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Posts tagged ‘IRS tax forms’

Graham: Obama Not ‘Trustworthy Fellow’ on IRS Scandal.


President Barack Obama is “not a very trustworthy fellow,” in light of his claim there wasn’t a “smidgen of corruption” in the Internal Revenue Service scandal and the revelation Thursday of an email chain by agency officials that pointed to a strategy to target conservative groups, Sen. Lindsey Graham said.

“I hate to say this about the president but he’s not a very trustworthy fellow when it comes to scandals in his own backyard,” the South Carolina Republican told Fox News’ “America’s Newsroom” Thursday.

Jay Sekulow, attorney for 41 targeted conservative groups, testified during a hearing about the IRS scandal on Capitol Hill Thursday. He revealed an email among IRS officials outlining a strategy for applicants seeking nonprofit status. According to Sekulow, IRS employees wrote they would work “off plan to devise rules to curtail the activities of 501C-4 organizations.”

Story continues below video.

The email chain was important, Graham indicated, because it showed targeting by the IRS was not limited to a “rogue” group of employees in Cincinnati, as the administration had maintained.

“Now you have this e-mail chain talking about a plan to go after people,” Graham said. “I hope people are beginning to put the puzzle together that President Obama himself is not a very reliable person to talk to about mistakes on his watch.”

Graham maintained if that email chain “doesn’t wake up the Justice Department to criminal activity, nothing will.”

“You’ve got interaction between government officials in charge of overseeing these tax-exempt groups that are talking about a strategy. And, to me, that lends itself to a conspiracy between people in Cincinnati and other places,” he said.

Graham explained that was why former IRS official Lois Lerner pled the Fifth Amendment when testifying before a House committee in May on the issue.

“That is why she took the Fifth Amendment, because she has literally exposed herself to illegal behavior here,” he said.

President Obama repeatedly has promised that his administration would get to the bottom of scandals, including the IRS activity and the bombing of the U.S. consulate in Benghazi.

Graham dismissed that by saying of the president that the bottom was “very shallow in his world.”

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© 2014 Newsmax. All rights reserved.
By Wanda Carruthers

Taxpayer Advocate: Brace for Obamacare Tax Surprises.


It’s not too early to start thinking about the tax implications of health care reform.

Did you buy health insurance through one of the exchanges? You might be eligible for a refundable tax credit. Taxpayers had the option of estimating their 2014 income to see if they qualified for the credit and then having it applied in advance to the cost of the premiums.

“We have an opportunity in the 2014 filing season to educate taxpayers about what they need to do during the year to avoid problems during the 2015 filing season,” National Taxpayer Advocate Nina Olson said.

Her advice to those taxpayers: keep the exchanges advised if there are changes in your circumstances that could affect the subsidy.

“It could increase if you have another child and you want to be able to get the benefit of that,” she said in a wide-ranging interview with The Associated Press. “It could decrease if you have a significant pay increase, if your spouse gets a job, if a child is no longer covered on your plan.”

As a result, some taxpayers could end up owing the U.S. Treasury money when they file their 2014 taxes next year.

“It may mean that they would have a reduced refund, and many taxpayers depend on their refunds for various things,” Olson said. “They’ve used them for planning. They use them like savings, so that will be a rude surprise for these taxpayers. And we can avoid it by having them go into the exchanges throughout the year.”

But what about those taxpayers who don’t get refunds — between 75 percent and 85 percent do, she said — or those whose refunds aren’t big enough to cover what is owed if the subsidy is reduced?

In that case, “the easiest thing is you’ll have a refund the next year, and we’ll take it out of the refund the next year,” Olson said. “It’s a debt on the books. It’s an assessed tax, and we can collect it for 10 years and it’s just a computer offset.”

While her job is to take on the Internal Revenue Service where necessary, Olson said the agency’s role in verifying income for people applying for the health-care subsidy has been working well. “They have lessened the time in which they are able to give the answer to the exchange,” she said.

