5 Tax Moves To Make Now
It may seem a bit strange to be talking about income taxes in September. There are, however, good reasons to think about taxes well before April 15. For starters, there are some big changes in the tax code that go into effect in 2011. Depending on your income tax bracket and investments, some simple planning now could save you a bundle later.
And taking steps now to organize your tax files can avoid headaches and aggravation at tax time. So we’ve put together 5 tax moves to make now to take advantage of changing tax laws and to better prepare for tax season.
1. Evaluate Capital Gains: The current long-term capital gains tax rate, with some exceptions, is either 0 percent or 15 percent depending on what ordinary income tax rate you fall into. But in 2011, these rates jump to 10 percent and 20 percent. That means if you have some investments that have done well, you may want to consider selling them in 2010 to take advantage of the lower tax rates. If you currently fall within the 0 percent long-term capital gains rate, the decision may prove to be an easy one. But even for those that fall into the 15 percent bracket, saving 5 percent over next year’s higher rate is significant. Of course, the tax consequences of an investment are just one factor to consider when deciding whether to sell.
2. Make Money Now: As you’ve probably heard, some of the higher income tax brackets will get even higher next year. The top two rates for the 2010 federal income tax brackets are 33 percent and 35 percent, which will move to 36 percent and 39.6 percent in 2011. The effect these changes will have on lower tax brackets depends on what Congress does this year, but the lower tax brackets are set to increase as well. If you fall into a rising tax bracket, it may be in your best interest to accelerate income into 2010 if at all possible. This could be particularly helpful for small business owners and independent contractors who have some control over the timing of income.
3. Green Your Home: There are several energy tax credits that are set to expire at the end of the year. For example, you can get a tax credit up to 30 percent of the cost ($1,500 maximum) on certain qualifying home improvements, such as roofs, water heaters, and HVAC systems. Make sure to verify that the product you want to install qualifies for the tax credit. And get the work done this year before the tax credit expires.
4. Get Organized: Every year on April 15th at about 8 pm I tell myself I’ll be better organized the following year. While it’s taken several years of last-minute tax return filings to finally motivate me into action, this year I’m actually organized. The key is not to wait until tax season. Keep records of your taxable investments to help you calculate gains and losses. Keep your business receipts organized and separate from personal expenses. If you’ve made home improvements that qualify for tax credits, keep your receipts in a separate file. Staying organized takes just a few minutes week, but it can save you a lot of headaches when it comes time to file your taxes and will reduce the risk that you’ll miss a tax deduction.
5. Plan Your Tax Preparation: Many use online tax software to prepare and file their tax returns. For those folks, they have some time before the 2011 versions of the tax software are released. But if you plan to have a tax professional prepare your return, there are good reasons to hire them now. First, you can take your time to find the best tax professional for your needs, taking into consideration recommendations from friends and family. Second, they can further assist you with tax planning now in anticipation of the many changes to the tax code in 2011.
It’s important to recognize that tax planning is specific to each individual’s situation and can involve complex analysis. So if you think some of these tax moves may be right for you, consult with a tax specialist before making any decisions.
‘Tax lady’ Roni Deutch faces California fraud lawsuit
SACRAMENTO — California’s attorney general sued “tax lady” Roni Deutch for more than $34 million on Monday, alleging that her law firm regularly violates state law by making false promises that it will help people resolve disputes with the Internal Revenue Service.Attorney General Jerry Brown contends that Deutch overstates her TV claims of winning tax battles with the IRS. She advertises a success rate of up to 99%, yet successfully reduces the amount of money her clients owe in taxes in just 10% of cases, the lawsuit says.
”She promises to significantly reduce their IRS tax debts, but instead preys on their vulnerability, taking large up-front payments but providing little or no help in lowering their tax bills,” said Attorney General Jerry Brown, the Democratic nominee for governor in the November election.
Deutch’s law firm, which has its headquarters in the Sacramento suburb of North Highlands, referred calls Monday to attorney Alexander Collins, who did not immediately return a phone message from the Associated Press.
Deutch says she runs the nation’s largest tax resolution law firm. Her ads are in heavy rotation on cable television and she has offered tax advice on national networks, including NBC, CNN, Fox and CNBC.
