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Location: Westland, Michigan, United States

Graduate of Walsh Institute Of Accountancy (Now Walsh College) Michigan in 1959. Retired in 1987, but still active in the profession **World War II Veteran (Pacific) **PHONE 734-261-1979 **E-MAIL -cpabakem01@yahoo.com **(Domain Name CPASENSE Registered) **Mentioned in the Journal of Accountancy, SmartPros, Tax Prof Blog, CPA2BIZ, CPA Journal, AccountingWEB, CPATrendlines & More **Search Accounting Blogs: http://www.blognetnews.com/accounting (Includes cpasense)**TOPICS - FINANCE - FEDERAL & MICHIGAN TAXES ** Making Sense Of Your Finance & Taxes

Thursday, February 28, 2008

Michigan Legislature Passes Enhanced Drivers License Bills

Bills allowing creation of an enhanced drivers license passed both the Michigan Senate and House on Wednesday, February 27, putting the state into position to have a document that would allow Michigan residents to travel to Canada and Mexico without a passport

Gongwer News Service.

IRS Sending Rebate Info To SS, VA Beneficiaries

If you plan to receive a tax rebate from the federal government later this year, you need to file your 2007 income tax return on time. This includes those people receiving Social Security or veterans' benefits who, in most cases, don't normally have to file an income tax return. According to the IRS, it's that simple--no return, no rebate, even if you are eligible for the rebate.

This could be problematic for these beneficiaries, since they usually do not have to file an annual return. So the IRS is trying to get the word out to the seniors and veterans without earned income.

To help avoid confusion, Social Security and Veterans Administration beneficiaries can expect to receive a packet of information about claiming economic stimulus rebates in late March, the IRS announced February 24, 2008............

CCH Toolkit

Tuesday, February 26, 2008

Michigan Taxes - Business - Frequently Asked Questions

http://tinyurl.com/2yvb3n

Michigan Treasury

Michigan Taxes - Individuals - Frequently Asked Questions

http://tinyurl.com/25nx27

Michigan Treasury

Protective Refund Claim - Demutualization Shares

If in 2004 you sold stock of an insurer that "demutualized" ....Time is running out to file a protective refund claim with the IRS.

A Court has refuted IRS' view that the rights policyholders gave up in the conversion have no value.

So if you followed the Service's advice to use the zero basis for the stock sold, you may end up being due a refund.

But the Court won't determine the value before the statute of limitations for amending 2004 returns lapses on April 15, 2008 for those who timely filed.

To preserve your right to get a refund, fill out Form 1040-X and write "Protective Claim" at the top. IRS should hold it in abeyance.

On your amended return, you'll show reduced AGI and tax due - reflecting the basis you claim in the insurance stock - and effectively ask for a refund for the tax you overpaid.

In part 2 of the form "Explanation of Changes" note that this is a "protective claim - do not process" to protect your right to a refund in the event of a favorable ruling in the "Fisher" case (Eugene A. Fisher, Trustee v U.S. Case No. 04-1726 T) regarding a taxpayer's basis in stock received from xxxxx in a demutualization.
Link: http://tinyurl.com/ywcjkj

Editor's Note: On 2-26-08 I called C.D. Ulrich CPA (the opposition leader of zero basis stock) and he indicated there was no new news of the Fisher Case.

Monday, February 25, 2008

IRS: Frequently Asked Questions & Answers

Welcome to the Internal Revenue Service's general questions and answers section. Each year we update the answers to reflect the latest changes in tax regulations. These questions and answers came from taxpayers like you. We hope you find them helpful and informative.........

Name Change & Estimated Payments

If you changed your name and you made estimated payments using your old name, attach a brief statement to the front of your tax return, indicating when you made the payments, the amount of each payment, the IRS address to which you sent the payments and your social security number. The statement should cover payments you made jointly with your spouse as well as any you made separately.

Small Biz Taxes & Management

IRS Link: http://tinyurl.com/el8o9

Help Yourself By Filing Past-Due Tax Returns

Most citizens voluntarily file their tax returns and pay their taxes. Most people explain it by saying they want to pay their fair share. Others file to get a refund, claim a credit or avoid breaking the law.

