Tag: IRS

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Report: IRS Deliberately Cut Its Own Customer Service Budget

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9:00 AM, APR 22, 2015 • BY JOHN MCCORMACK

If you tried to contact the IRS with a question about your taxes this year, chances are you didn’t get a response. The IRS estimated that it would only answer 17 million of the 49 million calls received this filing season. Taxpayers lucky enough to have the IRS answer their calls waited an average of 34.4 minutes for assistance–nearly double the wait time last year (18.7 minutes).

IRS Commissioner John Koskinen has blamed the IRS’s “abysmal” customer service on congressional budget cuts–funding is down $1.2 billion from its 2010 peak–but a new congressional report points the finger back at the IRS. While congressional funding for the IRS remained flat from 2014 to 2015, the IRS diverted $134 million away from customer service to other activities.

In addition to the $11 billion appropriated by Congress, the IRS takes in more than $400 million in user fees and may allocate that money as it sees fit. In 2014, the IRS allocated $183 million in user fees to its customer service budget, but allocated just $49 million in 2015–a 76 percent cut.

Commissioner Koskinen will appear before the House Ways and Means Committee this morning, one week after the federal tax filing deadline, and he can expect to be asked why the IRS cut its own customer service budget and continues to spend money on other questionable activities.

The report notes that Koskinen reinstated bonuses weeks after his appointment, has allowed IRS employees to spend roughly 500,000 work hours on union activities, and failed to collect delinquent taxes owed by federal employees. The tax agency has also been strained by Obamacare. According to the report, the IRS has spent “over $1.2 billion on the President’s health care law to date, with a planned expenditure this year of an additional $500 million.”

https://www.weeklystandard.com/blogs/report-irs-deliberately-cut-its-own-customer-service-budget_927141.html

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$1,477,901,000,000+:Tax-Day Tax Record

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April 15, 2015 – 4:35 PM

CNSNews.com) – The federal government has set an all-time record for the amount of inflation-adjusted tax revenue brought into the federal Treasury from the beginning of the fiscal year through the April 15 tax-filing deadline.

As of the close of business on April 14, the Treasury had brought in a record $1,477,901,000,000 since fiscal 2015 started on Oct. 1, 2014, according the Daily Treasury Statement released this afternoon.

We won’t know how much additional tax revenue the Treasury hauled in today until it releases its next daily statement tomorrow at 4:00 p.m. But every dollar of it will add to the new record.

https://cnsnews.com/news/article/terence-p-jeffrey/1477901000000tax-day-tax-record

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10 Things Not To Do On Tax Day

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Kelly Phillips Erb Contributor

Happy Tax Day! You’ve probably read a ton of lists by now advising you about last minute filing tips and how to reduce your tax bill. That’s all good stuff. But as you finish up the last minute scramble to get yourtaxes filed, here’s a quick list of what not to do:

1. Fib on your taxes and think you’ll pay later.Don’t cheat to get your money faster – or to avoid paying what you owe now. Lying on your return is wrong. It’s also criminal. Even assuming that you don’t get charged criminally for fraud, the IRS does track patterns of tax behaviors: if they notice a pattern of bad filing behavior (filing now to avoid paying, for example), you’ll eventually be flagged. In addition to slowing future refunds, causing delays in processing and potentially increasing your audit risk, you’ll also get socked with a pretty nasty tax bill. You’ll eventually have to pay what you owe plus penalty and interest.

2. Call your tax professional for anything other than an extension.Lean in closely for this one and listen very carefully. Your tax professional may be awesome. Your tax professional may love you as a client. Your tax professional may be thrilled to have your business. But – and this is important – your tax professional doesn’t want to hear from you today. Really. Unless you’re filing for an extension, put the phone down. It isn’t likely that you can bring in your tax information for the first time on Tax Day and expect to file a reasonably correct tax return on time: all you can do at this point in most circumstances is file for extension. And if you’ve found a mistake on your return? You’ll want to amend using good ol’ form 1040X… next week. Not today. It’s been a long, busy season. Cut your tax professional a break.

