WELL IT'S ABOUT FEKKING TIME!

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The announcement finally came!

“Governor Jon S. Corzine today announced that the deadline for New Jersey’s senior and disabled homeowners to file 2008 Homestead Rebate applications has been extended to August 17, 2009. The deadline for filing a 2008 Senior Freeze (Property Tax Reimbursement) application has also been extended to August 17. The original deadline for filing 2008 applications for both programs was June 1, 2009.”

Each year the New Jersey Division of Taxation announces that the deadline for disabled and senior homeowners to file the Property Tax Reimbursement application (PTR-1 or PTR-2) and the NJ Homestead Rebate application is June 1st. And each year the deadline is pushed back to mid-August. And in early August each year the deadline is again pushed to October 31st.

This year the Governor waited until literally the last minute to announce the deadline extension, given that June 1st is Monday. What the f*ck was he waiting for? He had me worried such that I spent yesterday morning rushing though PTR forms to be sure to get them in the mail to clients before the end of the day. I had already begun a post titled “THE DFB’S!” (clean version is Damned Fool Bureaucrats – but you know damned well that is not what I meant) which chastised the State for not automatically extending the deadline when it had been expected, causing tons of NJ senior and disabled homeowners to lose out on this benefit.

To be honest I would not have been too surprised if the deadline had not been extended – knowing full well how those in Trenton like to screw NJ residents left and right when it comes to taxes and fees.

So we can now rest easy – knowing that there is at least 2½ months left before these applications are due – and probably in reality 5 months.

I cannot end without wondering why the idiots don’t just make the deadline for these applications October 31st, or August 15th, in the first place and stop playing this game every year?

TAFN

A FLAT TAX FOR NJ – SOUNDS GOOD TO ME!

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A good piece recently appeared in the Wall Street Journal’s Opinion Journal titled “New Jersey's Flat Tax Debate: Christie's cheap shots can hurt everyone” (no author credited).

The item discusses a proposal by Republican gubernatorial candidate Steve Lonegan, former Mayor of Bogota, to scrap Jersey's graduated income tax that has rates running from 1.4% to 8.97% and replace it with a 2.98% flat tax on the first dollar of income earned. The “flat tax” is opposed by rival Republican candidate Chris Christie.

This is like Pennsylvania’s current flat tax on all taxable income of 3.07%. The PA state income tax system is similar to the NJ Gross Income Tax (actually PA came first – we stole it from them) in that it is a “gross” income tax with minimal deductions. It does not allow losses in one category of income to offset income in other categories. If you have $10,000 in wages and $3,000 in stock market losses you are taxed on $10,000. However in PA income is taxed from “dollar one” – there is no personal exemption or filing threshold. PA does have a special “Tax Forgiveness” credit for lower income filers.

According to the piece, “If ever a state were ripe for bold economic reform, it would be New Jersey, which is shedding jobs and is in perennial budget crisis despite one of the highest tax burdens in the land”.

Candidate Christie’s ads claim that the flat tax isn't fair because it would raise taxes on "almost 70% of working families." But “Mr. Lonegan counters that only 40% would pay more -- by an average of less than $300 for a family earning $20,000 -- and their tax liability would still be lower than in New York and Pennsylvania. The average New Jersey family's tax bill would fall by $1,000 a year.”

In defending his flat tax on the first dollar Lonegan says what I have been saying for quite a while now about the federal income tax – “every working New Jersey resident should pay something -- on the principle that everyone should bear at least some of the cost of government”.

The item points out that under current Governor Jon “Big Disappointment” Corzine and his predecessor Jim “Gay American” McGreevey NJ has enacted “103 tax increases, including income and sales tax rate hikes”.

And “from 2001 to 2008, New Jersey lost a net 25,000 private-sector jobs even as public employment grew by 65,000 workers”. Since government workers will vote for the Democratic party this makes good political sense, although horrible public policy. But then we residents of the Garden State all know too well that NJ politicians only care about maintaining the “status quo” and fattening their own wallets, and those of their supporters, and don’t give a horse’s arse about what is best for the state.

I support Steve Lonegan’s flat tax proposal, and am leaning toward voting for Steve in the primary. Christie made his name putting away NJ corrupt politicians – and while he made a good start he barely scratched the surface since most NJ politicians remain in office (if he were able to put all NJ corrupt politicians behind bars we would need to annex Rhode Island as a prison) – but he is basically a “one hit wonder”, so to speak, and he has the backing of the state’s existing Republican leaders, which is not necessarily to his credit.