There are times when normally law-abiding citizens fail to file. Why? IRS research shows that sometimes people don’t file in years their filing status changes, such as due to the death of a spouse or divorce. Emotional or financial reasons may cause a person to not file. Or it could simply be due to procrastination..............

Internal Revenue Service

In Order To Receive An Economic Stimulus Payment You Must Generally File An Income Tax Return

For taxpayers who regularly file that's not a problem. The IRS notice below informs certain individuals not otherwise required to file a return how to request the payment.

How To Fill Out The Form 1040A: See pages 3 & 4
http://www.irs.gov/pub/irs-drop/n-08-28.pdf

Form 1040A:
http://www.irs.gov/pub/irs-pdf/f1040a.pdf

Sunday, February 24, 2008

IRS: Tax Payment Options

http://tinyurl.com/2vugzj

http://tinyurl.com/39mq2z

Internal Revenue Service

Saturday, February 23, 2008

Tax Forms - Federal, Michigan, & Cities

http://tinyurl.com/yt9m24

Michigan Treasury

Thursday, February 21, 2008

Michigan Attorney General Warns Consumers About Digital TV Conversion Scams

Michigan Attorney General Mike Cox issued a new consumer alert today as part of his effort, in conjunction with the Michigan Association of Broadcasters, to safeguard consumers against scams when television signals convert to digital...........

State of Michigan

Wednesday, February 20, 2008

Financial Advice for the "Sandwich Generation"

Many members of the Baby Boom generation are trying to balance supporting a parent while also raising a youngster or providing........

Michigan Association of CPAs

Storing Tax Records: How Long Is Long Enough?

After April 15 has come and gone and another year of tax forms and shoeboxes full of receipts is behind us. But what should be done with those documents after your check or refund request is in the mail?

Federal law requires you to maintain copies of your tax returns and supporting documents for three years. This is called the "three-year law" and leads many people to believe they're safe provided they retain their documents for this period of time.

However, if the IRS believes you have significantly underreported your income (by 25 percent or more), or believes there may be indication of fraud, it may go back six years in an audit. To be safe, use the following guidelines.........

1 Year Business
1 Year Personal
3 Years Business
3 Years Personal
6 Years Business
6 Years Personal
Forever Business
Forever Personal

Paul Dion CPA

IRS: http://tinyurl.com/bcn4h

Sunday, February 17, 2008

Michigan Governor Signs Drivers License Bill

Legislation to allow foreign residents living legally, but temporarily in the U.S. to get drivers licenses was signed into law on Friday by Michigan Governor Jennifer Granholm
An official from the Department of State said that by the middle of this week the State should be able to take applications

Gongwer News Service

Friday, February 15, 2008

Drivers License Fix Goes To Michigan Governor

As soon as Governor Jennifer Granholm signs HB 4505 (http://legislature.mi.gov ), the international embarrassment the state faced over drivers licenses should end, as the Legislature rushed through a fix that will allow foreign citizens living in Michigan temporarily and lawfully to obtain a driver's license.

Gongwer News Service

Thursday, February 14, 2008

Lawsuit Filed On Michigan Driver's License Issue

Charging that rules denying driver's licenses to temporary legal residents of Michigan are unconstitutional as well as a misinterpretation of law, the American Civil Liberties Union filed a lawsuit against Secretary of State Terri Land in Ingham Circuit Court on Wednesday seeking an injunction against the rules implemented last month that barred temporary residents.

Gongwer News Service

Wednesday, February 13, 2008

Michigan Officials Hoping To Clear Up License Issue This Week

With businesses, universities and refugee organizations growing increasingly worried about the potential effects of rules denying drivers licenses for foreign citizens lawfully residing temporarily in Michigan, officials are saying quietly that they hope to resolve the issue yet this week.

Gongwer News Service

Tuesday, February 12, 2008

Bush Wants To Scrap Tougher Standards For Return Preparers - that took effect January 1

Those standards require positions taken on returns to have a better than 50% chance of being upheld by the IRS.

