The Importance of Earnest Service

I’ve always been in fear of government authority.

Copy that

In my early 20s, I received documents to present to a military installation so as to pick up Air Force wife credentials, such as a pass to enter a base. My then husband had filled out the form under the stress of basic training in Texas plus he was colorblind. In any case, the eye color and the date of my birth on his signed document were wrong, and I freaked. I took advantage of my mother’s offer of a lift–she had a car–and off we went to the nearest installation which was Fort Hamilton in Brooklyn. In addition to my passport and my green—not blue—eyes, I dragged my mother inside the office to verify that the corrections needed on the paperwork were valid.

The sergeant behind the desk could have cared less. An eye-opener.

Taxing

I go nuts at tax time. I worry about the smallest thing. I input only four pin numbers on the signed document authorizing my accountant to submit my business taxes electronically. When I realized it should have been five digits I added one to the original to be mailed and scanned the documents again so he could move forward. He was relaxed about it when I called and said he could have added a fifth digit for me. People get it wrong all the time. Yet I have visions of going to tax jail, a picture that’s also in the back of my head as I collect the information.

Bon Voyage

We are warned that names on airline and official documents must match precisely. I learned after much time on the phone that airlines can’t add hyphens to names such as mine–Jeanne-Marie. The hyphen is on the passport and not on the travel voucher. Hmmmm.

And there are my shakes on the rare occasions I’ve been stopped for speeding.

My anxiety doesn’t make sense. I doubt crooks, tax dodgers or hackers and impersonators sneaking on planes don’t worry as much as I do. Am I the only one to have such irrational fears?

As it should be the taxes of parents who send their children to private school cover the cost of public school. Citizens who never call the fire department pay the freight for those who must. Those cared for in private hospitals pay for public ones.

When 50+ inches of snow fell in Buffalo, NY last December, and not a flake hit the streets of NYC, nobody squawked at the cost of helping with the cleanup. And on a national level, do citizens in Hawaii whine about FEMA funds sent to hurricane victims in Florida or Louisiana?

Yet, according to Ben Brachfeld of amny.com, “A group of suburban lawmakers are urging their Albany colleagues to restrict proposed payroll tax increases, meant to shore up the finances of the Metropolitan Transportation Authority to businesses in the city — arguing the suburbs are already subject to ‘onerous’ taxes without service levels equivalent to residents of the five boroughs.” The tax, proposed by Governor Kathy Hochul, would be 0.5% from 0.34%.

According to Brachfeld, “In their letter, the suburban legislators suggest that municipalities outside the city should be exempted not only from the tax increase, but from the tax writ large, since it would post a levy on public funds used to run such municipalities. They also say community colleges and hospitals should be exempt from the payroll tax.”

Brachfeld reported that the levy impacts businesses in NYC’s five boroughs, two LI counties, five upstate counties that Metro-North serves. It has irritated the legislators in these places since  2009 when the tax was ratified. According to Brachfeld, MTA Chair and CEO Janno Lieber said on WCBS radio, “It [the tax] would only apply to the biggest employers. Only 5% of all businesses would be subjected to this little incremental payroll mobility tax.”

Mayor Adams isn’t a fan either. “He says the city, not the suburbs, are getting shafted, as the Big Apple is the state’s only municipality being asked to contribute new annual subsidies to the MTA, to the tune of over $500 million per year, in addition to the payroll tax increase and fare hike,” according to Brachfeld.

I envision a child’s game of hot potato: Who will end up footing the bill when the music ends? Should suburban municipalities or their constituents who may use the MTA’s buses and subways when they work or visit NYC also pay for some?  Shouldn’t we be proud of the legacy in this country of helping those who need it when disaster strikes even if we are not directly impacted by the emergency?

I overdo it by flagging receipts that indicate charitable donations or medical bills throughout the year to help with tax prep and in the event I get a dreaded I.R.S. notification that I’m being audited. It has happened to several friends of modest means and standard sources of income. The I.R.S., which claims it doesn’t have the staff to catch scofflaws, seems to waste time on microscopic fries while letting master cheaters they have been alerted to fly free.