3. Spend your refund when it’s not in pocket. If your tax return says that Uncle Sam owes you money – and not the other way around – the temptation is to want to spend it. Right now. And why not? It’s good news, right? But don’t rush to the web to plan that dream vacation or plop a deposit down on a brand new car until you actually have cash in pocket. There could be a delay in processing your return or you could be subject to offset. You might have made a calculation error, overstated a deduction or understated your income. Your refund might be held due to concerns about a duplicate Social Security number or an injured spouse claim. Most of the time, IRS gets it right and statistically, refunds were processed fairly quickly this year. ButVisa V +0.37% doesn’t accept “I’m eventually getting a tax refund” for payment. So be smart, plan ahead and don’t spend your refund in advance.

4. Head out for the post office at 4:55pm. If you’re going to have a Murphy’s Law moment, it’s bound to be on Tax Day. According to a study in the Journal of the American Medical Association, deaths from traffic accidents rise 6% on Tax Day. Combine the rush with the extra stress – and in many parts of the country today (including mine), some pretty terrible weather and you’re bound to increase your odds of something bad happening. And even assuming that something terrible doesn’t happen (and I hope that it doesn’t), you don’t want to take a chance on missing that postmark. Check the post office website for post offices with extended hours today – or better yet, leave a few minutes early.

5. Call the IRS. On a routine day, the chances of the IRS actually picking up the phone are about 7 in 10. And if you are one of the lucky taxpayers to get through to IRS, you’re going to have to wait. On Tax Day, those statistics are even more dire. Don’t assume that you can camp out at your phone today and still meet your filing deadline. If you’re worried about timing, you need to file for an extension and figure it out later (but see #7).

6. Forget to sign your return. I know the feeling. You are so glad to be done that you swoop out of the office, tax return in hand on your way to have Tax Day done for good. Don’t be so glad to be done that you forget to sign your return. A tax return is not considered timely filed if you don’t sign it properly – and if you’re married, that means both spouses have to sign. So take a moment to look your return over and make sure that your signature is at the bottom.

https://www.forbes.com/sites/kellyphillipserb/2015/04/15/9-things-not-to-do-on-tax-day/

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Tax Day extra difficult for many same-sex married couples

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photo by ArChick
Tax Day gets complicated for same-sex couples in states that don’t recognize their marriages

By Stephen Ohlemacher, Associated Press

WASHINGTON (AP) — A necessary burden for most Americans, Tax Day is an accounting nightmare for thousands of gay and lesbian couples as they wrestle with the uneven legal status of same-sex marriage in the United States.

They live in a country that recognizes their marriages, but some reside in the 13 states that do not, an issue that will be argued before the Supreme Court later this month.

At tax time, and Wednesday is the filing deadline, it gets complicated because most state income tax returns use information from a taxpayer’s federal return.

Straight couples simply copy numbers from one form to another. But that doesn’t work for same-sex couples reporting combined incomes, deductions and exemptions on their federal tax returns. These couples must untangle their finances on their state returns, where they are still considered single.

“We’re adults, we’re contributing to the welfare of society and yet, here’s this one thing that just reaches up every year and kind of slaps us in the face,” said Brian Wilbert, an Episcopal priest who lives in Oberlin, a small college town in northern Ohio.

Wilbert married his husband, Yorki Encalada, in 2012, at a ceremony in upstate New York. He is filing a joint federal tax return for the second time this year. But Ohio, which doesn’t recognize same-sex marriages, requires the couple to file their state tax returns as if they were single.

“It may not be the most burning thing,” Wilbert said. “But as we think about equality and marriage equality, this is an important thing because it’s part of what couples do.”

https://finance.yahoo.com/news/tax-day-extra-difficult-many-130932026.html

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Ways and Means Readies a Batch of Bills Targeting IRS

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By Charles S. Clark
March 26, 2015

Now that they control both chambers of Congress, Republicans are wasting no time advancing pent-up bills intended to crack down on alleged political bias at the Internal Revenue Service, moving a batch of bills out of the Ways and Means Committee on Wednesday for coming floor action.

Though the most visible policy-oriented legislation would repeal the estate tax, the narrower set of bills was aimed at the tax agency’s Exempt Organizations division, where the imbroglio over mishandled applications from largely conservative groups revealed in 2013 set the course of the Republican bid to rein in the tax agency.

Designed to pressure IRS employees toward more transparency, the bills do not address the issue of how to define a social welfare organization that is not political—for which the IRS is working on revised regulations—and none appear to acknowledge the staffing, procedural and policy changes made at the Exempt Organizations division over the past two years.

