In every effort to be fair to each client, I must remind you once again that the Dinar Investment is still on the table. Some tax clients completed their own research and purchased Dinars. I encourage others to do the same.
There are many arguments against this investment, as well as positive points. It is your decision. I just don't want anyone in my line up to say, "Why didn't you tell us?" Investment Tip from TWT.
Thursday, January 31, 2013
The IRS and JD Asking for an Injuction on Tax Preparation Ruling
The Internal Revenue Service and Justice Department are asking for an injunction against tax preparation regulations to be lifted and plan to appeal the ruling of a judge who granted the move. In the meantime, preparers who have become Registered Tax Return Preparers are wondering what is going to happen with the money they paid to register under the program.
It's all up in the air for thousands of paid preparers after a judge in Washington D.C. held the IRS did not have the authority to regulate paid preparers and issued a permanent injunction to block its enforcement of the regulations.
For preparers, the fall out of from the ruling goes beyond simply paying the registration fee. On an IRS Facebook page, preparers complained that they had paid for new business cards reflecting their registration and signed up for and paid for CPE credits. In email and Facebook comments, more than one preparer asked if they could take the examination anyway. Some on the discussion boards on TaxAlmanac.com asked if the IRS could make registration voluntary.
In general, comments appear to strongly support the regulation of preparer communities. Intuit issued a statement expressing its disappointment in the court ruling. In a prepared statement, John Ams, EVP of the National Society of Accountants, said, "We have long supported the registration of paid preparers and continuing education requirements so that preparers have the up-to-date knowledge needed to prepare complete and accurate tax returns for their clients."
Under the new regulations, IRS required all paid preparers to receive an identification number and prepapers other than CPAs, Enrolled Agents and Tax Attorneys would have been required to pass an examination. The suit was brought by three preparers and a conservative rights group.
No one is yet certain how far the court's ruling extends. The IRS said in a prepared statement that it is "continuing to evaluate the scope of the court's order in determining consistent next steps."
It's all up in the air for thousands of paid preparers after a judge in Washington D.C. held the IRS did not have the authority to regulate paid preparers and issued a permanent injunction to block its enforcement of the regulations.
For preparers, the fall out of from the ruling goes beyond simply paying the registration fee. On an IRS Facebook page, preparers complained that they had paid for new business cards reflecting their registration and signed up for and paid for CPE credits. In email and Facebook comments, more than one preparer asked if they could take the examination anyway. Some on the discussion boards on TaxAlmanac.com asked if the IRS could make registration voluntary.
In general, comments appear to strongly support the regulation of preparer communities. Intuit issued a statement expressing its disappointment in the court ruling. In a prepared statement, John Ams, EVP of the National Society of Accountants, said, "We have long supported the registration of paid preparers and continuing education requirements so that preparers have the up-to-date knowledge needed to prepare complete and accurate tax returns for their clients."
Under the new regulations, IRS required all paid preparers to receive an identification number and prepapers other than CPAs, Enrolled Agents and Tax Attorneys would have been required to pass an examination. The suit was brought by three preparers and a conservative rights group.
No one is yet certain how far the court's ruling extends. The IRS said in a prepared statement that it is "continuing to evaluate the scope of the court's order in determining consistent next steps."
Seven Essential Elements to Small Business Growth
Need to understand more about how to make your small business grow. This article will provide insight into the essential elements needed to help your business grow.
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Business plans are great, useful even, but the planning process and a growth oriented plan of action is where it's at for the small business.
A growth strategy planning approach forces you to focus on customer based strategy, high priority objectives and measurement of the things that actually impact your ability to reach your growth goals.
Every business that has growth in mind should make quarterly planning the practical and useful vehicle that it is.
The following seven elements and associated questions make up the foundation for brainstorming, questioning and organizing your growth planning strategy sessions.
Divide a white board into seven segments and pass out post it note pads to all participants involved. Then, just start asking questions. Let everyone vote with their ideas in private then start posting and discussing the thoughts as a group.
1) Ideal customer (IC) – How would someone spot our ideal customer? What do they look like, what do they think, where do they live, work and play? How do we locate them? What is their pain? Is there a behavior that signals they are ideal? What triggers their desire to solve their problem? What do they get when they hire us?
The goal of this phase of planning is to complete a picture of the ideal customer – one that values your unique approach. Look to your most profitable clients that also tend to refer business for clues.
2) Value proposition (VP) – Why do people buy from us rather than our competitors? This is a hard one for some companies to nail and you might have much better luck spending some time asking your customers why they buy from you, stay with you and refer you. Listen very carefully to the stories the tell for clues to your value proposition. There are a handful of proven value propositions, but the key is for you to find and commit to something that clearly differentiates.
3) Strategy Hourglass (SH) – Where are our gaps in customer engagement? I believe that process of growing a customer centric business lies in developing a mindset that focuses on the act of logically moving customers and prospects through seven stages of engagement – know, like, trust, try, buy, repeat and refer. The Marketing Hourglass is a tool I’ve used with hundreds of business owners to help create a focus on customer engagement.
4) Primary objectives (PO) – What are our 2-3 highest priority objectives for growth? One of the things the derails growth most often is too many goals and objectives. Most business can only focus on a couple of initiatives at any give time. You must identify and commit to no more than three priorities and then go to work on creating the projects and tasks needed to pull these off. And, you must say no to the idea of the week that shows up to knock you off course.
5) Revenue streams (RS) – How can we create more streams of revenue? There are only three ways to grow: add more customers, increase the average transaction size, increase the number of purchase per customer. It's actually easier to sell more to existing customer than add new customers. What services or products could you add? What packaging, pricing or promotion could you realign? What new markets or segments could you enter?
6) Strategic relationships (SR) – What relationships do we need to develop? This is probably one of the greatest untapped opportunities for growth. What marketing partners could be motivated to promote and co-market your business? What joint ventures would allow you to tackle new work? What vendors or suppliers could help you grow? What competitors could become cooperative partners for new venture, markets or work?
7) Key indicators (KI) – What metrics impact our growth most? Most businesses can tell you how much revenue they did last month and how much money they have in the bank. By tracking things like % or leads converted, % or business via referral, cost to acquire a new customer and % of customers likely to refer you can take control of the things that actually impact your growth in near real-time. Here are 7 key indicators that I believe should be part of the picture.
When asked to come into a business and evaluate it for growth or help develop a marketing plan – this is where I start because this is where all the answers reside.
About the Author: John Jantsch is a marketing consultant, award winning social media publisher and author Duct Tape Marketing and The Referral Engine. He is the creator of the Duct Tape Marketing System and Duct Tape Marketing Consultant Network that trains and licenses small business marketing consultants around the world.
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Business plans are great, useful even, but the planning process and a growth oriented plan of action is where it's at for the small business.
A growth strategy planning approach forces you to focus on customer based strategy, high priority objectives and measurement of the things that actually impact your ability to reach your growth goals.
Every business that has growth in mind should make quarterly planning the practical and useful vehicle that it is.
The following seven elements and associated questions make up the foundation for brainstorming, questioning and organizing your growth planning strategy sessions.
Divide a white board into seven segments and pass out post it note pads to all participants involved. Then, just start asking questions. Let everyone vote with their ideas in private then start posting and discussing the thoughts as a group.
1) Ideal customer (IC) – How would someone spot our ideal customer? What do they look like, what do they think, where do they live, work and play? How do we locate them? What is their pain? Is there a behavior that signals they are ideal? What triggers their desire to solve their problem? What do they get when they hire us?
The goal of this phase of planning is to complete a picture of the ideal customer – one that values your unique approach. Look to your most profitable clients that also tend to refer business for clues.
2) Value proposition (VP) – Why do people buy from us rather than our competitors? This is a hard one for some companies to nail and you might have much better luck spending some time asking your customers why they buy from you, stay with you and refer you. Listen very carefully to the stories the tell for clues to your value proposition. There are a handful of proven value propositions, but the key is for you to find and commit to something that clearly differentiates.
3) Strategy Hourglass (SH) – Where are our gaps in customer engagement? I believe that process of growing a customer centric business lies in developing a mindset that focuses on the act of logically moving customers and prospects through seven stages of engagement – know, like, trust, try, buy, repeat and refer. The Marketing Hourglass is a tool I’ve used with hundreds of business owners to help create a focus on customer engagement.
4) Primary objectives (PO) – What are our 2-3 highest priority objectives for growth? One of the things the derails growth most often is too many goals and objectives. Most business can only focus on a couple of initiatives at any give time. You must identify and commit to no more than three priorities and then go to work on creating the projects and tasks needed to pull these off. And, you must say no to the idea of the week that shows up to knock you off course.
5) Revenue streams (RS) – How can we create more streams of revenue? There are only three ways to grow: add more customers, increase the average transaction size, increase the number of purchase per customer. It's actually easier to sell more to existing customer than add new customers. What services or products could you add? What packaging, pricing or promotion could you realign? What new markets or segments could you enter?
6) Strategic relationships (SR) – What relationships do we need to develop? This is probably one of the greatest untapped opportunities for growth. What marketing partners could be motivated to promote and co-market your business? What joint ventures would allow you to tackle new work? What vendors or suppliers could help you grow? What competitors could become cooperative partners for new venture, markets or work?
7) Key indicators (KI) – What metrics impact our growth most? Most businesses can tell you how much revenue they did last month and how much money they have in the bank. By tracking things like % or leads converted, % or business via referral, cost to acquire a new customer and % of customers likely to refer you can take control of the things that actually impact your growth in near real-time. Here are 7 key indicators that I believe should be part of the picture.
When asked to come into a business and evaluate it for growth or help develop a marketing plan – this is where I start because this is where all the answers reside.
About the Author: John Jantsch is a marketing consultant, award winning social media publisher and author Duct Tape Marketing and The Referral Engine. He is the creator of the Duct Tape Marketing System and Duct Tape Marketing Consultant Network that trains and licenses small business marketing consultants around the world.
Information on the Obama Care, Glitch
WASHINGTON — Some families could get priced out of health insurance due to what's being called a glitch in President Barack Obama's overhaul law. IRS regulations issued Wednesday failed to fix the problem as liberal backers of the president's plan had hoped.
As a result, some families that can't afford the employer coverage that they are offered on the job will not be able to get financial assistance from the government to buy private health insurance on their own. How many people will be affected is unclear.
The Obama administration says its hands were tied by the way Congress wrote the law. Officials said the administration tried to mitigate the impact. Families that can't get coverage because of the glitch will not face a tax penalty for remaining uninsured, the IRS rules said.
"This is a very significant problem, and we have urged that it be fixed," said Ron Pollack, executive director of Families USA, an advocacy group that supported the overhaul from its early days. "It is clear that the only way this can be fixed is through legislation and not the regulatory process."
But there's not much hope for an immediate fix from Congress, since the House is controlled by Republicans who would still like to see the whole law repealed.
The affordability glitch is one of a series of problems coming into sharper focus as the law moves to full implementation.
Starting Oct. 1, many middle-class uninsured will be able to sign up for government-subsidized private coverage through new health care marketplaces known as exchanges. Coverage will be effective Jan. 1. Low-income people will be steered to expanded safety-net programs. At the same time, virtually all Americans will be required to carry health insurance, either through an employer, a government program, or by buying their own plan.
Bruce Lesley, president of First Focus, an advocacy group for children, cited estimates that close to 500,000 children could remain uninsured because of the glitch. "The children's community is disappointed by the administration's decision to deny access to coverage for children based on a bogus definition of affordability," Lesley said in a statement.
The problem seems to be the way the law defined affordable.
Congress said affordable coverage can't cost more than 9.5 percent of family income. People with coverage the law considers affordable cannot get subsidies to go into the new insurance markets. The purpose of that restriction was to prevent a stampede away from employer coverage.
Congress went on to say that what counts as affordable is keyed to the cost of self-only coverage offered to an individual worker, not his or her family. A typical workplace plan costs about $5,600 for an individual worker. But the cost of family coverage is nearly three times higher, about $15,700, according to the Kaiser Family Foundation.