David A. Fahrenthold, Troy Closson and Julie Tate reported on a flagrant example in their article “76 Fake Charities Shared a Mailbox. The I.R.S. Approved Them All.“

The American Cancer Society alerted the IRS to one fake–American Cancer Society of Michigan headquartered in a Staten Island PO Box–run by Ian Hosang, previously convicted for stock market fraud and barred from the industry in 1997. Hosang next launched another scam–the United Way of Ohio at the same “headquarters.” The reporters wrote that the “long-running charity fraud that has astounded nonprofit regulators and watchdogs — [and] raised concerns about the I.R.S.’s ability to serve as gatekeeper for the American charity system.” Hosang had also warmed his heels in jail for two years for fraud and money laundering.

According to the reporters, the I.R.S. approved all but one in 2,400 applications from potential charities. “The agency declined to answer questions about Mr. Hosang’s case, citing taxpayer privacy laws. It also declined to make officials available for in-person interviews, but it released a written statement saying that the fast-track approval system ‘continues to reduce taxpayer burden and increase cost effectiveness of I.R.S. operations.'”

Hosang, who said he was filled with remorse, asked the reporters “’If you file something with an agency and they approve it, do you think it’s illegal?”

In addition to the faux American Cancer Society of Michigan, he created them for Detroit, Green Bay, Cleveland and for Children to name a few–17 in this disease group alone. The real American Cancer Society launched local and national initiatives with a lawyer to alert the I.R.S. “American Cancer Society officials said they never heard back from the I.R.S.”

“The first problem,” wrote the reporters, “according to former I.R.S. officials: Tax law does not prohibit nonprofits from impersonating better-known nonprofits by using sound-alike names. The second: There are no systematic checks for a history of fraud.” They quote a former employee who admitted you could apply for tax-free status from jail.

They reported: “One 2019 study by the agency’s taxpayer advocate found that 46 percent of the applicants it approved were not actually qualified, usually because their charters did not conform to charity law. It also noted that the ‘mission statements’ were often so vague as to be useless. In 2021, federal records show, the I.R.S. approved groups whose mission statements were, in their entirety, ‘CHARITABLE ACTIVITY,’ ‘NON-PROFIT’ and ‘Need to fill in’ (possibly a forgotten note to self).”

There’s more but you get the gist.

Shouldn’t a simple search of prison records be part of a fast-track I.R.S. charity approval system? Given the lax approach to this aspect of the I.R.S.’s responsibility, do you think Joe and Jane Citizen are also pretty safe from scrutiny?

What am I grousing about today? The $660,000 that New York State tax payers are forking over for a new Buffalo Bills stadium.

I’m not a sports fan. And friends shrug when I grumble about this saying “This is the way it has always been,” or “If New York doesn’t pay they’ll go somewhere else” and “the Governor, Kathy Hochul, who hails from upstate NY, is watching the back of her core constituents.”

I get it but I still say “Bon Voyage–let the Bills owner pick up the full cost of construction or go elsewhere.”

Does someone who decides to add a greenhouse to their home to grow plants for sale get such support from the state? Will they even have an easy time getting a loan unless they have deep pockets and don’t really need one?

The team owner, Terry Pegula, is said to be worth $5.1 billion. The $660 big ones is a drop in three buckets to him but could help out countless homeless/starving individuals in New York. In radio interviews last week, deli and souvenir shop owners around Yankee Stadium in the Bronx that have barely survived the pandemic said they’d not received stimulus/paycheck protection program money. That money was from the Federal purse. But is anyone lobbying the State to help them?

The money isn’t to support a home for refugees or to house the helpless. Tickets, boxes and NFL brand paraphernalia will generate plenty of money. Why doesn’t Pegula launch a GoFundMe page so fans can help him pay the bill?

I’m letting off steam–what’s done is done. Do you think $600,000 too little to worry about in a $220 billion New York State budget? That it’s fruitless to mention when this happens all the time?

Image by Steve Buissinne from Pixabay

People cheat on their taxes and some claim everyone does, but best not try. Ask Allen Weisselberg.

Taxes aren’t the only thing people fiddle with.  One friend lied to the anesthesiologist about her weight. She thought that was why she woke up in the middle of the operation. A doctor subsequently told me that wouldn’t happen for that reason. But still, not a good idea to underestimate.

Image by Niek Verlaan from Pixabay

What about people with healthy resumes and years of accomplishments under their professional belts who nonetheless cheat on theirs? Some report a degree they don’t have [which is nuts as it’s so easy to confirm]. Others stretch a three month stint into a year. Many companies make the background check the last thing in what can be a month’s long process, sometimes more. What a shame to be beached after all that. From the employer’s point of view, the thought would be that such a candidate could as easily cheat the company or its clients. “You’re only speaking about a seven month difference,” a few might argue. I say keep it to three if that’s the truth.

