Celebrate Your Freedom!
Tax Freedom, that is! You actually just achieved it about a week ago, according to the Tax Foundation. “Tax Freedom Day” 2016 just passed – on April 24, or 114 days (not counting “Leap Day”) into the new year. And indeed, “Freedom” comes one day earlier than last year!
That’s the good news. You will mope when you hear that Americans will spend more on taxes in 2016 than they will on food, clothing, and housing combined! And when you include Federal borrowing, Tax Freedom Day won’t hit until May 10! (The latest ever deficit-inclusive Tax Freedom Day occurred during World War II – on May 25, 1945.)
Indeed, freedom would come earlier each year if it weren’t for all those tax scofflaws out there who just refuse to pay their fair share. Recently released IRS stats have measured the “tax gap” based on the 2008 to 2010 time frame: some $406 billion! That would be the gross gap of about $458 billion, less what the Revenooers think will be subsequently collected – either paid voluntarily or resulting from IRS administrative and enforcement activities. Nonetheless, ugly considering the overall compliance rate is just over 80 percent, according to these IRS numbers.
And all you folks continually worked up about IRS’ nasty habit of annually snooping into your foreign investment affairs have just lost another one, before an Ohio District Court. Seems the Court dismissed a suit brought by Senator Rand Paul (R-KY) and a handful of other folks challenging the infamous Foreign Account Tax Compliance Act (“FATCA”) and Foreign Bank Account Report (“FBAR”) requirements.
The Court found that Senator Paul’s alleged diminution of political power was not a sufficient injury for purposes of enabling him “standing” to bring this suit, and the other plaintiffs had asserted largely hypothetical injuries or harms which were not traceable to actions of the United States government.
CONSULT YOUR TAX ADVISOR – This article contains general information about various tax matters. You should consult your CPA regarding the implications to your own particular situation.
Jeff Quinn, the author of this article, is a CPA, recently retired from Ashley Quinn, CPAs and Consultants, Ltd., with offices in Incline Village and Reno. He welcomes comments at email@example.com.