So if the employer isn't willing to chip in for family premiums – as most big companies already do – some families will be out of luck. They may not be able to afford the full premium on their own, and they'd be locked out of the subsidies in the health care overhaul law.
Employers are relieved that the Obama administration didn't try to put the cost of providing family coverage on them.
"They are bound by the law and cannot extend further than what the law provides," said Neil Trautwein, a vice president of the National Retail Federation.
As a result, some families that can't afford the employer coverage that they are offered on the job will not be able to get financial assistance from the government to buy private health insurance on their own. How many people will be affected is unclear.
The Obama administration says its hands were tied by the way Congress wrote the law. Officials said the administration tried to mitigate the impact. Families that can't get coverage because of the glitch will not face a tax penalty for remaining uninsured, the IRS rules said.
"This is a very significant problem, and we have urged that it be fixed," said Ron Pollack, executive director of Families USA, an advocacy group that supported the overhaul from its early days. "It is clear that the only way this can be fixed is through legislation and not the regulatory process."
But there's not much hope for an immediate fix from Congress, since the House is controlled by Republicans who would still like to see the whole law repealed.
The affordability glitch is one of a series of problems coming into sharper focus as the law moves to full implementation.
Starting Oct. 1, many middle-class uninsured will be able to sign up for government-subsidized private coverage through new health care marketplaces known as exchanges. Coverage will be effective Jan. 1. Low-income people will be steered to expanded safety-net programs. At the same time, virtually all Americans will be required to carry health insurance, either through an employer, a government program, or by buying their own plan.
Bruce Lesley, president of First Focus, an advocacy group for children, cited estimates that close to 500,000 children could remain uninsured because of the glitch. "The children's community is disappointed by the administration's decision to deny access to coverage for children based on a bogus definition of affordability," Lesley said in a statement.
The problem seems to be the way the law defined affordable.
Congress went on to say that what counts as affordable is keyed to the cost of self-only coverage offered to an individual worker, not his or her family. A typical workplace plan costs about $5,600 for an individual worker. But the cost of family coverage is nearly three times higher, about $15,700, according to the Kaiser Family Foundation.
So if the employer isn't willing to chip in for family premiums – as most big companies already do – some families will be out of luck. They may not be able to afford the full premium on their own, and they'd be locked out of the subsidies in the health care overhaul law.
Employers are relieved that the Obama administration didn't try to put the cost of providing family coverage on them.
"They are bound by the law and cannot extend further than what the law provides," said Neil Trautwein, a vice president of the National Retail Federation.
Monday, January 28, 2013
Why You May Want to Hold Up on Filing Your 2012 Tax Return Until Mid February 2013
This article is now outdated:
IRS To Accept Returns Claiming Education Credits by Mid-February
IRS To Accept Returns Claiming Education Credits by Mid-February
WASHINGTON - As preparations continue for the Jan. 30 opening of the 2013 filing season for most taxpayers, the Internal Revenue Service announced today that processing of tax returns claiming education credits will begin by the middle of February.
Taxpayers using Form 8863, Education Credits, can begin filing their tax returns after the IRS updates its processing systems. Form 8863 is used to claim two higher education credits -- the American Opportunity Tax Credit and the Lifetime Learning Credit.
The IRS emphasized that the delayed start will have no impact on taxpayers claiming other education-related tax benefits, such as the tuition and fees deduction and the student loan interest deduction. People otherwise able to file and claiming these benefits can start filing Jan. 30.
As it does every year, the IRS reviews and tests its systems in advance of the opening of the tax season to protect taxpayers from processing errors and refund delays. The IRS discovered during testing that programming modifications are needed to accurately process Forms 8863. Filers who are otherwise able to file but use the Form 8863 will be able to file by mid-February. No action needs to be taken by the taxpayer or their tax professional. Typically through the mid-February period, about 3 million tax returns include Form 8863, less than a quarter of those filed during the year.
The IRS remains on track to open the tax season on Jan. 30 for most taxpayers. The Jan. 30 opening includes people claiming the student loan interest deduction on the Form 1040 series or the higher education tuition or fees on Form 8917, Tuition and Fees Deduction. Forms that will be able to be filed later are listed on IRS.gov.
Updated information will be posted on IRS.gov.
Who Should File a 2012 Tax Return, You Can Get a Refund, Even if You Didn't Legally Have to File
You can find income tax filing requirements on IRS.gov. The instructions for Forms 1040, 1040A or 1040EZ also list filing requirements. The Interactive Tax Assistant tool, also available on the IRS website, is another helpful resource. The ITA tool answers many of your tax law questions including whether you need to file a return.
Even if you’ve determined that you don’t need to file a tax return this year, you may still want to file. Here are five reasons why:
1. Federal Income Tax Withheld. If your employer withheld federal income tax from your pay, if you made estimated tax payments, or if you had a prior year overpayment applied to this year’s tax, you could be due a refund. File a return to claim any excess tax you paid during the year.
2. Earned Income Tax Credit. If you worked but earned less than $50,270 last year, you may qualify for EITC. EITC is a refundable tax credit; which means if you qualify you could receive EITC as a tax refund. Families with qualifying children may qualify to get up to $5,891 dollars. You can’t get the credit unless you file a return and claim it. Use the EITC Assistant to find out if you qualify.
3. Additional Child Tax Credit. If you have at least one qualifying child and you don’t get the full amount of the Child Tax Credit, you may qualify for this additional refundable credit. You must file and use new Schedule 8812, Child Tax Credit, to claim the credit.
4. American Opportunity Credit. If you or someone you support is a student, you might be eligible for this credit. Students in their first four years of postsecondary education may qualify for as much as $2,500 through this partially refundable credit. Even those who owe no tax can get up to $1,000 of the credit as cash back for each eligible student. You must file Form 8863, Education Credits, and submit it with your tax return to claim the credit.
5. Health Coverage Tax Credit. If you’re receiving Trade Adjustment Assistance, Reemployment Trade Adjustment Assistance, Alternative Trade Adjustment Assistance or pension benefit payments from the Pension Benefit Guaranty Corporation, you may be eligible for a 2012 Health Coverage Tax Credit. Spouses and dependents may also be eligible. If you’re eligible, you can receive a 72.5 percent tax credit on payments you made for qualified health insurance premiums.
Social Security Changes for 2013, Higher Earning Limits Before Being Taxed
The biggest news in this latest line up of Social Security changes has to do with the ability for seniors or retired persons to earn more money before being taxed.
The Social Security Administration has implemented a variety of new rules and features for 2013. The two-year payroll tax cut has officially ended, and paper Social Security checks will soon cease to be printed. A growing number of Social Security services will also be online this year. Here's a look at some of the recent Social Security changes that go into effect this year:
1. Payroll tax cut ends. The temporary payroll tax cut was allowed to expire at the end of 2012. Workers who paid 4.2 percent of their income into the Social Security system in 2011 and 2012 will now resume contributing 6.2 percent of their earnings in 2013, up to the payroll tax cap of $113,700.
2. Higher payroll tax cap. The payroll tax cap increased by $3,600, from $110,100 in 2012 to $113,700 in 2013. Workers who earn more than this threshold don't need to pay Social Security taxes on that income.
3. More online services. A trip to the Social Security office is no longer necessary to start your Social Security payments. A growing number of retirees are claiming Social Security payments online, largely thanks to an advertising campaign starring actors Patty Duke and George Takei. For the first time in 2012, workers could access their Social Security statements online, including their complete earnings history and expected payments, and about 3 million people have already done so.
The Social Security Administration has implemented a variety of new rules and features for 2013. The two-year payroll tax cut has officially ended, and paper Social Security checks will soon cease to be printed. A growing number of Social Security services will also be online this year. Here's a look at some of the recent Social Security changes that go into effect this year:1. Payroll tax cut ends. The temporary payroll tax cut was allowed to expire at the end of 2012. Workers who paid 4.2 percent of their income into the Social Security system in 2011 and 2012 will now resume contributing 6.2 percent of their earnings in 2013, up to the payroll tax cap of $113,700.
2. Higher payroll tax cap. The payroll tax cap increased by $3,600, from $110,100 in 2012 to $113,700 in 2013. Workers who earn more than this threshold don't need to pay Social Security taxes on that income.
3. More online services. A trip to the Social Security office is no longer necessary to start your Social Security payments. A growing number of retirees are claiming Social Security payments online, largely thanks to an advertising campaign starring actors Patty Duke and George Takei. For the first time in 2012, workers could access their Social Security statements online, including their complete earnings history and expected payments, and about 3 million people have already done so.
In early 2013, Social Security added online services including the ability to access a benefit verification letter and payment history. Retirees can also change their address and start or change direct-deposit information online. "The ability to do this online, it will be a real convenience for the people who are required to have these benefit verification letters," says Social Security Commissioner Michael Astrue. "It is going to allow us to focus on the kind of conversations that we really do need to have face to face."
4. Reduced office hours. Social Security offices are reducing the hours they are open to the public to save money and avoid paying overtime to workers. Social Security locations nationwide have been closing 30 minutes early each day since Nov. 19, 2012, and they began closing to the public at noon every Wednesday on Jan. 2.
5. Paper checks will end. On March 1, the Treasury department will stop mailing paper checks to Social Security recipients. Retirees will be required to choose to have their Social Security payments either directly deposited into a bank or credit union account or loaded onto a prepaid Direct Express Debit MasterCard. "If you already have a bank account or credit union account, we encourage you and it's our preference that you sign up for direct deposit," says Walt Henderson, director of the electronic fund transfer strategy division at the Treasury Department. "The debit card is primarily for unbanked benefit recipients. We don't want people who already have a bank account to feel that they have to get the debit card." New Social Security beneficiaries have been required to choose an electronic payment option since May 2011, and approximately 93 percent of Social Security and Supplemental Security Income (SSI) payments are already being made electronically.
6. Higher earnings limit. People between ages 62 and 66 who work and collect Social Security benefits at the same time might have part or all of their Social Security benefit temporarily withheld. Workers between ages 62 and 65 can earn up to $15,120 in 2013, after which $1 in benefits will be withheld for every $2 of income above the earnings limit. People who turn 66 this year can earn up to $40,080, and then $1 of benefits will be withheld for every $3 earned above the limit. However, once you turn age 66, the earnings limit no longer applies. And benefits may be recalculated at age 66 to reflect the withheld benefits and continued earnings.
7. Bigger payments. Social Security beneficiaries began receiving payments that were 1.7 percent larger in January. The average monthly Social Security benefit in January increased from $1,240 to $1,261 as a result of the cost-of-living adjustment.
4. Reduced office hours. Social Security offices are reducing the hours they are open to the public to save money and avoid paying overtime to workers. Social Security locations nationwide have been closing 30 minutes early each day since Nov. 19, 2012, and they began closing to the public at noon every Wednesday on Jan. 2.
5. Paper checks will end. On March 1, the Treasury department will stop mailing paper checks to Social Security recipients. Retirees will be required to choose to have their Social Security payments either directly deposited into a bank or credit union account or loaded onto a prepaid Direct Express Debit MasterCard. "If you already have a bank account or credit union account, we encourage you and it's our preference that you sign up for direct deposit," says Walt Henderson, director of the electronic fund transfer strategy division at the Treasury Department. "The debit card is primarily for unbanked benefit recipients. We don't want people who already have a bank account to feel that they have to get the debit card." New Social Security beneficiaries have been required to choose an electronic payment option since May 2011, and approximately 93 percent of Social Security and Supplemental Security Income (SSI) payments are already being made electronically.
6. Higher earnings limit. People between ages 62 and 66 who work and collect Social Security benefits at the same time might have part or all of their Social Security benefit temporarily withheld. Workers between ages 62 and 65 can earn up to $15,120 in 2013, after which $1 in benefits will be withheld for every $2 of income above the earnings limit. People who turn 66 this year can earn up to $40,080, and then $1 of benefits will be withheld for every $3 earned above the limit. However, once you turn age 66, the earnings limit no longer applies. And benefits may be recalculated at age 66 to reflect the withheld benefits and continued earnings.
