of the year. The problem now is that much is new, and more complex. "The end of last year was a disaster for tax planning," said Grafton "Cap" Willey, managing director of Top 100 Firm CBIZ. "There was a lot of year-end planning last year, but it was done without any certainty as to what would happen. Some of the planning was needed, while some was not. For example, we did a lot of accelerating of capital gains. With the increase in capital gains rates from 15 percent to 20 percent for people making more than $250,000, plus the new Medicare tax of 3.8 percent, this year we're taking a hard look at net investment income. With the potential increase from 15 percent to 23.8 percent, it's an effective increase of 57 percent." "It's become a complicated calculation," he said. "If someone is in the threshold area, we try to keep their net investment income down to get below the threshold. If not, we try to minimize the impact of the increased rates. We might use municipal bonds, or take a look at tax-deferred annuities, which could take income out of the current year. For example, if someone is near retirement but still has a high income, they might put some of their income in tax-deferred annuities until their income rates decrease when they stop earning wages." There are a number of new thresholds coming into play, Willey indicated. The new Medicare 3.8 percent tax applies to net investment income of taxpayers with AGI above $200,000 for single taxpayers or $250,000 for joint return filers. The 3 percent phase-out of itemized deductions and the 2 percent phase-out of exemptions have been re-instated. "In the area between $200,000 and $400,000, managing AGI is helpful because you can save tax on phase-outs and net investment income surcharges," said Willey. "Look at things that can affect those; for example, the opportunity to max out retirement contributions, and anything that's tax-deferred. Also, you have to be concerned about taking distributions from retirement plans because they can increase AGI." Another tool to use is an installment sales agreement, Willey observed. "It spreads out gains over future years, and lowers AGI in a particular year. And if there is any state estate tax due, it might be better to pay it before the end of the year so you get the deduction for it in the current year." WALK THE LINE "This year's tax planning is going to be heavily focused on reducing above-the-line amounts," said Monic Ramirez, senior tax manager at Sensiba San Filippo LLP. "There are several thresholds for adjusted gross income that taxpayers should manage in order to avoid the Medicare tax hike of 3.8 percent on investment income, the Medicare high-earner tax of .9 percent, and the Pease limitation on itemized deductions. And in California, managing taxable income will have an added benefit of avoiding the higher tax brackets enacted by Proposition 30." Ramirez suggests maximizing contributions to tax savings and retirement vehicles such as 401(k), 403(, 457 and 529 plans, as well as HSA, SEP and Keogh plans. "If self-employed, set up a self-employed retirement plan, and revisit decisions to contribute to a traditional versus a Roth retirement plan. Since distributions from Roth IRAs and 401(k)s are not subject to regular tax or the Medicare investment tax, they are a more attractive retirement savings vehicle for high-net-worth individuals." "On the contrary, if a taxpayer is hovering around the threshold for the new Medicare tax, the taxpayer should consider moving Roth contributions to a traditional retirement plan," she said. "Maximizing contributions to a traditional plan could reduce taxable income below the threshold and, therefore, avoid an additional 3.8 percent tax on investment income." "Long-term capital gains still maintain their preferential rates," Ramirez observed. "However, long-term capital gains received a 5 percent increase and are subject to the additional 3.8 percent Medicare investment tax. Even worse, short-term capital gains are subject to ordinary income rates and the 3.8 percent Medicare investment tax. Therefore, tax-deferral mechanisms for significant tax gains should be considered, such as a Section 1031 exchange for real property sales or structuring the sale as an installment sale." "An installment sale spreads the gain over several tax periods in order to minimize or entirely avoid the Medicare tax on investment income," she said. "Taxpayers should also consider realizing losses on existing stock holdings while maintaining the investment position by selling at a loss and repurchasing at least 31 days later, or swapping it out for a similar, but not identical, investment." Taxpayers might also consider reducing income by taking advantage of other tax-exempt investment vehicles, such as municipal bonds, which are still tax-free, she noted. "And in most states, home-state bonds are also state tax-exempt." If a loss in a flow-through has been incurred, make sure that it's deductible, suggested Ramirez. "Taxpayers can increase their basis in a partnership or S corporation if doing so will enable them to deduct a loss from it this year." If a taxpayer has self-employment income, they should consider any capital expenditures that will be needed in the coming year, Ramirez suggested. "Favorable Section 179 deductions and bonus depreciation have been extended through the end of 2013. Purchasing qualified property and placing it in service before the year end will accelerate the depreciation deduction allowed on the assets into 2013 and reduce the earnings potentially subject to the .9 percent Medicare surtax." WATCH THE RATES The big difference between last year and this year is that the rates are "quite a bit higher" now for upper-income taxpayers, noted Robin Christian, a senior tax analyst at Thomson Reuters. "For most individuals, the ordinary federal income tax rates for 2013 will be the same as last year: 10 percent, 15 percent, 25 percent, 28 percent and 35 percent," she said. "However, the fiscal cliff legislation passed in January increased the maximum rate for higher-income individuals to 39.6 percent - up from 35 percent. This change only affects taxpayers with taxable income above $400,000 for singles, $450,000 for married joint-filing couples, $425,000 for heads of households, and $225,000 for married individuals who file separate returns." Where taxpayers are near the standard deduction amount, Christian recommends bunching together expenditures for itemized deduction items every other year, while claiming the standard deduction in the intervening years. "For example, say the taxpayer is a joint filer whose only itemized deductions are about $44,000 of annual property taxes and about $8,000 of home mortgage interest. If the taxpayer prepays their 2013 property taxes by December 31 of this year, they could claim $16,000 of itemized deductions on their 2013 return. Next year, they would only have the $8,000 of interest, but they could claim the standard deduction, which will probably be around $12,500 for 2014. Following this strategy will cut taxable income by a meaningful amount over the two-year period. The drill can be repeated all over again in future years." Taxpayers should take advantage of the Section 179 deduction this year, since the maximum deduction is scheduled to drop from $500,000 to $25,000 for tax years beginning in 2014. Likewise, she urges, take advantage of the 50 percent first-year bonus depreciation, since it will expire at year's end unless it is extended by Congress. She also advises updating estate plans to reflect the current estate and gift tax rules, with the exemption pegged at a "historically generous" $5.25 million, and the rate at a "historically reasonable" 40 percent for 2013. John Vento, a New York-based CPA and CFP, advises clients to check with their HR department to fully understand the extent of benefits available to them. "For employees, the bulk of write-offs they can get is through their employer," he observed. "If they can get tax-free benefits they should try to maximize them. They should take advantage of their tuition reimbursement plan, and fully fund their 401(k) plan. If they're 50 or older, they should take advantage of the catch-up provisions, which allows them to contribute an additional $1,000 to their IRA. They should also check out the provisions where benefits are paid out in pre-tax dollars, such as tax-free reimbursement of child care, and even transit passes." The energy efficiency credit, which was slated to expire at the end of last year, has been extended for one more year, Vento indicated. "While it may be renewed, there is no guarantee, so clients should be advised to make any necessary improvements that qualify for the credit this year." Vento noted that if you find a job for your dependent children to help fund some of their living expenses, each child can earn up to $6,100 in 2013 without having to pay any federal income tax. "Consider establishing a Roth IRA in the child's name," suggested Vento. "The child can withdraw money from it to pay for college, and the withdrawal will be taxed at the child's tax rate, which could be as low as zero if structured properly."

