by | ARTICLES, BLOG, ECONOMY, FREEDOM, OBAMA, POLITICS, RETIREMENT, SOCIAL SECURITY, TAXES
Our Social Security System is bankrupt. In fact, there is not enough money in the entire world for the United States to make good on its entitlement promises to its present and future retirees. And one of the key reasons for this is that the government uses a fraudulent, incompetent accounting method to report its costs.
As a CPA, it is frustrating to hear Social Security repeatedly being described as a pay-as-you-go (“PAYGO”) system, which gives credence to something that is terribly incorrect. PAYGO operates by calling all social security payments received by the Government in a year as income, and all monies paid out as expenses. It does not account at all for the fact that millions of workers are earning billions of dollars of Social Security pension every year, but since it will only be paid to them in the future, PAYGO ignores it! It would be as if your local mom & pop store promised its employees a retirement pension, but never recorded it as an expense and never put aside any money to pay for it when it would come due. This is not only totally unacceptable to the accounting professions, the SEC, and the Department of Labor, but it would be a criminal violation with jail time for any corporate officer allowing it.
The fallacy of calling it PAYGO is that it reports employees contributions as income, but the purpose of these payments is to pay for their ultimate retirement pension – yet none of this obligation to pay future benefits is recorded.
We need to be including in our current budget the amounts we are promising to pay in the future! The promises that we’ve made in the past — what we are paying out today — are not a part of this year’s costs – these are old liabilities and are part of our already existing debt. The US debt is currently being reported as just over $19 Trillion. When the real social security debt is added, the true National Debt becomes almost $60 trillion. (As an aside, Medicare payments and benefits are treated the same as Social Security – if the unrecorded Medicare existing debt were also properly included, the National Debt would be over $100 Trillion – way more money than exists in the entire world!)
It is clear that these promised benefits have ZERO chance of ever actually being paid. And the longer our legislators allow this fraud to continue, the worse it will be for ourselves, our children, and our grandchildren.
by | ARTICLES, BLOG, BUSINESS, ECONOMY, ELECTIONS, FREEDOM, GOVERNMENT, OBAMA, POLITICS, TAXES
As a tax practitioner, I have been following the IRS scandal since the beginning. Here’s the latest update — the list of IRS target have been released, 3 years later. From the Washington Times:
More than three years after it admitted to targeting tea party groups for intrusive scrutiny, the IRS has finally released a near-complete list of the organizations it snagged in a political dragnet.
The tax agency filed the list last month as part of a court case after a series of federal judges, fed up with what they said was the agency’s stonewalling, ordered it to get a move on. The case is a class-action lawsuit, so the list of names is critical to knowing the scope of those who would have a claim against the IRS.
But even as it answers some questions, the list raises others, including exactly when the targeting stopped, and how broadly the tax agency drew its net when it went after nonprofits for unusual scrutiny.
The government released names of 426 organizations. Another 40 were not released as part of the list because they had already opted out of being part of the class-action suit.
That total is much higher than the 298 groups the IRS‘ inspector general identified back in May 2013, when investigators first revealed the agency had been subjecting applications to long — potentially illegal — delays, and forcing them to answer intrusive questions about their activities. Tea party and conservative groups said they was the target of unusually heavy investigations and longer delays,
Edward D. Greim, the lawyer who’s pursuing the case on behalf of NorCal Tea Party Patriots and other members of the class, said the list also could have ballooned toward the end of the targeting as the IRS, once it knew it was being investigated, snagged more liberal groups in its operations to try to soften perceptions of political bias.
“As we have identified in our filings in this case, important questions still exist regarding changes to the IRS‘ case listings that occurred after theIRS learned that the [inspector general] and congressional investigations had begun,” he said. “Based on these changes, which to date remain unexplained, a very real possibility — if not probability — exists that theIRS modified its targeting in light of the investigations, packing its own internal lists of targeted groups to support its preferred narrative, including by adding ideologically diverse groups.”
He said if that did happen, it would have “tainted” the list the IRS has now released.
The IRS declined to comment, saying its filing spoke for itself.
A series of investigations found the IRS did ask intrusive questions and did delay applications for years, in violation of policy. But so far no investigation has found any order from the White House to conduct the targeting.
‘Tea’ and ‘patriot’ groups
Sixty of the groups on the list released last month have the word “tea” in their name, 33 have “patriot,” eight refer to the Constitution, and 13 have “912” in their name — which is the monicker of a movement started by conservatives. Another 26 group names refer to “liberty,” though that list does include some groups that are not discernibly conservative in orientation.
Among the groups that appear to trend liberal are three with the word “occupy” in their name.
And then there are some surprising names, including three state or local chapters of the League of Women Voters — a group with a long history of nonprofit work.
Some of the most active and prominent tea party groups snared in the targeting aren’t on the class-action list. At least some of them opted not to be part of the joint legal action to preserve their own lawsuits.
Congressional Republicans say IRS Commissioner John Koskinen, who was brought in by President Obama to clean up the agency after the targeting scandal, has failed — and even misled Congress during the investigation. Some Republicans are even pursuing impeachment against Mr. Koskinen, accusing him of defying a subpoena for former senior IRSexecutive Lois G. Lerner’s emails by allowing computer backup tapes to be destroyed.
Even outside of impeachment, the House GOP has proposed a new round of budget cuts for the IRS, aimed at trying to deliver a message that Mr. Koskinen’s tenure has been unacceptable.
And the tax agency is still defending itself in a series of court cases. In addition to the NorCal class action case, the federal appeals court in Washington, D.C., is currently considering an appeal by tea party groups who argue the targeting is still going on.
