Here are great source sites used for our research and possibly useful as you enter tax season:
As promised last Friday we wanted to share some neat stats and information concerning taxes and the collection of, and the IRS in general.
This is a brief review of the subject matter from our pending 2020 Q2 Newsletter which will hit your mailbox right around tax filing date, and we thought it a good time to share some stats.
We know that when you think of the IRS and taxes you’re mostly concerned with one thing … ENFORCEMENT!
With brevity a concern in this venue, we will drill directly to the enforcement portions of our much deeper and more comprehensive article … again in our Pending Q2 Newsletter.
Enforcement of Tax Collections and IRS Statistics
In dealing with the IRS and tax situations over the past 31 years the one thing that we have found most important is to always respond to the IRS in a timely fashion.
Our general IRS/Client experience over the past three decades has been a very good one. We have found the IRS to almost always be very receptive to information, understanding of mistakes, and even frequently waving penalties and interest …however this last point is not always in stone given certain situations
Amazingly nearly 2/3 of audits, which are almost all done by paper due to the cost of a field audit are not answered, resulting in a claim on the taxpayer. Bottom line, make sure you show the IRS that you’re answering their questions in a timely fashion and expect a paper computer driven notice.
The majority of audits and notifications (AKA CP2000) are created or driven by an income mismatch – said another way, if you earn some income, wages, interest, investments, or some type of capital gains, and you do not get it on your tax return, it’s easy for the IRS to catch, and you WILL get a notification. (CP2000)
Sir Learned Hand, Famous Quote
“Anyone may arrange his affairs so that his taxes shall be as low as possible; he is not bound to choose that pattern which best pays the treasury. There is not even a patriotic duty to increase one’s taxes. Over and over again the Courts have said that there is nothing sinister in so arranging affairs as to keep taxes as low as possible. Everyone does it, rich and poor alike and all do right, for nobody owes any public duty to pay more than the law demands.”
While you hear us talk about tax reducing strategies frequently, (here, here, here ) as we are big believers in not paying any extra taxes, we are also very big believers of being fair and honest with the IRS. Over the years we have been presented with many gray area tax strategies that have almost inevitably not held up against the IRS.
If it sounds too good to be true, it usually is in the end … don’t even think about going there – the IRS will eventually find you, and it will most always be at the most inconvenient time!
Having respect, and mutual admiration for the IRS and its’ enforcers, but not fearful or conspiracy, is a healthy way to go about your tax responsibility as a United States Taxpayer!
Have a Great “Tax Stats” Day!
John A. Kvale CFA, CFP
Founder of J.K. Financial, Inc.
A Dallas Texas based fee only
Financial Planning Total Wealth
Management firm.
32.862841
-96.808100
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January 2020 Podcast Video (Dogs Blooper at 2:55), Financial Planning and Capital Market Update – By John Kvale
Hello and Welcome to our January 2020 Financial Planning and Capital Market Update!
If you are too busy to read, feel free to listen as we describe our post and thoughts in friendly podcast audio format as well as Video!
Newbies –
We like to articulate our thoughts and review on a Monthly basis our Financial Planning Tips, Capital Markets and current events!
January – 2020 Video
Financial Planning Tip (s) –
Handy New Tax Rates and Table
Early in the month, here in this post, we review the new contribution levels, rates and maximums.
As suspected, we have reviewed this ourselves a ton of times already as 2019 and 2020 levels blur during conversations…
Homesteading Reminder
In our article here, we remind all of those who may have changed primary residence last year to check their homesteading provisions as this can be a significant saving, depending on your situation.
Examples
Helping Close Relatives or Others
During the month, we had multiple Financial Planning questions for close relatives and friends, which were asked, but some what hesitantly…
Wanting to reinforce the fact that we are glad to help, in this article we remind everyone we are not only flattered by the question, but VERY happy to help!
Tax Forms and Information Reminders
In another handy reference post, here, we discuss the tax form alphabet and more importantly, note the due dates and expected delivery times of the most common tax forms….
We know, it’s tax season again…not everyone’s fav…but we are trying to help make it easier.
Capital Market Comments
The markets finally took notice of the CoronaVirus. As scary as the virus is, modern day medicine and the actual fast spreading of the event and comprehension, unlike SARS which we remember well will likely help stem the fears and spread of the virus.
Have a Great Day – Talk to you at the end of February!
John A. Kvale CFA, CFP
Founder of J.K. Financial, Inc.
A Dallas Texas based fee only
Financial Planning Total Wealth
Management firm.
www.jkfinancialinc.com
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Posted in General Financial Planning, Investing/Financial Planning, Market Comments, Monthly Review, Podcast, Tax Related, Video
Tagged Corona Virus, Homestead, SARS, Tax Rates, Tax Schedules