Rangel Rule

[WhiteOleander]

Congressman John Carter(R) of Texas wants to do away with interest and penalties for taxpayers who do not pay their taxes on time. He says since Charles Rangel did not pay any interest or penalties for underpaying his taxes, the same rule should extend to the American public.

http://www.foxnews.com/politics/2009/01/28/gop-congressman-intros-rangel-rule-eliminating-irs-late-fees/

Maybe it should be the Rangel/Greithner rule.

[taxea]

Congress has the power to do this so I am waiting to see whether he is all mouth or intends to pass a law that in essense would allow taxpayers to pay their past liabilities without penalty and interest. I have never known the IRS to waive interest. It is common for them to waive penalties. I haven't read the entire articles on the Rangel Rule...did it include a waiver of interest?

Everyone write this congressman and yours. taxea

[DaveO]

I wrote my congressman today. Looking at this seriously and not political gotcha this could be a major revenue raiser when congress is otherwise giving away the store.

If all back taxes could be paid in a lump sum all P&I would be abated. I have several clients that could get a clean start under those rules. As it is they face far more difficult choices. An OIC, a bankruptcy or playing hide and seek until the statute of limitations runs out. This is worthy of serious consideration if only for a one time deal.

[taxea]

I think they would do just as well if they would allow an installment agreement with no penalties and interest attached, unless and until, the taxpayer violated the terms of the IA. taxea

[Snaggletooth]

Me Too

As strange as it sounds, I agree with the idea set forth by taxea.

Revenue people would think I was crazy to give up penalties and interest, but I think this would be more than offset by the increase in collections of delinquent accounts. This would give the delinquent taxpayers quite an incentive to pay up.

Oleander, I believe if you are from Texas, you might keep in contact with Rep Carter's office just to see how well his bill is progressing. My guess is that it will go nowhere, but would certainly get my vote in a heartbeat.

[WhiteOleander]

As strange as it sounds, I agree with the idea set forth by taxea.

Revenue people would think I was crazy to give up penalties and interest, but I think this would be more than offset by the increase in collections of delinquent accounts. This would give the delinquent taxpayers quite an incentive to pay up.

Oleander, I believe if you are from Texas, you might keep in contact with Rep Carter's office just to see how well his bill is progressing. My guess is that it will go nowhere, but would certainly get my vote in a heartbeat.

Yes, I'm in Texas. I will try to see if I can get anything more on it. Carter is not my Congressman, but he might respond to my question.

[taxea]

Immunity from penalties has been done before by the IRS and various states.

My suggestion is that we all write our congressmen, and ask our clients to do the same, suggesting that immunity from penalties and interest for those who can pay liability in full or by IA for a period of time would bring in more taxes that are owed then threatening the taxpayer with levys and leins. taxea

[LCP]

Rangel's troubles are coming to a head as the counsel for the House Ethics Committee recommended censure today.

Does anybody know how much he repaid in back taxes for the five years?

Is it a fact that he did not pay any interest or penalties?

Anybody know what he might have owed for the other 12 years that had tolled?

[JohnH]

His troubles are about to be over.
There's going to be a lot of fanfare and then they'll sweep it under the rug.
A slap on the wrist coupled with a sincere promise not to do it again...

[Uncle Sam]

Rangel Rule

This should be better known as the Rangle Angle.

[joanmcq]

Penalties could be abated for a variety of reasons. I didn't see anything in the article about interest being waived. also, penalties are usually not assessed if the tax due for any year is less than 5K unless you are a repeat offender.

Really the amount of income that was not reported on the property was really small if you look at it per year. If I remember correctly the INCOME was less than 5K per year, so the tax couldn't have been more than about 3K.

Small beans when you see the kind of stuff I do. Of course as a Senator, and chair of the finance committee I would hold him to a higher standard. Just like I hold myself to a higher standard.

[veritas]

I would eliminate penalties

for those that come forward voluntarily.

[joanmcq]

Usually they do. Its called amending your return.

[veritas]

Amended return?

Usually they do. Its called amending your return.

"Congressman John Carter(R) of Texas wants to do away with interest and penalties for taxpayers who do not pay their taxes on time."

[JohnH]

To me, the most disgusting thing about the whole Charles Rangel affair is that he and his sycophants actually think this is about him. He's been putting on a good show, but there's no substance there. In actuality, this is a significant matter of public trust in our insitutions and political leaders. Sadly and predictably, everyone with any responsibility in this entire charade has failed miserably.

They're all playing their part in the 3-ring circus, and personally I'm getting very tired of replacing one very expensive set of clowns with another.