7. Bigger payments. Social Security beneficiaries began receiving payments that were 1.7 percent larger in January. The average monthly Social Security benefit in January increased from $1,240 to $1,261 as a result of the cost-of-living adjustment.
O.J. In Trouble With the IRS and the State of California
Imprisoned former football standout O.J. Simpson failed to pay $17, 015.99 in taxes for 2011, according to a federal tax lien filed in December, TMZ reports.
That sum, combined with $179,435.07 for the years 2007-2010 and $318,566.04 the State of California intends to collect for state taxes, brings Simpson's unpaid tax grand total to $515,007.10.
Not to mention his other expenses.
"And don't forget ... he still owes MILLIONS to the families of Nicole Brown Simpson and Ronald Goldman for that whole double murder thing," TMZ points out.
Simpson is currently serving a 30-year prison sentence -- including nine years without parole -- in Las Vegas after a 2008 conviction involving armed robbery and kidnapping.
Simpson was found not guilty of murdering his ex-wife and her friend in a highly publicized criminal trial. A 1997 civil court judgement against Simpson ordered him to pay the families of those victims $33.5 million.
That sum, combined with $179,435.07 for the years 2007-2010 and $318,566.04 the State of California intends to collect for state taxes, brings Simpson's unpaid tax grand total to $515,007.10.
Not to mention his other expenses.
"And don't forget ... he still owes MILLIONS to the families of Nicole Brown Simpson and Ronald Goldman for that whole double murder thing," TMZ points out.
Simpson is currently serving a 30-year prison sentence -- including nine years without parole -- in Las Vegas after a 2008 conviction involving armed robbery and kidnapping.
Simpson was found not guilty of murdering his ex-wife and her friend in a highly publicized criminal trial. A 1997 civil court judgement against Simpson ordered him to pay the families of those victims $33.5 million.
$153.3 Million in Unclaimed Tax Refund Checks From 2011
The IRS has $153.3 Million in Unclaimed Tax Refunds. Read the entire article to find out if any of this money is yours.
Millions of Americans are missing out on billions in forgotten cash.
Currently, states, federal agencies and other organizations collectively hold more than $58 billion in unclaimed cash and benefits. That's roughly $186 for every U.S. resident. The unclaimed property comes from a variety of sources, including abandoned bank accounts and stock holdings, unclaimed life insurance payouts and forgotten pension benefits.
Some people are owed serious cash. Last year, a Connecticut resident claimed $32.8 million, proceeds from the sale of nearly 1.3 million shares of stock. The recipient of the funds requested to remain anonymous and no further details were provided.
More than $300 million in pension benefits is currently owed to some 38,000 people, according to the Pension Benefit Guaranty Corp. The unclaimed benefits currently range from 12 cents to a whopping $704,621, with an average benefit of $9,100. Benefits may go unclaimed because an employee is unaware they had accrued retirement benefits at a previous employer, the agency said.
However, the majority of the forgotten funds -- roughly $41.7 billion -- are held by the states, according to the National Association of Unclaimed Property Administrators.
Under varying state laws, financial institutions and other companies are required to turn over any funds considered "abandoned," including uncashed paychecks, forgotten bank account balances, unclaimed refunds, insurance payouts and contents of safe deposit boxes. They have found some pretty unusual items like diamonds, bottles of liquor and sardines. Property is usually considered abandoned after the holder of the account or property has had no activity or contact with the owner for several years.
The states then try to find the owner through websites, newspaper ads and booths at events like state fairs. But every year, the vast majority of unclaimed funds remain in state coffers, where the cash can be used to fund government operations. Although the states are careful to note that the owner's claim to the property will always remain valid.
"The money belongs to the owner in perpetuity. Even if the owner dies, then their heirs could come back and claim it," said Carolyn Atkinson, West Virginia's deputy treasurer for unclaimed property and a past president of National Association of Unclaimed Property Administrators.
Florida's chief financial officer announced this month that the state had received 61,271 new unclaimed property accounts worth more than $25 million as part of a settlement with insurance company AIG (AIG). The settlement is one of several reached last year with major insurers, including MetLife (MET), Prudential (PRU) and Nationwide after regulators in 20 states audited the methods they used to locate life insurance beneficiaries after a policyholder's death.
The state auditors found that many insurers would use the Social Security Administration's Death Master File to cancel annuity payments to clients who passed away, but not to start issuing payments to their beneficiaries. In some cases, companies would continue collecting premium payments from the policy's value for years after the insured's death, depleting the cash reserves down to zero.
Through the settlements, those balances are being reinstated and remitted to the states. But in many cases, beneficiaries remain unaware of their policy claim and many of their current addresses are unknown, making it hard for the funds to be connected with their rightful owner.
"Once it goes to the state, it's unlikely that the rightful owner will be found," said Mark Paolillo, a Massachusetts-based accountant and Ryan LLC's abandoned and unclaimed property practice leader.
Are you owed money? Here's where you can find out.
Millions of Americans are missing out on billions in forgotten cash.
Currently, states, federal agencies and other organizations collectively hold more than $58 billion in unclaimed cash and benefits. That's roughly $186 for every U.S. resident. The unclaimed property comes from a variety of sources, including abandoned bank accounts and stock holdings, unclaimed life insurance payouts and forgotten pension benefits.
Some people are owed serious cash. Last year, a Connecticut resident claimed $32.8 million, proceeds from the sale of nearly 1.3 million shares of stock. The recipient of the funds requested to remain anonymous and no further details were provided.
More than $300 million in pension benefits is currently owed to some 38,000 people, according to the Pension Benefit Guaranty Corp. The unclaimed benefits currently range from 12 cents to a whopping $704,621, with an average benefit of $9,100. Benefits may go unclaimed because an employee is unaware they had accrued retirement benefits at a previous employer, the agency said.
However, the majority of the forgotten funds -- roughly $41.7 billion -- are held by the states, according to the National Association of Unclaimed Property Administrators.
Under varying state laws, financial institutions and other companies are required to turn over any funds considered "abandoned," including uncashed paychecks, forgotten bank account balances, unclaimed refunds, insurance payouts and contents of safe deposit boxes. They have found some pretty unusual items like diamonds, bottles of liquor and sardines. Property is usually considered abandoned after the holder of the account or property has had no activity or contact with the owner for several years.
The states then try to find the owner through websites, newspaper ads and booths at events like state fairs. But every year, the vast majority of unclaimed funds remain in state coffers, where the cash can be used to fund government operations. Although the states are careful to note that the owner's claim to the property will always remain valid.
"The money belongs to the owner in perpetuity. Even if the owner dies, then their heirs could come back and claim it," said Carolyn Atkinson, West Virginia's deputy treasurer for unclaimed property and a past president of National Association of Unclaimed Property Administrators.
Florida's chief financial officer announced this month that the state had received 61,271 new unclaimed property accounts worth more than $25 million as part of a settlement with insurance company AIG (AIG). The settlement is one of several reached last year with major insurers, including MetLife (MET), Prudential (PRU) and Nationwide after regulators in 20 states audited the methods they used to locate life insurance beneficiaries after a policyholder's death.
The state auditors found that many insurers would use the Social Security Administration's Death Master File to cancel annuity payments to clients who passed away, but not to start issuing payments to their beneficiaries. In some cases, companies would continue collecting premium payments from the policy's value for years after the insured's death, depleting the cash reserves down to zero.
Through the settlements, those balances are being reinstated and remitted to the states. But in many cases, beneficiaries remain unaware of their policy claim and many of their current addresses are unknown, making it hard for the funds to be connected with their rightful owner.
"Once it goes to the state, it's unlikely that the rightful owner will be found," said Mark Paolillo, a Massachusetts-based accountant and Ryan LLC's abandoned and unclaimed property practice leader.
Are you owed money? Here's where you can find out.
- State-held unclaimed property: Visit NAUPA's unclaimed.org for a map with links to each state's program.
- Life insurance: For benefits not held by the state, check the insurer's site directly. For example, MetLife has an online search.
- Pensions: For Pension Benefit Guaranty Corp. benefits, visit the agency's online search directory.
- U.S. savings bonds: More than 45 million matured savings bonds, worth nearly $16 billion, remain unredeemed, according to the U.S. Department of the Treasury. To search the database, visit treasuryhunt.gov.
- Tax refunds: In 2011, the Internal Revenue Service said it had $153.3 million in tax refund checks that were undeliverable. To make sure you've received your checks, visit the IRS's Where's my refund? tool.
- Overbid proceeds: If a foreclosed home or tax lien for delinquent taxes is sold at auction for a price above the money owed, the former property owner is owed the so-called "overbid proceeds," which are typically held at the country level. But, counties typically send notifications about the funds to the foreclosed address, so many people remain unaware of the extra cash, according to Mary Pitman, author of "The Little Book of Missing Money." These funds are different than other unclaimed funds in that the property owner's claim in some counties only last a few years. Contact the county clerk to find out which local agency holds the funds.
Friday, January 25, 2013
Earned Income Tax Credit for Taxpayers Who Earned Less than $50,270, See if You Qualifiy
Taxpayers who earned less than
$50,270 may qualify.
Seven Lesson Learned for Success Online and Offline, Guest Article
My Point of View:
7 Lessons From the World of a Lifelong Learner
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As we begin a new year, I have been reflecting on some of the lessons that I have learned that can be useful in making the year ahead better for me and the community that I care so much about. What my reflection revealed is that I have a point of view about a lot of things. My friends and colleagues agree with some of them, and of course, they disagree with others. So, I sorted through my opinions to find the core beliefs that drive the actions that I take to enhance the relationships I have with others.
Here are seven of the key lessons that represent the foundation of my actions related to the iZania Black Business Network. It is my hope that sharing these will invite a more active dialog within the community to help all of us as we strive to reach the goals we have set for ourselves.
I look forward to building on these lessons to provide more value to our community. Throughout the year, we will launch new initiatives, improve on those which provide value, and discard those which are no longer working. I also welcome your "point of view" about our community. http://www.izania.com/
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The IRS Is NOT Rolling Over on the Recent Law Suite Concerning Tax Preparers, The Fight is On
It to the IRS Attorneys a couple days to respond to the most recent court ruling, but it is clear the fight is on. The ruling will be appealed. This will be interesting. We have no doubt that the IRS reviewed the possible objections to licensing tax preparers, didn't they?
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The Internal Revenue Service said it will appeal a court’s ruling that it lacks the power to license tax preparers, a decision that might affect as many as 700,000 people who work on clients’ returns.
Immediately discontinuing the agency’s tax preparer oversight program “would result in a substantial disruption to tax administration,” the IRS said in a court filing yesterday accompanying a request to lift a court order barring it from regulating return preparers during its appeal.
U.S District Judge James Boasberg in Washington, D.C., ruling on a lawsuit filed by three preparers, invalidated the program Jan. 18. The agency overstepped its authority by relying on an 1884 law that allows it to regulate people presenting cases before the Treasury Department, he said.
The IRS program favored large corporate providers of tax services such as H&R Block Inc. and Intuit Inc. over smaller independent return preparers, said Dan Alban, an attorney with the Institute for Justice, a self-described libertarian public interest law firm representing the plaintiffs.
Large providers lobbied the IRS “for this program that they knew would put a lot of mom-and-pop preparers out of business,” Alban said in a phone interview from the group’s Arlington, Va.’s offices. “This is an example of protectionism at its finest.”
Program Proponents
Tax-preparation companies have expressed support for the program.
“We have been proponents of oversight, not to disadvantage competitors but in favor of consumers,” said Julie Miller, a spokeswoman for Intuit, the maker of TurboTax.
The IRS said the rules were designed to impose standards on return preparers who aren’t certified public accountants, attorneys or enrolled agents already licensed to practice before the agency.
The idea, promoted by Douglas Shulman while he was IRS commissioner, was to impose minimum standards and help the agency thwart tax fraud.
The agency’s licensing program affects from 600,000 to 700,000 preparers “who are responsible for a substantial number of the more than 80 million returns filed each year,” the IRS said in court papers.
The program required preparers to register with the federal government, pass a competency test and meet continuing-education requirements. A 15-hour continuing-education regime began in 2012 and the testing was set to go into effect this year.
