Let’s face it: the IRS is facing some significant issues, besides the one that folks fear it due to its responsibility of collecting taxes. With the organization supposedly scrutinizing conservative leaning groups in their application for tax-exempt status, while other applicants were being processed without so much as a hiccup, the powers that be appear to have A LOT of explaining to do. I’ve said “…supposedly scrutinizing conservative leaning groups…” because no one in this country is supposed to be guilty before being proven so, which will be found out through various congressional hearings and the many law suits that have been filed against the organization. The Obama administration seems to have a couple “issues” on its hands; however, based on a poll conducted by Quinnipiac University between 05/22 & 05/28, the one most important to the voting public is the one concerning the IRS (of the 1,419 respondents, 44% said the IRS probe is the most important, 24% picked Benghazi and 15% chose Eric Holder and the DOJ).
We might never know where the IRS’ scrutiny issues materialized; however, when David Schulman, the former IRS Director, responds that he was “going to the Easter Egg Roll with my kids” to the inquiry: ‘what was he doing in 118 visits over an 18 month period to the White House’, this leads me to be concerned. Frankly, if he responded “discussing the administration of the Affordable Care Act” or “discussing possible tax code revisions”, a single eyebrow might not have been raised, but when he arrogantly responds: “going to the Easter Egg Roll with my kids”, I’m led to think maybe something not so kosher might have been being discussed, and then, based on an article by Vince Coglianese in The Daily Caller on 05/29/2013, those 118 visits to the White House between 2010 and 2011 were actually 157 times, and the next department head/cabinet member, Eric Holder, visited only 62 times, and Kathleen Sebeleius & Tim Geithner’s (primary players in Obamacare/tax reform) visiting only 52 times each, I’m led to believe something nefarious might have been going on. This is simply conjecture on my part; what was actually taking place might never be known unless a “deep throat” comes out, seeing that these visits were all probably private meetings between two individuals; however, based on Schulman’s smug response to the question, I’m sure led to think it might not have been all above board. As I said, a lot more will come out from congressional hearings and the more than 50 law suits that have been filed by affected groups.
- Bottom line, if anyone thinks the IRS might be abolished due to this somewhat questionable activity, I’m afraid they might be sadly disappointed. The IRS is the tax collecting authority of the federal government which needs taxes to continue operating, so I don’t see it going away anytime soon, and it does do some things that are appropriate, such as:
- >requiring 1099’s to be issued for any financial dealings between parties exceeding $600 and establishing the new 1099-K forms, issued by Credit and Debit Card companies, to report payments made via Credit & Debit Cards, both of which were needed to tighten the “cash market”;
- >increasing the 2013 IRS Estate & Gift Tax Exemptions to $5,250,000 and $14,000 respectively (they were $5,120,000 & $13,000 in 2012). The 2013 Gift Tax Rate has increased to 40% (it was 35% in 2012).
- Some Annual COLA (Cost of Living Adjustments) for 2013 are:
- >Increasing the 2013 Personal Exemption (the amount deductible for each party claimed as a dependent) to $3,900 (it was $3,800 in 2012), along with the changes in the Standard Deductions:
- Married – Joint Filers: 2013: $12,200; 2012: $11,900
- Single – Married, filing individual: 2013: $6,100; 2012: $5,950
- Head of Household: 2013: $8,950; 2012: $8,700.
- >Increasing the Social Security Wage Base; i.e.: the amount at which paying Social Security Taxes stop: 2013: $113,700; 2012: $110,100;
- >the 2013 maximum 401(k) Contribution increases to $17,500 (it was $17,000 in 2012);
- >The 2013 maximum IRA Contribution increases to $5,500 (it was $5,000 in 2012);
- >the 2013 Standard Mileage Allowance increased to $.56.5/mile (it was $.55.5/mile in 2012); and
- >the 50% Bonus Depreciation and the expensing of up to $500,000 of Business Assets remain in effect for 2013.
- Finally, some “negative” adjustments for 2013:
- >As of 01/01/2013, the threshold for deducting Medical Expenses has increased from 7.5% to 10% of Adjusted Gross Income (AGI). This means folks that itemize deductions as opposed to taking the Standard Deduction, as of 01/01/2013, may only deduct Medical Expense outlays that exceed 10% of their AGI, where it used to be anything above 7.5% was deductible in the past; and
- >As of tax year 2014 (tax returns filed in 2015) a “tax” of the greater of $95.00 or 1% of income above the amount that triggers the requirement to file a tax return ($10,000 for Single Taxpayers in 2013, $9,750 in 2012) will be levied against individuals that do not carry health insurance. The fee for uninsured children will be paid by the parent/adult that claims them as a dependent. The fee is capped at $285/citizen for 2014, but is expected to increase sharply in subsequent years.