Bills reported out Wednesday included:

H.R. 1058 by Rep. Peter Roskam, R-Ill., to “ensure that IRS employees are familiar with and act in accordance with taxpayer rights, including the right to be informed, to be assisted, to be heard, to pay no more than the correct amount of tax, to an appeal, to certainty, to privacy, to confidentiality, to representation, and to a fair and just tax system;”
H.R. 1152 by Rep. Kenny Marchant, R-Texas, to prohibit IRS employees from conducting official business using personal email;
H.R. 1026, by Rep. Mike Kelly, R-Pa., to “stop the IRS’ misuse of a provision designed to protect taxpayers to instead protect government employees who improperly look at or reveal taxpayer information;”
H.R. 1314, by Rep. Patrick Meehan, R-Pa., to codify the right for organizations denied tax exempt status to file an administrative appeal;
H.R. 1295, by Rep. George Holding, R-N.C., to streamline the “burdensome IRS process by allowing groups to declare their tax-exempt status rather than wait for endless amounts of time to gain approval;” and
H.R. 709 by Rep. James Renacci, R-Ohio, to authorize the IRS to terminate employees who target individuals based on their political beliefs.

“Though it’s been nearly two years since we learned of the IRS’ abuse of power, the American people’s distrust in the agency remains,” Renacci said. “If someone at the IRS targets taxpayers based on their political beliefs, he or she should be held accountable. It’s that simple.”

https://www.govexec.com/oversight/2015/03/ways-and-means-readies-batch-bills-targeting-irs/108547/?oref=relatedstories

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This Year Tax Freedom Day® Arrives on April 24

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Americans will collectively spend more on taxes in 2015 than they will on food, clothing, and housing combined

Washington, DC (Mar 31, 2015)—Tax Freedom Day, the day when the nation as a whole has earned enough money to pay its federal, state, and local tax bill for year, will arrive 114 days into the year on April 24, according to the annual report released this morning by the nonpartisan Tax Foundation.

“Tax Freedom Day gives us a vivid representation of how much we pay for the goods and services provided by governments at all levels,” said Tax Foundation Economist Kyle Pomerleau. “Arguments can be made that the tax bill is too high or too low, but in order to have an honest discussion, it’s important for taxpayers to understand cost of government. Tax Freedom Day helps people relate to that cost.”

While the national date arrives nine days after the tax filing deadline, each state’s total federal, state, and local tax burden varies greatly. Tax Freedom Day arrives earliest in Louisiana on April 2 and Mississippi on April 4. On May 13, Connecticut and New Jersey will be the last states to reach Tax Freedom Day this year.

Key takeaways from the report:

Tax Freedom Day is one day later than last year due mainly to the country’s continued steady economic growth, which is expected to boost tax revenue especially from the corporate, payroll, and individual income tax.
Americans will collectively spend more on taxes in 2015 than they will on food, clothing, and housing combined.
Americans will pay $3.3 trillion in federal taxes and $1.5 trillion in state and local taxes, for a total bill of more than $4.8 trillion, or 31.1 percent of the nation’s income.
If you include annual federal borrowing, which represents future taxes owed, Tax Freedom Day would occur 14 days later on May 8.
Tax Freedom Day is a significant date for taxpayers and lawmakers because it represents how long Americans as a whole have to work in order to pay the nation’s tax burden.

Historically, the date for Tax Freedom Day has fluctuated significantly. The latest-ever Tax Freedom Day was May 1, 2000 – meaning that Americans paid 33% of their collective incomes towards taxes. A century earlier, in 1900, only 5.9% of national income was required to pay the tax bill, and Tax Freedom Day fell January 22.

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Fake IRS Agents Target More than 360,000, Make Off With $15.5M in Scam

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Fake IRS Agents Target More than 360,000, Make Off With $15.5M in Scam

Thursday, 12 Mar 2015 10:33 AM

A federal investigator says fake IRS agents have targeted more than 366,000 people with harassing phone calls demanding payments and threatening jail time as part of a huge nationwide scam.

A deputy inspector general for the agency says more than 3,000 people have fallen for the ruse since October 2013. He says they have been duped out of a total of $15.5 million.