Registration Fees
Almost 100,000 return preparers have registered to take the test and the IRS has collected more than $100 million in registration and competency-testing user fees, according the IRS filing. The agency said it has spent more than $50 million and assigned 167 employees to operate the program.
The IRS also would probably face lawsuits and demands for fee refunds if the injunction isn’t lifted during an appeal, the court filing said.
“All these actions—and taxpayer funds—would be wasted if the Court of Appeals subsequently overturned this court’s decision and reinstated the return preparer program,” the IRS said in its request to Boasberg to suspend the injunction against the program for at least 14 days to allow an appeal.
The case is Loving v. Internal Revenue Service, 12-cv- 00385, U.S. District Court, District of Columbia (Washington
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The Internal Revenue Service said it will appeal a court’s ruling that it lacks the power to license tax preparers, a decision that might affect as many as 700,000 people who work on clients’ returns.
Immediately discontinuing the agency’s tax preparer oversight program “would result in a substantial disruption to tax administration,” the IRS said in a court filing yesterday accompanying a request to lift a court order barring it from regulating return preparers during its appeal.
U.S District Judge James Boasberg in Washington, D.C., ruling on a lawsuit filed by three preparers, invalidated the program Jan. 18. The agency overstepped its authority by relying on an 1884 law that allows it to regulate people presenting cases before the Treasury Department, he said.
The IRS program favored large corporate providers of tax services such as H&R Block Inc. and Intuit Inc. over smaller independent return preparers, said Dan Alban, an attorney with the Institute for Justice, a self-described libertarian public interest law firm representing the plaintiffs.
Large providers lobbied the IRS “for this program that they knew would put a lot of mom-and-pop preparers out of business,” Alban said in a phone interview from the group’s Arlington, Va.’s offices. “This is an example of protectionism at its finest.”
Program Proponents
Tax-preparation companies have expressed support for the program.
“We have been proponents of oversight, not to disadvantage competitors but in favor of consumers,” said Julie Miller, a spokeswoman for Intuit, the maker of TurboTax.
The IRS said the rules were designed to impose standards on return preparers who aren’t certified public accountants, attorneys or enrolled agents already licensed to practice before the agency.
The idea, promoted by Douglas Shulman while he was IRS commissioner, was to impose minimum standards and help the agency thwart tax fraud.
The agency’s licensing program affects from 600,000 to 700,000 preparers “who are responsible for a substantial number of the more than 80 million returns filed each year,” the IRS said in court papers.
The program required preparers to register with the federal government, pass a competency test and meet continuing-education requirements. A 15-hour continuing-education regime began in 2012 and the testing was set to go into effect this year.
Registration Fees
Almost 100,000 return preparers have registered to take the test and the IRS has collected more than $100 million in registration and competency-testing user fees, according the IRS filing. The agency said it has spent more than $50 million and assigned 167 employees to operate the program.
The IRS also would probably face lawsuits and demands for fee refunds if the injunction isn’t lifted during an appeal, the court filing said.
“All these actions—and taxpayer funds—would be wasted if the Court of Appeals subsequently overturned this court’s decision and reinstated the return preparer program,” the IRS said in its request to Boasberg to suspend the injunction against the program for at least 14 days to allow an appeal.
The case is Loving v. Internal Revenue Service, 12-cv- 00385, U.S. District Court, District of Columbia (Washington
What Tax Preparers Charge and Why, An Average of $246 for Schedule A Returns
Tax preparers charge an average of $246 to prepare an itemized Form 1040 with a Schedule A and a state tax return, according to a survey by the National Society of Accountants.
If a professional tax preparer can catch even one more deduction or credit that a taxpayer may have missed, that can pay for the tax prep fee, the NSA noted.
“I think most people would say this is worth the money,” NSA executive vice president John Ams said in a statement. “Especially when you think about how long it will take you to do the return. Just reading the instructions can take hours, let alone filling it out. Let a professional take the hassle out of it.”
Rates for non-itemized returns are also low, with the average cost to prepare a Form 1040 and state return without itemized deductions is only $143.
The cost of tax prep may even go lower now that a federal judge has invalidated the Internal Revenue Service’s tax preparer regulation program. U.S. District Court Judge James E. Boasberg enjoined the IRS from enforcing its requirements for testing and continuing education of Registered Tax Return Preparers (see Court Rules IRS Doesn’t Have the Authority to Regulate Tax Preparers). Many tax preparers were forced to pass along the costs of complying with the new requirements to their clients. The IRS has suspended the program, but is appealing the decision (see IRS to Appeal Ruling Barring Licensing of Tax Preparers).
The NSA collected the tax prep fee information through a biennial survey of tax preparers. The tax and accounting firms surveyed are largely owners, principals and partners of local “Main Street” companies who have an average of more than 26 years of experience. Most of them hold credentials such as Enrolled Agent, CPA, Accredited Tax Preparer, Accredited Tax Advisor and others.
The survey also identified the average fees for preparing specific IRS tax forms, including:
• $205 for a Form 1040 Schedule C (business)
• $556 for a Form 1065 (partnership)
• $759 for a Form 1120 (corporation)
• $717 for a Form 1120S (S corporation)
• $468 for a Form 1041 (fiduciary)
• $628 for a Form 990 (tax exempt)
• $59 for a Form 940 (Federal unemployment)
• $134 for Schedule D (gains and losses)
• $155 for Schedule E (rental)
• $185 for Schedule F (farm)
However, the fees varied by region, firm size, population and economic strength of an area. The average tax preparation fee for an itemized Form 1040 with Schedule A and a state tax return in each
U.S. census district are as follows:
• New England (CT, ME, MA, NH, RI, VT) - $237
• Middle Atlantic (NJ, NY, PA) - $258
• South Atlantic (DE, DC, FL, GA, MD, NC, SC, VA, WV) - $253
• East South Central (AL, KY, MS, TN) - $279
• West South Central (AR, LA, OK, TX) - $226
• East North Central (IL, IN, MI, OH, WI) - $225
• West North Central (IA, KS, MN, MO, NE, ND, SD) - $196
• Mountain (AZ, CO, ID, MT, NV, NM, UT, WY) - $233
• Pacific (AK, CA, HI, OR, WA) - $288
Nearly 90 percent of accounting firms offer prospective clients a free consultation, the NSA noted, and those can be worth well over $100 based on the hourly fees of most tax preparers.
Sixty percent of accounting firms do not require payment until returns are completed and clients are satisfied, the survey found. Others may require a portion of the fee upfront or payments throughout the tax return process.
All fees assume a taxpayer has gathered and organized all the necessary information beforehand. Taxpayers should make sure they provide information on time to avoid additional fees, the NSA noted. Some preparers will charge an average fee of $41 to file an extension, an average fee of $73 to expedite a return, and an average fee of $80 if information is not provided by 15 days in advance of a filing deadline.
If a professional tax preparer can catch even one more deduction or credit that a taxpayer may have missed, that can pay for the tax prep fee, the NSA noted.
“I think most people would say this is worth the money,” NSA executive vice president John Ams said in a statement. “Especially when you think about how long it will take you to do the return. Just reading the instructions can take hours, let alone filling it out. Let a professional take the hassle out of it.”
Rates for non-itemized returns are also low, with the average cost to prepare a Form 1040 and state return without itemized deductions is only $143.
The cost of tax prep may even go lower now that a federal judge has invalidated the Internal Revenue Service’s tax preparer regulation program. U.S. District Court Judge James E. Boasberg enjoined the IRS from enforcing its requirements for testing and continuing education of Registered Tax Return Preparers (see Court Rules IRS Doesn’t Have the Authority to Regulate Tax Preparers). Many tax preparers were forced to pass along the costs of complying with the new requirements to their clients. The IRS has suspended the program, but is appealing the decision (see IRS to Appeal Ruling Barring Licensing of Tax Preparers).
The NSA collected the tax prep fee information through a biennial survey of tax preparers. The tax and accounting firms surveyed are largely owners, principals and partners of local “Main Street” companies who have an average of more than 26 years of experience. Most of them hold credentials such as Enrolled Agent, CPA, Accredited Tax Preparer, Accredited Tax Advisor and others.
The survey also identified the average fees for preparing specific IRS tax forms, including:
• $205 for a Form 1040 Schedule C (business)
• $556 for a Form 1065 (partnership)
• $759 for a Form 1120 (corporation)
• $717 for a Form 1120S (S corporation)
• $468 for a Form 1041 (fiduciary)
• $628 for a Form 990 (tax exempt)
• $59 for a Form 940 (Federal unemployment)
• $134 for Schedule D (gains and losses)
• $155 for Schedule E (rental)
• $185 for Schedule F (farm)
However, the fees varied by region, firm size, population and economic strength of an area. The average tax preparation fee for an itemized Form 1040 with Schedule A and a state tax return in each
U.S. census district are as follows:
• New England (CT, ME, MA, NH, RI, VT) - $237
• Middle Atlantic (NJ, NY, PA) - $258
• South Atlantic (DE, DC, FL, GA, MD, NC, SC, VA, WV) - $253
• East South Central (AL, KY, MS, TN) - $279
• West South Central (AR, LA, OK, TX) - $226
• East North Central (IL, IN, MI, OH, WI) - $225
• West North Central (IA, KS, MN, MO, NE, ND, SD) - $196
• Mountain (AZ, CO, ID, MT, NV, NM, UT, WY) - $233
• Pacific (AK, CA, HI, OR, WA) - $288
Nearly 90 percent of accounting firms offer prospective clients a free consultation, the NSA noted, and those can be worth well over $100 based on the hourly fees of most tax preparers.
Sixty percent of accounting firms do not require payment until returns are completed and clients are satisfied, the survey found. Others may require a portion of the fee upfront or payments throughout the tax return process.
All fees assume a taxpayer has gathered and organized all the necessary information beforehand. Taxpayers should make sure they provide information on time to avoid additional fees, the NSA noted. Some preparers will charge an average fee of $41 to file an extension, an average fee of $73 to expedite a return, and an average fee of $80 if information is not provided by 15 days in advance of a filing deadline.
If You Earned Less Than $50,270 You May Qualify for EITC Credit
If you qualify for the EITC Credit you can get a refund from the IRS, even if you don't owe any taxes. This is a credit well worth looking into.
WASHINGTON — The Internal Revenue Service and partners nationwide launched the Earned Income Tax Credit Awareness Day outreach campaign today, aimed at helping millions of Americans who earned $50,270 or less take advantage of the Earned Income Tax Credit (EITC).
Local officials and community organizations across the country are sponsoring over 250 news conferences and other outreach events highlighting the benefits of this key work incentive for low-and moderate-income workers and working families.
The annual campaign is necessary because one-third of the eligible population changes each year as their financial, marital and parental statuses change. Although an estimated four out of five eligible workers and families get the credit, one in five still miss out on it, either because they don’t claim it when filing, or don’t file a tax return at all.
“A large part of the nation sees major changes every year with their tax situation,” said IRS Acting Commissioner Steven T. Miller. “This year, millions of workers could qualify for EITC for the first time, and the IRS urges them not to overlook this valuable credit.”
The EITC varies by income, family size and filing status. The average EITC amount last year was around $2,200. People can see if they qualify by visiting IRS.gov and answering a few questions using the EITC Assistant. In tax year 2011, over 27 million eligible workers and families received nearly $62 billion total in EITC.
Workers, self-employed people and farmers who earned $50,270 or less last year could receive larger refunds if they qualify for the EITC. That could mean up to $475 in EITC for people without children, and a maximum credit of up to $5,891 for those with three or more qualifying children. Unlike most deductions and credits, the EITC is refundable. In other words, those eligible may get a refund from the IRS even if they owe no tax.
The EITC provides a financial boost for millions of hard-working Americans. However, the IRS reminds taxpayers that even though most federal tax refunds are issued in less than 21 days, many factors can affect how long it may take for taxpayers to get their refunds. It is also possible that a tax return could require additional review and therefore take longer to process. Taxpayers can track the status of their refund with the “Where’s My Refund?” tool available for use on the IRS.gov website after the IRS starts processing tax returns on Jan. 30.