Brown’s lawsuit, filed in Sacramento County Superior Court, says Deutch’s firm takes in at least $25 million annually and spends $3 million on advertising.
Brown is seeking a preliminary injunction to block what his office alleges are unfair business practices and false advertising.
The case seeks unspecified civil penalties on top of $33.9 million in restitution for the hundreds of clients Brown says filed complaints alleging they were defrauded. Her firm collects retainers of up to $4,700 and refuses to return the money when it fails to win tax settlements, the suit says.
Deutch entices clients with television ads that make false claims, the lawsuit alleges.
For instance, it says one ad portrays three clients she purportedly helped save a collective $86,000, yet all three still owe their taxes plus interest and penalties. Deutch merely won the three clients a delay from the IRS’ collection efforts, according to the document.
Delays orchestrated by the firm drive up her fees while often increasing the interest and penalties her clients owe the IRS, the complaint alleges. It also accuses her of creating false billings to justify fees that are often higher than originally promised.
Deutch has faced similar allegations before.
In December 2006, she settled a lawsuit filed by New York City’s Department of Consumer Affairs that alleged she misled consumers with her advertising. She agreed to pay $300,000, including $100,000 in fines and $200,000 in restitution to consumers.
Six Months to Go Until the largest tax hikes in history
In just six months, the largest tax hikes in the history of America will take effect. They will
hit families and small businesses in three great waves on January 1, 2011:
First Wave: Expiration of 2001 and 2003 Tax Relief
In 2001 and 2003, the GOP Congress enacted several tax cuts for investors, small business
owners, and families. These will all expire on January 1, 2011:
Personal income tax rates will rise. The top income tax rate will rise from 35 to 39.6
percent (this is also the rate at which two-thirds of small business profits are taxed). The
lowest rate will rise from 10 to 15 percent. All the rates in between will also rise. Itemized
deductions and personal exemptions will again phase out, which has the same mathematical
effect as higher marginal tax rates. The full list of marginal rate hikes is below:
- The 10% bracket rises to an expanded 15%
- The 25% bracket rises to 28%
- The 28% bracket rises to 31%
- The 33% bracket rises to 36%
- The 35% bracket rises to 39.6%
Higher taxes on marriage and family. The “marriage penalty” (narrower tax brackets for
married couples) will return from the first dollar of income. The child tax credit will be cut in
half from $1000 to $500 per child. The standard deduction will no longer be doubled for
married couples relative to the single level. The dependent care and adoption tax credits will
be cut.
The return of the Death Tax. This year, there is no death tax. For those dying on or after
January 1 2011, there is a 55 percent top death tax rate on estates over $1 million. A person
leaving behind two homes and a retirement account could easily pass along a death tax bill to
their loved ones.
Higher tax rates on savers and investors. The capital gains tax will rise from 15 percent
this year to 20 percent in 2011. The dividends tax will rise from 15 percent this year to 39.6
percent in 2011. These rates will rise another 3.8 percent in 2013.
Second Wave: Obamacare
There are over twenty new or higher taxes in Obamacare. Several will first go into effect on
January 1, 2011. They include:
The “Medicine Cabinet Tax” Thanks to Obamacare, Americans will no longer be able to
use health savings account (HSA), flexible spending account (FSA), or health
medicines (except insulin).
The “Special Needs Kids Tax” This provision of Obamacare imposes a cap on flexible
spending accounts (FSAs) of $2500 (Currently, there is no federal government limit). There
is one group of FSA owners for whom this new cap will be particularly cruel and onerous:
parents of special needs children. There are thousands of families with special needs children
in the United States, and many of them use FSAs to pay for special needs education. Tuition
rates at one leading school that teaches special needs children in Washington, D.C. (National
Child Research Center) can easily exceed $14,000 per year. Under tax rules, FSA dollars can
be used to pay for this type of special needs education.
The HSA Withdrawal Tax Hike. This provision of Obamacare increases the additional tax
on non-medical early withdrawals from an HSA from 10 to 20 percent, disadvantaging them
relative to IRAs and other tax-advantaged accounts, which remain at 10 percent.