Read Latest Breaking News from Newsmax.com https://www.newsmax.com/Newsfront/irs-tax-scam/2015/03/12/id/629732/#ixzz3UCzqT48h

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Feds sent incorrect tax information to 800,000 people on ObamaCare

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Feds sent incorrect tax information to 800,000 people on ObamaCare
By Peter Sullivan and Sarah Ferris – 02/20/15 10:26 AM EST

The administration sent the wrong tax information to 800,000 people who have enrolled in ObamaCare, officials announced Friday.

The information used to calculate subsidies was wrong on about 20 percent of tax forms, an error that could delay tax refunds for thousands of people.

Administration officials stressed that the vast majority of HealthCare.gov customers received the correct forms, and White House spokesman Josh Earnest said the issue impacted “a very small fraction of people.”

But the tax glitch quickly provided new ammunition for Republicans, who continue to argue that the healthcare law is fatally flawed.

“Surprise, surprise, the Obama administration still does not have its act together,” Rep. Marsha Blackburn (R-Tenn.), vice chair of the House Energy and Commerce Committee, wrote in a statement.

She said the new problems offer more proof that the IRS should be kept out of healthcare, and pledged to redouble her efforts to repeal the ObamaCare insurance penalty entirety.

“The Obama administration has built a healthcare law so complex, so confusing, and so costly that even they don’t know how to properly administer it,” Rep. Diane Black (R-Tenn.) added in a statement just minutes after the error was disclosed.

https://thehill.com/policy/healthcare/233315-incorrect-tax-information-sent-to-800000-people-on-obamacare

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Trey Gowdy: Time for a Select Committee to Investigate the IRS Scandal

IRS officials face the House Oversight Committee in Washington, DC

IRS officials face the House Oversight Committee in Washington, DC.

Trey Gowdy: Time for a Select Committee to Investigate the IRS Scandal

Feb 18, 2015 12:13 PM EST

GREENVILLE, S.C.—At a Republican Party fundraising breakfast in his district on Wednesday, Representative Trey Gowdy suggested that the congressional GOP needed to investigate the IRS’s scrutiny of political groups with the same intensity that it was investigating the 2012 attacks in Benghazi.

“I’m glad that the speaker of the House convened a select committee on Benghazi,” said Gowdy, a former prosecutor who chairs that panel. “I think it makes every bit as much sense to convene a select committee on the IRS. Now that we have the Senate, the Senate has tools the House doesn’t have in terms of getting e-mails and cooperation. It has nothing to do with politics. Do you really want an IRS targeting you based on your political beliefs?”

The congressman, flanked by colleagues Mick Mulvaney and Jeff Duncan, took most of the questions at the $25-per-head voter briefing. Mulvaney encouraged fellow Republicans to win the moral argument about immigration reform, instead of allowing the issue to be frozen and polarized. “If you hear us talking 10 percent about the Constitution and 90 percent about something else, that’s why,” he said. Gowdy described the ways that Democrats had undermined his committee—mostly by portraying it as heartlessly partisan.

https://www.bloomberg.com/politics/articles/2015-02-18/trey-gowdy-time-for-a-select-committee-to-investigate-the-irs-scandal

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IRS to pay back-refunds to illegal immigrants who didn’t pay taxes

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IRS to pay back-refunds to illegal immigrants who didn’t pay taxes

Lawmakers fear illegals could use Obama amnesty to find ways to vote

By Stephen Dinan – The Washington Times – Wednesday, February 11, 2015

IRS Commissioner John Koskinen told Congress on Wednesday that even illegal immigrants who didn’t pay taxes will be able to claim back-refunds once they get Social Security numbers under President Obama’s temporary deportation amnesty.

The revelation — which contradicts what he told Congress last week — comes as lawmakers also raised concerns Mr. Obama’s amnesty could open a window to illegal immigrants finding ways to vote, despite it being against the law.

“While we may disagree about whether your deferred action programs were lawfully created and implemented, we are confident that we can all agree that these programs cannot be permitted to impair the integrity of our elections,” Republican members of Congress from Ohio wrote in a letter to Mr. Obama Wednesday, ahead of a hearing on the issue in the House on Thursday.

Read more: https://www.washingtontimes.com/news/2015/feb/11/irs-pay-back-refunds-illegal-immigrants-who-didnt-/#ixzz3RZL24Mbd

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Feds won’t release IRS targeting documents

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Feds won’t release IRS targeting documents
By Bob Cusack – 02/10/15 06:00 AM EST

The Obama administration is refusing to publicly release more than 500 documents on the IRS’s targeting of Tea Party groups.

