It's going to be a mixed Thanksgiving in Internal Revenue Service households. The agency definitely won't be thankful for the Senate funding bill released on Nov. 20. That Financial Services & General Government Appropriations measure proposes the IRS get $11.1 billion in fiscal year 2018. That's $149 million less than it received for the 2017 fiscal year. However, the IRS can be grateful that the funding is close to the $11.235 billion that then IRS Commissioner John Koskinen said the agency needs to maintain its current performance levels. And it's $111 million more than what Donald J. Trump's budget recommended... Read more →
Federal Budget Spending
Michael Horowitz, Inspector General for the U.S. Department of Justice and Chair of the Council of the Inspectors General on Integrity and Efficiency, welcomes one and all to Oversight.gov, a new website that consolidates public reports from federal Inspectors General. Whenever talk turns to tax reform, there also are discussions on cutting federal spending. After all, if some of us get more favorable tax treatment, the money to make up for that lost revenue must come from somewhere. Conventional wisdom and political rhetoric tends to focus on Uncle Sam's inefficiencies, both perceived and real. If a federal agency or department... Read more →
Many professional tax preparers say that giving the Internal Revenue Service added regulatory ability over their jobs isn't warranted. The tax agency and Trump Administration disagree. (Photo by Sebastiaan ter Burg via Flickr CC) The Trump Administration has continued the current trend of cutting the Internal Revenue Service's annual operating funds, but a provision in the new White House's fiscal year 2018 budget also could solve a new IRS problem. On June 1, the Internal Revenue Service got the bad news from the United States District Court for the District of Columbia that the tax agency can't collect fees from... Read more →
Mick Mulvaney, the Trump Administration's Office of Management and Budget Director, met the press this morning to discuss the 45th president's fiscal year 2018 budget proposal. (Screenshot of C-SPAN broadcast; click image to watch the full event) It's official. The amount of money going to the Internal Revenue Service under Donald J. Trump's first federal budget gets cut yet again. The White House today released its fiscal year 2018 budget. As expected from the Administration's so-called skinny budget made public in March, the fully fleshed out $4.1 trillion plan proposes cuts to long-time safety net programs for lower income Americans... Read more →
Federal tax reform is still a ways off, but the prospect of an Internal Revenue Code rewrite already has prompted Oklahoma to change one of its tax laws. Republican Gov. Mary Fallin on May 12 signed legislation that will decouple the Sooner State's standard deduction from the current federal standard deduction. The reason for the change? If the Trump Administration's proposal to double the federal standard deduction eventually becomes part of the tax law of the land, Oklahoma stands to lose a lot of tax revenue. Federal, state tax ties: Oklahoma's tax system, like that of many states with income... Read more →
The Internal Revenue Service collected more than $3.3 trillion during the 2016 fiscal year. That tax tidbit is part of the agency's 2016 Data Book, which details IRS activities from Oct. 1, 2015 through Sept. 30, 2016. After taking a dive in 2009, IRS collection of taxes has increased each of the last five fiscal years even though it's been forced to so with smaller budgets. Bringing in tax dollars and making sure that you, I and all the other U.S. taxpayers comply with the nation's tax laws are two of the IRS' major jobs. But for the last few... Read more →
Let me make this very clear from the get-go. I never, ever, ever recommend that anyone cheat on his or her taxes. But if you're inclined to be a bit aggressive with your Form 1040 strategies, your odds of catching a tax examiner's eye are decreasing. The Internal Revenue Service's audit rate has been dropping for years and that trend likely will continue, due in part to more agency funding cuts in the latest federal budget proposal. Fewer audits yet again: Recently released IRS data shows that in 2016 the number of individual audits dropped for the fifth straight year.... Read more →
Uncle Sam runs out of money on Oct. 1, but a group of Democratic Senators is hopeful that lawmakers will eventually get their funding act together. They even are enlisting the help of U.S. Treasury Jack Lew in providing sufficient money for the Internal Revenue Service to do its job in the coming fiscal year. In a letter to the Treasury chief, Sens. Bob Casey of Pennsylvania, Patrick Leahy of Vermont, Dianne Feinstein of California, Ben Cardin of Maryland and Sherrod Brown of Ohio denounce "shortsighted budget cuts" as the reason the IRS has struggled to meet "its objective to... Read more →
I was feeling a bit overwhelmed recently, looking at what was on my to-do list and the time left to do it. Then I saw Congress' schedule and thought, I'm in good shape. The House and Senate are facing a series of deadlines that have much more serious consequences than me getting a story or blog post in at the last minute (please don't tell my editors I said that!). There are four major dates on the remaining 2015 Congressional calendar: October 1 -- The end of 2015 appropriations and the return of sequestration. October 29 -- Expiration of the... Read more →
Capitol Hill is in the throes of contentious budget negotiations. The process is complicated not only by the differing political priorities of Democrats and Republicans, but also the somewhat competing stances of GOP members, some of whom have higher political aspirations. Both sides of the Hill agreed on their fiscal plans in late March. Now they must reconcile the two. With the GOP in control of both chambers, the House and Senate fiscal year 2016 budgets actually are pretty similar. Both want to fast-track a measure that would repeal Obamacare, as well as add more money for defense projects. Balanced... Read more →
