Ed Slott: Child Tax Credit Is ‘a Mess!’



The Internal Revenue Service issued Tuesday a revised Fact Sheet and frequently asked questions on the 2021 child tax credit and advance child tax credit to help eligible families properly claim the credit when they prepare and file their 2021 tax return.

Tax expert Ed Slott of Ed Slott & Co. told ThinkAdvisor on Tuesday in an email that the child tax credit situation this year is “a mess! Some people may end up paying a tax pro more than the credit!”

Others, Slott said, “may still pay a tax pro only to end up returning money they already received. Advance payments can always be tricky when it’s time to reconcile.”

Author(s): Melanie Waddell

Publication Date: 1 Feb 2022

Publication Site: Think Advisor

Summary of the Latest Federal Income Tax Data, 2022 Update

Link: https://taxfoundation.org/summary-latest-federal-income-tax-data-2022-update?mc_cid=aeb8f14671&mc_eid=4737d05e09



In 2019, taxpayers filed 148.3 million tax returns, reported earning nearly $11.9 trillion in adjusted gross income, and paid $1.6 trillion in individual income taxes.

The top 1 percent of taxpayers paid a 25.6 percent average individual income tax rate, which is more than seven times higher than taxpayers in the bottom 50 percent (3.5 percent).

The share of reported income earned by the top 1 percent of taxpayers fell to 20.1 percent from 20.9 percent in 2018. The top 1 percent’s share of federal individual income taxes paid fell to 38.8 percent from 40.1 percent.

The top 50 percent of all taxpayers paid 97 percent of all individual income taxes, while the bottom 50 percent paid the remaining 3 percent.

The top 1 percent paid a greater share of individual income taxes (38.8 percent) than the bottom 90 percent combined (29.2 percent).

The Tax Cuts and Jobs Act reduced average tax rates across income groups.

Author(s): Erica York

Publication Date: 19 Jan 2022

Publication Site: Tax Foundation

Yellen, IRS Push Democrats to Require Banks to Report Taxpayers’ Annual Account Flows

Link: https://www.wsj.com/articles/yellen-irs-push-democrats-to-require-banks-to-report-annual-account-flows-11631727020


Treasury Secretary Janet Yellen and IRS Commissioner Charles Rettig pressed lawmakers Wednesday to give the Internal Revenue Service more information about taxpayers’ bank accounts, as the Biden administration tries to salvage its tax-compliance proposal.

In letters to lawmakers, the administration officials again asked Congress to require banks to report annual inflows and outflows from bank accounts with at least $600 or at least $600 worth of transactions, a proposal aimed at letting the IRS target its audits more effectively. It would generate about $460 billion over a decade to cover the costs of Democrats’ planned expansion of the social safety net and climate-change policies, according to the administration.

But after a flurry of opposition from banks and credit unions, House Democrats omitted the proposal from their list of tax-policy changes this week. That was a sign that it lacked the support in the party to advance, though a scaled-back version raising about half as much money could still emerge from ongoing talks between administration officials and Congress.

Author(s): Richard Rubin and Orla McCaffrey

Publication Date: 15 Sept 2021

Publication Site: Wall Street Journal

Return of the IRS Scandal

Link: https://www.wsj.com/amp/articles/return-of-the-irs-scandal-11623191964


 Less than half a year into the Biden Presidency, the Internal Revenue Service is already at the center of an abuse-of-power scandal. That news broke Tuesday when ProPublica, a website whose journalism promotes progressive causes, published information from what it said are 15 years of the tax returns of Jeff Bezos, Warren Buffett and other rich Americans.

Leaking such information is a crime, since under federal law tax returns are confidential. ProPublica says it received the files from “an anonymous source” and doesn’t know who provided them, how they were obtained, or what the source’s motives are.

Allow us to fill in that last blank. The story arrives amid the Biden Administration’s effort to pass the largest tax increase as a share of the economy since 1968. The main Democratic argument for a tax hike is that the rich should pay their “fair share.” The ProPublica story is a long argument that somehow the rich don’t pay enough. The timing here is no coincidence, comrade.


This still leaves the real scandal, which is that someone leaked confidential IRS information about individuals to serve a political agenda. This is the same tax agency that pursued a vendetta against conservative nonprofit groups during the Obama Administration. Remember Lois Lerner?

This is also the same IRS that Democrats now want to infuse with $80 billion more to chase a fanciful amount of uncollected taxes. As part of this effort, Mr. Biden wants the IRS to collect “gross inflows and outflows on all business and personal accounts from financial institutions.” Why? So the information can be leaked to ProPublica?

Author(s): Editorial board of WSJ

Publication Date: 8 June 2021

Publication Site: Wall Street Journal

New IRS migration data: Illinois third-biggest loser of people, biggest loser of incomes, to other states in 2019 – Wirepoints Special Report



Wirepoints’ analysis uses national state-by-state migration data compiled by the Internal Revenue Service. The IRS reviews tax returns annually to track when and where people move. It also aggregates the ages, income brackets and adjusted gross incomes of filers. 

That data shows Illinois continued to be a national outlier in 2019 when it comes to losing people and the money they earn:

Illinois lost 81,770 net tax filers and their dependents in 2019. Illinois’ losses were the third worst in the country, with only California and New York losing more residents, 165,355 and 152,703, respectively.

On a per capita basis, Illinois also ranked 3rd-worst for out-migration, with net losses of 0.64 percent of its population. Only Alaska and New York fared worse, with losses of 1.02 percent and 0.78 percent of their populations, respectively.

Author(s): Ted Dabrowski, John Klingner

Publication Date: 3 June 2021

Publication Site: Wirepoints

Criminal Tax Cheat Robert Smith of Private Equity Firm Vista Gets a Pass for Conduct Worse Than Apollo’s Leon Black, Now in Epstein Doghouse


Smith, who has a $7 billion net worth and is best known for having paid off the student debt of the 2019 graduates of Morehouse College, paid $139 million, admitted to guilt, and agreed to cooperate in the criminal tax fraud case against Texas software billionaire Robert T. Brockman, where the Feds allege $2 billion in tax evasion over 20 years. Brockman put Smith’s Vista in business as the sole investor in its first fund, via a $1 billion capital commitment.

Before we get to the details of the aggressive influence-peddling deployed to keep Smith from being indicted, bear in mind why it’s certain Smith got off easy.

First, the IRS unearthed that Smith’s hidden income, estimated at $200 million, via external means, in this case, being accused by his former wife. That lead probably led to other digging, say probing with Suspicious Activity Reports from Smith’s banks. That means that “more than $200 million” is pretty certain to be the minimum amount of money Smith stashed away from the taxman’s eyes. If Smith had been indicted, prosecutors would have done discovery on Smith’s accounts and probably on those of individuals and companies whose dealings with Smith could possibly have been part of his schemes.

Author(s): Yves Smith

Publication Date: 10 February 2021

Publication Site: naked capitalism