Let’s Use Obama’s Nomines to Overhaul the Tax Code
If President Obama were a smart man, he would give serious thought to why yet another one of his nominees has found it so difficult to correctly pay his taxes.
It would be easy for me to crack wise about the utter incompetence of the President’s vetting process but I think there’s an opportunity here. Why in the world is our tax code so complex that fairly well-off and supposedly smart people end up owing thousands of dollars because they didn’t think to declare basketball tickets or the gift of a limo and driver as reportable income? If these guys, with all the accountants they can afford, can’t get it right, then it’s simply too complicated and needs to be overhauled.
It would be a pretty good idea for some enterprising conservative candidate to use the tax woes of the President’s nominees to push for a simpler tax code. It’d be difficult (though not impossible) for the Democrats to oppose it, given that it’s their own people who’ve been running afoul of the laws so often lately.
Other Posts of Interest:
- Politico: Please Excuse Our Timmy from Paying Taxes. He Was Confused.
- How Would You Like to Get All Your 2008 Taxes Back? One Republican Wants to Make It Happen.
- Tax Cuts for the Rich? Well, and the Middle Class, Too
Category: The Economy and Your Money
Jimmie – I think this is a revolutionary thought – seriously – I hadn't thought about it in this way and really just thought "why aren't these folks paying their taxes?" As someone who has been audited (and I use a CPA firm to file my taxes) I was quite surprised by audit findings. It all worked out fine – but wow – tax code reform – hooray – I'm going with what you say.
Well, we know the Dems have been saying for some time that they really wanted to force the wealthy to pay more (any?) taxes and they wanted to do away with "tax shelters" that shield people from having to pay their fair share. Maybe this is part of his strategy? Find all the people who cheat on their taxes…nominate them for some job that requires them to pay what they have owed. And presto…now they have cash for pay-as-you-go welfare programs….maybe?
I've worked for H&R Block. (_LONG_ time ago) Their policy was that if they made a mistake, they'd pay the penalty and interest – but not the original tax – on what you were assessed. As a result, preparers were instructed to follow the absolutely most conservative guidance lines, and if the client insisted that such and such be taken as a deduction against H&R advice, we were to get a written statement of same, signed by the client. Which relieved the company of having to pay the penalty and interest if the client were to be assessed same.
CPAs are frequently more aggressive in taking deductions, banking on the likelihood of not being audited, and even if the client is audited, the cost will be less on an individual return than the cumulative total of the deductions over the years. The problem here is that returns over a large number of years is being reviewed – usually, unless the IRS is inspecting actual fraud, only one year is audited and three years is the normal limit of look-back time for audits.
I understand that whoever the current problem person is this time, one problem is that he signed payment checks over directly to a charity/school(whatever). He assumed that by doing so, it wasn't income. It never entered into his accounts. In fact, though, the check was made to him (and thus traceable through the account of whoever did the payment)and he wasn't entitled to deduct 100% from his income – only the charitable deduction level, whatever that was. So he got caught, and his CPA probably passed it because it was reasonably untraceable. Except when a thorough search is done, it'll turn up. He should have had the payer made the check directly to his charity – not to him. That _might_ have worked – it would have appeared as a donation to the charity from the group he spoke to, and he might still have been able to take a charitable deduction for his services. Maybe.
But still – all in all – your point is well taken. Taxes are way too complicated. Too much of a game where he who risks wins – or doesn't get to pass GO!