Revenooer Rants: Lacking in return investment analysis
November 27, 2013
We guess the powers that be within the IRS cut more than a few of their business classes when they were in school. That's the implication, in any case, set forth in the latest and greatest from the Treasury Inspector General for Tax Administration (TIGTA) whose recent findings claim that IRS needs to improve the use of "return on investment" (ROI) data in managing tax enforcement resources.
Seems IRS does calculate, each year, ROI performance measures for seven of the IRS' enforcement program areas. But TIGTA found that although IRS considers cost-benefit information in making resource allocation decisions, it does not document how or to what extent it uses the information and has no policies or procedures to guide this process. TIGTA also found that IRS continues to be unable to measure actual revenue from new enforcement initiatives funded in prior years.
IRS has responded that it will plan to "consider the feasibility" of developing procedures to assist in guiding the use of enforcement program cost-benefit information and review the current cost/benefit model.
And they expect us to believe that auditors are not evaluated based on how many audit dollars they deliver.
And as we ease into the last month of the year, don't lose sight in your planning of the new Obamaisms (the tax effects of which will hit in 2013), a couple of the more significant of which are:
• The highest income tax bracket on ordinary income and short-term capital gains increases from 35 percent in 2012 to 39.6 percent in 2013.
• The highest income tax bracket on long-term capital gains (and most dividend income) increases from 15 percent to 20 percent.
• A new 3.8 percent net investment income tax will clip the higher income folk, on their dividends, rents, interest, passive activity income, capital gains, annuity and royalty income.
So as you plan for all of this, check out your withholding and estimated tax payment levels, lest ye be shocked in April when that final tax payment comes due. We expect more than a few will indeed get their hair on fire over all of this, sometime after the Ides of March.
So, is it any wonder that this year will set a record for U.S. taxpayers departing the country for good. So says the Treasury Department, relative to its quarterly publication of the names of U.S. folk who renounced their citizenship, and long-term residents who turned in their green cards in the third quarter of 2013.
The total head count for the year, so far, is 2,369, as recently reported in The Wall Street Journal. The highest number of published expatriates before this year was 1,781 for the entire year 2011.
Nice work, Barack.
CONSULT YOUR TAX ADVISOR – This column contains general information about various tax matters. You should consult your CPA regarding the implications to your own particular situation. Jeff Quinn, the author of this article, is a shareholder in Ashley Quinn, CPAs and Consultants, Ltd., with offices in Incline Village and Reno. He can be reached at 831-7288 and welcomes comments at email@example.com.
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