Tax Blawg: “Getting a Notice of Levy from the IRS is never fun, especially if you are the taxpayer. However, it can be even more perilous when you receive one with respect to someone you employ that owes the IRS money, seeking to garnish the worker’s compensation.”
1. Reuters: “California lawmaker introduces soda tax bill”
2. Washington Post: “D.C. council finance chair Evans opposes soda tax proposal”
3. Tax Policy Blog: “Soda Taxes and Trash Fees In Philadelphia”
The Heritage Foundation: “On January 1, 2011, the tax rates facing small businesses are set to jump, destroying jobs and lowering wages. The top two income tax rates now stand at 33 percent and 35 percent, but will rise to 36 percent and 39.6 percent. . . . According to the Treasury Department . . . 8 percent of small businesses pay the highest two tax rates. But those businesses earn 72 percent of all small business income and pay 82 percent of all income taxes paid by small businesses.”
Bloomberg Businessweek: “Americans seeking reward money are turning in neighbors, clients and employers they suspect of cheating on taxes to the IRS at a rate of nearly eight per day, the director of the agency’s whistleblower program said.”
Good news for people who steal other people’s social security numbers and report wages using the incorrect SSAN (identity thieves) – the IRS won’t do anything about it. The Treasury Inspector General for Tax Administration issued the following press release:
An estimated 1.2 million tax returns filed in 2007 reported wages earned by taxpayers who used another taxpayer’s Social Security Number, a sign of possible identity theft, according to a report publicly released today by the Treasury Inspector General for Tax Administration (TIGTA). The Internal Revenue Service cannot currently identify identity theft cases when taxpayers file tax returns using an Individual Taxpayer Identification Number (ITIN) and use another person’s name and Social Security Number to work, the report found.
TIGTA conducted this review when it learned that individuals using another person’s Social Security Number to work had their wages attached by the IRS to satisfy a tax debt associated with the tax accounts of the legitimate holders of the Social Security Number. ITINs are intended to provide tax identification numbers to resident and nonresident alien individuals who may have U.S. tax reporting or filing obligations but do not qualify for Social Security Numbers, which generally are only issued to U.S. citizens and individuals legally admitted to the U.S. The issuance of an ITIN, however, does not change an individual’s immigration status, nor does it entitle the individual to work in the U.S. or receive Social Security benefits.
TIGTA assessed whether the IRS has procedures to effectively handle collection issues related to ITINs. The IRS lacks internal guidelines for its employees to follow to assist either the taxpayer whose wages are being attached or the legitimate holder of the Social Security Number (who may unknowingly be the victim of identity theft).
“This report reveals a very troubling situation. The IRS must take steps to ensure that innocent taxpayers are notified when there is evidence that their identity has been compromised,” said J. Russell George, the Treasury Inspector for Tax Administration. “When the IRS is in a position to notify victims of the theft of their identity, it should do so without fail.”
TIGTA recommended that the IRS alert taxpayers that their identity may have been compromised, match ITIN returns with their related reporting returns, such as Wage and Tax Statements (Form W-2), and, update guidelines to handle collection issues associated with ITINs. The IRS generally agreed with TIGTA’s recommendations.
To view the report, including the scope, methodology, and full IRS response, go to: http://www.treas.gov/tigta/auditreports/2010reports/201040040fr.pdf..