But she said there needs to be more outreach and education does need to be done about the Affordable Care Act. She called on the IRS to make its website more informative by offering more examples “so taxpayers can recognize themselves if you direct them to a page,” she said.

As for her own role, Olson said she speaks for taxpayers, interceding in individual disputes with the IRS and pushing for tax reform. She said she understands the agency’s constraints and won’t propose changes that are unrealistic. “But,” she said, “I’m not going to take as an answer, ‘Oh, this is too heavy of a lift.'”

There are 74 taxpayer advocates around the country — at least one in each state — who work with her, she said.

To qualify for taxpayer advocate assistance, you must show that you face a significant hardship — that the IRS is causing you economic harm, that its systems are not working or that your rights have been violated. “That gets you through the door,” Olson said.

Ask her what challenges taxpayers face and she answers emphatically, “Getting assistance from the IRS, getting service from the IRS.”

In fiscal year 2013, she said, nearly four out of 10 calls to the IRS did not get through to a live person who could help. The average wait time was 17.5 minutes.

Getting IRS assistance is particularly an issue, she said, when it comes to identity theft, which remains a major issue, although the number of cases has declined since the IRS put “significant screens” in place. When identify theft occurs, Olson said, the IRS needs to act more quickly and consistently to help victims.

“The taxpayer has already gone through an enormous amount of angst and huge inconvenience … and we do not recognize that in our customer service to them,” Olson said. Victims of identity theft typically speak to a different person each time they call the IRS, she complained, and “have to explain their situation over again.”

She said the agency should assign each case to one person who can see it all the way through.

As for electronic filing, Olson suggested that taxpayers look into the IRS’ Free File program, which allows people whose adjusted gross income is under $58,000 to file their taxes for free through the IRS site. For people whose income is higher, the IRS has Free Fillable Forms, which do the basic math but don’t walk you through filling out your returns.

“I don’t think I should have to pay to file electronically with the IRS,” said Olson, who uses the Free Fillable Forms. “That’s my duty as a taxpayer, and the IRS in the 21st century should make it available to me for free. It’s crazy.”

She urged taxpayers to check out tax preparers carefully before hiring one, and not to fall for promises of huge refunds. “It really becomes a ‘consumer, beware’ world,” she said.

In dealing with tax preparers, she offered these tips:

—Get a copy of your return. “If the preparer then alters the return after you’ve signed off on it, that’s proof that it was a false return that was filed.”

—Make sure the preparer’s name, registration number and address are on the return.

—Check with the Better Business Bureau or state consumer affairs agency to see if there are any complaints against the preparation firm or preparer.

“Even though that seems like some work upfront, if you get sucked into one of these preparer issues it can take over a year to get it resolved, and that’s just pain that nobody needs to go through,” she said.

 

© Copyright 2014 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
Source: Newsmax.com

US Pressure on Swiss Banks May End Era of Secret Accounts.


Image: US Pressure on Swiss Banks May End Era of Secret Accounts

By Lisa Barron

The Swiss banking industry is slowly but surely abandoning its legacy of guarding the secrecy of customer accounts.

As many as 40 of the country’s approximately 300 banks have said they would voluntarily turn over client information to the U.S. Department of Justice in return for immunity from prosecution for helping Americans evade taxes, reports USA Today.

The Justice Department set a deadline of Dec. 31 for the banks to take deals protecting them from prosecution in exchange for handing out Americans’ account information.

“What’s really clear is that this [Justice] program is at the limit of what is tolerable for banks in Switzerland,” Sindy Schmiegel of the Swiss Bankers Association in Basel told the newspaper.

The effort is part of a government crackdown on tax evaders and overseas banks that heated up in 2009 after UBS, Switzerland’s biggest bank, agreed to a $780 million settlement for concealing identities and assets from the IRS.

The Justice Department is currently investigating 14 major Swiss financial institutions, including Credit Suisse, Julius Baer, and the Swiss arm of HSBC, for shielding U.S. tax evaders, and many leading banks that are not yet being probed have been urging wealthy clients to turn themselves in to the tax man, Politico reported last month.