How to Claim the EITC
Following the late tax law changes made by Congress, the IRS plans to open the 2013 tax filing season and begin processing both paper and e-filed individual income returns on Jan. 30 after updating forms and completing programming and testing of its processing systems. The vast majority of taxpayers who qualify can begin to file EITC claims with their federal tax return starting on Jan. 30, 2013.
To get the EITC, workers must file a tax return, even if they are not required to file, and specifically claim the credit. Those eligible for the EITC have free options to file a tax return to claim the credit:
More information on EITC and detailed eligibility rules are available at www.irs.gov/eitc. IRS partners should also visit EITC Central at www.eitc.irs.gov for helpful resources
WASHINGTON — The Internal Revenue Service and partners nationwide launched the Earned Income Tax Credit Awareness Day outreach campaign today, aimed at helping millions of Americans who earned $50,270 or less take advantage of the Earned Income Tax Credit (EITC).
Local officials and community organizations across the country are sponsoring over 250 news conferences and other outreach events highlighting the benefits of this key work incentive for low-and moderate-income workers and working families.
The annual campaign is necessary because one-third of the eligible population changes each year as their financial, marital and parental statuses change. Although an estimated four out of five eligible workers and families get the credit, one in five still miss out on it, either because they don’t claim it when filing, or don’t file a tax return at all.
“A large part of the nation sees major changes every year with their tax situation,” said IRS Acting Commissioner Steven T. Miller. “This year, millions of workers could qualify for EITC for the first time, and the IRS urges them not to overlook this valuable credit.”
The EITC varies by income, family size and filing status. The average EITC amount last year was around $2,200. People can see if they qualify by visiting IRS.gov and answering a few questions using the EITC Assistant. In tax year 2011, over 27 million eligible workers and families received nearly $62 billion total in EITC.
Workers, self-employed people and farmers who earned $50,270 or less last year could receive larger refunds if they qualify for the EITC. That could mean up to $475 in EITC for people without children, and a maximum credit of up to $5,891 for those with three or more qualifying children. Unlike most deductions and credits, the EITC is refundable. In other words, those eligible may get a refund from the IRS even if they owe no tax.
The EITC provides a financial boost for millions of hard-working Americans. However, the IRS reminds taxpayers that even though most federal tax refunds are issued in less than 21 days, many factors can affect how long it may take for taxpayers to get their refunds. It is also possible that a tax return could require additional review and therefore take longer to process. Taxpayers can track the status of their refund with the “Where’s My Refund?” tool available for use on the IRS.gov website after the IRS starts processing tax returns on Jan. 30.
How to Claim the EITC
Following the late tax law changes made by Congress, the IRS plans to open the 2013 tax filing season and begin processing both paper and e-filed individual income returns on Jan. 30 after updating forms and completing programming and testing of its processing systems. The vast majority of taxpayers who qualify can begin to file EITC claims with their federal tax return starting on Jan. 30, 2013.
To get the EITC, workers must file a tax return, even if they are not required to file, and specifically claim the credit. Those eligible for the EITC have free options to file a tax return to claim the credit:
• Free File on IRS.gov Free brand-name tax software walks people through a question and answer format to help them prepare their returns and claim every credit and deduction for which they are eligible. The program also allows people to file electronically for free, using Free File Fillable Forms, which are online versions of our paper forms designed for taxpayers comfortable preparing their own returns.
• Free tax preparation sites EITC-eligible workers can seek free tax preparation at thousands of Volunteer Income Tax Assistance (VITA) and Tax Counseling for the Elderly (TCE) sites. To locate the nearest site, taxpayers can search www.IRS.gov or call the IRS at 800-906-9887. Taxpayers can also find VITA/TCE sites by calling their community’s 211 or 311 line for local services.
• IRS Taxpayer Assistance Centers EITC-eligible workers can seek free assistance in IRS locations across the country. Locations are listed online at www.IRS.gov. Hours and services offered vary by location and should be checked before visiting.
Wednesday, January 23, 2013
More Tax Audits Due to Credits Being Abused
The IRS has long cited refundable credits as an abuse area, because the credits can reduce a taxpayer's total tax liability to zero, plus provide a cash payment for any remaining credit amount. According to a 2012 report by the Treasury Inspector General for Tax Administration, the IRS estimates that since 2003, between $99 billion and $119 billion has been erroneously paid in the Earned Income Tax Credit, which is one of the most prominent refundable credits.
Because of this report and other like it, we expect that audits will increase.
The IRS Shuts Down Testing of Tax Preparers Due to Recent Court Ruling
OK now we are going to have double standards in the Tax Preparer Industry. Those who have passed the RTRP Exam and those who have not. Humm....... Interesting
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The Internal Revenue Service reacted Tuesday to the surprise ruling Friday by a federal judge striking down the IRS’s authority to regulate tax preparers, shutting down its Preparer Tax Identification Number registration system and its testing system for tax preparers.
U.S. District Court Judge James E. Boasberg ruled against the IRS and in favor of three tax preparers who filed suit with the help of a libertarian law firm, enjoining the agency against enforcing its Registered Tax Return Preparer requirements (see Court Rules IRS Doesn’t Have the Authority to Regulate Tax Preparers).
“As of Friday, Jan. 18, 2013, the United States District Court for the District of Columbia has enjoined the Internal Revenue Service from enforcing the regulatory requirements for registered tax return preparers,” the IRS said in a statement Tuesday. “In accordance with this order, tax return preparers covered by this program are not currently required to register with the IRS, to complete competency testing or secure continuing education. The ruling does not affect the regulatory practice requirements for CPAs, attorneys, enrolled agents, enrolled retirement plan agents or enrolled actuaries.
“The Internal Revenue Service, working with the Department of Justice, continues to have confidence in the scope of its authority to administer this program,” the IRS added. “It is considering how best to address the court’s order and will take further action shortly. Please continue to check this site as additional information becomes available.”
IRS spokesman Dean Patterson said Tuesday that the IRS had no further comment at this time.
The director of the IRS’s Return Preparer Office, Carol Campbell, held a brief conference call Tuesday afternoon with representatives of approximately 25 stakeholder associations such as the National Association of Tax Professionals. Campbell verified that the online PTIN system is down and the IRS is no longer allowing the scheduling of RTRP exams. The IRS also told participants on the conference call that the RTRP testing system would go down by the end of the day, and if preparers have an exam scheduled, they would not be able to take it.
Paul Cinquemani, director of government relations at the NATP, who was on the call, said Campbell told them, “I thought about taking questions, but frankly, we don’t have all the answers.” Cinquemani also reported that Campbell encouraged the participants on the call to send in their questions, so the IRS could take them into consideration as it determines how to move forward.
Cinquemani believes the PTIN registration system will only be down temporarily. The system for registering to take the RTRP exam was handled through the PTIN registration system, so the former was most likely closed down to disentangle it from the latter.
In the case challenging the IRS’s authority to regulate tax preparers, three independent tax preparers—Sabina Loving of Chicago, John Gambino of Hoboken, N.J., and Elmer Kilian of Eagle, Wis.—joined forces with the Institute for Justice, a libertarian public interest law firm, in filing suit against the IRS in the U.S. District Court for the District of Columbia.
“The decision in the Loving case took most people in the industry by surprise,” said Cinquemani.
“There is a clamor for information and answers to questions that just won’t be available for weeks, if not months. The IRS released a statement today that did not reveal much. One could read an intent, in the second paragraph, to pursue the court decision further. It seems to me that the IRS has the following options available: They could appeal the court’s decision and ask for a stay of the injunction in the interim; they could go ask Congress for a piece of legislation that would grant them the authority denied by the court; or they could consent and comply with the decision. If they did this, they could either abandon the registered tax return program entirely, or make it a voluntary credential to be earned as the EA designation is.”
The National Association of Enrolled Agents also weighed in on the decision. “This decision is—at least temporarily—a setback for taxpayers, and for tax administration,” said Robert Kerr, senior director of government relations at the NAEA, which represents over 45,000 enrolled agent tax practitioners. “Some would argue, in fact, that the decision is a victory for those who would like the right to remain incompetent, to remain completely ignorant of the many annual changes in tax law and administrative procedure, and to foist the cost of their willful ignorance onto their clients.”
Fred Slater, CPA, managing member of New York City-based tax prep firm MS1040 LLC and former chair of the New York State Society of CPAs’ IRS Relations Committee, said he agrees with the judge’s decision in the case. “I think it’s a good decision in terms of reality because what has happened is the IRS set up all these guidelines to try to ‘regulate’ the tax preparers, and then once they did that they proceeded to exclude the CPA, the enrolled agents, to some degree, and the tax attorneys so you ended up with a dual system, which is fine because that’s the practicality of what each side services,” he said. “Then they proceeded to put out rules of what both sides are supposed to follow, and you can’t do that. You end up with this situation where everyone is registering, and paying 60-something bucks every year to prepare tax returns. What could happen and what I’m hoping will happen is that Congress will respond to it, not the IRS, and come out with two sets of rules. There should be a set of rules for those that are not enrolled, not CPAs and not tax attorneys, because they don’t have the official training, and they don’t have the ethics codes that we have to have. I’m not saying that all CPAs and attorneys are perfect, but that’s the group that is the most out of control and they are trying to regulate that.”
He also sees a role for the states regulating the tax preparation profession if Congress is unable to pass a law, but he pointed out that many tax preparers have clients in multiple states. Currently only two states have laws requiring registration, testing or continuing education of tax preparers: California and Oregon. Congress has reportedly failed to pass eight different bills over the past decade aimed at giving the IRS the ability to regulate tax preparers.
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The Internal Revenue Service reacted Tuesday to the surprise ruling Friday by a federal judge striking down the IRS’s authority to regulate tax preparers, shutting down its Preparer Tax Identification Number registration system and its testing system for tax preparers.
“As of Friday, Jan. 18, 2013, the United States District Court for the District of Columbia has enjoined the Internal Revenue Service from enforcing the regulatory requirements for registered tax return preparers,” the IRS said in a statement Tuesday. “In accordance with this order, tax return preparers covered by this program are not currently required to register with the IRS, to complete competency testing or secure continuing education. The ruling does not affect the regulatory practice requirements for CPAs, attorneys, enrolled agents, enrolled retirement plan agents or enrolled actuaries.
IRS spokesman Dean Patterson said Tuesday that the IRS had no further comment at this time.
The director of the IRS’s Return Preparer Office, Carol Campbell, held a brief conference call Tuesday afternoon with representatives of approximately 25 stakeholder associations such as the National Association of Tax Professionals. Campbell verified that the online PTIN system is down and the IRS is no longer allowing the scheduling of RTRP exams. The IRS also told participants on the conference call that the RTRP testing system would go down by the end of the day, and if preparers have an exam scheduled, they would not be able to take it.
Paul Cinquemani, director of government relations at the NATP, who was on the call, said Campbell told them, “I thought about taking questions, but frankly, we don’t have all the answers.” Cinquemani also reported that Campbell encouraged the participants on the call to send in their questions, so the IRS could take them into consideration as it determines how to move forward.
Cinquemani believes the PTIN registration system will only be down temporarily. The system for registering to take the RTRP exam was handled through the PTIN registration system, so the former was most likely closed down to disentangle it from the latter.
In the case challenging the IRS’s authority to regulate tax preparers, three independent tax preparers—Sabina Loving of Chicago, John Gambino of Hoboken, N.J., and Elmer Kilian of Eagle, Wis.—joined forces with the Institute for Justice, a libertarian public interest law firm, in filing suit against the IRS in the U.S. District Court for the District of Columbia.
“The decision in the Loving case took most people in the industry by surprise,” said Cinquemani.
“There is a clamor for information and answers to questions that just won’t be available for weeks, if not months. The IRS released a statement today that did not reveal much. One could read an intent, in the second paragraph, to pursue the court decision further. It seems to me that the IRS has the following options available: They could appeal the court’s decision and ask for a stay of the injunction in the interim; they could go ask Congress for a piece of legislation that would grant them the authority denied by the court; or they could consent and comply with the decision. If they did this, they could either abandon the registered tax return program entirely, or make it a voluntary credential to be earned as the EA designation is.”
