IRS

Get a Slurpee; Pay Your Taxes – The Conspiracy Theory

Bear with me, please.  I am not usually a conspiracy theorist, but I may be on to something.  There could be a plot afoot in which President Obama pulls a fast one to undermine Ted Cruz and/or Donald Trump and/or whomever and to grease the path to the presidency for Hillary Rodham Clinton.

For a while, Ted Cruz has quite vocally called for the Internal Revenue Service to be abolished.  He has not explained who would collect tax revenues or who would assure compliance with tax laws – details, details.  While not quite as directly as Cruz, Donald Trump has invited the demise of the IRS with his flat tax proposal.  It is so simple, says The Donald, that the country will not a need a HUGE bureaucracy to enforce tax laws.

The call to abolish the IRS is pretty attractive to a broad swath of the population.  Someone who really did come up with a concrete plan for that action would be popular with a lot of people, at least for a while and hopefully, for that person, at least through the November elections.

Follow me closely.  The plot thickens.

On April 6, 2016, the IRS announced a new payment option for taxpayers who want to pay their tax bills in cash.  Those taxpayers can simply drop off up to $1,000 per day at their neighborhood 7-Eleven, for a fee of $3.99 per payment.  I think that the theory behind this plan is to encourage the one in 13 households that do not have banking accounts to pay their taxes. Hmmm . . .

Flash forward.  As the elections near, President Obama will announce that the government has finally found something worth talking about in Clinton’s thousands of emails that the feds have been vetting for the last year or so.  While the President had forgotten about the exchange, the search revealed that Secretary Clinton had suggested to him in an email that the IRS be abolished and be replaced by 7-Eleven!  She had even laid out a fairly complete plan.

  1. People would file their tax returns at the neighborhood 7-Eleven.
  2. People would pay in cash their taxes at the neighborhood 7-Eleven.
  3. 7-Eleven clerks would receive training in English as a Second Language and in tax law.
  4. When not selling beer, cigarettes, or beef jerky, 7-Eleven clerks would audit tax returns.
  5. To encourage taxpayers to comply with the tax laws, they would get free Slurpees when they brought in their records for their tax audits.

Brilliant!  Clinton’s likability scores will soar and she’ll vanquish the Republican candidate.

Mark my word.

VKM

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Health Care Forms: They are Confusing- For Everyone, It Seems

Some of my confusion may come from the fact that I am following my spring busy season sleepless pattern.  Does the following make any sense to you?

At 3:11 p.m. yesterday I received an “IRS Tax Tips” email entitled:  “Corrected:  IRS Health Care Tax Tip 2016-45:  Don’t Confuse Health Care Forms.”

At 3:13 p.m. yesterday I received an “IRS Tax Tips” email entitled:  “IRS Health Care Tax Tip 2016-44: Don’t Confuse Health Care Forms.”

Then, I was intrigued. I disengaged from April 18th deadline work for 10 minutes.  I read both versions three times and they appeared to me to be identical.  I clicked through all the links on the “incorrect” version and they all took me where they said they would.

Apparently, even the IRS gets confused when communicating about confusing things.

VKM

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“It’s déjà vu all over again!” -Yogi Berra

Last week, I was reading headnotes of just-released Tax Court cases and I ran across one that was eerily familiar.  Says I to myself:  “I have already blogged about this case.”  I reviewed my old blogs and found that I had written about a very similar Tax Court case on September 17, 2014.  Do people never learn?

Like Patricia Diane Ross in the 2014 Tax Court case, John H. Fisher and Lisa M. Fisher, in the years in question, were busy people. The two attorneys claimed that their three children were legitimately employed in Mrs. Fisher’s legal practice.  In 2008, the last of three consecutive years being considered by the Tax Court, the court pointed out that all three offspring were less than nine years old.  So, remember, in the first year being considered, all were less than seven years old.

Ms. Fisher said that, since “day care was cost-prohibitive,” she had the children work for her in her office.  Ms. Fisher said that they shredded waste, “mailed things,” answered telephones, photocopied documents, greeted clients, and escorted clients to the office library or other waiting areas in the office complex.  Ah, yes.  If I were looking for legal representation in 2006, I would take great comfort in knowing that Ms. Fisher’s legal assistants averaged no more than six years old.

Ms. Fisher deducted wages on her tax return for her pint-sized administrative staff.  However, she did not issue W-2 Forms to them, had no payroll records for them, and made no Federal withholding payments with respect to their “wages.”  She said she didn’t have those sorts of bothersome records; she paid them by contributing to their Section 529 college funds and giving them cash, which they found handier than cumbersome checks.

One more thing.  When she took them on trips (staff retreats, I guess), such as a trip to Disney World, she deducted the costs of the trip.  She purportedly was engaged in the writing of children’s travel guides with a profit motive.  You guessed it; she never published a book, hired a literary agent, or offered her books to the public.  She said she did sell four (4) books to friends.

Well, I’ll bet you already know what happened:  the IRS beat the Fishers like a drum.  Also, the Tax Court upheld the accuracy-related penalty assessed by the IRS.

The Fishers must have been playing the audit lottery.  They lost.  They deserved to lose.

VKM

 

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