Don't Mess With Taxes

Look out. Some hitchhiking private tax debt collectors could stall the Highway Trust Fund, which already is running on fumes. Claudette Colbert shows Clark Gable how to catch a ride in the classic film It Happened One Night. Their characters were much more welcome hitchhikers than are private collectors of tax debt who are hitching a ride on the Senate bill to pay for the Highway Trust Fund by July 31. Photo/movie trailer screenshot courtesy Wikipedia. The Senate late Wednesday, July 22, finally restarted its transportation funding effort thanks to a 62-36 vote that will let debate on the actual... Read more →

Greece's future, both financially and as part of the Eurozone, remains unclear as the Mediterranean country and its creditors struggle to come to an agreement on what should be done about its persistent inability to pay its bills. UPDATE Monday, July 13, 2015: European leaders agree to tough Greek rescue plan. In simplest terms, the Greeks borrowed more money than they can pay back. The New York Times offers a more detailed look at how Greece got to this financial crisis point. At issue now is a three-year bailout of 53.5 billion euros, or $59 billion. It's not a new... Read more →

Next week should be fun. U.S. Treasury Secretary Jacob Lew says that unless Congress increases the federal debt ceiling, the country will hit its borrowing limit on Monday, March 16. That deadline day is this week's By the Numbers figure. Lew, in a letter to Congressional leaders on both sides of the aisle, points out, just in case any lawmakers are unclear, that increasing the debt limit does not authorize new spending commitments. "It simply allows the government to pay for expenditures Congress has already approved, thereby protecting the full faith and credit of the United States," writes Lew. Time... Read more →

Congressional gridlock generally is a problem, not just for folks on Capitol Hill, but also for all of us who are impacted by legislative inaction. Take the tax extenders. By delaying action on this collection of 50-plus tax breaks, all of us who depend on any of these expired provisions are in limbo as to what tax-planning moves to make. But there is a very thin silver lining in the delay. It means there's more time to fight a bad provision in the bill, the requirement that the Internal Revenue Service once again use private debt collectors, or PDCs, to... Read more →

Have you ever owed the Internal Revenue Service money that you just couldn't pay? What about other overdue bills? If you're behind on private sector payments, chances are you'll eventually hear from a debt collector. Now the Senate Finance Committee, via a provision in its tax extenders bill approved on April 3, wants to once again sic private bill collectors on delinquent taxpayers. Near the end of S. 2260, the Expiring Provisions Improvement Reform and Efficiency (EXPIRE) Act -- that's the catchy, acronym-friendly name Senate Finance Committee Chairman Sen. Ron Wyden (D-Oregon) gave his extenders bill -- is Sec. 304.... Read more →

And here we are again, if not on a fiscal cliff, at least standing on a debt ceiling ledge. When Congress agreed to reopen the federal government after October 2013's 16-day shut-down, it also suspended the debt ceiling until today, Feb. 7. Click image for the full interactive national debt clock. As we've all come to learn in the last few years, the debt ceiling is the limit on Uncle Sam's ability to borrow money to pay for bills he -- and by he, I mean Congress -- has already incurred, including, but not limited to Social Security and Medicare... Read more →

It's a done financial deal. This evening (Jan. 16), the Senate approved the $1.1 trillion spending bill that was OK'ed the day before by the House. Obama should sign the measure soon has signed the measure into law. Everyone in federal offices now knows just how big -- or small in the Internal Revenue Service's case -- a budget they'll have to work with for fiscal year 2014. Now for the next fiscal battle, increasing the debt ceiling. Debt And that deadline will be a bit closer than we previously thought. February, not March: Treasury Secretary Jacob (Jack) Lew says... Read more →

Did you pay your real estate taxes this month so you can deduct the payment on your 2013 taxes? How close to your residence's value was the assessment on which your tax bill was based? Ours was pretty close. But then the housing market in Texas, and the part of the state where we live in particular, hasn't been hit as hard as other parts of the country. There's a tiny bit of improvement in national numbers. Online real estate database Zillow says that in the third of 2013, negative equity for homeowners with mortgages has fallen to 28.2 percent... Read more →

Will Capitol Hill and the White House come to an agreement on raising the debt ceiling and reopening all federal offices? A meeting had been scheduled for this afternoon -- actually as I type -- between the White House and Senate Democratic and Republican leaders who are working on a deal. The word now, however, is that the confab has been pushed back, possibly into tomorrow. If Congress, including Speaker John Boehner and the House Republican Party's recalcitrant Tea Party wing, can't be coaxed into a deal, we all will be left flying blind. That feeling of fear and hopelessness... Read more →

There's a lot of talk about the Beltway Bubble, the phenomenon where the nation's capital exists in an atmosphere insulated from the real lives the rest of us lead. One Representative, however, recently tried to burst it. Rep. Alan Grayson (D-Fla.) saw the latest surveys revealing that public approval of Congress has plummeted to its lowest level ever and he wanted to make sure his House colleagues knew about the lack of esteem in which they are held. Grayson attempted to use a special House rule that allows members to address harms to the "dignity" of the House. Yes, I... Read more →

