Kevin Colby: News, culture, political blog

IRS is getting rid of private debt collectors which had access to records pertaining to your tax debt.

The justification for the private debt collectors in the first place had always been that private industry can work more efficiently than government. That’s usually true in most cases. However, in this instance, the office of the National Taxpayer Advocate reports that the third party bill collectors actually cost more in expense than they were able to collect.

The IRS will, of course, now have to hire more collectors of their own to go after those people who haven’t paid their back taxes.   And that would be an increase in government and an increase in taxes on your hard earned paycheck.

If you owe money to the IRS and can’t pay, it’s tempting to not file. You probably figure, “Well, I can’t pay, so does it really matter whether or not I file?”

Yes, it does. The IRS has 2 penalties — failure to file and failure to pay. The former is a heavy-duty one, while the latter brings with it a lower rate of interest than your typical credit card.

Make sure you file on time even if you don’t have any money to pay. The IRS actually has an offer in compromise program where you can pay as you go if you’re financially stretched.

Are you a small business owner who is having trouble staying open? There’s always that temptation to not send the withholding you keep out of your employees’ checks and use it to keep your doors open. But this is never a smart move. Just file on time and get on a repayment plan.

But, I have a solution for this pain in the ass problem called the IRS.  What is it?

It is called the Fair Tax Act. What is the Fair Tax? The FairTax plan is a comprehensive proposal that replaces all federal income and payroll based taxes with an integrated approach including a progressive national retail sales tax, a prebate to ensure no American pays federal taxes on spending up to the poverty level, dollar-for-dollar federal revenue neutrality, and, through companion legislation, the repeal of the 16th Amendment.

* Enables workers to keep their entire paychecks
* Enables retirees to keep their entire pensions
* Refunds in advance the tax on purchases of basic necessities
* Allows American products to compete fairly
* Brings transparency and accountability to tax policy
* Ensures Social Security and Medicare funding
* Closes all loopholes and brings fairness to taxation
* Abolishes the IRS

Bill Archer, former head of House Ways and Means Committee did a survey on the fair tax. The survey was conducted among 500 European companies. One simple question was asked, ” What would you do if the U.S. installed the FairTax.” The responses where astounding. Four hundred said they would build their next plant here. The remaining one hundred said they would move their corporate headquarters here. My guess is that this would be just the tip of the iceberg as to what would follow. Our current tax code does the exact opposite. Product labels would contain the same foreign corporate names but the labels would also contain ” MADE IN THE U.S.A.”

For more info on the Fair Tax. Link.

Change that we can believe in:

Some interesting articles to read:

First, Barack Obama appointed tax cheater Timothy Geithner to head the IRS and now we have yet another Obama appointee who has failed to properly do his taxes: Tom Daschle.  Daschle will most likely be our secretary of Health and Human Services.

Here is a funny story though about Tom Daschle and his feelings on people who avoid paying taxes.  Back in 1998 Obama’s choice for HHS Director put a little statement on the Congressional Record. Ready? Here you go: “Make no mistake, tax cheaters cheat us all, and the IRS should enforce our laws to the letter.”

Well, those are some pretty strong feelings.  Let’s take a look at Daschle’s tax record:

When he left the U.S. Senate in 2005 - involuntarily - Daschle went to work as an advisor to an investment firm. By “advisor,” of course, we mean “lobbyist.” Now … how many of you get a company car? If you do you will know that you are expected to pay income taxes on the value of your personal use of that car. If you’re going to claim some business use you had better have it documented - mile by mile.   Back to Daschle.  As part of his compensation for his “work” for the investment firm Daschle he had the use of a .. get this .. limousine and a chauffeur! Somehow Daschle forgot to claim this as income on his tax returns for three years. Then along comes Obama to talk about a cabinet-level job with Daschle and suddenly Daschle’s knowledge of tax issues becomes more clear. He files an amended tax return claiming the $255,256 value of the limo and driver for three years. He also suddenly “remembers” that he had received about $83,333 in consulting fees in 2007 that somehow didn’t make it to his tax return, as well as some phony charitable contributions amounting to another $14,963. He coughs up about $140,167 in back taxes and interest and now everything is supposed to be just hunky dory.

Daschle said that he’s “deeply embarrassed and disappointed” about his failure to pay the taxes from 2005 through 2007.  Yeah right!  He’s only sorry because he was apppointed to a cabinet by President Obama and he had no choice but to pay the taxes.

There was a recent survey conducted about how Americans feel about not paying your taxes:

Nearly nine in 10 Americans say it is “not at all” acceptable to cheat on your taxes — a sticky issue for an Obama administration that has nominated two Cabinet officials with tax troubles.

The annual survey released Monday by the Internal Revenue Service Oversight Board found that only 9 percent of respondents thought it was ever OK to cheat on their taxes. Eighty-nine percent said it was never OK.

This is going to be an interesting first 4 years of this administration.