Treasury and IRS Propose Rules for Affordable Care Act Information Reporting Washington, D.C. (September 9, 2013) By Michael Cohn The Treasury Department and the Internal Revenue Service have issued proposed regulations to implement the information reporting requirements for insurers and certain employers under the Affordable Care Act. The ACA provides for information reporting by insurers, self-insuring employers and other parties that provide health coverage. It also provides for information reporting by employers that are large enough to be subject to the employer shared responsibility provisions regarding the health coverage they offer their full-time employees. The regulatory proposals come amid an ongoing dialogue that the Treasury and the IRS say they have been engaging in with representatives of employers, insurers, other reporting entities and individual taxpayers. Other stakeholders who have been providing input include plan sponsors, many of whom already offer their full-time workforce coverage far exceeding the minimum employer shared responsibility requirements. Nearly 95 percent of employers with more than 50 full-time employees already offer coverage to their employees, the Treasury and the IRS noted. “Today’s proposed rules enable us to continue engaging on how best to implement the ACA reporting requirements in a more streamlined and focused manner,” said Assistant Treasury Secretary for Tax Policy Mark J. Mazur in a statement. “We will continue to consider ways, consistent with the law, to simplify the new information reporting process and bring about a smooth implementation of those new rules. Doing so will help ensure that the ACA effectively and efficiently delivers its historic tax benefits that promote health security for all Americans.” The proposed rules, which were issued last Thursday, describe a variety of options to potentially reduce or streamline information reporting, such as replacing Section 6056 employee statements with Form W-2 reporting on offers of employer-sponsored coverage to employees, spouses, and dependents. The proposals would also eliminate the need to determine whether particular employees are full-time if adequate coverage is offered to all potentially full-time employees. They would also allow employers to report the specific cost to an employee of purchasing employer-sponsored coverage only if the cost is above a specified dollar amount. In addition, the proposed regulations would allow self-insured group health plans to avoid furnishing employee statements under both Section 6055 and Section 6056 of the Tax Code by instead providing a single substitute statement. They would also limit reporting for certain self-insured employers offering no-cost coverage to employees and their families. In addition, the proposed rules would permit health insurance issuers to forgo reporting under Section 6055 on individual coverage offered through a health insurance marketplace, also known as an health insurance exchange, because that information will be provided by the marketplace. In addition, the proposed rules would permit health insurance issuers, employers and other reporting entities under Section 6055 to forgo reporting the specific dates of coverage (instead reporting only the months of coverage), the amount of any cost-sharing reductions, or the portion of the premium paid by an employer. The statute calls for employers, insurers and other reporting entities to report, among other things: • For Section 6055: o Information about the entity providing coverage, including contact information. o A list of individuals with identifying information and the months they were covered. • For Section 6056: o Information about the applicable large employer offering coverage (including contact information for the employer and the number of full-time employees). o A list of full-time employees and information about the coverage offered to each, by month, including the cost of self-only coverage. The Treasury and the IRS are inviting stakeholders to submit comments on the Section 6055 and 6056 proposed rules through early November. They said the public comments will be taken into account in developing final reporting rules. Once the final rules have been published, reporting entities will be encouraged to voluntarily implement information reporting in 2014 (when reporting will be optional), in preparation for the full application of the reporting provisions in 2015. Real-world testing of reporting systems in 2014 will contribute to a smoother transition to full implementation in 2015. The proposed regulations for insurance providers under Section 6055 can be viewed here . The proposed regulations for employers under Section 6056 can be viewed here .