One friend learned that his mother was older than she’d admitted when he accompanied her to the doctor towards the end or her life. She hadn’t wanted to be older than his father which was the reason for the discrepancy.

Some people exaggerate their wealth [which I’ve never understood].

What other things do people do–that they shouldn’t–with the excuse that everyone also does it? Any repercussions?

Image by TheDigitalWay from Pixabay

Photo: amny.com

I tucked this horrible decision on the part of New York Governor Cuomo into an early December post, “Service of I Love New York… But Don’t Push It.”

It’s too important a move–a giant $2.50 surcharge on every ride in yellow taxis in Midtown Manhattan–big enough to fell an essential NYC industry.

A judge postponed the measure from January 1, which was the deadline when I originally wrote about the debilitating tax. It started last weekend. I’m appalled. As a result, I forecast the end of an industry that served me, my parents and grandparents so well. According to Google, it was the first Yellow Cabs that in mid-1880 knocked “less predictable” competitors out of the ring in the big apple.

Yellow cab owners have invested so much in their businesses, and NYC’s citizens whose cabs touch a toe below 96th Street and are slapped with the surcharge, don’t deserve this. Tossing a tax on the vulnerable to solve your financial difficulties in an allied but otherwise unrelated sector isn’t the way to go.

I’d written on December 6, 2018:

Photo: fineartamerica.com

The January 1, 2019 $2.50 congestion pricing fee will help destroy the already limping yellow cab industry and hurt citizens of modest or microscopic means who rely on traditional cabs. Many can’t manage busses or subways, can’t afford limos or don’t have smartphones to hire car services like Uber or Lyft. The fee impacts “any yellow cab, e-hail or other for-hire vehicle trips that start, pass through or end in a designated ‘congestion zone’ below 96^th Street in Manhattan,” Vincent Barone wrote in amny.com.

What’s the destination of the some $400 million the tax man anticipates collecting? According to Barone, it will help the Metropolitan Transit Authority [MTA]  which is “financially strapped.”

Services like Lyft and Uber are charged a $2.75 fee but because they can fiddle with their basic price which yellow taxis can’t, they could make rides cheaper than traditional cabs—another stab to the financial heart of their competitor.

Barone reported: “‘The fact that it will cost $5.80 to step into a taxi cab now is going to be devastating for the taxi industry,’ TLC Commissioner Meera Joshi said after a City Council oversight hearing on the surcharges, referencing the existing fees on taxi trips. ‘The other sectors … have more flexibility. They have to add $2.75 on but they’re not bound to a metered fare, so they can reduce the price of the trip so that the passenger doesn’t feel the effect of the $2.75.’”

I took [too] many yellow cabs last weekend between my current and future apartment filled with TJ Maxx bags holding my plants, food and other items movers don’t carry. My suitcase was embarrassingly heavy. Each driver was helpful, grateful and cheerful. Only one pointed out that drivers don’t benefit from a penny of the surcharge yet their volume will be impacted. “People don’t take us for short trips like they did before–look at the meter: $9 for a few blocks.”

Do you think that there is a chance for a rollback to a more reasonable surcharge such as 50 cents instead of $2.50? What impactful action might we take to put the brakes on this poorly conceived method of paying for the city’s subway system? Why does this city care more about bicyclists than about pedestrians or taxi drivers?

Photo: amny.com

Photo: thepitcher.org

Most people must meet deadlines at work and/or at home. There are plenty associated with product introductions that, in turn, trigger marketing and media rollouts and, of course, news deadlines. Some whisk out restaurant and school meals at lunch in record time. Others note coupon redemption days; plan and attend weddings; catch trains or planes and return library books for starters.

Here’s a deadline from left field: For tax reasons you’d better hurry up and finalize your divorce according to Jim Tankersley in his New York Times article, “Wedded Bliss Lost Its Ring? Rich Should End It in ’18.” You have 5½ months before the Republican tax law kicks in.

Photo: illinoislegalaid.org

If you split after December 31, you will no longer be able to take the full amount of alimony off your Federal income taxes. This is a very big deal especially for the wealthy and think–the benefit could last for decades. In fact, from 2019 on, alimony-payers won’t be taking off a cent.