“The banks have every incentive to shove their American clients into compliance in order to reduce the penalties,” tax attorney Jeff Neiman, who prosecuted UBS for the U.S. government, told the publication.

Politico cited three letters from Swiss banks to U.S. clients urging them to come clean.

“Your account information may be subject to a treaty request from the United States to the Swiss Federal Tax Administration, which may result in your account information being turned over to the DOJ or IRS,” warned one letter sent by Corner Bank.

Meanwhile, the World Economic Forum taking place this week at Davos, Switzerland, will reportedly hold a forum dedicated to how the country’s banking industry can reinvent itself in the absence of banking secrecy.

“Swiss bankers accept that they are living in a new reality,” Bruno Patusi, head of wealth and asset management at Zurich-based financial services firm EY, told USA Today.

“But we will only see a change in certain areas. Confidentiality is still extremely important. It is true that we are seeing assets flow out [of Switzerland], but that’s partly because the next generation is more interested in spending than saving.”

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© 2014 Newsmax. All rights reserved.

Bridge-gate Getting Much More Press Than Obama Scandals.


Image: Bridge-gate Getting Much More Press Than Obama Scandals

By Lisa Barron

Just two days after news broke of politically motivated traffic jams in New Jersey, the mainstream media has already given the story far more airtime than it has given to the Obama administration’s IRS scandal.

The Media Research Center has found that the three networks have devoted 17 times more coverage to Bridge-gate than they have allowed in the last six months for the controversy over the Internal Revenue Service’s targeting of conservative groups.

“This is media bias,” former New York City Mayor Rudolph Giuliani said on Fox News’“Fox & Friends” Friday when asked about the report.

“If it’s a story involving a Republican that they can in any way make negative, they exaggerate it tremendously. If it’s a story involving a Democrat who they like — of course they love President Obama — they give it as little attention as possible. This is a perfect example of it,” he said.

A prominent GOP fundraiser agreed, telling Politico that Christie is getting blasted for standard “political activities” by a partisan media. “Obama had the IRS investigate GOP-ers and media yawned. That’s a crime. This is silly,” he said.

Indeed, the Wall Street Journal editorial board wrote on Friday, “Republicans operate under a double media standard that holds them to a much lower scandal threshold. In that sense, the pathetic New Jersey traffic-lane scandal may be, as Mr. Obama likes to say, a teachable moment.”

Many in fact, contrasted the New Jersey governor’s decisive response to the controversy to the president’s failure to take action or responsibility for his administration’s missteps.
“The real question is does a leader own up to it and handle it correctly,” said Giuliani on Fox. “In the case of Obama, he has yet to own up to the IRS scandal. In this case, Chris Christie acted the way a leader has to act.”

“He was sincere and decisive. He apologized, fired people, and promised to make changes. He said the buck stopped at his desk,” Fox Business News host and analyst Charles Payne wrote in his Wall Street Commentary newsletter.

“We haven’t been able to say the same thing, when it comes to President Obama, whose litany of scandals are always met with a strategy of circling the wagons, and deflecting blame; no apologies and no accountability,” he said.

As the Wall Street Journal noted, “Lois Lerner, who ran the IRS tax-exempt shop and took the Fifth before Congress, was allowed to ‘retire,’ presumably with a pension. Acting IRS Commissioner Steven Miller resigned under pressure but no other heads have rolled.”

Meanwhile, with Christie’s political future still the subject of much debate, some Republicans say that the way he handled Bridge-gate could work to his advantage.

“This will be, at the end of the day, a political benefit to Chris Christie,” GOP strategist Steve Schmidt,” told The Washington Post, adding, “This sends a very clear signal: If you screw up, you violate the public trust, there’s not going to be an exercise in wagon-circling — there’s going to be an exercise in accountability.”

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© 2014 Newsmax. All rights reserved.

FBI Finally Contacts Conservative Groups in IRS Targeting.


Image: FBI Finally Contacts Conservative Groups in IRS Targeting

 

By Sandy Fitzgerald

The FBI is contacting some conservative groups that were targeted by the Internal Revenue Service as calls heat up for a key Justice Department investigator to step down from the probe after questions about her donations to President Barack Obama’s presidential campaigns.

