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IRS Patrol: The IRS Wants You To Know More About the Earned Income Tax Credit – EITC Awareness Day Declared

February 11, 2010 7:08 am / Leave a comment

[Stacie says: If you are claiming this credit for yourself or for a client, be sure to complete the necessary documentation. Plus, free help is available for people who qualify – read on to learn more]

EITC Video: English | ASL
EITC Audio Files for Podcast: English | Spanish

WASHINGTON — An expanded Earned Income Tax Credit (EITC) means larger families will qualify for a larger credit, offering greater relief for people who struggled through difficult financial times last year, the Internal Revenue Service said today.

The IRS and the Treasury Department marked EITC Awareness Day [January 29] as their partners nationwide worked to highlight the availability of this important tax credit. EITC, which is in its thirty-fifth year, is one of the federal government’s largest benefit programs for working families and individuals. Last year, nearly 24 million people received $50 Billion in benefits. The average credit was more than $2,000.

“As part of the economic recovery efforts, there have been important changes to expand EITC to benefit taxpayers,” said IRS Commissioner Doug Shulman. “Today, more than ever, hard-working individuals and families can use a little extra help. EITC can make the lives of working people a little easier.”

Eligibility for EITC depends on earned income and family size, among other tests. However, single people and childless workers also are eligible, although for smaller amounts. For tax years 2009 and 2010, the American Recovery and Reinvestment Act created a new category for families with three or more children and expanded the maximum benefit for this category.

To qualify for the EITC, earned income and adjusted gross income (AGI) for individuals must each be less than:

$43,279 ($48,279 married filing jointly) with three or more qualifying children
$40,295 ($45,295 married filing jointly) with two qualifying children
$35,463 ($40,463 married filing jointly) with one qualifying child
$13,440 ($18,440 married filing jointly) with no qualifying children

The maximum credit for tax year 2009 is:

$5,657 with three or more qualifying children
$5,028 with two qualifying children
$3,043 with one qualifying child
$457 with no qualifying children

The maximum amount of investment income is $3,100 for tax year 2009. For families, there are also certain requirements for child residency and relationship that must be met. Additional eligibility information is available in FS-2010-11 and on the Web at IRS.gov/EITC.

Another new provision adds to the definition of a “qualifying child:” The child must be younger than the person claiming the child unless the child is totally and permanently disabled any time during the year. The child cannot have filed a joint return other than to claim a refund. Also new for 2009, if a qualifying child can be claimed by either a parent or another person, the other person must have an AGI higher than the parent in order to claim the child for EITC purposes.

Historically, one in four eligible taxpayers fails to claim the EITC, which is why the IRS and its free tax preparation partners host an annual EITC Awareness Day. This year, there are 68 news conferences being held around the country. Community coalitions and IRS partners nationwide also are also issuing 128 news releases, writing letters to the editor and using social media tools to spread the word about EITC.

Typically, people who fail to claim the EITC include workers without qualifying children, people whose earned income falls below the threshold required to file a tax return, farmers, rural residents, people with disabilities and nontraditional families such as grandparents raising grandchildren. People must file a tax return to claim the EITC.

Free help is available to EITC-eligible taxpayers. There are nearly 12,000 free tax preparation sites nationwide. People who want to prepare their own tax returns can visit Free File on IRS.gov. This free tax software and free electronic filing program will walk taxpayers through a question and answer format and help them claim the tax credits and deductions for which they are eligible.

EITC-eligible taxpayers also can seek assistance at the 400 IRS Taxpayer Assistance Centers nationwide. To assist EITC taxpayers, 167 IRS assistance centers will offer Saturday service on Jan. 30, Feb. 6 and Feb. 20.

There is an online EITC Assistant also available on IRS.gov which can help taxpayers and tax preparers determine eligibility. And, for tax preparers and IRS partners, there is EITC Central which has links to toolkits that include marketing products.

More than 65 percent of EITC returns are prepared by a third party. The IRS urges taxpayers to choose a reputable tax preparer to avoid problems that come with an inaccurate tax return. The agency also urges tax preparers to follow due diligence requirements when preparing an EITC tax return. More information is available at irs.gov/eitc.

