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Tag: tax day
Most Won’t Sweat Income Tax Deadline, Poll Finds

Most Won’t Sweat Income Tax Deadline, Poll Finds

By Kevin G. Hall, McClatchy Washington Bureau

WASHINGTON — One in four Americans waited until the end of tax season to file their returns and a majority think they pay about the right amount in federal taxes, according to a new McClatchy-Marist Poll released Monday, a day before the tax deadline.

The taxman cometh Tuesday, and those Americans who filed their returns well in advance are in the majority. A full 76 percent of respondents to the McClatchy-Marist Poll, which covered the period from April 7 to April 10, said they’d already filed their tax returns.

There’s a logical reason for that, said Lee Miringoff, the director of the Marist College Institute for Public Opinion.

“People who are expecting to get money back are more eager to file earlier,” he said.

Similarly, there’s generally a good reason that last-minute filers send in their tax returns in the final hours.

“Those who have to write another check for their tax bill are more likely to wait until the last minute,” Miringoff said.

Irrespective of when they file, 61 percent of those surveyed said they expected tax refunds this year, while 36 percent didn’t expect to get checks back from the Internal Revenue Service. Nearly 7 in 10 men expected refunds, while just 54 percent of women expected money back from the IRS.

A majority of the adults surveyed — 56 percent — think they pay about the right amount in federal taxes. That finding is surprising, since it contradicts some earlier research from other pollsters that found about half of Americans thought they were paying too much.

Another 42 percent of respondents in the McClatchy-Marist Poll said they paid more than their fair share and just 1 percent said they didn’t pay enough in taxes.

The poll broke the numbers down by political party. It found that 50 percent of respondents who identified themselves as Republicans said they paid more than they should, while 48 percent said that what they paid was about right. Forty percent of respondents who identified themselves as Democrats said they paid too much, and 43 percent of those who said they were independents thought they paid too much in federal taxes.

In another somewhat surprising finding, about 1 in every 2 tax filers turned to specialists to prepare their tax returns, while only 15 percent responded that they use retail software packages to do their own taxes. Another 17 percent of respondents said they turned to family members for help, while 18 percent said they did their taxes on their own without the help of experts or software.

As for sending those tax returns to Uncle Sam, considerably more Americans reported that they filed electronically, even if only a small number said they used retail software packages. Three in 4 Americans responded that they send their tax forms to the IRS by electronic means, while 25 percent said they filed by traditional mail.

Photo: Casey Konstantín via Flickr

TurboTax Maker Linked To ‘Grassroots’ Campaign Against Free, Simple Tax Filing

TurboTax Maker Linked To ‘Grassroots’ Campaign Against Free, Simple Tax Filing

by Liz Day,ProPublica.

Over the last year, a rabbi, a state NAACP official, a smalltown mayor and other community leaders wrote op-eds and letters to Congress with remarkably similar language on a remarkably obscure topic.

Each railed against a long-standing proposal that would give taxpayers the option to use pre-filled tax returns. They warned that the program would be a conflict of interest for the IRS and would especially hurt low-income people, who wouldn’t have the resources to fight inaccurate returns. Rabbi Elliot Dorff wrote in a Jewish Journalop-ed that he “shudder[s] at the impact this program will have on the most vulnerable people in American society.”

“It’s alarming and offensive” that the IRS would target the “the most vulnerable Americans,” two other letters said. The concept, known as return-free filing, is a government “experiment” that would mean higher taxes for the poor, two op-eds argued.

The letters and op-eds don’t mention that, as ProPublica laid out last year, return-free filing might allow tens of millions of Americans to file their taxes for free and in minutes. Or that, under proposals authored by several federal lawmakers, it would be voluntary, using information the government already receives from banks and employers and that taxpayers could adjust. Or that the concept has been endorsed by Presidents Obama and Reagan and is already a reality in some parts of Europe.

So, where did the letters and op-eds come from? Here’s one clue:

Rabbi Dorff says he was approached by a former student, Emily Pflaster, who sent him details and asked him to write an op-ed alerting the Jewish community to the threat.