What do we like more than Congress. Apparently, just about everything. But there is a silver lining to our disgust with Representatives and Senators. It might finally force federal lawmakers to rethink their so-called governing strategies. House Speaker John Boehner (R-Ohio) and other Republican leaders have put together a proposal to extend for six weeks the debt ceiling, which is the maximum amount the United States can borrow to pay already incurred bills. They've met with President Obama, who reportedly said he would make a deal, but only if it also went beyond the debt ceiling and cleared the way... Read more →

A lot of attention has been paid, rightfully, to the federal workers who are on furlough or working for free until Capitol Hill agrees on a fiscal 2014 budget. Among those sitting out the political stalemate are around 86,000 Internal Revenue Service rank and file workers. But as the shutdown approached, there also were some changes -- or not -- at the IRS' executive level. Werfel remains, for a while: First, the top guy's status. Daniel Werfel stepped in as Acting IRS Commissioner (his title was tweaked for administrative reasons in June) after word broke, and Congressional hearings began, on... Read more →

"I think, personally, it would bring stability to the world markets." That's the prediction by Florida Republican Rep. Ted Yoho of what will happen if Congress doesn't raise America's debt ceiling by Oct. 17 and lets the country default on what it owes. Yoho already is no stranger to outrageous statements. You might remember when he called the 10 percent tax on indoor tanning services racist. But the Tea Party darling's assessment of what might happen if the United States breaches the impending debt ceiling is being called the scariest, dumbest and stupidest thing said so far during this latest... Read more →

Oct. 1, the beginning of the 2014 fiscal year, is more than half over. The stalemate between Congressional Republicans and Democrats over a stopgap spending bill is far from over. The biggest stumbling block is the continuing stubbornness insistence of House conservatives to tie Uncle Sam's operational costs to the president's signature health care law. The resistors, most of them recently elected thanks to Tea Party support, want Obamacare, as the Affordable Care Act is popularly known, either defunded or at least delayed for a year. That ship, folks, has sailed. The health care reform law's insurance coverage exchanges opened... Read more →

While Capitol Hill lawmakers are screwing around considering ways to deal with the country's impending financial deadlines, Congress' independent budget analysts announced some good fiscal news. The U.S. Treasury picked up $284 billion in August. That added revenue, according to the Congressional Budget Office (CBO), means Uncle Sam's budget deficit at the end of last month was $411 billion smaller than at the comparable period last year. That sizable reduction, making the budget deficit around $753 billion for the first 11 months of the 2013 fiscal year, is noteworthy. At this point in 2012, the budget deficit was $1.164 trillion.... Read more →

Looking for something to do this weekend? If you pay estimated taxes on earnings that aren't subject to withholding, then you can work on your third 1040-ES filing for the 2013 tax year. Click image to access the PDF version of Form 1040-ES, including all vouchers and instructions. In case you haven't yet encountered estimated taxes, these four extra payments are for such taxable income as investment and self-employment earnings, as well as unexpected income like prizes, gambling winnings or a lottery jackpot. Estimated taxes are the way to meet the tax code's pay-as-you-earn system that's covered for most wage... Read more →

The Motor City is getting a lot of attention today. Unfortunately, it's because Detroit has filed for bankruptcy. Detroit, Mich., viewed from Windsor, Ontario, Canada, across the Detroit River; photo by Andrea_44 via Flickr The process is different for a municipality that files bankruptcy than when a company or an individual goes broke. But the bottom line is that all entities have determined that this last-ditch effort is the only way to get their finances back in any kind of workable shape. Taxes obviously are a part of the equation. In Detroit's case, the falling individual and corporate population has... Read more →

The federal debt is at more than $16.8 trillion and counting. In less than two weeks, the amount of money that Uncle Sam can borrow to pay his (our) bills will need to be increased. The Treasury Department has said it can take "extraordinary measures" to cover the federal debt, giving us a bit more time beyond May 19 when we technically hit the debt ceiling. But the debt ceiling debate is heating up. Debt fight resumes: The Republican-controlled House this week may take up the Full Faith and Credit Act. This measure would allow the Treasury to take on... Read more →

The wide ranging federal budget cuts known as sequestration have been in place for a month now and some folks definitely are starting to feel the effects. It's possible that Congress could come up with a budget that would ameliorate some of the $85 billlion in sequester pain being felt across the country. But don't expect it to be an easy process. Several fiscal year 2014 budget proposals have been released so far, including the Republican version from the House (Rep. Paul Ryan's "The Path to Prosperity") and the Democratic proposal out of the Senate (Sen. Patty Murray's "Foundation for... Read more →

Republicans in the House and Democrats in the Senate today unveiled their budgets for Fiscal Year 2014, which begins Oct. 1. Each side declared the other's proposal dead on arrival. The president was supposed to have, by law, delivered his budget on the first Monday in February. In case you don't have a calendar handy, that was Feb. 4. But the White House now says it will have its financial wish list ready on April 8. That date is significant because it's the day that Congress returns to work after its spring break. Capitol Hill watchers speculate that the Administration's... Read more →