Keeping my Promise to Patrick Byrne and how Overstock.com Has Qualified for my DUH Factor

February 9, 2010 11:13 am / Leave a comment

By Stacie Clifford Kitts, CPA

If you are a regular reader of Stacie’s More Tax Tips, you know that Patrick Byrne CEO of Overstock.com (or at least someone claiming to be Patrick Byrne) commented on my post, They Wield Their Personal Knowledge of Criminal Activity Like A Superpower .

Since I can’t verify that the person who wrote the comment was really Mr. Byrne CEO, in this post I am going to refer to the commenter as “PB.”

Now, the purpose of PB’s comment was to clarify some of the stuff I discussed in the post I mention above. The following is what he wrote:

Stacie,

Thanks for the story and the link. There are, however, some minor suggestions I’d make. You say:

“and a purported owner of a website called Deepcapture.com.”

Actually, for much of its existence we just put a big bubble on the upper right hand corner of the home page explaining that I am indeed the funder of DeepCapture.com; later, we added a whole page about it and who we are . So there is nothing “purported” about it. (In one more example of the Bad Guys’ mendacity, any time I mention this in an interview they write blogs pretending that it is some huge matter that I had previously kept hidden, presumably because they think suggestible people will fall for it.)

“The purpose of Deepcapture is to expose the short sellers who are trying to make money off the decline in value of Overstock.com.”

No, the purpose of DeepCapture is to expose the stock manipulators who are ruining our capital markets (most of whom have never had anything to do with overtock, as far as I know).

“But really, what could be more interesting and telling than this disclosure from Sam Antar…”

Here’s one thing that is more interesting about Sam Antar

I hope that the information provided by PB clears up any confusion about Deepcapture and its purpose. – so there ya go. I don’t suppose I need to make any more comments on the subject.

Before I move on, I would like to point out one thing about PB’s comment that did provide some amusement.

It seems clear that PB wants to make sure that my readers and I are aware that Mr. Antar is not a nice guy.

If you click the link at the end of the last sentence you will be taken to an article written by Patrick Byrne describing Mr. Antar’s recent and past behavior. Basically we are told that Mr. Antar is a very bad, and maybe even an evil, guy.

This article and PB’s reference to it just struck me as funny. Frankly, I was LMAO. Yes folks, Sam Antar a former Crazy Eddie fraudster is a bad guy. For havens sake this is not news. Given the opportunity Sam Antar admits he would still be a bad guy, he would still be committing fraud, and the only reason he stopped is because he got caught.

Hello – these are exactly the reasons why I think Sam Antar and other former fraudsters have a powerful fraud spotting superpower.

Honestly, if I found out that Sam was guilty of recent crimes, my answer would be – so what. That would not negate his ability to spot his own kind or the signs of possible fraud.

Besides, I keep asking myself, what the motivation for the attack on Mr. Byrne is. Patrick Byrne does not give any reasons why Sam Antar might have targeted him. Maybe Patrick can enlighten me to his thoughts as to that point.

My take is pretty simple – it might just be because he could. After all, Mr. Byrne has made himself quite an easy target.

Case in point – have you read any of the recent information coming out about Overstock.com and an apparent lack of internal controls?

If I understand this correctly, an investigative reporter Roddy Boyd got his hands on some internal Overstock.com documents that had been part of the discovery process related to a lawsuit initiated by Overstock.com. These internal documents supposedly imply that Overstock.com’s internal controls were not effective. This is a real problem because Overstock.com indicates in its SEC filings that the internal controls are adequate.

What does this mean? Well, basically if you have established proper controls, your internal processes, including things like supervision, flow of paperwork, accounting systems, how things are tracked and recorded- heck -basically every aspect of your financial process is set up to ensure the accuracy (so to catch or prevent mistakes) of the financial information. Therefore, in auditor terms, if you find that your controls are working – that is they are catching or preventing errors – you might report, “internal controls are adequate to meet control objectives.”

Obviously lying in an SEC filing is a NO NO. If this is determined to be the case (i.e. controls are not working and management knew it), Mr. Byrne may have some explainin’ to do.

***

Here is a lesson on making yourself an easy target, lie to the SEC and then file a lawsuit where your internal company documents will expose the lie. DUH