The National Association of Enrolled Agents also weighed in on the decision. “This decision is—at least temporarily—a setback for taxpayers, and for tax administration,” said Robert Kerr, senior director of government relations at the NAEA, which represents over 45,000 enrolled agent tax practitioners. “Some would argue, in fact, that the decision is a victory for those who would like the right to remain incompetent, to remain completely ignorant of the many annual changes in tax law and administrative procedure, and to foist the cost of their willful ignorance onto their clients.”
Fred Slater, CPA, managing member of New York City-based tax prep firm MS1040 LLC and former chair of the New York State Society of CPAs’ IRS Relations Committee, said he agrees with the judge’s decision in the case. “I think it’s a good decision in terms of reality because what has happened is the IRS set up all these guidelines to try to ‘regulate’ the tax preparers, and then once they did that they proceeded to exclude the CPA, the enrolled agents, to some degree, and the tax attorneys so you ended up with a dual system, which is fine because that’s the practicality of what each side services,” he said. “Then they proceeded to put out rules of what both sides are supposed to follow, and you can’t do that. You end up with this situation where everyone is registering, and paying 60-something bucks every year to prepare tax returns. What could happen and what I’m hoping will happen is that Congress will respond to it, not the IRS, and come out with two sets of rules. There should be a set of rules for those that are not enrolled, not CPAs and not tax attorneys, because they don’t have the official training, and they don’t have the ethics codes that we have to have. I’m not saying that all CPAs and attorneys are perfect, but that’s the group that is the most out of control and they are trying to regulate that.”
He also sees a role for the states regulating the tax preparation profession if Congress is unable to pass a law, but he pointed out that many tax preparers have clients in multiple states. Currently only two states have laws requiring registration, testing or continuing education of tax preparers: California and Oregon. Congress has reportedly failed to pass eight different bills over the past decade aimed at giving the IRS the ability to regulate tax preparers.
Monday, January 21, 2013
Ups! Urgent News; IRS Loses Lawsuit Challenging Authority to Regulate Tax Preparers
OK, I don't care what they say, if you have what it takes to pass the IRS test, do so. Yes, you may be able to legally do taxes for pay, without complying with the IRS requirements, however, we strongly suggest that you go for the highest point of qualifications. This is a our business opinion.
Coming soon Taxes Will Travel will provide an eBook to help future and existing tax preparers to pass the competency test. Hold on, strive for the highest point of qualification, in order to trigger the highest earning potential.
..................................................
In a stunning blow to the Internal Revenue Service’s efforts to regulate the tax preparation profession, a federal judge struck down the IRS’s licensing requirements for tax preparers on Friday, including testing and continuing education. (Our first thought was, does this mean the State of California has been wrong in demanding continuing education?)
Three independent tax preparers—Sabina Loving of Chicago, John Gambino of Hoboken, N.J., and Elmer Kilian of Eagle, Wisc.—joined forces with the Institute for Justice, a libertarian public interest law firm, in filing suit against the IRS in the U.S. District Court for the District of Columbia.
U.S. District Court Judge James E. Boasberg ruled against the IRS and in favor of the tax preparers in enjoining the agency against enforcing its Registered Tax Return Preparer requirements.
“Today’s ruling is a victory for hundreds of thousands of tax preparers across the country and the tens of millions of taxpayers who rely on them to prepare their taxes,” said lead attorney Dan Alban. “This was an unlawful power grab by one of the most powerful federal agencies and thankfully the court stopped the IRS dead in its tracks. The court ruled today that Congress never gave the IRS the authority to license tax preparers, and the IRS can’t give itself that power.”
The opinion is available online at http://www.ij.org/images/pdf_folder/economic_liberty/irs_tax_preparers/irs-opinion-1-18-13.pdf. The court enjoined the IRS from enforcing its new licensing scheme for tax preparers. The ruling does not affect CPAs, Enrolled Agents and tax attorneys, who were exempted from the RTRP regime as they are already regulated under Circular 230 requirements.
“Through these regulations, the IRS set itself up as king and sought to license hundreds of thousands of tax preparers without being authorized to so do under the law,” said Institute for Justice senior attorney Scott Bullock. “But as Judge Boasberg noted, under our system of law, ‘statutory text is 0king.’”
Former IRS Commissioner Doug Shulman made tax preparer regulation a priority, aiming to root out tax preparers who were unqualified, filed fraudulent refund claims and even cheated clients, with the further goal of improving tax compliance. Shulman ended his term last November and is now a guest scholar at the Washington, D.C., think tank, the Brookings Institution. His successor, IRS Acting Commissioner Steven T. Miller will now have to deal with the fallout from the lawsuit.
Boasberg recognized that the IRS recently did a “flip-flop” with regard to its ability to license tax preparers, the Institute for Justice noted, declaring for years it did not have the authority to do so but only recently claiming that it did have that power.
The IRS can appeal the ruling to the U.S. Court of Appeals for the District of Columbia Circuit. The IRS had no immediate comment on the ruling, according to IRS spokesman Dean Patterson.
“They may very well appeal, but the District Court ruled that the IRS is enjoined from enforcing the RTRP licensing regulations,” said Alban. “Assuming the ruling stands, tax preparers no longer are going to need to comply with the IRS licensing requirements. It returns things to the way they were before the IRS passed those regulations in the first place. No longer do you have to get the IRS’s permission to work as a tax return preparer.”
He noted that the IRS’s continuing education requirements only just went into effect on January 1. “The timing on this really couldn’t have been any better,” said Alban. “Tax preparers should be able to prepare tax returns in this 2013 tax season without getting permission from the IRS. Tens of thousands of tax preparers who would have otherwise been put out of business, including two of our clients, can now continue to prepare returns.”
All three prongs of the IRS tax preparer regulation regime were affected by the ruling, including the testing, continuing education and RTRP registration requirements. However, the Preparer Tax Identification Number, or PTIN, which is part of the registration requirements, is not affected by the lawsuit.
“Anything that’s part of the RTRP regulations is struck down by this decision today,” Alban explained. “The PTIN is a separate regulation and it’s done under separate statutory authority. It’s a ‘shall issue’ type of permit. If you pay the fee, if you pay that amount of about $65, you’ll get a PTIN. The IRS was going to make the PTINs conditional on having the RTRP credentials, but now they’re not allowed to do that. It will go back to how it was last year, when you had to get a PTIN, but anyone could get one and you didn’t have to pass an exam or complete any continuing education.”
It is unclear how the IRS will deal with tax preparers who were scheduled to take the competency exam. “I don’t know how the IRS is going to wind things down,” said Alban. “As of the court’s ruling today, those regulations are null and void. Tax preparers don’t have to take that exam and they don’t have to comply with those regulations. The court ruled that these regulations did not have statutory authority.”
Judge Boasberg found that the text of the relevant statute does not support what the IRS claims as its authority to regulate tax preparers.
“Without deciding whether any of these three textual points alone would be dispositive, the Court concludes that together the statutory text and context unambiguously foreclose the IRS’s interpretation of 31 USC Section 330,” the judge wrote, adding, “The IRS also makes a number of nontextual arguments in favor of its interpretation, but none of these can overcome the statute’s unambiguous text here. In the land of statutory interpretation, statutory text is king.”
“They found that the IRS misinterpreted the statute and was basically trying to use it to expand its own authority in ways that the statute didn’t authorize,” said Alban. “On the first page of the opinion, they said that ‘the statute’s text and context unambiguously foreclose the IRS’s interpretation.’”
"With an invalid regulatory regime on the IRS's side of the scale and a threat to plaintiff's livelihood on the other, the balance of hardships tips strongly in favor of plaintiffs," Boasberg wrote later in the ruling.
There was no trial in the case because there were no disputed facts, Alban noted. The ruling came after cross-motions for summary judgment. The lawsuit was originally announced in March (see Tax Preparers Sue IRS over New Requirements). The Institute for Justice filed a motion for summary judgment in September, and the IRS filed a cross-motion for summary judgment in October. “We trialed a couple of reply briefs, and that was it,” said Alban. “It was just in front of the court on the papers to rule on the case.”
The IRS had argued that the statute was unambiguous and could be read expansively to give the agency the authority that it claimed. “They also claimed that they had inherent authority as an agency to regulate anything related to what they do and the court rejected both of those arguments,” said Alban.
On the first page of the opinion, the court said, “Agency action, however, requires statutory authority. The IRS interpreted an 1884 statute as enabling these new regulations. That statute allows the IRS to regulate ‘representatives’ who ‘practice’ before it. Believing that tax-return preparers are not covered under the statute, and thus cannot be regulated, Plaintiffs—three independent tax-return preparers—brought this suit.”
“That was pretty much the basis of its decision,” Alban explained. “An agency can’t act without statutory authority, without Congress giving them authorization to do something.”
If the IRS appeals the ruling, which it is almost certain to do, Alban said the Institute would then argue the case in front of the D.C. Circuit court, and to higher courts if necessary. “If the IRS loses again in front of the D.C. Circuit, we’d be happy to argue it in front of the Supreme Court if they take the case. But all of that is speculative. I have no idea if the IRS is going to appeal the decision on this. We’ll certainly take it as far as it goes. We’re willing to represent the rights of independent tax preparers.”
Coming soon Taxes Will Travel will provide an eBook to help future and existing tax preparers to pass the competency test. Hold on, strive for the highest point of qualification, in order to trigger the highest earning potential.
..................................................
In a stunning blow to the Internal Revenue Service’s efforts to regulate the tax preparation profession, a federal judge struck down the IRS’s licensing requirements for tax preparers on Friday, including testing and continuing education. (Our first thought was, does this mean the State of California has been wrong in demanding continuing education?)
Three independent tax preparers—Sabina Loving of Chicago, John Gambino of Hoboken, N.J., and Elmer Kilian of Eagle, Wisc.—joined forces with the Institute for Justice, a libertarian public interest law firm, in filing suit against the IRS in the U.S. District Court for the District of Columbia.
U.S. District Court Judge James E. Boasberg ruled against the IRS and in favor of the tax preparers in enjoining the agency against enforcing its Registered Tax Return Preparer requirements.
“Today’s ruling is a victory for hundreds of thousands of tax preparers across the country and the tens of millions of taxpayers who rely on them to prepare their taxes,” said lead attorney Dan Alban. “This was an unlawful power grab by one of the most powerful federal agencies and thankfully the court stopped the IRS dead in its tracks. The court ruled today that Congress never gave the IRS the authority to license tax preparers, and the IRS can’t give itself that power.”
The opinion is available online at http://www.ij.org/images/pdf_folder/economic_liberty/irs_tax_preparers/irs-opinion-1-18-13.pdf. The court enjoined the IRS from enforcing its new licensing scheme for tax preparers. The ruling does not affect CPAs, Enrolled Agents and tax attorneys, who were exempted from the RTRP regime as they are already regulated under Circular 230 requirements.
“Through these regulations, the IRS set itself up as king and sought to license hundreds of thousands of tax preparers without being authorized to so do under the law,” said Institute for Justice senior attorney Scott Bullock. “But as Judge Boasberg noted, under our system of law, ‘statutory text is 0king.’”
Former IRS Commissioner Doug Shulman made tax preparer regulation a priority, aiming to root out tax preparers who were unqualified, filed fraudulent refund claims and even cheated clients, with the further goal of improving tax compliance. Shulman ended his term last November and is now a guest scholar at the Washington, D.C., think tank, the Brookings Institution. His successor, IRS Acting Commissioner Steven T. Miller will now have to deal with the fallout from the lawsuit.
Boasberg recognized that the IRS recently did a “flip-flop” with regard to its ability to license tax preparers, the Institute for Justice noted, declaring for years it did not have the authority to do so but only recently claiming that it did have that power.
The IRS can appeal the ruling to the U.S. Court of Appeals for the District of Columbia Circuit. The IRS had no immediate comment on the ruling, according to IRS spokesman Dean Patterson.