And speaking of taxes.  You know there is a bill in Congress called the Fair Tax act which would eliminate the IRS and avoid bullshit like tax evasion.  Have you heard of the Fair Tax?

What is the Fair Tax? The FairTax plan is a comprehensive proposal that replaces all federal income and payroll based taxes with an integrated approach including a progressive national retail sales tax, a prebate to ensure no American pays federal taxes on spending up to the poverty level, dollar-for-dollar federal revenue neutrality, and, through companion legislation, the repeal of the 16th Amendment.

* Enables workers to keep their entire paychecks
* Enables retirees to keep their entire pensions
* Refunds in advance the tax on purchases of basic necessities
* Allows American products to compete fairly
* Brings transparency and accountability to tax policy
* Ensures Social Security and Medicare funding
* Closes all loopholes and brings fairness to taxation
* Abolishes the IRS

The Fair Tax Act was first  introduced into Congress in 2007 and it is a bill to replace the current complicated income tax code. This tax code was written by Congressman John Linder. It will help reduce government power (gotta love that) and increase spending power for consumers and we all know Americans love to spend considering that Americans actually owe more money than they make.

The current tax code also has a hard time keeping people in compliance with the tax laws like tax evasion or illegal immigrants living and working here and not paying tax. The Fair Tax is a tax on all new goods and services. This is an absolute must that all Americans should get to know and understand what is involved in the Fair Tax, our future depends on it!

Visit www.fairtax.org

Some interesting articles from Clark Howard’s website:

New federal tax credits for solar panels

Now may be the perfect time to install solar paneling at your home, according to a recent USA TODAY report. There’s an oversupply of panels coupled with a severe drop in demand.  Read the full story.

Tips on surviving an audit

Have you ever been audited before? It’s most certainly not a fun experience. Clark was once audited 3 years in a row some 2 decades ago! At the time, he was in a limited partnership, which back then was an automatic audit trigger.  Read the full story.

Consumers becoming shifters with no brand or store loyalty

A recent IBM survey of 30,000 people uncovered several trends that speak to the dawn of a new day in consumerism.  Read the full story.

Dell reaches settlement over alleged customer-no-service

Did you receive customer-no-service from Dell in the past? The computer giant has agreed to a $1.5 million settlement to provide restitution to consumers in up to 46 states.  Read the full story.

A tax cheat has become our Secretary of the Treasury. Tim Geithner, the man behind the “Troubled Asset Relief Program.”   And then the government wonders why it can’t keep track of the money that it has sent to banks that us taxpayers had to bailout or else our whole economic system would explode.  Yeah, it’s working really well now isn’t it.

Now, if Geithner was a Republican in the Bush Administration, do you think that the Liberal media and the Democrats would have let him off the hook?   We have an economic crisis, so we’re told that its just fine if we have a tax cheat running the department that includes the Internal Revenue Service.  So if we have crooks running the IRS, tell me, where is the change?

Some interesting articles from Clark Howard’s website:

New kinder, gentler IRS policies

Owing money to the IRS can be one of the most uncomfortable things in the world. But now, in a surprise move, IRS Commissioner Doug Shulman has announced new initiatives aimed to help taxpayers who are unable to make good on their tax debt because of financial hardship.  Read the full story.

Executives who refuse bonuses and golden parachutes

Executive compensation is something of a sore point for Clark. In some of its more outrageous examples, you have former Home Depot CEO Bob Nardelli who received $130 million as part of his exit package. Meanwhile, Countrywide CEO Angelo Mozilo got $120 million when he exited — after playing a major role in our subprime mortgage crisis.   Read the full story.

Track your mortgage with a free amortization schedule

Years ago when Clark had his first home, the mortgage was sold off by the lender, and the result was a dispute about the balance. Clark contended he owed around $3,000 less than the new servicer of his mortgage claimed.  Read the full story.

Jan 26, 2009 — Ways to exit your cell phone contract

Looking to get out of your cell phone contract? CellSwapper.com and CellTradeUSA.com both offer you the chance. The type of phone you have is very important when you’re looking to swap — that is, the “hotter” your phone, the more likely someone else will want it.   Read the full story.

Some interesting articles from Clark Howard’s website:

Free e-filing for all through the IRS this year

Did you know that you can prepare and e-file your income tax completely for free this year regardless of your income? Last year the IRS had strict limits on who could use free tax prep software.  Read the full story.

Honda, Chrysler oversupply presents hazard and opportunity

CLARKONOMICS: One common measure of an automaker’s overall health is the days’ worth of supply they like to have on their dealers’ lots.  Read the full story.

Clark details his bidding secrets for upcoming Las Vegas trip

Clark and his wife are about to embark on a trip to Las Vegas thanks to some cheap airfare they managed to land. Though they’ll be going on a holiday weekend, they had no trouble finding bookings at hotels.   Read the full story.

Some interesting articles to read: