The View From The Cliff

Internal Revenue Service
I thought it my be helpful to give some hypothetical tax examples in order to get a clearer picture of the view from the cliff top we face January 1. Jason  is single and has an adjusted gross income of $60,000 a year. As is the case among two-thirds of the tax-paying population, Joe claims the standard deduction.  After subtracting the projected 2013 personal exemption of $3,850 and standard deduction of $6,050 for a single taxpayer, Jason's taxable income comes to $50,100. If the current tax laws are extended beyond 2012, that would mean $8,900 of Jason's income would be taxed at only 10 percent, and his top tax rate would be 25 percent. This would leave him with a tax liability of $8,465.  If the current rates expire, however,…
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Fraudulent Tax Returns Up 181%

Internal Revenue Service
The number of taxpayers trying to bamboozle the IRS and collect bigger refunds has shot up this filing season. The IRS identified 335,341 tax returns claiming $1.9 billion in fraudulent refunds as of March 4, 2011, according to the findings of an audit conducted by the Treasury Inspector General for Tax Administration. That's a whopping 181% increase from the same period last year. While the IRS has become more effective in its screening process, a weak economy has also driven more people to cut corners, said Tim Gagnon, assistant academic specialist of Accounting at Northeastern University. "When the economy gets really bad, people get more touchy about how much they're paying in taxes and look at where they think they can push the envelope a little more," said Gagnon. "100…
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IRS Versus The Wealthy

IRS Versus The Wealthy

Internal Revenue Service
IRS Push Against the Wealthy Is All Talk, Little Action The Transactional Records Access Clearinghouse at Syracuse University has released a report, IRS Global High Wealth Taxpayer Program Lags: A year and a half ago, in the fall of 2009, the IRS created a special new unit to examine "high wealth individuals" and the extent to which they were complying with the tax laws. In an October 2009 speech announcing the new program, IRS Commissioner Douglas Shulman said that the purpose of the Global High Wealth Industry Group (GHWIG) was to "centralize and focus the IRS compliance expertise" on "high wealth individuals and their related entities." To give prominence to this program direction, the new agency organization was established as an entire "industry" group. The five other industry groups cover large…
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