What Pflaster did not tell him is that she works for a PR and lobbying firm with connections to Intuit, the maker of best-selling tax software TurboTax.

“I wish she would have told me that,” Dorff told ProPublica.

The website of Pflaster’s firm, JCI Worldwide, had listed Intuit among its clients, but removed it after ProPublica contacted them. Pflaster said Intuit had been listed by mistake, but added that the firm does work for the Computer & Communications Industry Association (CCIA), a trade group of which Intuit is a member. Pflaster also said her firm has reached out to multiple groups and encouraged them to share information about the “flaws” of return-free filing.

The only CCIA member that’s involved with tax preparation software is Intuit, and it’s also the only member of the group that has taken a public position on return-free tax filing.

Intuit has long worked against return-free filing. (See How the Maker of TurboTax Fought Free, Simple Tax Filing.) The company has said in filings with the Securities and Exchange Commission that it views free government tax preparation as a risk to its business.

Last year, the company spent more than $2.6 million on lobbying, some of it to lobby on four bills related to the issue, federal lobbying records show.

Both Intuit and CCIA declined to answer questions about their connections to the letters and op-eds. An Intuit spokeswoman, Julie Miller, said in an emailed statement that Intuit works with many types of groups to support “taxpayer empowerment,” and “We feel all points of view deserve to be heard.”

“ReturnFree minimizes the taxpayers’ voice and instead maximizes revenue collection for government,” Miller wrote. “That kind of anti-consumer policy does not advance taxpayer rights.”

CCIA president Ed Black said in a statement, “We think it’s important to help policymakers and the public understand what many already know: ReturnFree is unfair, unworkable and unwise.”

The letters and op-eds — there have been at least eight of them — also appear on a new website, www.FairTaxRefunds.com, which Pflaster said her company created for CCIA. It resembles a similar previous site, www.StopIRSTakeover.org, which was also sponsored by the CCIA.

Another instance in which CCIA solicited a letter wasn’t successful. Angela Martin, director of an Oregon nonprofit, said a PR professional gave her a sample anti-return-free filing letter last year for her organization to send to Sen. Ron Wyden (D-OR).

Martin knew the caller, Colin Cochran, who works for the firm Hilltop Public Solutions.

Cochran used “a lot of words that advocates would be sympathetic to, like ‘oh, it’ll hurt people with English as a second language,'” Martin said.

Martin was skeptical. So she asked Cochran who he was representing. He said he was working for the CCIA and, when asked, said yes, that Intuit is a member.

Cochran confirmed the details of his discussion with Martin, including that he was working for the CCIA. His firm boasts on its website of a “winning grasstops approach” — “grasstops” is industry lingo for recruiting the support of community leaders.

Two other letter writers told ProPublica they were approached by lobbyists, though it’s not clear who the lobbyists were representing.

One letter writer, Richard Smith, the president of the NAACP Delaware State Conference, was approached by a longtime acquaintance with information about how return-free filing would take dollars out of poor people’s pockets. Smith felt so strongly he fired off a letter to Sen. Tom Carper (D-DE), and encouraged other local NAACP leaders to do the same.

Smith said the acquaintance, Anne Farley, told him that if return-free filing was adopted, the government would stop offering free tax filing help to low-income communities. (In fact, none of the bills on return-free filing propose that.)

When ProPublica told Smith that Farley is also a registered lobbyist, he said he was now questioning the information she gave him.

“We may have to retract so far based on my research,” Smith said. “I didn’t question her.”

Lobbying records for Farley’s firm, First State Strategies, do not list Intuit or the CCIA among its clients. The firm’s website does advertise “grass tops advocacy campaigns.” Farley and First State Strategies did not respond to requests for comment.

Dennis Huang, executive director of the L.A.-based Asian Business Association, also told ProPublica he was solicited by a lobbyist to write about return-free filing. When the lobbyist sent him a suggested op-ed last summer and told him the proposal would hurt small businesses, Huang wrote an op-ed in the Asian Journal that claimed Asian-owned businesses would not only spend more time paying taxes, but they’d also get less of a refund each year.