“One thing remains clear: Continued litigation is the only way to force theIRS‘ hand in order to expose its targeting scheme that was coordinated with the help of the DOJ and other federal agencies so that we can obtain justice for those patriotic Americans who were unconstitutionally targeted by their own government,” said Jay Sekulow, chief counsel at the American Center for Law and Justice, which is representing some of the plaintiffs in the appeals case.
In yet another case, the conservative group Cause of Action has been pursuing the IRS to turn over documents the group believed would show White House officials requesting secret taxpayer information on conservatives.
But in a filing Friday, the IRS said it has conducted a final search and can’t find any evidence that the White House either asked for or received protected information.
by | ARTICLES, BLOG, BUSINESS, ECONOMY, FREEDOM, GOVERNMENT, OBAMA, POLITICS, RETIREMENT, TAXES
The Financial Times reviewed data recently that suggested that the US public pension system is in dire straits; the funding shortage is likely 3 times as large as what is being reported. The estimated deficit is $3.4 trillion.
The solutions for the funding shortfalls are grim: either raise taxes or cut spending; unfortunately the “cut spending” approach always goes to the essential services first, so that taxpayers feel the heat and will consider a tax hike instead.
US Congressman Devin Nunes recently noted that, “It has been clear for years that many cities and states are critically underfunding their pension programmes and hiding the fiscal holes with accounting tricks.” Nunes has “put forward a bill to the House of Representatives last month to overhaul how public pension plans report their figures.” He added: “When these pension funds go insolvent, they will create problems so disastrous that the fund officials assume the federal government will have to bail them out.”
Insolvency has already been observed in San Bernardino, California and Detroit, Michigan, largely due to mismanagement of pension funding and budget shortfalls. The Financial Times noted that “Chicago, Dallas, Houston and El Paso have the largest pension holes compared with their own revenues”, as well as the states of Illinois, Arizona, Ohio, and Nevada.
Research done by Stanford paints a difficult future: “Currently, states and local governments contribute 7.3 per cent of revenues to public pension plans, but this would need to increase to an average of 17.5 per cent of revenues to stop any further rises in the funding gap.”
And more: “Several cities and states, including California, Illinois, New Jersey, Chicago and Austin, would need to put at least 20 per cent of their revenues into their pension plans to prevent a rise in their deficits, while Nevada would have to contribute almost 40 per cent.”
Much of the problem lies in the fact that retirement costs and liabilities have consistently been calculated on a 7%-8% return , which is not particularly realistic, as has been demonstrated in recent years during the economic downturn.
There is no way this silent funding crisis will get any better — and until localities recognize and admit their crisis and make ardent changes to their pension systems, it will only continue to worsen egregiously.
by | ARTICLES, BUSINESS, ECONOMY, FREEDOM, GOVERNMENT, HYPOCRISY, POLITICS, TAXES
Yesterday, The Treasury Department made more changes to rules with regard to inversions. The driving force behind the constant meddling into this legal practice is the retention of tax revenue.
“Under the new rules, there will be a three-year limit on foreign companies bulking up on U.S. assets to avoid ownership requirements for a later inversions deal, Treasury said in a statement.”
In an inversion, a U.S. company typically buys a smaller foreign rival and reincorporates to the rival’s home country, which moves the company’s tax domicile, though core management usually stays in the United States.
The Treasury, which had last introduced new rules in November to curb inversions, also is proposing tackling the practice of post-inversion earnings stripping with new limits on related-party debt for U.S. subsidiaries.”
This continued attack on inversions is ridiculous and companies are being targeted unfairly because they represent a possible loss of revenue for the government. Inversions are legal, and sometimes necessary. They are a way for U.S. companies to change their HQ from the U.S. to a foreign country, for the sole purpose of allowing themselves the express privilege of being on par with foreign companies and eliminate the severe disadvantage that the U.S. puts on its own businesses via excessive taxes!
It is outrageous that the government applies such discrimination. It is outrageous that American companies have to chose to move their headquarters elsewhere simply to survive and compete globally, because they are taxed on their profits in two jurisdictions — both domestic and foreign.
by | ARTICLES, BLOG, BUSINESS, CONSTITUTION, FREEDOM, OBAMA, OBAMACARE, TAX TIPS, TAXES
Find Out How ACA affects Employers with 50 or More Employees
Some of the provisions of the health care law apply only to large employers, which are generally those with 50 or more full-time equivalent employees. These employers are applicable large employers – also known as ALEs – and are subject to the employer shared responsibility provisions.
Information Reporting
Applicable large employers have annual reporting responsibilities concerning whether and what health insurance they offered to their full-time employees during the prior year. In 2016, the deadline to provide Forms 1095-C to full-time employees is March 31. The deadline by which ALEs must file information returns with the IRS is no later than May 31 or June 30 if filed electronically.
All employers, regardless of size, that provide self-insured health coverage must file an annual return reporting certain information for individuals they cover. In 2016, the deadline by which self-insured ALEs must provide Forms 1095-C to responsible individuals is March 31. The returns with 2015 information are due no later than May 31 or June 30 if filed electronically.
Employer Shared Responsibility Payment
ALEs are subject to the employer shared responsibility payment if at least one full-time employee receives the premium tax credit and any one these conditions apply. The ALE:
- failed to offer coverage to full-time employees and their dependents
- offered coverage that was not affordable
- offered coverage that did not provide a minimum level of coverage
SHOP Marketplace
Employers with more than 50 cannot purchase health insurance coverage for its employees through the Small Business Health Options Program – better known as the SHOP Marketplace. However, Employers that have exactly 50 employees can purchase coverage for their employees through the SHOP.
For more information, visit the Determining if an Employer is an Applicable Large Employer page on IRS.gov/aca.