By removing the tax break Federal revenues should benefit by $7 billion over ten years.

IRS records show that 600,000 get that deduction each year, reported Tankersley. He wrote that “about 20 percent of taxpayers who currently claim the deductions are in the top 5 percent of household income earners.”

Photo: nstp.org

There are other repercussions in addition to the obvious one. The higher earning ex spouse, once the deductibility is gone, might agree to pay less alimony to compensate for the loss of the tax benefit. This will impact women and some children. “Child support payments are not deductible, but so-called unallocated support—payments that are meant to help a divorcing spouse and children at the same time—is deductible.”

Some experts predict that the new tax law might reduce the number of divorces that women initiate if it adversely impacts their alimony/income.

Photo: 80snostalgia.com

But take heart: Financial planners for the wealthiest “will have ways of working around the change.” Some spouses “may choose to forgo alimony payments and instead accept more lucrative real estate, larger shares in tax-deferred retirement accounts or some complex combination of the two that maximizes tax advantages.”

What about everyone else? Surprise surprise: “Middle-class and lower-income taxpayers have fewer of those assets—and less ability to recapture potentially lost benefits of the alimony deduction,” Tankersley wrote.

What deadlines do you find hardest to meet? Do you wait until the last minute? Have you benefited from the new tax law? Do you think that lawmakers take into consideration the repercussions that the changes they make have on citizens’ lives? The pundits couldn’t forecast whether there will be a flurry of divorces before year’s end. Do you think that there might be?

Photo: defymca.org

Photo: fedsmith.com

We have yet to see the fallout caused by the Republican tax bill passed so close to year’s end. For one thing, citizens and communities were unprepared, making plenty of mistakes amid chaos especially for those trying to save a buck by prepaying local taxes in states with hefty ones.

In New York State, for example, the governor signed an executive order on December 22, permitting citizens to pre-pay state and local property taxes which many did because of the $10,000 cap that kicks in next year. But this order happened five days before Federal guidelines were posted and plenty of folks moved fast, as New Yorkers tend to do, to take tax advantage one last time so they may not have submitted what they needed so they wasted their time.

The guidelines stated that “those prepayments could be deducted only in limited circumstances, a decision that appeared to invalidate many taxpayers’ efforts and raised the prospect that local governments could come under pressure to refund millions of dollars,” according to Washington Post reporters Peter Jamison, Jeff Stein and Patricia Sullivan.

“‘This is not the way to do legislation that will massively impact the entire economy. It sets off a flurry of action from people trying to save money, and they act as rash as the legislators who pushed this thing through,’ said Philip Hackney, a tax expert at Louisiana State University.”

After the executive order but before the Federal guidelines, local news reported people waiting in the cold for over an hour in certain Long Island towns. When we called our town clerk an administrator gave us the amount and she asked us to get the check to the office by noon two days later, Friday, the last working day of 2017. We could not prepay any of the school tax and had to pay all of the rest [no option, as in some communities, to make a partial payment].

Gov. Cuomo

When we spoke, the administrator hadn’t yet been informed, and we didn’t yet know, that to count, we needed the 2018 assessment to accompany the check. We subsequently found that out, once reporters got wind of the guidelines, and in time. I posit that many sent or delivered a check without the bill. Others based the amount of their check on a previous assessment. No go.

The day after we called, we visited the clerk’s office. The staff of two had neat files and boxes filled with bills on tables. Their work hours are only 9 a.m. to 3 p.m., Monday through Friday, and yet they were ready.

This city slicker was impressed at how buttoned up and prepared they were.

Normally, our property tax is paid by our mortgage company—it’s part of what we send them monthly—so we notified the company that we had prepaid. The town clerk’s office will also verify this and we expect the mortgage company will refund our payment. Fingers crossed.

Jamison, Stein and Sullivan wrote that Virginia counties don’t mail their assessments until February [and no doubt counties all over the country are in similar binds]. In addition, “The tax law explicitly states that the $10,000 deduction cap cannot be avoided by prepayment of 2018 income taxes but had left open the question of whether it applied to prepaid property taxes.”

So who knows if prepayment will eventually be disallowed? Think of the mess and confusion refunds and tax revisions would cause.