Third Wave: The Alternative Minimum Tax and Employer Tax Hikes
When Americans prepare to file their tax returns in January of 2011, they’ll be in for a nasty
surprise—the AMT won’t be held harmless, and many tax relief provisions will have expired.
The major items include:
The AMT will ensnare over 28 million families, up from 4 million last year. According
to the left-leaning Tax Policy Center, Congress’ failure to index the AMT will lead to an
explosion of AMT taxpaying families—rising from 4 million last year to 28.5 million. These
families will have to calculate their tax burdens twice, and pay taxes at the higher level. The
AMT was created in 1969 to ensnare a handful of taxpayers.
Small business expensing will be slashed and 50% expensing will disappear. Small
businesses can normally expense (rather than slowly-deduct, or “depreciate”) equipment
purchases up to $250,000. This will be cut all the way down to $25,000. Larger businesses
can expense half of their purchases of equipment. In January of 2011, all of it will have to be
“depreciated.”
Taxes will be raised on all types of businesses. There are literally scores of tax hikes on
business that will take place. The biggest is the loss of the “research and experimentation tax
credit,” but there are many, many others. Combining high marginal tax rates with the loss of
this tax relief will cost jobs.
Tax Benefits for Education and Teaching Reduced. The deduction for tuition and fees
will not be available. Tax credits for education will be limited. Teachers will no longer be
able to deduct classroom expenses. Coverdell Education Savings Accounts will be cut.
Employer-provided educational assistance is curtailed. The student loan interest deduction
will be disallowed for hundreds of thousands of families.
Charitable Contributions from IRAs no longer allowed. Under current law, a retired
person with an IRA can contribute up to $100,000 per year directly to a charity from their
IRA. This contribution also counts toward an annual “required minimum distribution.” This
ability will no longer be there. -End of article.
Grover Norquist: Bush Tax Cut Expiration Will Cost Taxpayers $1 Trillion
Wednesday, 14 Jul 2010 07:40 PM
Article Font Size
By: Jim Meyers
Low-tax crusader and Republican strategist Grover Norquist tells Newsmax that letting the Bush tax cuts expire in January 2011 would amount to a $1 trillion tax increase — the largest boost in American history.
Norquist — president of Americans for Tax Reform — also warns that President Barack Obama and the Democrats are intent on pursuing the “very bad idea” of imposing a European-style value-added tax.
And he says the tea party movement arose when millions of Americans became “scared straight” by huge increases in federal spending and debt.
Americans for Tax Reform is a coalition of taxpayer groups, individuals, and businesses opposed to higher taxes at the federal, state, and local levels.
In an exclusive Newsmax interview, Norquist — who is also on the board of the American Conservative Union and a regular Newsmax contributor — was asked if Obama had reneged on his promise not to raise taxes on couples earning less than $250,000 a year.
Story continues below.
“Yes — 16 days into his presidency he signed a bill that raised taxes on tobacco,” he says.
“The first tax increase he signed hit Americans of all income levels.”
Allowing the Bush tax cuts to expire at the end of this year, as the Democrats plan, will in fact result in “about a trillion-dollar tax increase on the American people over the next decade,” Norquist says.
“It would be the largest tax increase in American history, and it would take every marginal tax rate and increase it. The taxes on businesses, on capital gains, would be very high.
“When these tax cuts went into effect in 2003, the economy and the stock market strengthened. As soon as people realized that those tax increases were going to come in in January of 2011, the stock market began its decline.”
Asked about proposals for a national sales tax known as a value-added tax, or VAT, Norquist tells Newsmax:
“A VAT is a very bad idea. It is true that it is what the Democrats plan to do. It is Obama’s goal.
“Obama and the Democrats have been moving the United States toward the European social welfare model. That has a VAT, on average in Europe, of 20 percent.
“If we were to adopt a value-added tax as Europe has, your salary would be worth 20 percent less because you could buy less with it. Your life savings would be worth 20 percent less. Your pension would be worth 20 percent less, because anything you bought would have a 20 percent value-added tax attached to it.
“It would be very bad for the American economy.”
The Democrats’ healthcare reform bill includes a mandate to purchase health insurance and severe penalties for noncompliance.
