O.T.: The IRS Has a New Weapon: Your Tax Pro

[Rodger Tellefson]

The IRS Has

A New Weapon:

Your Tax Pro

Law 'Deputizes' Preparers

To Police Their Clients;

Higher Fees a Likely Result

July 11, 2007; Page D1



A new law that puts the onus on tax preparers to head off tax dodging is expected to lead to more paperwork and higher fees for some taxpayers.



The law is intended to make preparers more cautious about signing tax returns that include questionable or aggressive tax items without disclosing the details to the Internal Revenue Service on a special form. Stiff penalties may be imposed not only on income-tax preparers, but also on those who prepare estate- and gift-tax returns, employment and excise-tax returns, and returns of tax-exempt organizations.



continued...

 

[Jeff C]

Hurray for gov't stepping in on a private service industry! :wacko:

 

[Tom Schindler]

Support the Fair Tax and abolish the IRS!





Tom

 

[C W]

I agree Tom. Tax me on what I spend, not what I make.

 

[Ryan Schaecher]

Support the Fair Tax and abolish the IRS!

Absolutely. Everybody pays 15% on everything. Rich get no breaks. Poor don't either. The middle-class (most of us) don't get the shaft. The government is forced to stop playing games and triple taxation.....

 

[TomT]

You guys just don't get it. The Fair Tax makes to much sense and would be the logical and fair way to tax people in this country. When has our government EVER done anything logical or fair?

 

[Tom Schindler]

So, in other words, the government does what they want to do and not what we want them to do. (TJR bait here)



Stand up. "For the people, by the people."



Who are the people?





Tom

 

[Thomas Rogers]

It's a stupid law (sorry, no bait to take, Caymen).



No tax account is going to willingly or knowingly sign a return that has his or her client illegally evading taxes. People, especially rich people, high priced tax accounts to chart the murky waters of the tax code in order to reduce their tax bill as much as possible, and to do so legally. There are enough loop holes, vague items, etc, in the codes that a person can reduce their tax bill legally if they have a good tax accountant.



As it currently stands, it is in an audit that the validity of exemptions and other cuts often come up, and are then negotiated. Unless there is glaring abuse of the codes, such audits never happen.



So now, with this new law, the preparer has to give "hints" to the IRS of areas of the return that may have issues. Given the murky tax laws, how wide-open to interpretation many statutes are; and the fact that even IRS help desk personnel get the answers to questions wrong over 50% of the time, how can this new law POSSIBLY be a good thing?



The tax codes suck....free tax NOW!



TJR

 

[Tom Schindler]

TJR, the bait was an absolute...and I know how you like to jump on me about absolutes.





Tom

 

[Robert Poole]

Our income tax is designed more for social engineering than actual tax collection.



www.fairtax.org







Have a good one



bob

 

[Nelson Atwell]

I think 15% is a low estimate of what the flat tax would be. In Most European countries there is a sales tax and it is around 20 - 25% on most items. Some items like food are taxed at a lower rate.



I suspect that a tax that high in the US would encourage a black market economy to be established, which could create social havoc even larger than we are currently experiencing with the black market on drugs. A high rate like that could also discourage consumer spending, which would cause a decline in the economy. A lot of jobs could be lost.



I agree that the current tax law should be rewritten from scratch. The current ones have been modified so many times that I doubt anyone completely understands them. Just start from scratch and make a simple formula that everyone can understand.

 

[Johnny O]

We have a large black market economy now. My legit business competes against it. The idea of a national sales tax is partly to get those people paying taxes as well. They might work under-the-table but eventually they will have to buy food, clothes, beer, whatever, and pay their fair share of tax.

Although you would pay a sales tax on most everything you buy, your gross pay would be your gross pay and you would take more money home. The idea is for it to be a wash.

I used to do my own taxes (it would take me about a month) until about three years ago when my wife started her own company too. After that it got too complicated so I have a CPA do it now.

 

[Richard L]

Actually I too agree with Caymen.



I have heard it said many years ago that if the government adapted a flat tax of 10% with no deductions and no exemptions, that the governement would have more money than they would know what to do with.



I think a 10-15% tax on all purchases (except food) would accomplish the same thing as a flat income tax.



I doubt that the government would ever go for a spending tax since that would incourage people to save and invest money not spend it, thus it would actually reduce their tax revenue.....But we can still wish for it.