One thing is sure – New Jersey needs to “get a GRIP” (Get Rid of ALL Incumbent Politicians) in the coming election!

TAFN

NJ TAX AMNESTY PROGRAM NOTICES

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I received NJ Tax Amnesty notices for two of my own corporations this past Saturday. One corporation is current and the other has been out of business since the end of 2002.

I found the amnesty process very easy. I simply went to www.taxamnesty.nj.gov and entered the Amnesty ID number (rather lengthy) and PIN provided on the notice. The system provided a list of all outstanding returns, the same list that appeared on the notice. In both cases all listed returns had "0" for “Amnesty Tax Due” and the “Reason Selected” was “No payment required, zero return”. The system provided a “Final Application Confirmation”, showing all the returns submitted and giving a Confirmation Number, which I printed out using a “Printer Friendly” format.

The entire process took less than 5 minutes!

I have yet to hear from clients who have received the notice.

The Amnesty notice for the old corporation brings up an interesting point about the State’s inconsistent treatment of businesses that have not filed an Annual Report Form, which I will discuss in a future posting.

FYI, the notice for the old corporation included only delinquent “Gross Income Tax -Employer” returns, as did the one for the current corporation. There was no mention of outstanding CBT-100s or Annual Reports on the notice for the old corporation. It makes me wonder if the State is sending out notices by Tax Type, with Gross Income Tax being the first type, and that the same business entity may receive several notices for different types of taxes over the Amnesty period.

TAFN

NY-NATP NEWSLETTER

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The April 2009 issue of the New York State chapter of NATP's newsletter is available to download.

The issue discusses the new definition for a “permanent place of abode” and provides the dates and locations for the chapter’s fall state tax seminars.

The chapter will be offering a special “Basic IT-201 Preparation” workshop in December.

Click here to download the issue.

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TAFN

NJ-NATP DISCUSSES PA STATE TAXES

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Here are some more details on the upcoming NJ-NATP “Breakfast Seminar”.

Enrolled Agents Amy Gambler and Kathy Bowman will discuss PA tax issues, including –

· Easily missed PA items,

· Tax Forgiveness,

· Part-year residents,

· Reciprocity,

· PA property tax rebate

· Berkheimer local taxes

The cost is $40.00 for a NATP member and $55.00 for a non-member if postmarked before May 20th and $70.00 for all if postmarked on or after May 20th or at the door.

Click here to download a registration form.

TAFN

A FIRST

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Here, from a recent post at THE WANDERING TAX PRO, is a first! I have never heard of this happening before in 37 years of preparing 1040s.

Look what happened to a client -

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“{My son’s} return was properly addressed to the IRS. I mailed it myself. The US Postal Service had delivered {the} tax return to a company in Kansas City MO instead of delivering it to the IRS address. That company had opened the letter up, must have looked at the information inside, and it was returned back to {my son} with a small explanation attached. What I can't figure out is why they just didn't give it back the Post Office and it would of been on it's way. So, know we are worried about someone having all of {my son's} information and are concerned.”

I provide my clients with pre-addressed envelopes to use in mailing their tax returns. The address on the envelope is from a self-created page of labels. So the Post Office certainly could read the correct address. And those who know me will tell you that even if I hand wrote the address it would be easily readable.

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A properly addressed envelope, confirmed by the client, was provided in the above instance. So there is really no excuse for the tax return not being delivered to the proper Internal Revenue Service address in Kansas City, MO.

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As I said, this is the first time I have encountered such a massive FU by the Post Office. In the past I have always praised their service and announced that I have never lost a tax return in the mail. The closest incident was several years ago when a package from Rhode Island never arrived at my office. The client was able to track it down within the PO and it eventually made its way to Jersey City intact.

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I prefer Post Office overnight to FedEx or more expensive services. The Post Office delivered an overnight package to a client on Easter Sunday once, while FedEx could not always guarantee overnight delivery to out of the way locations within the US.

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I do share my client’s curiosity about why the letter was opened in the first place by the company who received it in error. It was clearly addressed to the Internal Revenue Service and not them, so it should have been promptly returned to the Post Office unopened. Is opening something addressed to the IRS breaking a federal law?

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There was no refund requested on the return in question (and therefore no direct deposit information), and there was no payment enclosed with the return – it was a “0” liability + “0” withholding return filed only to report excessive stock losses to be carried over. The return did not include any real financial information other than the son’s Social Security number. And the company did return the return to the son, so they at least have the appearance of honesty.

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This situation seems to support “e-filing” of a return, although there are also confidentiality concerns connected with the electronic filing system.

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Has this ever happened to anyone out there before?

TAFN