U.S. Treasury Secretary Jacob Lew was on the hot seat today, spending three full hours being grilled by Ways and Means Committee members about the Administration's fiscal year 2016 budget. As is the case in most Capitol Hill hearings, members were more interested in making their own political statements than in asking questions and getting answers. That's why some of the budget time was spent on the upcoming Supreme Court decision on premium tax credit help for folks who bought health insurance on the federal exchange. But we did get some actual budget talk, too. Tea Party troubles reviewed: One... Read more →
It's a dual Groundhog Day this year. There's the traditional meteorological news, which, by the way, is bad. Punxsutawney Phil says we're looking at more winter. An apparently sleepy Punxsutawney Phil prepares to make his weather prediction. The final word: Phil saw his shadow, so we're in for six more weeks of winter. Full story and video at Weather Underground. This year, we also get the federal fiscal replay on official Groundhog Day. This is the one where the president issues his annual budget and the members of the opposing political party declare it dead on arrival. Political process replay:... Read more →
Well, well, well. I'm going to pull my crystal ball (yes, that's it pictured there) out of storage and dust it off. It seems like I've got a bit of my predictive mojo back. That hasn't been the case very much in recent years, at least not where the U.S. Congress is involved. Remember the estate tax? Nobody, including me, thought those fools lawmakers would let it expire at the end of 2009. But they did. And they took us over the fiscal cliff, albeit only for a couple of days. Still, logical people, who are most folks who don't... Read more →
Congress obviously didn't read the 2014 Taxpayer Attitude Survey before passing the $1.1 trillion fiscal year spending bill this weekend. The latest annual look by the Taxpayer Oversight Board at what we think of our tax system found that the majority of taxpayers support more funding for Internal Revenue Service services and enforcement. Sixty-one percent say the IRS should receive extra funding to assist more taxpayers, up two points from 2013. Another 56 percent say the IRS should receive extra funding to enforce tax laws, up one point from 2013. The House on Dec. 11 and Senate late Dec. 13... Read more →
Sen. Tom Coburn, the Republican who's served Oklahomans in Congress' upper chamber since 2005 and for six years in the House before that, is retiring as soon as this lame duck session wraps. Many see Coburn as an obstructionist, especially when it comes to considering budget bills, and are happy to see him go. Others, however, think he's done a fine job crusading against irresponsible government spending. In fact, Coburn will be remembered for the issuance of his so-called Wastebooks, reports on ways his Capitol Hill colleagues waste U.S. taxpayer money. As his parting gift to U.S. taxpayers and his... Read more →
It looks like Rep. Paul Ryan is shelving national political ambitions for a while to take over the House Ways and Means committee. Ryan will assume the chairmanship of the powerful tax-writing panel on Jan. 3, 2015 when the 114th Congress convenes. He takes the gavel from W&M Chairman Rep. Dave Camp (R-Mich.), who is retiring at the end of the current congressional session. Ryan, Republican Representative for the first district of Wisconsin since 1999, announced his desire for the top tax post on Nov. 4. Click image to see interview clip via Bloomberg Politics (@bpolitics) on Twitter "It is... Read more →
The only constant in life is change. That's also the case with taxes. Just ask anyone/everyone who's ever had to deal with new laws. Now big change is coming to the House panel charged with originating all U.S. tax measures. Ways and Means Chairman Dave Camp (R-Mich.) announced Monday, March 31, that he will not seek reelection. That, along with the 2015 Republican budget proposal, likely means that there won't be any major changes to the tax code any time soon. Already planning to go: Camp already was set to relinquish his chairmanship of the tax-writing panel. But given his... Read more →
Maybe the National Taxpayer Advocate's recommendations came too late in the budgeting process. Or maybe members of Congress just like whacking the most hated federal agency with a fiscal bludgeon. Whatever the reason, the Internal Revenue Service is going to have to make do with less money in fiscal year 2014 under the omnibus budget bill worked out this week on Capitol Hill. UPDATE: The House passed the spending bill Wednesday, Jan. 15, afternoon by a bipartisan 359-to-67 margin. It now awaits Senate action. And that means all of us taxpayers will probably suffer at least a little bit this... Read more →
I'm a big believer in you get what you pay for. Apparently, so is National Taxpayer Advocate Nina Olson. Olson this week released her annual report to Congress. In the yearly analysis, the Internal Revenue Service's internal watchdog details at least 20 of the biggest problems that taxpayers face. For 2013, Olson enumerated 25 taxpayer troubles. And she put the inability to get good service from the IRS near the top of her latest list. One of the most frustrating taxpayer-IRS interactions is telephone service. Folks seeking answers via phone are getting worse service now. And why is there such... Read more →
For the last few days of September and the first 16 days of October, much of the attention was on one Representative and one Senator. Sen. Ted Cruz (R-Texas) led a fight to defund Obamacare and egged on House Republicans to do the same, leading in large part to the government shutdown. That made things difficult for House Speaker John Boehner (R-Ohio) as he tried to bring the opposing factions of his party together. However, now that a deal has been reached to reopen federal facilities, the focus has shifted to 29 members of Congress. They are the bipartisan group... Read more →