Twenty months after the IRS scandal broke, there are still many unanswered questions about who was spearheading the agency’s scrutiny of conservative-leaning organizations.

The Hill sought access to government documents that might provide a glimpse of the decision-making through a Freedom of Information Act (FOIA) request.

The Hill asked for 2013 emails and other correspondence between the IRS and the Treasury Inspector General for Tax Administration (TIGTA). The request specifically sought emails from former IRS official Lois Lerner and Treasury officials, including Secretary Jack Lew, while the inspector general was working on its explosive May 2013 report that the IRS used “inappropriate criteria” to review the political activities of tax-exempt groups.

TIGTA opted not to release any of the 512 documents covered by the request, citing various exemptions in the law. The Hill recently appealed the FOIA decision, but TIGTA denied the appeal. TIGTA also declined to comment for this article.

https://thehill.com/business-a-lobbying/232249-feds-wont-release-irs-targeting-documents

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Fraud outbreak hits TurboTax

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Fraud outbreak hits TurboTax
By: Matt Krantz February 6, 2015 11:23 am

TurboTax has turned off the ability of its software to e-file state tax returns Thursday after the company found “an increase in suspicious filings,” the company said today.

The tax-preparation software company has found an increase in criminal activity where stolen personal data is used to file fake state returns with state authorities. This illegal act allows fraudsters to claim tax refunds from state governments.

An internal TurboTax investigation has found the breaches are not due to a problem with its own systems, but criminals digging up the personal information elsewhere. The company said the investigation is ongoing. Intuit says it’s working with state tax officials to get the e-filing security back to where it needs to be to turn it back on. TurboTax customers who already e-filed their state returns don’t have to do anything. The returns will be transmitted again when the problem is resolved, TurboTax says.

The e-filing halt only affect state returns. Federal tax returns can still be filed electronically.

https://americasmarkets.usatoday.com/2015/02/06/fraud-outbreak-hits-turbotax/

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White House Seeks to Limit Health Law’s Tax Troubles

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White House Seeks to Limit Health Law’s Tax Troubles

By ROBERT PEARJAN. 31, 2015

WASHINGTON — Obama administration officials and other supporters of the Affordable Care Act say they worry that the tax-filing season will generate new anger as uninsured consumers learn that they must pay tax penalties and as many people struggle with complex forms needed to justify tax credits they received in 2014 to pay for health insurance.

The White House has already granted some exemptions and is considering more to avoid a political firestorm.

Mark J. Mazur, the assistant Treasury secretary for tax policy, said up to six million taxpayers would have to “pay a fee this year because they made a choice not to obtain health care coverage that they could have afforded.”

But Christine Speidel, a tax lawyer at Vermont Legal Aid, said: “A lot of people do not feel that health insurance plans in the marketplace were affordable to them, even with subsidies. Some went without coverage and will therefore be subject to penalties.”

https://www.nytimes.com/2015/02/01/us/politics/white-house-seeks-to-limit-health-laws-tax-troubles.html?_r=0

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Millions to owe Obamacare tax penalty

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Millions to owe Obamacare tax penalty

By Tami Luhby   @Luhby January 28, 2015: 4:03 PM ET

Were you uninsured in 2014? It’s time to pay the piper!

Some 3 million to 6 million Americans will have to pay an Obamacare tax penalty for not having health insurance last year, Treasury officials said Wednesday. It’s the first time they have given estimates for how many people will be subject to a fine.

The penalty is $95, or 1% of income above a certain threshold (roughly $20,000 for a couple). So you could end up owing the IRS a lot of money.

Take a married couple with $100,000 in income – their bill comes to $797, according to the Tax Policy Center ACA penalty calculator.

The penalty for remaining uninsured rises to the larger of $325 or 2% of income in 2015.

https://money.cnn.com/2015/01/28/news/economy/obamacare-tax-penalty/

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The Cheapest Tax Prep Software for 2015 (Hint: It’s Not TurboTax)

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The Cheapest Tax Prep Software for 2015 (Hint: It’s Not TurboTax)

By Ben Steverman January 23, 2015

For the second year in a row, TurboTax has raised its prices. At least that’s what it feels like to many customers. https://www.onlinecourserank.com/best-online-courses/for-accounting/ Continue reading The Cheapest Tax Prep Software for 2015 (Hint: It’s Not TurboTax)