So glad you are OK. Always appreciate your point of view. Stay well, dear friend.

Actually, the only 'offensive' part to me was the "southern" stereotype. I'm used to it, but as a southerner myself, it still irks me a little. I grew up in the south while segregation was still in place, starting college in 1960 yet I have had black friends not only visit but stay in my home overnight, my kids [now in their 40's] had black friends without even thinking about it, one even dated a black girl for a while during his college days. Today's south is a totally different place, indeed, most southern towns are less racially segregated than northern cities today. But, hey, let's not get worked up about a joke, friends. Even a 'dated' one.

Sara, the easiest way to fire any client is by raising their fee significantly. They either leave on their own or they pay the higher fees and that makes you not mind so much. And next year you raise it again, if you still want to get rid of them painlessly. As for the long time client who's fees have not gone up as they should, that is YOUR fault, because the IRS has been helping make that easy to fix, with their constant addition of new forms and such. You simply tell them that due to the new laws [healthcare is certainly this years reason] and the raising software prices due to those changes, plus more CPE for the same reason, you have to raise your prices. And in future you do this regularly. It's not fair to you to not be fairly compensated for your knowledge and skill. PS you do know I'm female, right?

BTW, if anyone wants to watch that $10K IRS spoof of the Apprentice, here's a link http://www.theblaze.com/stories/2013/09/06/youre-fired-irs-blew-10k-on-apprentice-parody-video/

Funny thing, I did not see Jack's joke as racist, I saw it as the opposite, as the winners were the black officers with the impressive resumes.

LOVE IT !!!!

And if you are smart, instead of doubling the fees, just raise them 25 %, odds are high you will lose less than 10%. Or better yet, raise them individually, more for the PITA clients. That way, you either get rid of a lot of pain, or you get paid enough to not mind the pain.

