WRITTEN BY: Theodore M. David, Chairman
TAX LAW COMMITTEE
Current Items:
- Know When to Fold Them
- How You Do-in’?
- A Sweet Spot
1) Congratulations you’ve been a good citizen. Survived another tax season and you join the other hundred and 60 million individual tax returns that were filed. This year the tax filing deadline was April 18, 2023 and it is now safely behind us. Of course there are those who file for extensions and will get their stuff together in time to get those papers filed properly. But there are approximately on the other hand 1.5 million people who are about to fold their cards with regard to tax refunds they are entitled to for tax year 2019. That year IRS extended the filing date to July 17. What this means is that about $1.3 billion is about to go unclaimed by those millions of people. So should you have a client or perhaps actually be one yourself it’s time to get that return filed for 2019 before July 17, 2023. The average refund that is going unclaimed is about $900 per taxpayer. IRS does not create a return for taxpayers who are owed any money. Ours is a self-assessment system and you just have to file. The confusion comes in because single taxpayers with income less than $12,200 and married couples with income less than $24,400 for 2019 were not required to file tax returns. And they are still not required to file. However, if those taxpayers were subject to withholding that money is sitting waiting to be claimed as a refund with IRS. Even in cases where no withholding or other payments were made some taxpayers will qualify for “refundable” credits. This could be $6000 or more for 2019. So even if no payments were made during the tax year a taxpayer can still receive a refund as the refundable credit is treated like a payment. There are some special rules about filing a 2019 return now. Taxpayers cannot use the IRS Free File Tool on the IRS website. It is available only for current tax year returns. Taxpayers must also file a paper tax return so no electronic filing is permitted. Filing a paper tax return guarantees that any refund will take longer to receive. Lastly a “hold” may be placed on the issuance of the refund if the taxpayer has not filed subsequent tax returns for 2020 and 2021. You can get the necessary forms for tax year 2019 at IRS.gov. The July 17, 2023 date can’t be extended under federal tax law.
2) When Ed Koch was mayor of New York he was fond of asking people: How am I doing? The IRS feels the same way about that stuff. So annually it publishes the IRS Data Book. And for those enthusiasts interested in exactly how IRS was doing from October 1, 2021 to September 30, 2022 the 2022 Data Book, available at IRS.gov, is for you. But if instead you have a decent life to lead and have other ways of squandering your time here are some tidbits from that report: IRS collected $4.9 trillion during that time period. That amounts to 96% of the cost of the entire government. As expenses go, for every $.29 spent funding the agency it collected $100. So it would appear that we are getting our money’s worth. IRS also says that in its survey of taxpayers it gets a 78% satisfaction rating! Not bad and way better than any of the recent sitting Presidents, indicted or not. IRS said 262.8 million tax returns were filed during the period which included 160.6 million individual tax returns. And taking their advice, 94% of those individual tax returns amounting to 150.6 million tax returns were e-filed electronically. The IRS also declared that it is continuing to pursue higher income taxpayers with no plans to increase audit levels for taxpayers whose income is less than $400,000. A Biden magic number? So now you decide how are they do-in’?
3). A healthy lawyer is a happy lawyer. A happy lawyer has happy clients. So what is the easiest way to become a happy lawyer with happy clients? Easy. Recognize the science behind chocolate. Fill client reception areas and your own office with chocolate not flowers and certainly not magazines declaring you as a Super Lawyer or boring ABA journals. You see cocoa is good for you. It contains high dosages of fiber and something called phytonutrients. Now before you think I have lost my mind let me tell you there are a number of medical journals which have concluded dark chocolate can assist in lowering blood pressure and reduce the incidence of heart disease. In one study there was a 27% reduction in heart related deaths. Now before you go and binge keep in mind that the fat, sugar and those extra calories that chocolate has may, in some cases, offset the advantages. Can chocolate ice cream be far behind?
Questions or comments should be emailed to: [email protected]