“It’s going to cost hundreds and eventually thousands of dollars a year,” Norquist declares.
“It is designed to force you to buy health insurance, but it is a tax. It will largely be put on low-income people since higher-income Americans already have health insurance.”
Norquist is also highly critical of the Democrats’ cap-and-trade plan to curb carbon emissions.
“There are a number of different versions of it, but all of them have the same thesis: They are taxing the energy that you and I use and subsidizing, giving corporate welfare, to industries that don’t yet exist or don’t produce energy at real prices,” he says.
“So it’s a massive tax increase on the energy you use generated by coal or natural gas or oil, electricity, and subsidies for expensive energy [wind, solar, etc.). Your energy costs will go up because of these taxes by thousands of dollars a year.
“It is not the unfortunate side effect of Obama’s policy. The goal of his policy is to make most energy, coal-generated energy, too expensive, so for similarly high prices you will use solar or wind energy — which you don’t use now because it’s too expensive.”
Asked for his view of the tea party movement, Norquist says: “The tea party movement is best understood as millions of Americans who have not been involved in politics for most of their adults lives but in the last two years got scared straight by Obama’s debt — trillions in higher taxes, higher debt, higher spending, and trillions more being threatened.
“And because they’re involved in politics, if the Republicans come back into power they will be a different party than they were in the past, because there are these new troops that have arrived with one thing on their mind — spend less.”
Norquist favors a plan to cut spending by setting up a congressional committee with subpoena powers to examine spending, with an eye toward reducing unnecessary federal expenditures. The plan is “getting good traction around the country,” he says, but the Democratic leadership opposes it.
He also says he would welcome a presidential campaign by former House Speaker Newt Gingrich, who is considering a run.
“Speaker Gingrich fought for lower taxes at all levels. The other thing Gingrich does is he’s a movement builder, a party builder, and so whether he’s a back-bencher, speaker of the House, or candidate for president, his goal has always been to advance liberty. I think it’s very helpful, very Reaganesque.”
Location: http://www.newsmax.com/Headline/norquist,bush,tax,cuts,obama,increase,trillion,democrats/2010/07/14/id/364671?s=al&promo_code=A471-1
Six Tax Benefits for Job Seekers
Did you know that you may be able to deduct some of your job search expenses on your tax return?
Many taxpayers spend time during the summer months updating their résumé and attending career fairs. If you are searching for a job this summer, you may be able to deduct some of your expenses on your tax return. Here are six things the IRS wants you to know about deducting costs related to your job search.
- To qualify for a deduction, the expenses must be spent on a job search in your current occupation. You may not deduct expenses incurred while looking for a job in a new occupation.
- You can deduct employment and outplacement agency fees you pay while looking for a job in your present occupation. If your employer pays you back in a later year for employment agency fees, you must include the amount you receive in your gross income up to the amount of your tax benefit in the earlier year.
- You can deduct amounts you spend for preparing and mailing copies of your résumé to prospective employers as long as you are looking for a new job in your present occupation.
- If you travel to an area to look for a new job in your present occupation, you may be able to deduct travel expenses to and from the area. You can only deduct the travel expenses if the trip is primarily to look for a new job. The amount of time you spend on personal activity compared to the amount of time you spend looking for work is important in determining whether the trip is primarily personal or is primarily to look for a new job.
- You cannot deduct job search expenses if there was a substantial break between the end of your last job and the time you begin looking for a new one.
- You cannot deduct job search expenses if you are looking for a job for the first time.
Homebuyer Tax Credit Closing Deadline Extended
Eligible taxpayers who contracted to buy a home, qualifying for the First-Time Homebuyer Credit before the end of April, now have until Sept. 30, 2010 to close the deal, according to the Internal Revenue Service.
The Homebuyer Assistance and Improvement Act of 2010, signed by the President on Friday, extended the closing deadline from June 30 to Sept. 30 for any eligible homebuyer who entered into a binding purchase contract on or before April 30 to close on the purchase of the home on or before June 30, 2010. The new law addresses concerns that many homebuyers might be unable to meet the original June 30 closing deadline.
Charitable Giving – How do I prove it?
