Monthly Archives: March 2015

GOOD NEWS FOR ESTATE TAX FOES

House action last week caused at least a “baby step” to be taken relative to repeal of the estate tax.  The House Ways and Means Committee, by a vote of 22 to 10, passed H.R. 1105, the “Death Tax Repeal Act of 2015.”

If/when it ever reaches Obama’s desk, veto is likely, but at least some in Congress are heading in the right direction.

If passed, the act would not only repeal the estate tax, but also the GST tax for estates of decedents dying after the date of enactment.

The bill would retain the gift tax with a top marginal rate of 35%, and basis rules would remain unchanged (carryover basis for gifted assets; fair market value step up for inherited assets.)

 

Could Cuban Player Defections Really Mess Up New Baseball Relations?

If you heard today’s NPR story on “With Improved Relations, Are The U.S. And Cuba Ready To Play Ball?“, then you heard a reference to the little-known “Cuban Adjustment Act.” Cuba’s baseball commissioner, Heriberto Suarez Pereda, places the blame squarely on this piece of U.S. immigration legislation for Cuba having already lost a number of major — and minor — players to the U.S., and for the likelihood that any efforts to normalize baseball competition between the two countries will be hampered by the risk of more Cuban player defections.

What on earth is the Cuban Adjustment Act? Even some immigration attorneys — particularly those practicing far from the shores of Florida — may have never had cause to use it, if they’ve even heard of it. The law dates back to 1959 — a response to Castro assuming power in Cuba and setting up the first Communist state in the Western hemisphere.

The idea of the Act is that any Cuban who makes it past the U.S. Coast Guard to dry land will be welcomed in a way that no other undocumented immigrant is. If they can meet some basic admissibility requirements (i.e. they’re not criminals or threats to U.S. health or security) they may receive a period of what’s called “parole.” This is a quasi-legal status allowing them to remain in the U.S. without fear of deportation.

After one year of parole, they may apply for a U.S. green card (“adjustment of status”). That’s about as fast a track to U.S. residence as any non-citizen could ask for. (If you’re interested in the procedural details, see “Becoming a Lawful Permanent Resident Under the Cuban Adjustment Act.”)

Of course, normalizing U.S.-Cuba relations will take high-level agreements and probably new legislation, in the course of which this Act, too, might well be amended. Undoing decades of a broken diplomatic relationship may be more complex than it first appeared. But for two countries that revere baseball so much, there has to be a way, right?

Credit Reporting Agencies Agree to Better Consumer Protections

This month, the three nationwide credit reporting agencies (Equifax, Experian, and TransUnion) agreed to significant changes in their credit reporting practices and the way they handle consumer disputes. These voluntary changes, which resulted from a settlement with New York Attorney General Eric Schneiderman, are set forth in what the credit reporting industry is calling The National Consumer Assistance Plan. (Learn what a credit report is and what is contains in Credit Report Basics.)

Here are the highlights of these new policies:

180-Day Waiting Period Before Reporting Medical Debts

In what many consider to be the most significant change in the plan, the credit reporting agencies (CRAs) have agreed to a 180-day waiting period before recording delinquent medical debt on a credit report. As we all know, insurance companies are notoriously slow in determining what will, and will not, be covered and then issuing payment. This waiting period will mean that consumers won’t have negative marks on their credit reports for medical bills that are tied up with the insurance company.

As a corollary to this new policy, the CRAs will also remove notations of delinquent medical debt for those accounts that have subsequently been paid by insurance.

Traffic Tickets or Government Fines Won’t Appear in Credit Reports

Credit reports will no longer contain negative information about traffic tickets or government fines. The CRAs will only record information about debts that arose from a contract or agreement.

More Information When Disputing Inaccurate Information

If you dispute an item on your report and are not happy with the result, the CRAs will now provide you with information about your options and further steps you can take. And if you successfully dispute an error after getting your free annual credit report, you can get another free report within the year. (Learn how to dispute errors on your credit report.)

Enhanced Dispute Resolution System for Identify Theft, Fraud, and Mixed Credit Files

The three nationwide CRAs are devising enhanced dispute resolution procedures for victims of identity theft and fraud, and for those whose credit file was mixed with another’s file.

When Will These Changes Take Effect?

The CRAs will start implementing the new policies over the next several months. Experts anticipate that they will take from three to thirty-nine months to complete (depending on the particular policy).

DON’T CALL – GO TO IRS WEBSITE FOR ANSWERS

The continuing IRS budgetary problem is making the days of calling them (by telephone) almost obsolete – indeed, at the very least, frustrating and often fruitless.

Taxpayers are therefore shifting their patterns of inquiry to the IRS website for answers.  Indeed, according to recent IRS stats, visits to www.irs.gov have increased by 11 percent compared to the same time last year.  In the week ended March 20 alone, there have been 15 million new visits!

Check the site for, among other things:

  • Procedure for obtaining your account transcript
  • To request an electronic filing PIN
  • Finding answers to your tax questions
  • To check the status of your amended return

 

Gather Charity Records Before Filing

Don’t forget that in order to claim a charitable contribution deduction, donors must have – in hand – a written acknowledgement from each charity to which contributions totaling $250 or more have been made.  This rule applies to donations of cash or property.

Indeed, the law requires that you have all of these acknowledgements before filing your return.  It won’t fly to wait until you’re audited, and secure the written proof at that time.

Also, before filing, be sure any charity which was the subject of your largesse during the year is a qualified organization.  Check www.irs.gov for a list of all of them.

Further, be sure to include as part of your return Form 8283 if you gave noncash contributions over $500 during the year.