Assured Tax

Think your tax returns are only between you and the IRS?  This information about the proposed health care bill is from CBS news...

Section 431(a) of the bill says that the IRS must divulge taxpayer identity information, including the filing status, the modified adjusted gross income, the number of dependents, and "other information as is prescribed by" regulation. That information will be provided to the new Health Choices Commissioner and state health programs and used to determine who qualifies for "affordability credits."

Section 245(b)(2)(A) says the IRS must divulge tax return details -- there's no specified limit on what's available or unavailable -- to the Health Choices Commissioner. The purpose, again, is to verify "affordability credits."

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IRS urged to investigate tuition tax-credit offer

Dem legislators want examination of private-school tuition tax credits

The Arizona Republic

Democratic legislators on Tuesday called for a federal investigation into a state program that uses tuition tax credits to help students attend private schools.

The lawmakers also called for the formation of a legislative task force to study the program, which has been the subject of media scrutiny in recent weeks.

Earlier this month, The Arizona Republic reported that the tuition tax-credits program has fallen short of its original goal to put a private-school education within reach of the state's poorest students. Additionally, some elected officials have benefited financially from their involvement with the non-profit school-tuition organizations. Many of the scholarships have been dispensed to upper- income students who didn't require financial assistance.

Over and above all, this program has failed to do what it was intended to do," said state Rep. Cloves Campbell, a Phoenix Democrat.

Since 1998, the private-school program has diverted $349 million from taxpayers to private tuition organizations that have little oversight from the state. Taxpayers receive tax credits for their gifts, and some have swapped donations with others to help finance private-school costs for their own or relatives' children. That practice may be contrary to federal and state rules.

In similar reports last week, the East Valley Tribune also found that executives of two of the largest organizations may have violated federal non-profit rules regarding excessive compensation.

House Democratic legislative leaders issued a letter seeking an inquiry into the program that was sent to Douglas Shulman of the Internal Revenue Service and John Tuchi, interim U.S. attorney for the district of Arizona. House Minority Leader David Lujan, a Phoenix Democrat, said the program needs closer scrutiny.

"Arizonans have seen this go on for too long," Lujan said in a statement. "Too many questions and concerns have been raised about this program and its reported violations of various laws."

Democrats have long been skeptical of the tuition tax-credit program, leading some Republicans to disregard Tuesday's announcement as little more than the usual Capitol theater.

Rep. John Kavanagh conceded that the common practice among families of earmarking scholarship donations for each others' children is "something that needs closer attention," but said the program in total remains a success.

"Overall, it saves the state a lot of money and it gives students choice," said Kavanagh, a Fountain Hills Republican and chairman of the House Appropriations Committee.

Democrats would like to form a 10-member, bipartisan legislative panel to study the program.

They hope to convene the group next month, with the intent of readying reform legislation in time for the January start of the next regular legislative session.

It remains unclear whether any Republicans will accept the invitation to join the task force.

Anne Hilby, a spokeswoman for Attorney General Terry Goddard, said he is "troubled by the allegations" but cited standard policy that they do not comment about whether they will investigate.

Only nine states have the costly rules that Obama wants to impose nationwide. This is a WSJ editorial showing pitfalls produced by some state insurance regulation now proposed for the country.

This is a quick read on Whole Foods employee health insurance.  WSJ 8/11/09 opinion piece by John Mackey the CEO of Whole Foods Market.

Identity-fraud rates are at their highest level in five years. But while most people imagine that sophisticated hackers pose the biggest threat to ID security, the majority of data breaches are accidental. (Click to read the rest of the article at Smart Money.com)

The process is full of politics and is tugging on your purse.  The Goldwater Institute has added to the discussion.  This time I'm in agreement with GI.

"At the Goldwater Institute in Phoenix, economist Byron Schlomach noted some spending cuts that should take precedence over harmful tax increases-written when the budget shortfall was only $1 billion.  Another Goldwater report by economist Art Laffer (using Tax Foundation data) recommends lower taxes and a flat tax rate on either consumption or income to encourage growth, competitiveness, and efficiency."

IRS Warns Taxpayers to Beware of First-Time Homebuyer Credit Fraud   IR-2009-69, July 29, 2009

WASHINGTON — The Internal Revenue Service today announced its first successful prosecution related to fraud involving the first-time homebuyer credit and warned taxpayers to beware of this type of scheme.

On Thursday July 23, 2009, a Jacksonville, Fla.-tax preparer, James Otto Price III, pled guilty to falsely claiming the first-time homebuyer credit on a client’s federal tax return. Price faces the possibility of up to three years in jail, a fine of as much as $250,000, or both.

To date, the IRS has executed seven search warrants and currently has 24 open criminal investigations in pursuit of potential instances of fraud involving the credit. The agency has a number of sophisticated computer screening tools to quickly identify returns that may contain fraudulent claims for the first-time homebuyer credit.

“We will vigorously pursue anyone who falsely tries to claim this or any other tax credit or deduction,” said Eileen Mayer, Chief, IRS Criminal Investigation. “The penalties for tax fraud are steep. Taxpayers should be wary of anyone who promises to get them a big refund.”

Whether a taxpayer prepares his or her own return or uses the services of a paid preparer, it is the taxpayer who is ultimately responsible for the accuracy of the return. Fraudulent returns may result not only in the required payment of back taxes but also in penalties and interest.

First-Time Homebuyer Credit

The First-Time Homebuyer Credit, originally passed in 2008 and modified in 2009, provides up to $8,000 for first-time homebuyers. The purchaser, however, must qualify as a first-time homebuyer, which for purposes of this credit means someone who has not owned a primary residence in the past three years. If the taxpayer is married, this requirement also applies to the taxpayer’s spouse. The home purchase must close before Dec. 1, 2009, to qualify, and the credit may not be claimed on the purchaser’s tax return until after the taxpayer closes and has purchased the home.

Different rules apply for homes bought in 2008.

Tons of documents and tax returns were shredded with the help of PD Shred (the shredding company that Assured Tax uses) at the event sponsored and paid for by the Scottsdale Fraternal Order of Police. 

Chet Anderson, the FOP's President, said that although it was very hot, Saturday's event was very well received.  He also said that another community event will be held to help reduce the scourge of identity theft by eliminating the source from personal documents.

We'll let everyone know when the next event will be!