“They may very well appeal, but the District Court ruled that the IRS is enjoined from enforcing the RTRP licensing regulations,” said Alban. “Assuming the ruling stands, tax preparers no longer are going to need to comply with the IRS licensing requirements. It returns things to the way they were before the IRS passed those regulations in the first place. No longer do you have to get the IRS’s permission to work as a tax return preparer.”
He noted that the IRS’s continuing education requirements only just went into effect on January 1. “The timing on this really couldn’t have been any better,” said Alban. “Tax preparers should be able to prepare tax returns in this 2013 tax season without getting permission from the IRS. Tens of thousands of tax preparers who would have otherwise been put out of business, including two of our clients, can now continue to prepare returns.”
All three prongs of the IRS tax preparer regulation regime were affected by the ruling, including the testing, continuing education and RTRP registration requirements. However, the Preparer Tax Identification Number, or PTIN, which is part of the registration requirements, is not affected by the lawsuit.
“Anything that’s part of the RTRP regulations is struck down by this decision today,” Alban explained. “The PTIN is a separate regulation and it’s done under separate statutory authority. It’s a ‘shall issue’ type of permit. If you pay the fee, if you pay that amount of about $65, you’ll get a PTIN. The IRS was going to make the PTINs conditional on having the RTRP credentials, but now they’re not allowed to do that. It will go back to how it was last year, when you had to get a PTIN, but anyone could get one and you didn’t have to pass an exam or complete any continuing education.”
It is unclear how the IRS will deal with tax preparers who were scheduled to take the competency exam. “I don’t know how the IRS is going to wind things down,” said Alban. “As of the court’s ruling today, those regulations are null and void. Tax preparers don’t have to take that exam and they don’t have to comply with those regulations. The court ruled that these regulations did not have statutory authority.”
Judge Boasberg found that the text of the relevant statute does not support what the IRS claims as its authority to regulate tax preparers.
“Without deciding whether any of these three textual points alone would be dispositive, the Court concludes that together the statutory text and context unambiguously foreclose the IRS’s interpretation of 31 USC Section 330,” the judge wrote, adding, “The IRS also makes a number of nontextual arguments in favor of its interpretation, but none of these can overcome the statute’s unambiguous text here. In the land of statutory interpretation, statutory text is king.”
“They found that the IRS misinterpreted the statute and was basically trying to use it to expand its own authority in ways that the statute didn’t authorize,” said Alban. “On the first page of the opinion, they said that ‘the statute’s text and context unambiguously foreclose the IRS’s interpretation.’”
"With an invalid regulatory regime on the IRS's side of the scale and a threat to plaintiff's livelihood on the other, the balance of hardships tips strongly in favor of plaintiffs," Boasberg wrote later in the ruling.
There was no trial in the case because there were no disputed facts, Alban noted. The ruling came after cross-motions for summary judgment. The lawsuit was originally announced in March (see Tax Preparers Sue IRS over New Requirements). The Institute for Justice filed a motion for summary judgment in September, and the IRS filed a cross-motion for summary judgment in October. “We trialed a couple of reply briefs, and that was it,” said Alban. “It was just in front of the court on the papers to rule on the case.”
The IRS had argued that the statute was unambiguous and could be read expansively to give the agency the authority that it claimed. “They also claimed that they had inherent authority as an agency to regulate anything related to what they do and the court rejected both of those arguments,” said Alban.
On the first page of the opinion, the court said, “Agency action, however, requires statutory authority. The IRS interpreted an 1884 statute as enabling these new regulations. That statute allows the IRS to regulate ‘representatives’ who ‘practice’ before it. Believing that tax-return preparers are not covered under the statute, and thus cannot be regulated, Plaintiffs—three independent tax-return preparers—brought this suit.”
“That was pretty much the basis of its decision,” Alban explained. “An agency can’t act without statutory authority, without Congress giving them authorization to do something.”
If the IRS appeals the ruling, which it is almost certain to do, Alban said the Institute would then argue the case in front of the D.C. Circuit court, and to higher courts if necessary. “If the IRS loses again in front of the D.C. Circuit, we’d be happy to argue it in front of the Supreme Court if they take the case. But all of that is speculative. I have no idea if the IRS is going to appeal the decision on this. We’ll certainly take it as far as it goes. We’re willing to represent the rights of independent tax preparers.”
Sunday, January 20, 2013
Best 15 Low Cost Marketing Ideas for Small Businesses in 2013
Best 15 Low Cost Marketing Ideas for Your Small Business in 2013
By Thomas R. Reich PhD
Small Businesses can benefit greatly in 2013 from an improved low cost marketing idea and plan or 15 ideas if you will. Many small businesses owners don’t see the need for a cohesive marketing plan, they think marketing is expensive and for larger companies. Let’s look at low cost marketing ideas that can really boost your small business in 2013.
To make this work, remember that in the past, every small business bought yellow page adds. The yellow pages are dead, but good marketing replaces its exposure, without some of the low cost marketing ideas discussed here, small businesses may be seriously underexposed.
1) Your first low cost marketing idea is to create and maintain a good functioning company website. Your website is you’re on line office, your virtual sales floor, the first impression many potential customers have of your small business and yes, it is your new yellow page add. Your website should also be an information resource for your products and services.
2) Develop a new brand identity; this low cost marketing idea may be easier than you think. How long has it been since you’ve updated your website or marketing materials? Maybe it’s time to take a fresh look and redesign your image, take advantage of the digital domain. Customers and prospects respond to new ideas and information which has been optimized for the internet.
3) Survey existing customers, a low cost marketing idea which is easier than you may think. How do your customers feel about your products and services? Stay in touch 
through informal lunches or a professionally coordinated survey campaign. A survey is an excellent method for taking the pulse of your audience. The survey should include detailed questions about your products and services and how they directly benefit the customer.
through informal lunches or a professionally coordinated survey campaign. A survey is an excellent method for taking the pulse of your audience. The survey should include detailed questions about your products and services and how they directly benefit the customer.
4) Make a list of your strengths, this can be another low cost marketing idea generator. Are you the low price leader? Is your business the most experienced? Do you have the highest quality product or service? Try to list between 50 and 100 different and measurable strengths. This is a great exercise to develop new ideas for your marketing campaigns
5) Now time for an easy, low cost marketing idea, one you need to do now! The customer is always right… always. The time to prove this statement is when the customer experiences a problem with your product or service. Make a point to take responsibility and solve any problems that a customer might have immediately. Satisfied customers turn into repeat, long-term customers.
6) This next tip, is a low cost marketing idea if it helps you with the previous two ideas. Take a customer out to lunch. Now is the time to ask a reliable customer out to lunch. Touch base with them to see how your company is solving problems and meeting their needs.
7) Well here is the cost, though still a low cost marketing idea if you follow these guidelines. Establish an annual marketing budget. A good rule-of-thumb estimate for your 
marketing budget is 3% to 5% of annual sales. Retail businesses need to budget 7% to 10% of annual sales for their marketing budgets. Your budget should include a breakdown of all marketing costs including printing, social media, website maintenance and advertising placement.
marketing budget is 3% to 5% of annual sales. Retail businesses need to budget 7% to 10% of annual sales for their marketing budgets. Your budget should include a breakdown of all marketing costs including printing, social media, website maintenance and advertising placement.
8) Here is a very low cost marketing idea, but arguably the most important you can consider. Be positive in your outlook. It’s important to feel good about yourself and enjoy what you do for a living. If you have a positive attitude about your job, you will succeed by transferring that enthusiasm to other employees, customers and prospects.
9) *****A low cost marketing idea should always look at social media. Pinterest is one of the newest and most effective parts of a social media exposure program. You can find out more in these 3 articles:7 Free Pinterest Tools; Things to get You Noticed!
10) *****Low cost marketing idea #10 is to establish and maintain a good active Twitter account. To learn more about Twitter and how to make it effective for your small
low cost marketing ideas
business, check out these suggestions: How to use Twitter for Small Business
11) *****Moving along with low cost marketing idea #11 have you fully updated your LinkedIn account on a regular basis? You must be at 100% on your profile, you need to update every week, you need a company page. Want to know more, take a look at: LinkedIn for Nonprofits
12) *****Don’t forget another social media low cost marketing idea, have an active and constantly updated Facebook account and company page. Learn more here: Want More Visitors? Use Social Media to Drive Visitors Home!
13) *****We talked about your Website but another low cost marketing idea is to have a very active blog attached to your website. Learn more here:
10 Tips and Tricks to make Your Website a Lead Generating Machine!
14) *****The best low cost marketing idea I can give you is this. Learn how to connect your website, blog, Twitter, Facebook, LinkedIn, Pinterest and any other social media fads that appear in 2013 into a network.
Learn how to use back links and directories. The more you work on your on-like presents, the more your small business will benefit!
Learn how to use back links and directories. The more you work on your on-like presents, the more your small business will benefit!Want More Visitors? Use Social Media to Drive Visitors Home!
15) Here is your top low cost marketing idea for 2013, in fact it is the most importaqnt idea you will hear in regards to marketing. In order for anything we have talked about to truly succeed, you need to develop a solid marketing plan! You need a road map, a plan to keep you on track to sustainable goals, and a ruler to judge your success. Part of this plan should include your established budget and an ongoing record of each fassett of your marketing plans success to determin what worked and what to rethink. All low cost marketing ideas are successful if you learn and grow from them.
Bonus Low Cost Marketing Idea: Consider hiring a marketing company to help you with a complete formula, if marketing is not your thing. A firm that does marketing for lots of companies can often deliver a great marketing campaign at a very low cost, compared to struggling with a part of small business that can confuse many. Be careful, there are a lot of firms that clams to know what they are doing, hire a firm that trains you to maintain your marketing plan.
With low cost marketing idea generating help, a good digital identity, a well branded small business and attention paid to your customers and their needs, success will be yours in 2013!
Article Created by: http://troblinreich.com/
Thursday, January 17, 2013
This Just In from the IRS: Tax-Free Transfers to Charity, Rollovers
Tax-Free Transfers to Charity Renewed For IRA Owners 70½ or Older; Rollovers This Month Can Still Count For 2012
WASHINGTON — Certain owners of individual retirement arrangements (IRAs) have a limited time to make tax-free transfers to eligible charities and have them count for tax-year 2012, the Internal Revenue Service said today.
IRA owners age 70½ or older have until Thursday, Jan. 31 to make a direct transfer, or alternatively, if they received IRA distributions during December 2012, to contribute, in cash, part or all of the amounts received to an eligible charity.
The American Taxpayer Relief Act of 2012, enacted Jan. 2, extended for 2012 and 2013 the provision authorizing qualified charitable distributions (QCDs)—otherwise taxable distributions from an IRA owned by someone, 70½ or older, paid directly to an eligible charitable organization. Each year, the IRA owner can exclude from gross income up to $100,000 of these QCDs. First available in 2006, this provision had expired at the end of 2011.
The QCD option is available regardless of whether an eligible IRA owner itemizes deductions on Schedule A. Transferred amounts are not taxable and no deduction is available for the transfer. QCDs are counted in determining whether the IRA owner has met his or her IRA required minimum distributions for the year.
For tax-year 2012 only, IRA owners can choose to report QCDs made in January 2013 as if they occurred in 2012. In addition, IRA owners who received IRA distributions during December 2012 can contribute, in cash, part or all of the amounts distributed to eligible charities during January 2013 and have them count as 2012 QCDs.
QCDs are reported on Form 1040 Line 15. The full amount of the QCD is shown on Line 15a. Do not enter any of these amounts on Line 15b but write “QCD” next to that line. Details are on IRS.gov.
Tuesday, January 15, 2013
Home Office Deduction, Simplified Option in 2013
Below is an Announcement from the IRS regarding a simplified option to clain the Home Office Deduction. Our suggestion is simple as well. If you own your home and are using the depreciation method to help lower your taxes, it may be well worth your time and money to pay a professional to use the "old" method. (Form 8829)
IRS Announces Simplified Option for Claiming Home Office Deduction Starting This Year; Eligible Home-Based Businesses May Deduct up to $1,500; Saves Taxpayers 1.6 Million Hours A Year
In tax year 2010, the most recent year for which figures are available, nearly 3.4 million taxpayers claimed deductions for business use of a home (commonly referred to as the home office deduction).
