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Bergen Bar Tax Bulletin: Vol. 37 No. 11

By Theodore M. David, Chair, Tax Law Committee

Current Items:                                                                                    

1) Tax Cops   

2) Inflation Hooray

3) A Turkey Tribute

1). Over 2,500 criminal investigations, the identification of more than $10 billion from tax fraud and financial crimes, and a nearly 90% conviction rate are just a few highlights from the IRS-Criminal Investigation (IRS-CI) Fiscal Year 2021 Annual Report. The report details statistics, important partnerships, and significant criminal enforcement actions from IRS-CI, the criminal investigative arm of the IRS, for the past fiscal year, which began Oct. 1, 2020, and ended Sept. 30, 2021. Among the various goings-on at the CI was that of April 2021, a dual Russian-Swedish national was arrested in Los Angeles on criminal charges related to his alleged operation of the longest-running bitcoin money-laundering service on the darknet dubbed Bitcoin Fog. The bulk of cryptocurrency laundered through Bitcoin Fog came from darknet marketplaces and was tied to illegal narcotics, computer fraud, and identity theft. This case marked the second U.S. prosecution of a cryptocurrency mixing service. Nice to know that IRS is surfing the dark web. Perhaps someone can tell me exactly where that is? The 2500 cases have a conviction rate of about 99.99%. So indeed it looks like IRS is doing its job..but 2500 amounts to about .00001 of the tax-filing population and who knows what it means in terms of the entire tax population considering those who just don’t file. That translates into the likelihood of winning the lottery and being hit by lightning on your birthday. When I was a young IRS recruit I wanted to be a CI criminal agent. They got to carry guns, protect the President some, and retire after 20 years. They also got to kick in doors on raids with the FBI wearing cool jackets with IRS on the back. Shame, I guess it’s just virtual now.

2).  The Internal Revenue Service has announced the tax year 2022 annual inflation adjustments for more than 60 tax provisions, including the tax rate schedules and other tax changes.

The tax year 2022 adjustments generally apply to tax returns filed in 2023:

  • The standard deduction for married couples filing jointly for tax year 2022 rises to $25,900 up $800 from the prior year. For single taxpayers and married individuals filing separately, the standard deduction rises to $12,950 for 2022, up $400, and for heads of households, the standard deduction will be $19,400 for tax year 2022, up $600.
  • The personal exemption for tax year 2022 remains at 0, as it was for 2021, this elimination of the personal exemption was a provision in the Tax Cuts and Jobs Act.
  • Marginal Rates: For tax year 2022, the top tax rate remains 37% for individual single taxpayers with incomes greater than $539,900 ($647,850 for married couples filing jointly).

The other rates are:

  • 35%, for incomes over $215,950  ($431,900  for married couples filing jointly);
  • 32% for incomes over $170,050  ($340,100  for married couples filing jointly);
  • 24% for incomes over $89,075  ($178,150  for married couples filing jointly);
  • 22% for incomes over $41,775 ($83,550  for married couples filing jointly);
  • 12% for incomes over $10,275  ($20,550  for married couples filing jointly).
  • The lowest rate is 10% for incomes of single individuals with incomes of $10,275 or less ($20,550 for married couples filing jointly).

 Thank God You’re Not a Turkey

Wouldn’t it be pleasant
To perhaps be a pheasant?
Or maybe a goose
Out on the loose.
But when leaves turn red,
You’d be filled with dread
If you were a turkey.

Why, if you were a turkey,
You’d be on the phone all day,
Talking with your lawyers,
Having bills to pay
To settle up the life jams,
Waiting for the roast yams.
Not wasting time a bluffin’
You could feel the stuffin’.
Your gizzards would begin to beat,
Your Maker soon, you would meet.

So when it’s time to dine and sip,
Include this prayer upon your lip:
“Be grateful for all you see
And that a turkey, you will never be.
Thank God for birds who don’t mind the loss,
When plucked and stuffed
And cooked in sauce.

 

Tax Law Committee Questions or Comments should be sent to:
Theodore M. David
e-mail: Tdavidlawyer@gmail.com