A lawyer working with some of the tea party groups told The Washington Times that a “small number” of his clients were recently contacted, albeit seven months after the investigation was to begin.

“After seven months of no contact from federal investigators, a small number of our clients recently received a request for an interview from the FBI,” said Jay Sekulow, chief counsel for the American Center for Law & Justice, which represents more than three dozen of the organizations.

Cleta Mitchell, another attorney representing some of the targeted groups, said her clients have not heard from investigators.

“Normally, don’t you first interview the victims?” Mitchell said. “I mean, I’ve watched enough cop shows over the years. You interview the victims. You don’t interview the perp.”

Republicans, though, say the whole investigation is under question following the selection of Justice Department attorney Barbara Kay Bosserman to lead the probe. Bosserman donated more than $6,000 to the president’s campaigns, and Republicans say she cannot be impartial.

House Speaker John Boehner said he is concerned by the Obama administration’s many obstructions on not only the IRS investigation, but many other issues.

“The administration has not been forthcoming with regard to the IRS investigation,” the Ohio Republican said. “Furthermore, they’ve not been forthcoming when it comes to the Benghazi investigation or Fast and Furious. And the administration can try to stonewall as much as they want, but these issues are not going to go away. The American people have a right to know the truth. And for the administration that came in five years ago promising to be the most transparent administration in history, they’ve got a very poor record.”

Meanwhile, Kentucky Republican Sen. Rand Paul called for independent investigations into the IRS scandal.

“They say the fox isn’t good to guard the henhouse; the fox is probably not good to investigate the henhouse, either,” Paul said Thursday. “I think these investigations need to be done by independent people outside of the administration.”

Last spring, Attorney General Eric Holder ordered an FBI investigation after it was revealed the IRS had been targeting conservative groups for additional scrutiny and delaying tax-exempt status for hundreds of groups’ applications.

However, not much has been done with the investigation since that time, and House Oversight and Reform Committee Chairman Darrell Issa and co-chair Rep. Jim Jordan, R-Ohio, complained last month that the committee still has not gotten related documents.

While the FBI rejected many of Issa’s demands for documents, he learned Bosserman was leading the investigation for the Justice Department, and on Wednesday he and Jordan sent a letter to Holder saying her selection tainted the entire investigation.

The Justice Department says federal law and policy prevents it from denying assignments based on an employee’s political views, and doing so violates workers’ rights right to participate in the political process, The Washington Times reports.

Sekulow said his firm’s clients are evaluating FBI’s requests, but Bosserman’s political leanings “create a serious conflict of interest and raises more questions and doubts about the Obama administration’s promise to get to the bottom of what happened.”

The FBI refused comment, pointing to a letter sent on Dec. 31 by Stephen Kelly, assistant director for the agency’s office of congressional affairs.

“We would request that the committee permit the investigators to complete their investigation and consult with federal prosecutors, as appropriate, to determine whether the evidence reveals a prosecutable violation of any statutes within our jurisdiction,” said Kelly. “As a result, we cannot provide the documents requested at this time while the criminal investigation is active and ongoing.”

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© 2014 Newsmax. All rights reserved.

Donors Look for Alternatives to Skirt IRS Rules for Political Fundraising.


As the IRS moves to limit campaign fundraising by nonprofit groups, lawyers are looking for new ways to enable donors to continue to pour money into elections while remaining anonymous.

According to the Wall Street Journal one option being considered is the creation of taxable, for-profit businesses which would be used as campaigning vehicles. Another idea involves donors banding together in trade associations. Neither type of group is required to disclose their members.

In November, the IRS proposed new rules to limit political activity by social-welfare groups, known as 501(c)(4) groups, whose influence on political campaigns has skyrocketed in the last two years, partially because donors can contribute unlimited amounts on an anonymous basis.