Actually, you really can't say what is 'fair fee' until you have done a return for the client, in my experience. You are looking at the finished product, but we all know that while two returns may LOOK identical, but often the work that went into them was quite different. One client may be well organized, give you his stuff early and complete, and be both polite and respectful of your advice, and pay promptly. The other is generally disorganized, late getting his data to you, you have to contact him three times to get everything you need, he ignores your advice then gripes when, as a result, things don't work out right. And once he finally gets you the last thing needed, he expects you to finish it the next day, then wants to pay you when.....[gets refund, next payday, in installments, or other]. SHOULD THEY BOTH BE CHARGED THE SAME? THE RETURNS LOOK ALMOST IDENTICAL, AFTER ALL.

Oh, yes, I well remember the feeling. In my early tax days, we used carbon paper to make the copies, and a 10 key was the only 'tool' we had. When I finished a return and then the client said. "Oh, by the way......." I wanted to scream.

My score 34 Correct 3 Wrong 92% You answered 34 of 37 questions correctly for a total score of 92%.

A coalition of six consumer privacy groups is calling on the Federal Trade Commission to enforce an earlier consent order with Facebook and block proposed changes in the social network’s Statement of Rights and Responsibilities and its Data Use Policy because the proposed changes violate the 2011 settlement with the Commission. “The changes will allow Facebook to routinely use the images and names of Facebook users for commercial advertising without consent,” the groups said. “The changes violate Facebook’s current policies and the 2011 Facebook settlement with the FTC. The Commission must act to enforce its order.” Signing the letter were Consumer Watchdog, the Electronic Privacy Information (EPIC), the Center for Digital Democracy, Patient Privacy Rights, U.S. PIRG, and Privacy Rights Clearing House. Read a copy of the letter here: http://www.consumerwatchdog.org/resources/ltrfacebookftc090413.pdf “Facebook has long played fast and loose with users’ data and relied on complex privacy settings to confuse its users, but these proposed changes go well beyond that,” said John M. Simpson, Consumer Watchdog’s Privacy director. “Facebook’s overreach violates the FTC Consent Order that was put in place after the last major privacy violation; if the Commission is to retain any of its credibility, it must act immediately to enforce that order.” The privacy groups’ letter said that the proposed changes’ “impact on minors is particularly pernicious.” In the proposed policy Facebook asserts: “If you are under the age of eighteen (18), or under any other applicable age of majority, you represent that at least one of your parents or legal guardians has also agreed to the terms of this section (and the use of your name, profile picture, content, and information) on your behalf.” “Such ‘deemed consent’ eviscerates any meaningful limits over the commercial exploitation of the images and names of young Facebook users,” the groups wrote. Copies of the letter were sent to the National Association of Attorneys General, the Senate Commerce Subcommittee on Consumer Protection, Product Safety and Insurance and the House Energy and Commerce Subcommittee on Commerce, Manufacturing and Trade. “We urge you to act. The right of a person to control the use of their image for commercial purposes is the cornerstone of modern privacy law,” the groups told the FTC. “Consumer privacy groups have worked diligently to preserve this right and to protect the interests of Facebook users. Now it is up to the FTC based on the Order that is already in place.”

PLEASE watch this, and then share it with everyone you can. This is such an important and powerful message. http://www.youtube.com/watch?v=MmpK_EshSL4

Posting just a few, for those who don't click on links. Hope you like these, Tom.

19 Jokes Only Grammar Nerds Will Understand The difference between knowing you’re shit and knowing your shit. http://www.buzzfeed.com/aj8/19-jokes-only-grammar-nerds-will-understand-cfe3

It's especially hard when you lose an argument with yourself, isn't it?

That's fair. We will be waiting.

A woman walks into a post office one day to see a middle-aged, balding man standing at the counter methodically placing "Love" stamps on bright pink envelopes with hearts all over them. He then takes out a perfume bottle and starts spraying scent all over them. Her curiosity getting the better of her, she goes up to the balding man and asks him what he is doing. The man doesn't even look up, and says, "I'm sending out 1,000 Valentine cards signed, 'Guess who?'" She watches as he continues with his work -- he clearly is on a mission. "But why?" asks the woman. "I'm a divorce lawyer," the man replies.