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Entries Tagged as 'Tax Credit'

Health-care law may pose compliance issues for IRS, taxpayers

July 11th, 2010 · Accountability, Democrats, Ethics, Federal Spending, Government, Government Control, Healthcare, Non-Transparency, Obama's Scheme, Selling Out the US, Tax Dollars, Taxes, Terrorism from Within, Treasury

By David S. Hilzenrath – Friday, July 9, 2010

The new federal health-care law may pose compliance challenges for taxpayers and the Internal Revenue Service, an IRS ombudsman said.

The agency, which will be responsible for administering major aspects of health insurance finance, is neither structured nor funded to effectively oversee social programs, the National Taxpayer Advocate Service said Wednesday in a news release.

In addition, a tax reporting requirement in the health-care law “may impose significant burdens on businesses, charities and government agencies,” the advocate service said.

Those burdens “may turn out to be disproportionate as compared with any resulting improvement in tax compliance,” the head of the service, Nina E. Olson, said in the release. The advocate service is an independent organization in the IRS that helps taxpayers solve problems with the agency and recommends reforms.

Although the IRS’s main mission is to collect taxes, it has been given a key role administering health insurance premium subsidies, tax credits for small businesses, assessments on employers and the mandate that beginning in 2014, everyone must obtain insurance.

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New-home sales plunge 33 pct with tax credits gone

June 23rd, 2010 · Economy, Housing Industry, Real Estate, Stimulus

By ALAN ZIBEL – The Associated Press
Wednesday, June 23, 2010; 10:37 AM

WASHINGTON — Sales of new homes collapsed in May, sinking 33 percent to the lowest level on record as potential buyers stopped shopping for homes once they could no longer receive government tax credits.

The bleak report from the Commerce Department is the first sign of how the end of federal tax credits could weigh on the nation’s housing market.

The credits expired April 30. That’s when a new-home buyer would have had to sign a contract to qualify.

“We fear that the appetite to buy a home has disappeared alongside the tax credit,” Paul Dales, U.S. economist with Capital Economics,” wrote in a note. “After all, unemployment remains high, job security is low and credit conditions are tight.”

New-home sales in May fell from April to a seasonally adjusted annual sales pace of 300,000, the government said Wednesday. That was the slowest sales pace on records dating back to 1963. And it’s the largest monthly drop on record. Sales have now sunk 78 percent from their peak in July 2005.

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Experts say Washington is too quick to dismiss a value-added tax

April 21st, 2010 · Deception, Democrats, Economy, Federal Spending, Government, Government Control, Greed, Money Lost, Stimulus, Tax Dollars, Taxes

By Lori Montgomery Washington Post Staff Writer
Wednesday, April 21, 2010

As Washington braces for the first serious conversation in more than a decade about deficit reduction, some economists and independent budget experts fear that the hyperpartisan political atmosphere is narrowing the options for dealing with the chronic budget shortfall.

The latest sign: the emphatic rejection by both parties in recent days of a value-added tax, a sales tax imposed by nearly every other developed nation. After a White House economic adviser was reported speaking semi-favorably about a VAT, the White House this week vigorously denied that President Obama is looking to include the tax in his deficit-cutting arsenal.

“This is not something the president has proposed, nor is it under consideration,” White House press secretary Robert Gibbs told reporters.

The VAT isn’t the only potential budget solution drawing fire. Republicans howled about cuts to Medicare in the recent health-care overhaul, and no one in Washington wants to raise taxes on the 98 percent of taxpayers whom the White House has defined as the middle class.

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Reduction of Mortgage Tax Breaks Unlikely

March 2nd, 2010 · Congress, Dissention, Housing Industry, Tax Dollars, Taxes, Treasury

So far, Congress is ignoring President Barack Obama’s budget proposal to reduce deductions for mortgage interest and real-estate taxes.

The president proposed that taxpayers would save 28 cents of tax liability for every $1 of mortgage interest or taxes, down from the current 35 cents.

Congressional representatives on both sides of the aisle have concerns about how the idea would impact the housing market, says Matthew Beck, a spokesman for the Democratic majority on the House Ways and Means Committee.

The Joint Committee on Taxation says the current mortgage-related tax deductions will reduce tax revenue by $104 billion this year, with 75 percent of the benefit going to people who earn more than $100,000 per year.

Source: The Wall Street Journal, James R. Hagerty (03/01/2010)

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Move-Up Tax Credit Having Little Impact

March 2nd, 2010 · Federal Spending, Housing Industry, Obama's Scheme, Tax Dollars, Taxes, Treasury

The $6,500 move-up tax credit isn’t significant enough to have much of an impact on the housing crisis, housing experts say.

The percentage of current home owners who are considering buying was unchanged from January, a traditional slow month, to February, when business is usually better, according to a poll of 1,500 real estate agents by Campbell Communications and Inside Mortgage Finance.

