Archive for the ‘Commentary’ Category

Internal Revenue But No Service

January 15, 2015

By Kaye A. Thomas
Current as of January 15, 2015

The Taxpayer Advocate has released a depressing report.

Internal Revenue ServiceTaxpayer service levels at the IRS have been declining for the last ten years. In 2004, the IRS answered 87% of calls from taxpayers seeking assistance, with an average hold time of 2½ minutes. On its toll-free lines and in roughly 400 walk-in sites, taxpayers received help on a wide range of tax questions. Tax return preparation assistance was provided to hundreds of thousands of taxpayers, many of them low-income, elderly or disabled. Here is what we can expect for 2015:


Wrongheaded Attack on Option Deduction

November 7, 2013
By Kaye A. Thomas

Every highly publicized IPO — this time it’s Twitter — provokes renewed attacks on rules permitting corporations to claim a deduction corresponding to the amount of option income reported by executives and other employees. These wrongheaded attacks are based on the notion that current law works to the detriment of the Treasury in allowing an overly generous tax treatment. The truth is exactly the opposite: the government benefits hugely from the current tax treatment of stock options.


CCH Gets Political?

January 4, 2013

“The new law effectively raises taxes for all wage earners (and those self-employed) by not extending the 2012 payroll tax holiday that had reduced OASDI taxes from 6.2 percent to 4.2 percent.”

We were surprised to see this statement in a release from CCH, which is generally known for highly accurate, and studiously nonpolitical, reporting of tax developments. It’s well known that the payroll tax holiday was always intended as a temporary measure that would expire when the economy was in recovery. An extension of this measure was never part of the fiscal cliff discussions leading to enactment of the American Taxpayer Relief Act of 2012 (“ATRA”).

The suggestion that ATRA was somehow responsible for terminating this measure has become a talking point for conservatives who want to pretend that the law raises taxes on middle income taxpayers. CCH dropped the ball in permitting a misleading, partisan statement in one of its normally neutral tax reports.

The Tax Law: What to Call It

December 17, 2010

Congress gives a name to every piece of major legislation, and people who work with those laws (or write about them) generally end up using that name, or a shortened version — often the initials of that name. Some roll off the tongue better than others. COBRA may be mysterious in its origins, but it’s easy to say and by now we all know it refers to a law that lets us extend our health insurance coverage in some situations. People who work with pension laws like to say that ERISA, the granddaddy of them all, stands for Every Ridiculous Idea Since Adam.

The naming of laws took a downturn in the aughts, with tongue-twisters such as JGTRRA. Speakers of Spanish know how to pronounce a double-r but the rest of us are at a loss. Somehow we adapted.

Now we have — I am not making this up — the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010. Want to use the initials? Here you go: TRUIRJCA.

Call this my Tea Party moment if you want: I’ve had it. I refuse to use that name. In my writing it will simply be the tax cut extension law. I hope others follow my lead. And I yearn for the time when Congress understands that even if they can’t write laws that work, they can at least give them workable names.



Who Won the Tax Battle?

December 12, 2010

The tax deal has turned House Democrats into a flock of angry birds. Are they right to be this upset? Let’s look at the scorecard. (more…)

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