This Proposal Would Affect Us....

[AZ-Tax]

I prefer not to get into discussions regarding politics but this one concerns us:

I copied and pasted from the following website

http://www.cnn.com/2007/POLITICS/09/18/obama.taxplan/index.htm

"Obama also said he'd simplify the tax code so that any employed American with a bank account can do their taxes in minutes if they take the standard deduction. It makes sense, he said, because the Internal Revenue Service already collects wage and bank account information.

"There's no reason the IRS can't send Americans pre-filled tax forms to verify," he said. "This means no more worry. No more wasted time. No more extra expenses for a tax preparer."


Your thoughts?

[les grans]

. ***Cynicism Alert!!***
Says Obama: "...so that any employed American with a bank account can do their taxes in minutes..."
Says me: "Why should I have to be employed and have a bank account to be able to do my taxes in minutes...?"

[FEDUKE404]

Wow!

The Schedule C folks, and retirees, and cash-only workers (what bank account?!?) should absolutely LOVE it!

[jimmcg]

Just bring on the flat tax!

[Jiggers]

Not so smart

Obama really has no clue as to our income tax situation.

Of course, probably 99% of our elected officials do not have a clue either.

[les grans]

It is *not* that they don't have a clue. They have many clues, they just don't know how to follow them!!

[erchess]

I think Obama is simply

speaking everyday language rather than the language of tax professionals. I think what he means is that if your only income is from wages reported on a W2, bank interest, dividends, and anything else already reported to the government, and you don't have or don't choose to take any deductions except the Standard Deduction for your filing status, then the IRS could prepare your return and send it to you for you to approve or argue with. They already prepare that return for all non filers who are in their system but they only print and mail the ones that appear on that basis to owe money. The only people for whom this could not be done competently would be those who need to report and deduct expenses that would not be known to the Service. It's hard for me to see how this would hurt anyone but the RAL Shops, and they might be able to adapt to it. I personally have only about ten percent of my clients who have returns that the Service could have done and I wouldn't mind simply checking them over in ten percent of the time for ten percent of the fee. In the probably 20% of cases where the government was wrong my fees would increase by an aggregate of more than my loss because where it was wrong the government would demand proof.

You have to remember that Obama is a Liberal Democrat so he thinks taxes on the middle class and up are much too low and he thinks that the government should employ half the working public and government employees once hired and through a short probationary period should be all but impossible to fire. If you don't like his ideas vote against him but I don't see that he is threatening to do anything to users of this board beyond what he would do to the country as a whole.

[Jiggers]

'splain to me...

I handle a lot of Schedule C's, E's, and F's where there are no 1099 tracing documents issued to the taxpayer or by the taxpayer.

The IRS would have no clue if my clients would not voluntarily report this income on their return.

How in the blue blazes would the IRS know about this income if Mr. O's plan comes about? Voluntarily reporting? Under threat of audit? The IRS can't audit enough now, much less then.

The underground cash economy, commonly known as "Hip Pocket National Bank" would flourish even more.

[ED SMITH]

Wait 24 hours and he will change his position on this.

[erchess]

Jiggers

That's just it - Obama's plan is only applicable for those taxpayers whose only sources of income are already being reported to the IRS and are not subject to deductions about which the IRS knows nothing.

In other words, Obama's plan will more or less knock out the RAL / EIC crowd from having to see professionals to do more than simply check, as opposed to prepare, their returns.

I'm not saying Obama has a great idea here but I don't see the threat to a tax professional whose client base consists mainly of clients who take deductions that the IRS does not know about. Even the shops that specialize in these "Obama Clients" can adapt. Instead of preparing the returns they will scan them into computers and check them both with human eyes and computers and interview the clients to see that nothing has been omitted. They will have to charge less but that will be ok because the process will take less time for most clients. However, 20% or more of the "Obama Returns" will be incorrect and the recipients of these returns will need to pay for representation. This will restore the lost revenue and the need for manpower.

[Uncle Sam]

O's Proposal

I don't see it either as a threat to us.
Remember a few years ago some Wash DC politician came up with the idea of "Flat Tax"?
How far did that go? It was good political talk during an election year campaign.

If he can make a remark like that, it shows how ignorant he is of understanding how the tax system works.

[Jiggers]

Non-believer, me, that is......

Even the shops that specialize in these "Obama Clients" can adapt. Instead of preparing the returns they will scan them into computers and check them both with human eyes and computers and interview the clients to see that nothing has been omitted. They will have to charge less but that will be ok because the process will take less time for most clients. However, 20% or more of the "Obama Returns" will be incorrect and the recipients of these returns will need to pay for representation. This will restore the lost revenue and the need for manpower.

I do not do RAL's. And just a handful of 1040A's.

But I know human nature. Those that have to use those firms for services now, must do so because they do not comprehend the tax laws on just simple returns. If they recevie a notice from the IRS saying that this is their income and this is their refund, do you really think they would take it somewhere to have it checked? I doubt it.

If the IRS left off a W-2 or a 1099, or the interest income and principal from a seller-financed mortgage, do you think they will correct the IRS. The chances of that error being caught by the IRS would probably be slim and none; and Slim left town!

If my Schedule C, E, & F clients, who also have W-2's, 1099INT's and 1099DIV's, and 1099R's, do you think they are going to bring it to me to tell the IRS that they forgot to report the income from that C, E, or F?

Dream on.

Don't get me wrong, Mr. O does have some great ideas, especially for "Change". I am tired of both parties doing nothing for many years now. I am really upset that Mrs., Speaker, left town without working on the energy bill. Any energy bill. And I am upset that there has nothing been done since the 70's when there was the first energy crisis. Just talk, no action.

But, I am also tired of politicians of both parties, talking about stuff and making recomendations about stuff that they have no clue about.

[ChEAr$]

But

what about my real estate tax deduction this next time round?
(grin

[WhiteOleander]

Obama either has no idea how the system works, or he thinks we don't know. Or both.

If the w-2's and 1099's etc don't have to be out to the people until Jan 31st, how does he think the IRS will have the info before then to process these "easy" returns? They don't even have access to the informational returns that are sent electronically that early in the tax season.

The IRS doesn't have enough personnel to do what they need to do now. And so he's going to add on tax prep? Oh yeah. That'll work out great.

[BOB W]

Obama is pandering to the low income Democrats and Independents who see life in simple terms, just to get him votes. This group has no clue that they would get their refund in July.

It is true, Obama has no clue of how things work and if he wins and makes any "Changes" it would end up being called "The Unraveling" of life in the US. Maybe "Polosie" should be his Vice President, just to make sure nothing changes..

Anyway, I know several client that would like to know what the IRS knows about them before they file their tax return.