“You’ve got a really big problem that requires big guns, and the tax credit is just not big enough,” says Roberton Williams, senior fellow at the Tax Policy Center in Washington.

The credit “is hardly registering on the economic Richter scale,” says Patrick Newport, an economist with IHS Global Insight.

Source: Associated Press, Adrian Sainz (03/01/2010)

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New Homebuyer Credit Form Released; Taxpayers Reminded to Attach Settlement Statement and Other Key Documents

January 18th, 2010 · Housing Industry, Stimulus, Taxes

New Homebuyer Credit – Claim It
New Homebuyer Credit – Military
For these and other videos: YouTube/IRSVideos

WASHINGTON — The Internal Revenue Service today released the new form that eligible homebuyers need to claim the first-time homebuyer credit this tax season and announced processing of those tax returns will begin in mid-February. The IRS also announced new documentation requirements to deter fraud related to the first-time homebuyer credit.

The new form and instructions follow major changes in November to the homebuyer credit by the Worker, Homeownership, and Business Assistance Act of 2009. The new law extended the credit to a broader range of home purchasers and added new documentation requirements to deter fraud and ensure taxpayers properly claim the credit.

With the release of Form 5405, First-Time Homebuyer Credit and Repayment of the Credit, and the related instructions, eligible homebuyers can now start to file their 2009 tax returns. Taxpayers claiming the homebuyer credit must file a paper tax return because of the added documentation requirements.

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Companies Could See Tax Breaks Yanked

January 5th, 2010 · Democrats, Greed, IRS, Taxes, Treasury

Communities all over the country are taking back the property and other tax breaks they offered businesses to locate there, according to the watchdog group Good Jobs First.

In DeKalb, Ill., when Target Corp. came up 66 jobs short of the agreement to waive taxes, the taxing bodies sent the company an unexpected $600,000 tax bill.

In St. Louis County, Mo., officials warned Pfizer Inc. that if it follows through on its plan to cut 600 jobs, the county will rethink the $7 million in tax breaks it promised.

While no one collects data on these “clawbacks,” it’s clear that the latest offers communities are making to woo businesses are being strongly worded. “There is much more (language) tied to jobs now because of economy,” says Lee Garrity, city manager in Winston-Salem, N.C.

Source: Associated Press, Don Babwin (01/02/2010)

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Federal Reserve to wind down several emergency programs

December 16th, 2009 · Economy, Money Lost, Obama's Scheme, Selling Out the US, Tax Dollars, Taxes, Treasury

By Neil Irwin Washington Post Staff Writer
Wednesday, December 16, 2009; 3:11 PM

The Federal Reserve will allow several of its special programs supporting credit markets to expire early next year, winding down some of the unconventional efforts to prop up the financial system during the depths of the 2008 crisis.

The Fed said Wednesday, following a two-day policymaking meeting, that it will allow five special lending programs — designed to support money market mutual funds, short-term corporate lending and investment banks — to cease to exist Feb. 1. It will also move to wind down special arrangements to pump hundreds of billions of dollars into other nations’ banking systems.

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U.S. gave up billions in tax money in deal for Citigroup’s bailout repayment

December 16th, 2009 · Banking Industry, Economy, Federal Spending, IRS, Money Lost, Obama's Scheme, Repayment, Selling Out the US, Tax Dollars, Taxes

DEAL MADE TO RECOVER BAILOUT
Firms exempted from rule when U.S. sells its stake

By Binyamin Appelbaum Washington Post Staff Writer
Wednesday, December 16, 2009

The federal government quietly agreed to forgo billions of dollars in potential tax payments from Citigroup as part of the deal announced this week to wean the company from the massive taxpayer bailout that helped it survive the financial crisis.

The Internal Revenue Service on Friday issued an exception to long-standing tax rules for the benefit of Citigroup and a few other companies partially owned by the government. As a result, Citigroup will be allowed to retain billions of dollars worth of tax breaks that otherwise would decline in value when the government sells its stake to private investors.

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Where’s the Refund?

December 12th, 2009 · Buyers, Stimulus, Taxes

First-time home buyers who bought as long ago as last winter are still waiting for their $8,000 tax refund.

As of mid-September, more than 1.4 million taxpayers had requested the credit by amending their federal tax returns. The IRS announced in October that it expects 5.1 million claims by year-end. That count doesn’t reflect the extension and expansion of the credit in November.

IRS spokeswoman Carrie Resch says the agency is experiencing a higher-than normal number of amended returns and because amended returns are reviewed by hand, the process is delayed.

U.S. Sen. Amy Klobuchar (D-Minn.) has been fielding constituent calls for weeks from irate home buyers. She sent a letter to the IRS that said in part: “The full and immediate economic impact of the tax credit is lost when it takes up to four months for people to get the money due to them … such lengthy delays are unacceptable and erode the public’s trust in the competence of the government.”

Source: Minneapolis-St. Paul Star Tribune, Kara McGuire (12/10/2009)

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