What is the most I can deduct for charitable giving without a receipt? I get this question all the time. Taxgirl has the best explanation I can think of on what the rules for charitable giving are. Here we go:
This question is pretty timely because there’s a buzz going around that the receipts from Goodwill, Salvation Army, etc. are not sufficient on audit and that it’s not a good idea to make those kinds of donations for fear of being flagged. As with most of these tax-related rumors, this is only half true. Here’s the whole picture…
First, always get a receipt. Always.
Second, make sure that the receipt has the right info. For donations of goods or cash (or cash equivalent), you need to get a receipt from the charitable organization which has:
- § the name of the charity;
- § the date of the gift;
- § the location of the charity; and
- § a detailed description of the property donated.
If the organization doesn’t offer you a receipt, ask for one. If they’re taking your money or your stuff, they owe you a receipt. If they can’t be bothered, find a new organization (or decide that you’re okay with donating the stuff but not taking the deduction). But the excuse that nobody offered you a receipt won’t fly.
Third, keep good records. That means receipts. Scan or copy them and toss them in a “charitable deductions” folder (or Tupperware, as many of my clients are wont to do – that works, too!). But hold onto them. And make sure that they’re readable and accurate, for goodness sakes.
With all of that said, it is true that the IRS is cracking down on charitable deductions. That does not mean that you will run into a problem if you follow the rules.
The case that’s making the rounds these days (and causing all of those panicky emails) is this one: Roberts v Commissioner (downloads as a pdf). In this case, Mr. Roberts painted himself as a good guy who meant well. He gave to charity. And according to him, he gave a lot. He claimed nearly $30,000 in charitable contributions for just one year. And to his credit, he tried to file the right forms. As the Tax Court noted:
Included with his 2005 Federal income tax return was a self-prepared substitute Form 8283, Noncash Charitable Contributions, in which petitioner claims to have contributed more than 450 items of property consisting primarily of used clothing, but also including, among other things, towels, bedsheets, books, costume jewelry, children’s toys, and glass lamps.
But here’s where his claim fell apart. The Tax Court further noted that “Petitioner’s descriptions of the items of property allegedly contributed to charity are vague and include self- assigned estimates of their values.”
No, no, no. (Imagine me shaking my head here.)
When you make charitable contributions, you have to be somewhat specific on the receipt. “4 bags of clothes” (one of the entries on Mr. Roberts’ tax return) is not sufficient. While you don’t need to itemize each and every piece of clothing, some attempt at accurate description is important. I’ve said before that my mom is great at this: she’ll write “four pairs women’s dress slacks, hardly worn.”
If you’re donating items that have more value than a few bucks, be even more descriptive. Maybe even include the brand name, where appropriate. While I’m not a clothes horse (yes, my friends think my wardrobe is appalling… I’m totally a candidate for What Not To Wear), I occasionally have an item or two that I’ve made an effort on. If I donate those, I’ll write down “Jones New York ladies dress suit” or “Coach women’s briefcase.” You don’t need a SKU but a little bit of identifying info is a good idea.
Mr. Roberts didn’t have any substantiation for his donations. He couldn’t explain their values. And, worse, he didn’t include the dates of contribution. The donations were disallowed – and he got socked with a penalty.
Mr. Roberts also claimed deductions for cash allegedly contributed to panhandlers and the Salvation Army. If you’ve been reading the blog, you know that wouldn’t be sufficient without a receipt (picking up on a theme here?).
This case (which was in Tax Court and pursuant to Internal Revenue Code section 7463(b), may not be treated as precedent for any other case) is getting a lot of press and making some taxpayers nervous about charitable giving. The IRS is examining charitable gifts more closely but don’t use that as a reason to scale back. It is clear that you have to be thoughtful about your donations. If you are expecting a deduction in exchange for the donation, get proper documentation. Get receipts. Keep good records. But for goodness sake, keep giving.
Nicholas Cage Tax Debt Grows
Nicolas Cage has another set of tax woes to add to what he has already described as a “catastrophic” financial meltdown. It’s not just the feds who have come calling; now the state of California wants Cage to pay up as well.