Otherwise, the preparer must disclose that position to the Service to avoid penalties.

Under Bush's proposal, the standard for preparers in cases that don't involve tax shelters would be the same as the one for taxpayers. Preparers would need to have substantial authority...about a 40% chance the position is valid. Congress will go along.

Kiplinger Tax Letter - Feb. 8, 2008

Understanding Medicare Advantage Plans

Are you or a loved one enrolled in Medicare? This government health insurance program for older Americans offers many choices in.......

Michigan Association of CPAs

Additional Link:
Medicare Advantage Plans:
http://tinyurl.com/2mpw2m

Friday, February 08, 2008

Michigan House Passes Driver's Licenses Fix Sans REAL ID

Individuals who can establish a "legal presence" in Michigan, regardless of how long they plan on staying here, could receive a state identification card or driver's license under legislation overwhelmingly approved by the Michigan House Thursday

But in making changes to the law in order to allow people like college faculty and business executives from foreign countries to receive a driver's license in light of a recent attorney general's opinion and Department of State rule change, the chamber did not tie that effort into implementing requirements under the federal Real ID Act, which the Senate has done.

Gongwer News Service

Thursday, February 07, 2008

Strident Debate Marks Michigan Senate OK Of License Bills

The Michigan Senate approved a bill (SB 0962) February 6, 2008, that would enact provisions of the controversial federal Real ID Act, as well as clarify that LEGAL foreign residents can obtain driver's licenses

Gongwer News Service

SB 0962 http://legislature.mi.gov/

Wednesday, February 06, 2008

How To Tell How Well-Funded Your Pension Plan Is

Excerpt: "Private pension plans are required to file a financial report called a Form 5500 every year with the federal government. The Form 5500 provides information regarding the plan's financial condition, investments, and operations. If you are a participant in a private pension plan, you have the legal right to request the most recent Form 5500 from your plan administrator." (Pension Rights Center)

Monday, February 04, 2008

How to Miniminze Your Health Care Costs

The average employee contribution for health insurance has soared over 143% since 2000. Typical out-of-pocket expenses that consumers..........

Michigan Association of CPAs

If You Do Not Receive Your W-2

Contact your employer to inquire if and when the W-2 was mailed. If it was mailed, it may have been returned to your employer because of an incorrect or incomplete address. After contacting your employer, allow a reasonable amount of time for your employer to resend or to issue the W-2.

If you still do not receive your W-2 by February 15th, contact the Internal Revenue Service for assistance at 800-829-1040. When you call, have the following information:

*Employer's name, address, city, and state, including zip code.
*Your name, address, city and state, including zip code, and Social Security number, and
*An estimate of the wages you earned, the federal income tax withheld, and the period you worked for that employer. The estimate should be based on year-to-date information from your final pay stub or leave-and-earnings statement, if possible.

If you misplaced your W-2, contact your employer. Your employer can replace the lost form with a “reissued statement.” Be aware that your employer is allowed to charge you a fee for providing you with a new W-2.

You still must file your tax return on time even if you do not receive your Form W-2. If you do not receive the missing information in time to file, you may use Form 4852, Substitute for Form W-2, Wage and Tax Statement. Attach Form 4852 to the return, estimating income and withholding taxes as accurately as possible. There may be a delay in any refund due while the information is verified.

http://www.irs.gov/pub/irs-pdf/f4852.pdf

On occasion you may get back conflicting documents. You may receive a Form W-2 or W-2C (corrected form) after you filed your return using Form 4852, and the information differs from what you reported on your return. If this happens, you must amend your return by filing a Form 1040X, Amended U.S. Individual Income Tax Return.

Internal Revenue Service

Speakers Back Michigan Foreigner IDs

Senate hears Cox opinion criticized as costing the state millions of dollars.
Detroit News Lansing Bureau
LANSING, MI -- Efforts to boost Michigan's economy are threatened by an attorney general's opinion that denies state driver's licenses or ID cards to hundreds of thousands of foreign college students and workers who are here legally, senators were told Thursday. Jan. 31.............

Editor's Note: When I first posted this story, I received several comments criticizing the Attorney General's opinion.