“Extenders” Deal Looms
We hear that even though they were on vacation last week, some Congresspersons actually found a minute or two to conduct some last minute business as year end approaches – discussing with their colleagues and possibly finding some common ground under which some of the “extender” provisions (Internal Revenue Code sections which have lapsed unless Congress acts to the contrary before 12/31) could be made permanent, and others left in place for at least another year.
Among those which look like they may become permanent:
- Deduction for state and local sales taxes (of value to Nevadans, most of whom don’t pay any state income taxes)
- Expensing of up to $500,000 of otherwise depreciable property purchased and placed in service during the year
- Tax free distributions for charitable purposes from individual retirement accounts of taxpayers age 70-1/2 or older
And among those which look like they may be good for at least another year:
- $250 “above the line” deduction for certain expenses incurred by teachers
- Deduction for mortgage insurance premiums treated as qualified mortgage interest
- Exclusion of up to $2 million of discharged principal residence indebtedness from gross income
None of this is “carved in stone,” yet, so keep an eye on what Congress actually
does before New Years’ Eve.
And here comes our old friend TIGTA (Treasury Inspector General for Tax Administration) again slapping the IRS’ hand for not minding their p’s and q’s.
To put it bluntly, TIGTA’s recent audit report says some IRS computer systems need modifications to better reflect current procedures.
Seems IRS computers utilize a coding system to identify situations (generally referred to as “freeze conditions”) which either require special handling or for which IRS is awaiting the outcome of a future event. When taxpayer accounts are in “credit” status (i.e.-Obama owes you money) and are also burdened with one of these codes, they are considered frozen credit accounts. TIGTA says “If freeze conditions are not adequately identified and resolved, IRS processing of taxpayer frozen credit accounts can be delayed and taxpayers can be adversely affected by delayed refunds or payments not applied to the proper tax modules.” Audit findings included a bunch of individual return problems with credits of over $46 million pending, and even more business tax problems with credits of almost $1.6 billion for which IRS did not take actions that could have resolved the matters sooner!
And finally, we hear that the Daily Treasury Statement released last week says Obama’s government minions have managed to add over $1 trillion in new debt since fiscal 2015 started just eight weeks ago, in order to raise the dough needed to pay off Treasury securities that were maturing, and to cover new deficit spending by Uncle Sam!
Sound like a Ponzi scheme to you? Here’s Treasury Secretary Jack Lew: “Every week we roll over approximately $100 billion in U.S. bills. If U.S. bondholders decided that they wanted to be repaid rather than continuing to roll over their investments, we could unexpectedly dissipate our entire cash balance.”
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 shareholder in Ashley Quinn, CPAs and Consultants, Ltd., with offices in Incline Village and Reno. He may be reached at 831-7288, welcomes comments at firstname.lastname@example.org