The Golden State has filed a lien against the actor and his wife for $3.8 million in delinquent taxes, according to the Detroit News. The lien was filed in April. According to Cage’s representative, “All entities are aware that this is in process and, from my understanding, all the parties are satisfied that everything will be paid back. Nicolas is doing everything that he needs to do to get these monies owed paid back.”
For those of you keeping score at home, that brings the total of unpaid federal and state tax liens filed against Cage to about $18 million. Here’s the math: assuming 4% interest compounded monthly, if Cage paid the IRS and California $100,000 per month, it would take him 275 months – or nearly 23 years – to pay off his debt. The now 46 year old actor would be nearly 70 years old when the debt was paid (kind of like me paying back my student loans). Ouch.
Jailhouse Tax Scam Leader Pleads Guilty
If you’re going to be stupid, this guy is in the right place for it:
A Florida prison inmate who allegedly ran a scheme to defraud the Internal Revenue Service of approximately $115,000 in tax refunds has pleaded guilty.
Shawn Clarke, 37, pleaded guilty to one count of conspiracy to defraud the government after the U.S. Attorney’s Office agreed to dismiss 24 other counts of filing or contributing to filing fraudulent tax returns, according to the Miami Herald. He faces up to 10 years in prison, three years of probation and a fine of $250,000. Clarke’s mother, sister and brother have also been indicted and taken similar guilty pleas.
Clarke and about 50 other inmates and relatives were involved in a scheme at Stock Island Detention Center in which the inmates filed 1040EZ and 4852 forms, filling in the names of fake or defunct businesses, and bogus income and withholding numbers. At one point, they wrote to the IRS asking to be sent the 4852 forms, which they did not have access to in jail. The refunds were typically for about $5,000. The money would usually be signed over to relatives or deposited in an inmate’s account.
Prison officials learned of the scheme when they discovered a how-to note in one inmate’s cell, and a bank officer didn’t trust a power-of-attorney form from a relative seeking to cash a check.
Another ringleader in the case, Danilo Suarez, and his brother and two other relatives are also facing charges. His trial is scheduled to begin in July.
Ten Last Minute Filing Tips
With the tax filing deadline close at hand, the IRS offers 10 tips for those still working on their tax returns:
- File Electronically Consider filing electronically instead of using paper tax forms. If you file electronically and choose to have your tax refund deposited directly into your bank account, you will have your money in as few as 10 days. Virtually everyone can prepare a return and electronically file it for free. For the second year, the IRS and its partners are offering the option of Free File Fillable Forms. Another option is Traditional Free File. About 98 million taxpayers – 70 percent of all taxpayers – are eligible for the IRS Traditional Free File.
- Check the Identification Numbers When filing a paper return carefully check the identification numbers — usually Social Security numbers — for each person listed. This includes you, your spouse, dependents and persons listed in relation to claims for the Child and Dependent Care Credit or Earned Income Tax Credit. Missing, incorrect or illegible Social Security numbers can delay or reduce a tax refund.
- Double-Check Your Figures If you are filing a paper return, you should double-check that you have correctly figured the refund or balance due.
- Check the Tax Tables If you are filing using the Free File Fillable Forms or a paper return you should double-check that you have used the right figure from the tax table.
- Sign your form You must sign and date your return. Both spouses must sign a joint return, even if only one had income. Anyone paid to prepare a return must also sign it.
- Mailing Your Return Use the coded envelope included with your tax package to mail your return. If you did not receive an envelope, check the section called “Where Do You File?” in the tax instruction booklet.
- Mailing a Payment People sending a payment should make the check out to “United States Treasury” and should enclose it with, but not attach it to the tax return or the Form 1040-V, Payment Voucher, if used. The check should include the Social Security number of the person listed first on the return, daytime phone number, the tax year and the type of form filed.
- Electronic Payments Electronic payment options are convenient, safe and secure methods for paying taxes. You can authorize an electronic funds withdrawal, or use a credit or a debit card. For more information on electronic payment options, visit IRS.gov.
- Extension to File By the April due date, you should either file a return or request an extension of time to file. Remember, the extension of time to file is not an extension of time to pay.
- IRS.gov Forms and publications and helpful information on a variety of tax subjects are available around the clock at IRS.gov. You can also check the status of your refund after you file your return by clicking on Where’s My Refund?.