“They’ve become the hot trend over the last year or so,” Robert Kelner, head of the political law group at Covington & Burling LLP, said of the for-profit vehicles, according to the Journal. “It’s a trend that is accelerating, and the new proposals are going to put more steam behind the train.”

A 2010 Supreme Court ruling allowed for companies to spend unlimited amounts of money to support or oppose candidates. These organizations are not required to report their activities to the Federal Election Commission since they are not seeking tax-exempt status.

Unlike political action committees, these entities, such as the Democratic firm Catalist and the GOP group called America Rising, do not have to disclose donors, clients, or spending and can work directly with political campaigns, though they are required to pay taxes on any profits. Even then, election-law specialists say those requirements can be minimized or possibly eliminated depending on how a company is structured, according to the Journal.

“The arrival of these taxable, for-profit entities in the political arena will make it increasingly difficult to distinguish political-consulting firms from advocacy groups,” Kelner said.

At the same time, companies must be able to demonstrate they have a legitimate business purpose other than campaign activity to avoid being defined by the IRS as a PAC. Many already do, saying they are providing services for a price, such as polling, consulting, and advertising.

“Are you just a political committee parading around as something other than a political committee?” Kenneth Gross, former associate general counsel of the FEC, and now at Skadden, Arps, Slate, Meagher & Flom LLP, told the Journal. “That can be pierced either by FEC or IRS, depending on the nature of the entity.”

Meanwhile, political trade associations and charities, known as 501(c)(6) groups, similar to the U.S. Chamber of Commerce, are also finding ways of raising huge sums on an anonymous basis. The IRS has already hinted it may institute new rules to regulate these types of groups for their role in campaigning.

“If the IRS fails to act, Americans should expect to see an increase in the number of so-called ‘business leagues’ created to funnel money into our elections while cloaking the identities of their donors,” Melanie Sloan, executive director of the watchdog group Citizens for Responsibility and Ethics, told the Journal.

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© 2013 Newsmax. All rights reserved.

By Melanie Batley

Atheists Ask IRS to Tax Religious Groups.


 

Internal Revenue Service
Internal Revenue Service

Nonbelievers are challenging the Internal Revenue Service’s special exemptions for religiousorganizations in a federal court in Kentucky, saying churches and other religious groups should have the same financial rules as other nonprofit groups.

If they prevail, it will change the tax-exempt status of churches and other religious organizations, and require the same transparency of donors, salaries and other expenditures that secular nonprofits must currently meet.

“This is a very strong case,” said Dave Muscato, public relations director for American Atheists, a national advocacy group and lead plaintiff in the case. “It seems to be straight-up discrimination on the basis of religion.”

American Atheists is joined in the suit by Atheists of Northern Indiana and Atheist Archives of Kentucky. Oral arguments were heard Thursday in the U.S. District Court for the Eastern District of Kentucky in Covington.

The case centers around who must file IRS Form 990, an annual reporting statement that provides information on a group’s mission, programs and finances.

Current tax law requires all tax-exempt organizations to file a Form 990 financial report—exceptchurches and church-related organizations. A few state, political and educational organizations are exempt as well if their annual revenues fall below certain amounts.

This means the IRS treats religious organizations differently than it does all other organizations, the suit holds. It claims the IRS policy is a violation of the First Amendment and the due process promised under the Fifth Amendment.

IRS spokesman Anthony Burke said the agency’s policy is not to comment on pending litigation.

The suit argues that religious organizations receive preferential treatment because they do not have to withhold income tax from compensation to clergy, reveal staff salaries, or disclose the names of donors who give more than $5,000.

The plaintiffs allege that because they must reveal the names of major donors, they are hindered in the amount of money they can raise.

“We have donors who tell us, ‘I would like to give more than this but I don’t want people to know I am an atheist,’” Muscato said. “That is hurting us to be held to that different standard.”

The suit also alleges that, because religious organizations do not file Form 990, there is little proof that the organizations’ activities benefit the public and should therefore be tax-exempt. It holds that such “subsidization of religious entities” costs taxpayers $71 billion per year.

KIMBERLY WINSTON/RNS

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