PAUL’S TAX BLOG

I have not posted a tax blog since last Spring not because there was nothing noteworthy or entertaining in the tax world, but because I just can't seem to find the time to do it. Some court cases and pronouncements would make great fodder for discussion, but it seems there is always something a bit more pressing at the moment.  Well, the elections have forced me to sit down and take up the pen (ok, keyboard) once again. I won't speculate on what types of tax changes MAY happen as a result of the reelection of Pres Obama and the...

This one came across the news wire today and I’m sorry, but I just can’t resist a snarky comment. An H&R Block manager was arrested in Van Nuys, CA in February for identity theft. Apparently he was using client’s information to prepare bogus tax returns on their behalf and obtain refunds using the H&R Block “Emerald” cards to withdraw the refunds from ATM machines. The usual corporate caveats are being ladled out, ie H&R Block takes the matter very seriously, it involves only a handful of clients, they are cooperating with law enforcement, and so on. First off, let me...

As we close in on April 15, the traditional tax filing hysteria with all the media attention helps spawn another side industry – tax scams. This time of year criminals use the fear of IRS to prey on victims and get them to disclose valuable info to steal identities and money. The IRS issued a warning recently about one scam that offers free money to taxpayers who have little or no income based on the American Opportunity Tax Credit. Promoters take money to file fraudulent returns applying for bogus refunds. These tax schemes are often promoted to members of local...

Usually whenever any political body starts tinkering with taxes it is another Right To Work act for accountants. Virtually every “tax simplification” or “tax reduction” act that comes along only serves to make compliance more difficult for the taxpaying public.Given that tax accountants are arguably the only constituency that will always benefit from any change in the tax structure, it is interesting to note two recent events in the California State Capitol. First, AB 1963 was introduced which will extend the state sales tax to most services effective Jan 1, 2013. This bill has some special interest exceptions (of course)...

If you operate a business or are a sole proprietor you mayhave noticed a few new lines that appeared on your tax forms for 2011. In 2008Congress passed a tax law that requires all businesses to separately disclosethe amount of their gross revenue that was collected via credit cards. Thisamount was to be reconciled by the taxpayer to the new form 1099-K that reportssuch transactions by month. Any differences were to be explained on the taxreturn. This was going to create an accounting nightmare. Just thinkof all the problems a small restaurant might have trying to reconcile theirgross income to...

I didn’t expect to have time to update my Blog today, but asI write this our server is down and the phone system is dead due to a poweroutage (thanks So Cal Edison!) so it looks like it will be kind of quiet for aMonday morning… Tax season is in full swing here and it can be a challengeto keep up with the latest tax news coming in over the wires when you have no freetime to read. However this one stood out and I had to share it. A little background: medical costs are generally onlydeductible for medical necessities....