Obama Administration Takes Heat for Planned Fat Tax
Citing statistics that nearly 34% of Americans are obese, more than double the percentage 30 years ago, the Obama administration has introduced plans to implement a fat tax. The proposed tax, which has already caused controversy, is expected to raise more than $21 billion in its first year alone.
Here’s how it would work: the federal form 1040 for 2011 will require taxpayers to list the weight of each dependent in the home at the time of filing. Tax would be calculated at one dollar per pound for each taxpayer. Tax would then be submitted as a separate check to the US Treasury with the designation “fat tax.”
In a nod to California, exceptions will be made for synthetic body parts including weaves and breast implants that add to a taxpayer’s overall weight; taxpayers claiming an adjustment will be required to attach a doctor’s note to their tax return. However, the “big hair exemption” proposed by Sen. Kay Bailey Hutchinson (R-TX) did not make it into the bill; opponents noted that despite the gravity-defying nature of big hair, it is organic to the taxpayer.
Answering concerns about those taxpayers who might lie about their weight in order to save a few dollars, IRS Commissioner Doug Shulman noted that we have a self-governing tax system in place now. Shulman expects compliance from most taxpayers. He cited statistics that 28 million Americans regularly lie about their weight, far fewer than lie about their income.
Shulman clarified that no ambush-style “weight audits” are planned but like laws that allow police officers to issue additional tickets once a car has been pulled over, the IRS would be able to weigh a taxpayer at a regular audit and assess an additional penalty. In the event that a taxpayer is found to have lied about his or her weight, the IRS would impose penalties equal to five times the taxpayer’s actual weight, plus interest. Weigh-ins would be at the IRS’ discretion and shoes and belts will remain on. To ensure accuracy, IRS weight agents would be specially trained by Alison Sweeney.
Shulman encourages taxpayers to be honest in order to avoid the penalty, reminding taxpayers that individual federal income tax returns remain confidential and are not subject to public scrutiny.
For those taxpayers who do not have access to an accurate scale, the IRS will be setting up a series of free scales in newly created OH NO (Obama’s Health iNitiative Opportunity) offices. Most will be set up in strip malls across the country, ideally next to a Jenny Craig. However, Shulman warned, don’t expect to see a smiling Valerie Bertinelli at an OH NO office: pandering will be strictly prohibited. Unless it’s from, say, Krispy Kreme or McDonalds, which will actually help boost tax revenues. Shulman defended the decision, claiming, “We’re not trying to sabotage anyone. But we need all the money that we can get.”
In a rare show of bipartisan cooperation, presidential hopeful Mike Huckabee applauded the Democrat’s tax plan as good for the country. Known for his own weight loss success (Huckabee lost as much as 110 pounds in 2003), Huckabee has been at the forefront of healthy iniatives. He has collaborated with former President Bill Clinton on initiatives such as the fight against childhood obesity. Reacting to the plan, he said, “Eating a little bit less is a great way to feel better and now, save on taxes!” Clinton, however, responded a little differently, saying, “I don’t care if I have to pay an extra dollar or two in taxes to this great country. I’m eating a hamburger when I want to.”
When Congress took to the floor to generate support for the plan, the talk focused on those issues that most concerned Americans: childhood obesity, increasing health care costs and general discomfort of passengers on airplanes. But the Speaker of the House focused on a bigger issue: the perception of Americans abroad. How bad is the perception? No Miss USA has won the title to Miss Universe in more than ten years. Speaker Pelosi (D-CA) noted that Miss Venezuela has taken home the crown twice, as has Miss Puerto Rico. “Even Miss Canada has won in the last ten years,” Pelosi noted, shaking her head and looking at her feet, “Canada.”
For whatever reason, our neighbors to the north appear generally more healthy. But we’ll fix that like we fix all problems: by taxing Americans.
How excited is Vice President Biden? When told that the plan would likely pass Congress, the vice president leaned in to Obama and said, “This is a big f**king deal.” Really big. Millions of pounds big. A couple of hours of bank bailout funds big.
Despite the controversy surrounding the bill, a vote is expected to take place later today, on April 1st, otherwise known as April Fool’s Day. Happy April Fool’s Day!