The new optional deduction, capped at $1,500 per year based on $5 a square foot for up to 300 square feet, will reduce the paperwork and recordkeeping burden on small businesses by an estimated 1.6 million hours annually.
"This is a common-sense rule to provide taxpayers an easier way to calculate and claim the home office deduction," said Acting IRS Commissioner Steven T. Miller. "The IRS continues to look for similar ways to combat complexity and encourages people to look at this option as they consider tax planning in 2013."
The new option provides eligible taxpayers an easier path to claiming the home office deduction. Currently, they are generally required to fill out a 43-line form (Form 8829) often with complex calculations of allocated expenses, depreciation and carryovers of unused deductions. Taxpayers claiming the optional deduction will complete a significantly simplified form.
Though homeowners using the new option cannot depreciate the portion of their home used in a trade or business, they can claim allowable mortgage interest, real estate taxes and casualty losses on the home as itemized deductions on Schedule A. These deductions need not be allocated between personal and business use, as is required under the regular method.
Business expenses unrelated to the home, such as advertising, supplies and wages paid to employees are still fully deductible.
Current restrictions on the home office deduction, such as the requirement that a home office must be used regularly and exclusively for business and the limit tied to the income derived from the particular business, still apply under the new option.
The new simplified option is available starting with the 2013 return most taxpayers file early in 2014. Further details on the new option can be found in Revenue Procedure 2013-13, posted today on IRS.gov. Revenue Procedure 2013-13 is effective for taxable years beginning on or after January 1, 2013, and the IRS welcomes public comment on this new option to improve it for tax year 2014 and later years. There are three ways to submit comments.
- E-mail to: Notice.Comments@irscounsel.treas.gov. Include “Rev. Proc. 2013-13” in the subject line.
- Mail to: Internal Revenue Service, CC:PA:LPD:PR (Rev. Proc. 2013-13), Room 5203, P.O. Box 7604, Ben Franklin Station, Washington, DC 20044.
- Hand deliver to: CC:PA:LPD:PR (Rev. Proc. 2013-13), Courier’s Desk, Internal Revenue Service, 1111 Constitution Avenue NW, Washington, DC, between 8 a.m. and 4 p.m., Monday through Friday.
Monday, January 14, 2013
IRS RELEASED ANNUAL INFLATION ADJUSTMENTS FOR 2013
OK people, the numbers are in. The vote is still out on reaction to these numbers, check them out and see what you think. It is clear we as taxpayers are going to have to share more of a tax burden in the coming decade. If you will notice this informatin is being presented as "inflation adjustments" not as new tax laws, I guess it all how you look at it.
The Internal Revenue Service has released the annual inflation adjustments for 2013, including the tax rate schedules and other tax changes from the recently enacted fiscal cliff legislation with its new tax rate of 39.6 percent and permanently patched Alternative Minimum Tax.
Revenue Procedure 2013-15 provides the 2013 cost-of-living adjustments for inflation for certain items, including the tax tables. It also includes items whose values were specified in the American Taxpayer Relief Act of 2012 (ATRA), such as the beginning of the 39.6 percent income tax brackets; the beginning income levels for the limitation on certain itemized deductions, and the beginning income levels for the phaseout of the personal exemptions.
In addition Rev. Proc. 2013-5 modifies Rev. Proc. 2011-52 to reflect an amendment to Section 132(f)(2) made by ATRA concerning qualified transportation fringe benefits. Specifically, for 2012, the monthly limitation regarding the aggregate fringe benefit exclusion amount for transit passes and transportation in a commuter highway vehicle is $240.
The tax items for 2013 of greatest interest to most taxpayers include the following changes.
• Beginning in tax year 2013 (generally for tax returns filed in 2014), a new tax rate of 39.6 percent has been added for individuals whose income exceeds $400,000 ($450,000 for married taxpayers filing a joint return). The other marginal rates—10, 15, 25, 28, 33 and 35 percent—remain the same as in prior years. The guidance contains the taxable income thresholds for each of the marginal rates.
• The standard deduction rises to $6,100 ($12,200 for married couples filing jointly), up from $5,950 ($11,900 for married couples filing jointly) for tax year 2012.
• The American Taxpayer Relief Act of 2012 added a limitation for itemized deductions claimed on 2013 returns of individuals with incomes of $250,000 or more ($300,000 for married couples filing jointly).
• The personal exemption rises to $3,900, up from the 2012 exemption of $3,800. However beginning in 2013, the exemption is subject to a phase-out that begins with adjusted gross incomes of $150,000 ($300,000 for married couples filing jointly). It phases out completely at $211,250 ($422,500 for married couples filing jointly.)
• The Alternative Minimum Tax exemption amount for tax year 2013 is $51,900 ($80,800, for married couples filing jointly), set by the American Taxpayer Relief Act of 2012, which indexes future amounts for inflation. The 2012 exemption amount was $50,600 ($78,750 for married couples filing jointly).
• The maximum Earned Income Credit amount is $6,044 for taxpayers filing jointly who have 3 or more qualifying children, up from a total of $5,891 for tax year 2012.
• Estates of decedents who die during 2013 have a basic exclusion amount of $5,250,000, up from a total of $5,120,000 for estates of decedents who died in 2012.
• For tax year 2013, the monthly limitation regarding the aggregate fringe benefit exclusion amount for transit passes and transportation in a commuter highway vehicle is $245, up from $240 for tax year 2012 (the legislation provided a retroactive increase from the $125 limit that had been in place).
Details on the inflation adjustments and others are contained in Revenue Procedure 2013-15, which will be published in Internal Revenue Bulletin 2013-5 on Jan.28, 2013. Other inflation-adjusted items were published in October 2012 in Revenue Procedure 2012-41.
The Internal Revenue Service has released the annual inflation adjustments for 2013, including the tax rate schedules and other tax changes from the recently enacted fiscal cliff legislation with its new tax rate of 39.6 percent and permanently patched Alternative Minimum Tax.
In addition Rev. Proc. 2013-5 modifies Rev. Proc. 2011-52 to reflect an amendment to Section 132(f)(2) made by ATRA concerning qualified transportation fringe benefits. Specifically, for 2012, the monthly limitation regarding the aggregate fringe benefit exclusion amount for transit passes and transportation in a commuter highway vehicle is $240.
The tax items for 2013 of greatest interest to most taxpayers include the following changes.
• Beginning in tax year 2013 (generally for tax returns filed in 2014), a new tax rate of 39.6 percent has been added for individuals whose income exceeds $400,000 ($450,000 for married taxpayers filing a joint return). The other marginal rates—10, 15, 25, 28, 33 and 35 percent—remain the same as in prior years. The guidance contains the taxable income thresholds for each of the marginal rates.
• The standard deduction rises to $6,100 ($12,200 for married couples filing jointly), up from $5,950 ($11,900 for married couples filing jointly) for tax year 2012.
• The American Taxpayer Relief Act of 2012 added a limitation for itemized deductions claimed on 2013 returns of individuals with incomes of $250,000 or more ($300,000 for married couples filing jointly).
• The personal exemption rises to $3,900, up from the 2012 exemption of $3,800. However beginning in 2013, the exemption is subject to a phase-out that begins with adjusted gross incomes of $150,000 ($300,000 for married couples filing jointly). It phases out completely at $211,250 ($422,500 for married couples filing jointly.)
• The Alternative Minimum Tax exemption amount for tax year 2013 is $51,900 ($80,800, for married couples filing jointly), set by the American Taxpayer Relief Act of 2012, which indexes future amounts for inflation. The 2012 exemption amount was $50,600 ($78,750 for married couples filing jointly).
• The maximum Earned Income Credit amount is $6,044 for taxpayers filing jointly who have 3 or more qualifying children, up from a total of $5,891 for tax year 2012.
• Estates of decedents who die during 2013 have a basic exclusion amount of $5,250,000, up from a total of $5,120,000 for estates of decedents who died in 2012.
• For tax year 2013, the monthly limitation regarding the aggregate fringe benefit exclusion amount for transit passes and transportation in a commuter highway vehicle is $245, up from $240 for tax year 2012 (the legislation provided a retroactive increase from the $125 limit that had been in place).
Details on the inflation adjustments and others are contained in Revenue Procedure 2013-15, which will be published in Internal Revenue Bulletin 2013-5 on Jan.28, 2013. Other inflation-adjusted items were published in October 2012 in Revenue Procedure 2012-41.
Tuesday, January 8, 2013
ATRA - Taxpayers Should Wait Until at Least February 15 Before Filing Taxes
Because of the delay in getting the word out about the new tax laws to the tax software companies is delayed due to the last minute fiscal cliff "thing" it might be a good idea to give the software companies a little more time to get it right.
What happens with professional tax preparers is that our software companies sends us UPDATES on the software, and these updates checks ALL of the taxes which we have prepared - to let us know if any of our tax clients are affected by the new tax laws or tax UPDATES.
If a tax client's return is affected by the changes, we have to inform the client, change the tax return and re-file. I am not sure about most professional tax preparers, however, there is added cost involved and more room for error.
/The best thing to do, is to wait and BE SURE the bulk of the updates are included in the software, consumer and professional, before filing your tax return. Sure you may be in a hurry to get a refund, but if the laws have changed and its NOT in your favor, even if the IRS sends you the refund, they will want it back.
WASHINGTON — Following the January tax law changes made by Congress under the American Taxpayer Relief Act (ATRA), the Internal Revenue Service announced today it plans to open the 2013 filing season and begin processing individual income tax returns on Jan. 30.
The IRS will begin accepting tax returns on that date after updating forms and completing programming and testing of its processing systems. This will reflect the bulk of the late tax law changes enacted Jan. 2. The announcement means that the vast majority of tax filers -- more than 120 million households -- should be able to start filing tax returns starting Jan 30.
The IRS estimates that remaining households will be able to start filing in late February or into March because of the need for more extensive form and processing systems changes. This group includes people claiming residential energy credits, depreciation of property or general business credits. Most of those in this group file more complex tax returns and typically file closer to the April 15 deadline or obtain an extension.
“We have worked hard to open tax season as soon as possible,” IRS Acting Commissioner Steven T. Miller said. “This date ensures we have the time we need to update and test our processing systems.”
The IRS will not process paper tax returns before the anticipated Jan. 30 opening date. There is no advantage to filing on paper before the opening date, and taxpayers will receive their tax refunds much faster by using e-file with direct deposit.
“The best option for taxpayers is to file electronically,” Miller said.
The opening of the filing season follows passage by Congress of an extensive set of tax changes in ATRA on Jan. 1, 2013, with many affecting tax returns for 2012. While the IRS worked to anticipate the late tax law changes as much as possible, the final law required that the IRS update forms and instructions as well as make critical processing system adjustments before it can begin accepting tax returns.
The IRS originally planned to open electronic filing this year on Jan. 22; more than 80 percent of taxpayers filed electronically last year.
Who Can File Starting Jan. 30?
The IRS anticipates that the vast majority of all taxpayers can file starting Jan. 30, regardless of whether they file electronically or on paper. The IRS will be able to accept tax returns affected by the late Alternative Minimum Tax (AMT) patch as well as the three major “extender” provisions for people claiming the state and local sales tax deduction, higher education tuition and fees deduction and educator expenses deduction.
Who Can’t File Until Later?
There are several forms affected by the late legislation that require more extensive programming and testing of IRS systems. The IRS hopes to begin accepting tax returns including these tax forms between late February and into March; a specific date will be announced in the near future.
The key forms that require more extensive programming changes include Form 5695 (Residential Energy Credits), Form 4562 (Depreciation and Amortization) and Form 3800 (General Business Credit). A full listing of the forms that won’t be accepted until later is available on IRS.gov.
As part of this effort, the IRS will be working closely with the tax software industry and tax professional community to minimize delays and ensure as smooth a tax season as possible under the circumstances.
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