Huang declined to disclose the lobbyist’s name, but acknowledged he didn’t really do his own research. “There’s some homework needed,” he said.

Oregon’s Martin did some research on return-free filing and now supports it. She also co-published a post about the issue and the PR efforts related to it because, she says, she was alarmed that other nonprofits could easily agree to endorse a position they did not fully understand.

“You get one or two prominent nonprofits to use their name, and busy advocates will extend trust and say sure, us too,” Martin said.

Photo: absoblogginlutely via Flickr

 

Married Status Adds New Wrinkle To Tax Time For Married Gays

Married Status Adds New Wrinkle To Tax Time For Married Gays

by Stephanie Akin, The Record

Tax time has been described as anxiety-inducing and unnecessarily confusing, and its inescapability has even been equated with death. Now, it’s a reason for celebration — at least for same-sex couples who for the first time can check off the box that says “married” on their 1040s.

Tim Eustace and his husband, Kevin, marked the occasion by going out to dinner in downtown Maywood, N.J., where they live. Jeff Farlow, 30, of Pine Hill posted his refund on Facebook. And Jeff Gardner, 45, of Hawthorne described a visit to the accountant with this incongruous adjective: “Momentous.”

Filing as a newly married couple entails its own set of headaches, and filing for the first time as a same-sex married couple comes with an assortment of questions. But many said the symbolic significance is worth the hassle — at least this time around.

“It’s another act that points out that the government legally recognizes us as a legitimate couple,” said Charles Cumpston, a retired publishing executive from Fort Lee. “That’s pretty incredible.”

For many, the status means a huge reduction in paperwork, lower bills for tax preparation and a bigger refund. But the transition hasn’t been completely without its glitches — this is a tax issue, after all.

Some have dealt with setbacks familiar to any married couple, including the realization that they fall in the group that pays the so-called marriage penalty. Married people often begin to pay more than they would if they were single as a couple’s joint income increases, regardless of whether they file jointly or as a married couple filing separately.

Some couples who fall in the opposite category, those who get a bigger refund filing jointly, are working to get reimbursed for past taxes they paid as single filers while they had civil unions or marriages recognized in other states.

And couples who were legally married in one state, but work in a state that doesn’t recognize gay marriage face another challenge: filing separate state tax returns as individuals there, a reminder, they said, of why a nationwide debate is still raging.

In New Jersey, couples with civil unions have been allowed to file jointly since 2008. But they still had to file separate federal forms as single people, which in many cases almost doubled their tax preparation fees, said Ted Carnevale, a CPA and chief executive officer at Gramkow Carnevale Seifert & Co. in Oradell.

The elimination of that requirement means that the same tax rules apply to married couples claiming all their income in New Jersey, regardless of their sexual orientation. But some couples still have a lot of questions, Carnevale said.

“You could have people who have been life partners together for a long time, and now their tax (situation) has changed dramatically,” he said. “They have been used to being together and filing a certain way.”

Carnevale said some couples are also confused about whether they can file joint federal returns if they have a civil union and aren’t married — they can’t.

But not every couple has managed a seamless transition to their new tax status, said accountant Phil Goldstein of Goldstein Lieberman & Co.

One pair of longtime clients has been agonizing over the news that their marriage would eliminate one spouse’s $6,000 refund, although it would mean an $11,000 savings for the higher-earning partner, he said.

“The one who made more said, ‘If it’s costing us more to be married than if we were single, I think we should separate,'” he said. The couple eventually resolved their differences and decided to stay together.

But, he added, he saw the dispute as another sign of marriage equality: it was a version of an argument he’d seen between dozens of heterosexual couples over the years.

“It doesn’t make a difference if it’s a heterosexual couple or a gay couple,” he said. “Money is money, and people fight over it.”

Photo: AgriLife Today via Flickr