Thread: Harry Reid, Barbara Boxer and the continued assault on liberty

Originally Posted by lutherf

Try this on for size, campers - Owe the IRS? You're Not Going Anywhere

So, with this little bit of legislation buried in another 1600+ page bill if you owe the IRS more then $50k your passport will get yanked.

Sounds reasonable, right?

Well, it's not. Let me explain just how easy it is to end up "owing" the IRS $50k and having them place a lien on your property.
- As an example: Your mother passes away and leaves her house to you and your sibling. The two of you agree to sell the house and split the proceeds. The house sells for $250k and the proceeds are split $125k each. The title company issues a 1099-S to each of you and you, being the diligent taxpayer that you are, check with a tax professional or research on the internet and find out that since the basis in the house was stepped up at the date of Mom's death you will have no gain to report on the sale and won't owe any taxes. The real estate agent confirms this. You then do your taxes on turbotax but, since there isn't any gain, don't report anything.

At that point your tax liability will be correct but the IRS is still going to be looking for that sale to be reported. When they don't see it they send you a letter but, in the interim, you moved and never got the letter. When the IRS doesn't get a response from you they make the an adjustment to your tax return considering the sale but with a basis of zero resulting in a short term gain of $125k for you and resulting in a tax increase of $40,000. They also tack on underpayment penalties and late payment penalties bringing the amount of tax you owe to $50k but, since you didn't get the letter, you still don't know about it. Also, since they are now getting return mail and don't know where you are, the IRS issues a lien.

Now, all this happened between April and September. It's now October and you are all ready to hop a plane for the Mediterranean cruise you had planned for the past 2 years and paid for back in July. Unfortunately, when you show up at the airport to check in for your flight you are informed that you are SOL and, instead of sailing the Greek islands, will be filling out paperwork for another 2 months to clean up the mess and that refund for your cruise?....fageddaboutit.

Thank you Harry Reid.

From the legislation (page 1448 of 1676!!) -


BTW, if any of you might be thinking that the above scenario is farfetched, think again. It happens all the time.

You can't beleave what you read on the internet.
Don't take tax advice form a real estate agent.
If a tax professional told them that, he's not very professional and you might think about suing him.
Go to the horses mouth for the answers. irs.gov or a phone call.
A living will does wonders to reduce the tax liability .
Don't blame the irs for peoples stupidity.

Originally Posted by wooyarn

You can't beleave what you read on the internet.
Don't take tax advice form a real estate agent.
If a tax professional told them that, he's not very professional and you might think about suing him.
Go to the horses mouth for the answers. irs.gov or a phone call.
A living will does wonders to reduce the tax liability .
Don't blame the irs for peoples stupidity.

In the scenario above, none of the professionals or the taxpayer did anything wrong - all taxes due were paid and in a timely manner. The only stupidity was on the part of the IRS, who routinely assume worse-than-worst-case scenarios when estimating peoples' tax liability, and then the rest of the government blindly following their lead.

Originally Posted by Evil_inKarlate

In the scenario above, none of the professionals or the taxpayer did anything wrong - all taxes due were paid and in a timely manner. The only stupidity was on the part of the IRS, who routinely assume worse-than-worst-case scenarios when estimating peoples' tax liability, and then the rest of the government blindly following their lead.

Well, technically, the taxpayer did screw up by not reporting the sale but most people don't know that the sale needs to be reported. It's one of those situations that most people don't run into very often so they often don't even know which questions to ask a professional.

Another scenario I run into very regularly is where someone has a managed securities account and several hundred thousand dollars in sales are made but the proceeds all go to new purchases. The taxpayer never sees a dime and may have even generated losses but all the IRS sees is $300k in stock sales so out goes the letter if they aren't reported.

The most common scenario usually involves business owners who don't pay their payroll taxes. That racks up really, really fast but, frankly, I don't have a lot of sympathy for those folks as for all intents they are stealing.

Seems like every time I turn around those darn congress critters are passing legislation putting the screws to people. Seems the senators in question would want to be more, umm, more 'Democratic' about it, eh?

How come they don't pass some legislation putting the screws to themselves? Like what's come of the anti-insider trading legislation for congress that they were all highly motivated to get passed? Public's eye off that ball, and it gets dropped?

Originally Posted by wooyarn

You can't beleave what you read on the internet.
Don't take tax advice form a real estate agent.
If a tax professional told them that, he's not very professional and you might think about suing him.
Go to the horses mouth for the answers. irs.gov or a phone call.
A living will does wonders to reduce the tax liability .
Don't blame the irs for peoples stupidity.

Spoken like someone that has never had to deal with the IRS.

Originally Posted by eohrnberger

Seems like every time I turn around those darn congress critters are passing legislation putting the screws to people. Seems the senators in question would want to be more, umm, more 'Democratic' about it, eh?

How come they don't pass some legislation putting the screws to themselves? Like what's come of the anti-insider trading legislation for congress that they were all highly motivated to get passed? Public's eye off that ball, and it gets dropped?

The bill was signed 4 days ago.

obama insider trading bill - Yahoo! Search Results