Trumps tax returns

It seems that there is a certain group of people obsessed with the idea of obtaining Donald Trumps tax returns.  This group seems to have been reanimated last week when Rep Bill Pascrell (D-N.J.) wrote a letter to the chairman of the House Ways and Means Committee requesting that they use their authority to request Trumps returns and review them for potential conflicts of interest.  I have seen several articles claiming that congress has the authority to review and release confidential tax information without the taxpayers consent, but they are just plain wrong.

There are certain committees of congress that have the authority to review confidential tax information but not to release it without the written consent of the taxpayer or taxpayers involved.  Here’s the wording of IRC section 6103(f) which deals with the subject.

(f)Disclosure to Committees of Congress

(1)Committee on Ways and Means, Committee on Finance, and Joint Committee on Taxation

Upon written request from the chairman of the Committee on Ways and Means of the House of Representatives, the chairman of the Committee on Finance of the Senate, or the chairman of the Joint Committee on Taxation, the Secretary shall furnish such committee with any return or return information specified in such request, except that any return or return information which can be associated with, or otherwise identify, directly or indirectly, a particular taxpayer shall be furnished to such committee only when sitting in closed executive session unless such taxpayer otherwise consents in writing to such disclosure.

2017 Standard Mileage Rates…and other IRS stuff

IRS has announced that the standard rates for mileage for 2017 are 53.5 cents per mile for business use, 17 cents per mile for medical or moving expense, and 14 cents per mile for medical. In a separate announcement, they have stated they will begin processing 2016 tax returns on January 23, 2017. Many due dates are changing for forms and tax returns also. Here’s a link to a blog I wrote for the BBB with more information.

Tax Court rules “cash for keys” payment is not ordinary income.

Cash for keys payments have become fairly common in cases of struggling homeowners facing foreclosure.  To avoid a lengthy and expensive foreclosure process, many lenders offer a cash incentive to homeowners to vacate the property quickly and to leave it in good condition.  Often these lenders issue a 1099-Misc to the homeowner showing that the payment is nonemployee compensation which would be taxed to the individuals as ordinary income subject to self employment tax.  In TC Summary Opinion 2016-74 the tax court again confirms that this treatment is not correct.  In the above case, the CPA for the taxpayers included the payment as part of the sales proceeds of the property and not as ordinary income.  The IRS disagreed and assessed additional taxes against them so they went to court.  The tax court agreed with the position taken by the CPA and not the IRS.  Cancellation of debt income is a complex tax issue.  It pays to have competent tax advice from someone such as an Enrolled Agent or CPA if you are facing this issue.

Giving Tuesday

Let’s see, we just had Thanksgiving, then Black Friday to spend our money at stores, Cyber Monday to spend online, and next comes Giving Tuesday if you still have any money left.  Here’s a link from the IRS with some information about tax deductible donations.  If you have any questions regarding what gifts are deductible, let us know.

Energy credits expiring at end of year

Most of the energy credits existing under current federal law expire at the end of 2016.  Solar energy credits have been extended but a variety of credits for energy efficient windows, doors, A/C systems etc expire on December 31st.  For anyone still wishing to take advantage of these credits, the items need to be installed and in use by December 31st.  As a caveat, these credits have expired before and then been reinstated by congress.  Will these credits be extended by the lame duck congress or reinstated in the future?  Well, my crystal ball isn’t working this morning so we will have to stay tuned to see what happens.

CA sales tax decreases on 1/1/2017

Good news for CA taxpayers!  A temporary increase to sales tax approved by voters expires on 12/31/2016.  In 2017 the rate drops by .25%.  So for all of those looking to purchase your newly approved recreational marijuana, you will pay slightly less in sales tax.  However, there are cultivation taxes, a 15% statewide excise tax and local governments can also add local taxes to your cannabis purchases.

Another group of IRS scammers arrested

Twenty people were recently arrested in another fake IRS scam.  This one involved call centers in India and runners doing some of the ground work in the US.  These scammers convinced people that they would be arrested if they didn’t make immediate payments through a variety of gift cards.  The real IRS does not accept gift cards to pay tax bills.  But, they have set up locations where tax payments can be made in cash through authorized vendors.  For details on this new program see here.