Tax “Breaks” Heading For Extinction?
If the nonpartisan Congressional Research Service has its way, a few tax “breaks” (to use The Wall Street Journal‘s jargon) may be headed straight out the door. That’s because, you see, these so-called “breaks” cost the government something like $1 trillion a year!
We are always offended by use of words like “breaks” in a discussion of this sort, inasmuch as Congress over the decades has done its very best to accomplish its ever-changing social engineering goals, resulting in tax incentives which some view as “breaks,” and which others consider sound policy.
In any case, check out “The Challenge of Individual Income Tax Reform: An Economic Analysis of Tax Base Broadening” if you want to learn more about all of these offensive-to-some tax provisions which might be on the chopping block – some of them may even be applicable to you. Among the top ten:
~Exclusion from taxable income of employer provided health insurance (tax effect
of about $164 billion per year)
~Exclusion of employer pensions ($163 billion cost)
~Mortgage interest deduction ($100 billion)
And while you’re potentially waving bye-bye to some of your favorite tax incentives, get ready to also perhaps lose a little more control over your privacy in the name of IRS efforts to combat tax fraud.
That’s because such a big increase in tax refund fraud and identity theft, in recent years, has moved the Revenooers to conclude that they should “share” more tax return info with police, in a combined effort to catch more of the bad guys.
Seems IRS is considering a pilot program in the Tampa, Florida area, where identity theft and refund fraud run amok.
“We are limited in what we can supply to local law enforcement,” quoth Steven Miller, deputy IRS Commish for Services and Enforcement. “There was a reason why we are limited in providing to local law enforcement, in an unfettered matter, tax returns. Congress has treated tax return information as sacrosanct,” since 1976, when Congress made it a crime for IRS to share taxpayer information.
And the Taxpayer Advocate, Nina Olson, has also weighed in on this one – cautioning that once local law enforcement has access to taxpayers’ information, who knows where that info could ultimately land.
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, and invites readers to consider his other commentary at http://blog.nolo.com/taxes.