THE TAX IMPLICATIONS IN TRUMP’S CONTRACT WITH THE AMERICAN VOTER

Donald Trump’s Contract with the American Voter


Included among measures to clean up the corruption and special interest collusion in Washington, DC
• A hiring freeze on all federal employees to reduce the federal workforce through attrition (exempting military, public safety, and public health).
• A requirement that for every new federal regulation, two existing regulations must be eliminated.
Middle Class Tax Relief and Simplification Act
• An economic plan designed to grow the economy 4% per year and create at least 25 million new jobs through massive tax reduction and simplification, in combination with trade reform, regulatory relief and lifting the restrictions on American energy.
• The largest tax reductions are for the middle class. A middle-class family with two children will get a 35% tax cut. The current number of brackets will be reduced from seven to three, and tax forms will likewise be greatly simplified. The business rate will be lowered from 35% to 15%, and the trillions of dollars of American corporate money overseas can now be brought back at a 10% rate.
End the Offshoring Act
• Establishes tariffs to discourage companies from laying off their workers in order to relocate in other countries and ship their products back to the U.S. tax-free.
American Energy and Infrastructure Act
• Leverages public-private partnerships, and private investments through tax incentives, to spur $1 trillion in infrastructure investment over ten years. It is revenue neutral.
Repeal and Replace Obamacare Act
• Fully repeals Obamacare and replaces it with Health Savings Accounts, the ability to purchase health insurance across state lines and lets states manage Medicaid funds.
Affordable Childcare and Eldercare Act
• Allows Americans to deduct childcare and eldercare from their taxes, incentivizes employers to provide on-site childcare services and creates tax-free dependent care savings accounts for both young and elderly dependents, with matching contributions for low-income families.

Does tax software prepare your returns?

I believe that if you go through the software’s interview process then the software is preparing your return.

However remember that the software is preparing your return based on what you told it. Therefore it’s important to review returns before you send them out just as you would if some tax professional was preparing your returns.

From what I’ve seen from IRS audits the software’s artificial intelligence is not the same as the intelligence of a thinking human being. For example it keeps on asking you questions and you keep on entering the same amounts at different places until the IRS finds them for you. That’s why it’s important to look over the tax return before you send it out or e-file it.

The Tax Court still looks at errors in self prepared returns as (GIGO) garbage in, garbage out. I believe however that as artificial intelligence evolves, in time, software developers will have to take the moral and ethical responsibilities for what they’re doing. You’re seeing this already with self driving cars and drones and robotics.

Even if eventually tax software developers will be penalized as preparers nevertheless you as a taxpayer still remain responsible for any taxes and penalties and interest.

The biggest hurdle in coming into tax compliance

It seems to me that the biggest hurdle in coming into tax compliance is readjusting our living expenses, balancing our budget, so that we are able to live off of net income versus gross income.  This is especially the case where we have not been filing tax returns or paying taxes for quite a while.

The IRS understands this somewhat and is willing sometimes to give us some time to readjust our living expenses.  It’s not exactly cold turkey but there will be some withdrawal pains in the process.

In the other extreme if we really can’t pay our ordinary living expenses, or we have extraordinary circumstances such as huge medical bills then the IRS will give us time to recuperate and put our accounts on currently not collectible status.

When looking for someone to represent you before the IRS make sure that they have some financial planning skills besides the skills necessary to deal with the IRS.  You still have to make the decision and the choices but it helps to have someone who understands how to guide you in the process.

A Massive Loss and a Huge Rebuke for the IRS from the Tax Court in Altera Decision

http://www.procedurallytaxing.com/a-massive-loss-and-a-huge-rebuke-for-the-irs-from-the-tax-court-in-altera-decision/

Lawyer charged with failing to pay nearly $800,000 in income taxes – Chicago Tribune

http://www.chicagotribune.com/news/local/breaking/ct-lawyer-tax-evasion-charges-met-20150528-story.html

TurboTax Glitch Leads To Long Battle With IRS – Forbes

http://www.forbes.com/sites/peterjreilly/2015/05/28/turbotax-glitch-leads-to-long-battle-with-irs/

NYTimes: Five Steps to Secure Your Data After I.R.S. Breach

Five Steps to Secure Your Data After I.R.S. Breach http://nyti.ms/1LIZa0G

NYTimes: I.R.S. Data Breach May Be Sign of More Personalized Schemes

I.R.S. Data Breach May Be Sign of More Personalized Schemes http://nyti.ms/1HMNhJ6

6 Ways To Avoid Ticking Off A Tax Court Judge – Law360

http://www.law360.com/tax/articles/660100?nl_pk=c66c97b4-bcf8-4887-b40d-e1c0d5aba027&utm_source=newsletter&utm_medium=email&utm_campaign=tax

What to Do If the IRS Audits Your Tax Return

http://m.kiplinger.com/article/taxes/T056-C005-S001-what-to-do-if-the-irs-audits-your-tax-return.html