• Will the fact that some have prepaid because they could and others can’t, for whatever reason, disqualify all who tried to save money?
• Will a governor’s executive order count in the end?

This is one tiny example of the fallout from such a sweeping change followed by so little time to implement guidelines. Did those who voted for the bill realize the bedlam they were creating by their last minute vote simply to satisfy their egos to show they got something done in 2017?

In a country where big rules and is most admired, can you think of other instances where small works more efficiently?

Photo: community.aras.com

Communications is often not our strong suit. The cost? Customers pay the price in wasted time and/or mistakes.

Taxing

I ordered an item online from a high end men’s store and noticed, in checking out, that I was charged tax. For clothing that costs $110 or less, New York residents don’t pay tax. While it wasn’t much, it irritated me that tax appeared on my bill but because it was the last day of a super sale, I approved the order and wrote customer service [which was closed on the weekend].

First thing Monday I got a response telling me that they will charge the correct total {without the tax} “when the order is ready to ship.” I was notified, but the tax was still there. So I whipped out another note–thank goodness for cut and paste and email. The correction was made.

Given that the store has a NY branch and that I assume more than one customer orders from NY, it would have been easier to note on the invoice that NY residents won’t pay tax for items under $110. Staff in billing should be similarly instructed….although I suspect that I may be the only one to care.

Check this out

I was having an annual checkup and on arrival dropped into the ladies room to wash the subway off my hands. There was a note warning patients not to urinate if they were having a sonogram. The office offers sonograms in a few parts of the body so out of curiosity I asked one of the technicians whether this directive applies to all sonograms. She said that it only applies to pelvic ones. So couldn’t that one word have been added to the warning?

Do it yourself and guess

I used the do-it-yourself package mailing system at the Grand Central post office. One of the questions is “Will your package fit in the bin?” which it would. When done, I tried to open the adjacent bin and it was locked shut. So I had to wait in line anyway to find out where to put the stamped package. An exasperated postal worker, who looked at me as though I was dumb, pointed in the direction of a large canvas container on wheels placed well below the counter where nobody would see it with nobody nearby to secure it, either.

Was there a note stating what to do with a package on the bin parked next to the scale/shipping computer? No. Was there a note above the hidden container that collected packages? No. US Postal Service customers take note: Bring along your ESP next time you drop by.

Cross street please

When a business posts its NYC address on its website, if on an avenue, please note the nearest cross street.  I’ve lived in NYC most of my life and I don’t always know this information. [See 666 Fifth Ave and 546 Broadway, in photo below.]

Have you noticed that increasingly few businesses put themselves in their customer’s shoes in planning websites or procedures by anticipating questions or sharing clear instructions in the first place? Do you have other examples?

Most working people pay Federal taxes, [even if a prominent presidential candidate apparently doesn’t], which must be why there’s yet another IRS scam in the land. The number of potential targets is huge and boy is it profitable. According to Laura Saunders in “The New IRS Email Scam,” in The Wall Street Journal, since 2013 almost 9,000 people have forked over $47 million +.

We’ve previously written about the phone swindle that threatens jail and worse if the prospective victim doesn’t respond immediately to a voice message and pay up. Saunders wrote: “Just recently, a new scam has started involving fake tax bills tied to the Affordable Care Act.” If you get an email CP-2000 notice you’ll know it’s fake because the IRS doesn’t communicate with you that way.”

However, the clever scammers are also mailing printed notices via standard mail which is how the IRS communicates. “Genuine versions of such notices are computer-generated letters asking for payment based on a mismatch between a taxpayer’s return and what’s reported by a third party, such as interest on a bank account. The fake notices typically ask victims to pay a balance due in connection with Affordable Care Act health coverage for 2014. Taxpayers without proper coverage owe a penalty.”

Saunders reported that CP-2000 notices are usually six to seven pages while the fake, in one instance, included a payment voucher and was three. Language and typeface mimic the real ones. Another crucial difference: The fake asks victims to make out checks to I.R.S.; the legitimate to the U.S. Treasury. Some IRS scammers ask to be paid by prepaid debit card or iTunes gift card!

According to Saunders the IRS warns anyone who receives such an email not to reply or open any attachments or links but should forward the email to phishing@irs.gov.

The threatening robocalls followed us from upstate New York to Manhattan where we received another one as recently as a week ago but we don’t know anyone who got a fake CP-2000 tax notice email or letter so far—and you?