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Showing posts with the label Taxation

Congress Finally Addressing Tax Reform

Congress refused for over a decade to make the Estate and Gift Tax law changes. They only passed a last-minute 2 year extension in December. The Internal Revenue Code was last overhauled in 1986 in the Reagan era attempt toward simplification. Since then, more than 20,000 amendments and additions have been made. The result is a patchwork mess which is filled with "tricks" and "gottchas" making the Tax Code incomprehensible. THe other issue is the high tax rates and the taxation of worldwide income. Most developed countries, including those in the European Union, only tax income earned in their own country. This worldwide taxation puts US companies and citizens at a big disadvantage. This hurts jobs and the economy. See WSJ article .
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IRS Form 990 Burdens NonProfits

Filing the revised IRS form 990 is a big burden for Non Profits. Many non-profits are now being required to maintain more sophisticated records and to do complex tax compliance. I anticipate Nonprofits and Churches will be subject to heightened IRS scrutiny and IRS and State Tax audits. Click here for an interesting article .
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Worker Savings Accounts Proposed

Rep. McHugh (R-NY) introduced the Worker Savings Account Act of 2008 on August 1, 2008. H.R. 6799 would create Unemployment Savings Accounts. These accounts would be treated like IRAs for tax purposes. Workers could contribute to these accounts to protect them during periods of unemployment other than following termination for gross misconduct. Note if passed: This legislation would not lessen the requirement for employers to pay state or federal unemployment taxes, and would not reduce an individual’s unemployment benefits. Employees would be limited to annual contributions of $5,000 (indexed to inflation) and employers could provide matching contributions up to the full amount of the employee’s contribution. The employe could rollover WSA funds into an IRA or 401(k) plan. This Bill was referred to the House Committee on Ways and Means. Because this is an election year, the Bill will most likely die in the Ways and Means Committee.
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