...Rich

 

[WXMotorSports DecalsPartsAccs]

I'm already paying 8.9% sales tax...LOL Whats a few more points.

 

[Tom Schindler]

SST,



Imagine NEVER, I mean NEVER, having to file another tax return. Imagine being able to keep ALL of your profits. Imagine any corporation having more money to invest back into their company. Imagine the price of ALL goods actually coming down due to the fact that corporate tax's are not included in the cost of the goods they sell.



Imagine the USA actually being able to compete in a global economy.



I am so naieve to think it would ever actually happen. Those in the government already go theirs. The ones that would benefit the most is the middle class.



They are already working hard at eliminating us. They will not do anything to help us.





Tom

 

[Ryan Schaecher]

Reality says a 15-18% is what will be needed. Even so, the average person would have more money in their pockets...



-No Income Tax

-No Personal Property Tax

-No FICA

-No MediCare tax

-No Fuel tax

etc...



This was a plan that I discussed in college economics with several people and professors and all liked it....



- A constitutional amendment making a NATIONAL sales tax of no more than 12%

- Allow states to charge a state sales tax of no more than 4-6%

- Remove EVERY other tax... luxury, estate, income, "sin", tobacco, FICA, SS, Medicare, PPT, etc

- Charge no more than a COMBINED 8% tax on all food goods that currently qualify for the WIC program (basic staples)

- NO DEDUCTIONS for anything... mortgage, charitable giving, children, etc.

- Organizations that are listed under the Tax Exempt status of the current IRS code would then be able to apply to have all their taxes returned at the end of the calendar year.





Since corporations never pay tax themselves, this should have a fairly negligable effect on overall pricing (corporations would still need to pay the sales tax on raw materials and OEM equipment, etc) as the "income" tax corporations "pay" is now in the form of the same sales tax we all pay.



Personally, a 15% total tax on sales would be more $$$ in my pocket when last year I paid more than 18% in income/ss/mc taxes.



Imagine, no more IRS. No more tax cheats (well, I don't know if there would be a 100% reduction). The statement that "The Rich are not paying their fare share" (though currently extremely incorrect) would no longer apply.



The poor would still complain though.



Yes, a 15% tax on a new car or on a boat or house may be extreme.... but you would never have to pay another tax on that car except on purchases for it. That is money saved in most states...



In an order to avoid getting into Presidential politics, let me just say that there are at least 2 of the current candidates and 2 of the rumored candidates that support a flat or a fair tax.

 

[Bill V]

Imagine being able to keep ALL of your profits.

OK, time to bust up this pipe dream. You WOULD still need to pay this new sales tax. Which means that you WOULDN'T be able to keep ALL your profits.



I'm not saying the flat tax is or isn't a good idea. I'm just pointing out that such a flat tax would be in place, and therefore the notion of keeping all of your profits would be as ridiculous of an idea under such a scenario as it is now.

 

[Johnny O]

I come down very slightly on the side of a flat income tax over a national sales tax, but either would be better than the confusing system we have now.

 

[Tom Schindler]

Bill V,



You missed the point. With a National Sales Tax, you can control how much tax's you pay. You like to drive a $70,000 car, you pay that much more tax's. You like to buy used cars, you pay no sales tax's. You get to keep what you earn ond only pay tax's when you spend it.



As it stands right now, we pay income tax, and then we pay a usage tax in the form of sales tax. It is a way of double dipping. We also pay property tax, fuel tax, sin tax, licence plate tax, capital gains tax, etc.





Tom

 

[Bill V]

You like to buy used cars, you pay no sales tax's.

No, Caymen, I'm not missing the point. I got it loud and clear. I'm just pointing out that some of the "benefits" of the tax that your espousing aren't quite what you're billing them to be. You claimed that under such a program, you'd be able to keep all your profits--but unless you're going to become some hermit living in the wilderness and never buying a single thing, that statement is simply false, as you'd be needing to pay this national sales tax using some of your profits. Your more recent quote about used cars is yet another example. How, exactly, do you think that with a national sales tax, you'd be able to not pay any taxes when buying a used car? The answer is simple--your statement isn't true. You'd be able to pay LESS taxes on a $5000 vehicle than a $70,000 vehicle, but you'd still have to pay taxes.