After Republican Sen. Mitch McConnell suggests Warren Buffett give his fortune to the U.S. Treasury, the billionaire pledges to match Republican contributions.
This post is by Andrew Frye and Noah Buhayar of Bloomberg.
Buffett, who has said the tax system favors the rich, made his offer after Republicans, including U.S. Representative Michelle Bachmann, suggested he donate his fortune to the government.
"If we go to a contribution system, I’ll match the total contribution made by all Republican members of Congress and I’ll even go 3-for-1 with McConnell," Buffett said of Senate Minority Leader Mitch McConnell, the Kentucky Republican, in an interview with the magazine.
The taxpayer advocate says an increased workload and decreased funding threaten taxpayers' rights and hamper the IRS in collecting revenue.
This post is by Steven Sloan of Bloomberg.
In her annual report to Congress this week, advocate Nina Olson told lawmakers that cutting the IRS’ budget while making frequent changes to the U.S. tax code poses difficulties for the agency in enforcing tax laws and collecting revenue. Lawmakers agreed last month to cut the agency’s budget by 2.5% for fiscal 2012.
"The overriding challenge facing the IRS is that its workload has grown significantly in recent years while its funding is being cut," Olson said in a press release. "This is causing the IRS to resort to shortcuts that undermine fundamental taxpayer rights and harm taxpayers and at the same time reduces the IRS’ ability to deliver on its core mission of raising revenue."
The actress is accused of failing to pay federal taxes for 2009. Sources blame the oversight on a change in business management and say she will pay up.
Being a celebrity is no insulation against IRS penalties.
Actress Lindsay Lohan had a tax lien slapped against house in Encino, Calif., for failing to pay 2009 taxes. According to the lien, she owes $93,701,57 in back taxes and penalties.
Lohan's business manager refused to comment. But "sources close to Lindsay" told TMZ that the 25-year-old actress was unaware of the debt and would pay it as soon as possible. The sources said Lohan had recently changed management teams and the debt must have been lost in the shuffle.
Adjustments for inflation include a change in tax-bracket thresholds and a small increase in the standard deduction and dependent exemption.
This post is by Tom Herman of The Wall Street Journal.
Happy New Year, and welcome to the many tax-law changes that became effective Jan. 1.
Most of the changes stem from annual inflation adjustments that affect income-tax brackets and many other provisions.
These changes apply only to 2012. Thus, they won't affect what you owe for 2011 when you file your return this year.
Taxpayers who are hiding money abroad can escape prosecution if they pay back taxes and penalties. Those who disclose before they get caught get better deals, the agency says.
The Internal Revenue Service is reviving a program that lets Americans hiding their money abroad pay back taxes and penalties while avoiding criminal prosecution, an effort that in recent years has netted the government billions of dollars.
IRS Commissioner Douglas Shulman, who announced the program's renewal this week, said previous efforts in 2009 and 2011 resulted in the collection so far of $4.4 billion from 33,000 people, an amount he said "we never thought we'd reach." He said the government could reap several times that amount from the newest initiative as well as people deciding against stashing their assets overseas in the first place.
"If we catch people before they come in voluntarily, it's going to be a much worse outcome for the taxpayer," Shulman told reporters.
Under the new program, those who voluntarily disclose their offshore holdings will face penalties of up to 27.5% of their assets, plus back taxes and interest for up to eight years. People whose money hidden abroad does not exceed $75,000 could face penalties of 12.5%, and others might face fines of even less.
A California campaign comparing reality star's tax bill with that of a middle-class earner is misleading and fails to account for federal taxes.
This post is from Brett Arends at SmartMoney.
It takes a lot to get me to write about Kim Kardashianm let alone to come to her defense.
The so-called "Courage Campaign," which wants to raise California's top tax rate from 10.3%, has come out with a video arguing that Kardashian is paying way too little tax.
The video, in the way of the Internet, has "gone viral," a term that is ironically appropriate. It's like a cold that people are passing around, entirely bypassing their brains.
The group says "Kim Kardashian made more than $12 million in 2010, but she only paid 1% more in taxes than a middle-class Californian" (earning, they estimate, $47,000).
I'm sorry. I don't care where you stand politically, or on the topic of Kim Kardashian. But this is nonsense, and I have to call it out.
Ignoring correspondence from the IRS just gets you into more trouble. Missing deadlines costs you money. Plus, it's not always bad news.
This post is from Kelly Phillips Erb at Forbes.
A client contacted me recently week with a tax problem. He sent over a big pile of correspondence that he had received from the IRS. On the front of one of the letters, it read in big letters: Last Date to Respond to this Letter: XXXX 2011.
Um, it’s 2012.
The client missed the deadline. It’s a common mistake, one that I deal with on a pretty regular basis. And 9 times out of 10, the reason is quite simple: The taxpayer didn’t open the mail.
I get it. It’s scary to get something from IRS. So the whole “I’ll just ignore it” mentality kicks in for taxpayers. They let the letters pile up. They refuse to go to the post office to pick up the certified letter. Sometimes, they even leave the letters on the stoop.
H&R Block and Jackson-Hewitt are offering free preparation of 1040EZ forms at the discount retailer's stores. Wal-Mart also offers economical cashing of refund checks.
This post is by Eileen AJ Connelly of The Associated Press.
Free preparation of simple tax forms is now available at more than 3,000 Wal-Mart stores nationwide.
The nation's largest retailer has contracted with the top two tax prep companies, H&R Block and Jackson-Hewitt Tax Service, to set up kiosks inside its stores where customers can have their tax returns completed by trained preparers.
As it is doing in its own retail locations nationwide, H&R Block will offer free preparation of 1040EZ forms at Wal-Mart through Feb. 29. Block will have kiosks in about 250 Wal-Mart stores.
It's the second year Block is offering free simple tax prep. The company, based in Kansas City, Mo., has shifted strategies to retain market share after struggling for several years, and the free preparations are one of its tactics to get people in the door.
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