Tag Archives: US-Canada income tax

Small discrepancies

Last week I got a message from the Canada Revenue Agency about my own 2015 income tax. I did not read the main part. I went to the bottom line and saw that they wanted me to pay them 14 dollars. I know that I could possibly fight this assessment but it would take a lot of time and energy. In addition to that they might decide to question other items on my return. I sent them the 14 dollars.

For a long time I have told tax clients not to worry about small items like this. If there is a large difference of course I will look into it. If the amount was a couple hundred dollars I would spend a couple of hours going through their assessment notice to see if I could find out exactly what they were objecting to. Then I could decide what to do about it.

Last week Revenue Canada sent a letter to one of my tax clients. They specifically asked him for one information slip. It was for a withdrawal from an RRSP (the Canadian equivalent of an IRA but with a much higher contribution limit.) This was amazing because there were only 2 items on the information slip, the withdrawal and the tax withheld.

They did not ask about the withdrawal, only the tax withheld. The brokerage firm that held the RRSP send in their copies of information slips to the tax authorities electronically.  I had to conclude that there had been a glitch in transmission so that the tax withheld did not appear to be 25% of the withdrawal.

This is not supposed to be possible. The only time I have seen such glitches was when I wrote a C program and discovered that the villains in Redmond had filled their new operating systems with read errors. I could write a file whenever I wanted to and then read it when they wanted to let me read it.

I can’t help mentioning that one of my buddies came to see me the first season that I worked on income tax. He had received a letter asking about 3 specific points on his return from the previous year. He was badly rattled and seemed to be very frightened. I went through it with him and showed him that in each of the 3 cases there were some points in his favor. He seemed relieved. When he came to see me the next time he did not remember anything that I had told him, except that now he knew that there were some points in his favor on each one. We went through it all again and this time he paid more attention.

 

 

Donald Trump’s Income Tax Return

Some of the Democrats have complained that Donald Trump has stated that he will not release his current income tax return until after the audit is finished. I think that this is reasonable.

Someone found a copy of his 1995 return in which he showed a huge Net Operating Loss. The calculation of the NOL is complex and difficult. I have only prepared a couple of them. They often take a couple of hours to fill in. The corresponding Canadian form takes only a few minutes.

The concept of Net Operating Losses is to decrease the effects of varying income levels. A typical one would be for someone like a realtor who made money when real estate was moving in the early 2000s and had huge losses when the real estate market died, because he was still making the same advertising expenses. Companies in mining or oil exploration would have the same problems. The NOL permits taxpayers to decrease the tax on other years to compensate for the losses of the loss year.

People whose income varies from year to year are quite likely to use NOLs. Some examples are a newspaper, a grifter, and an angel investor. I specifically mentioned these because the New York Times, Hillary Clinton, and Mark Cuban all recently condemned Trump for using NOLs recently without realizing that they had done the same. I have no idea why Mark Cuban made such a stupid mistake. Until recently I thought that he was smarter than that.

I would not expect to see anything interesting in Trump’s tax returns in any case. Anyone buying real estate developments in the US has to form a new corporation for each project. If the address is 123 Main Street you would try to set up a corporation with a name like 123 Main Street Ltd.

This is necessary because there are huge numbers of lawyers who are looking for business and nearly all of them would be glad to get a chance to make a claim against a property owner. Many lawyers make a practice of filing trivial actions against companies like real estate owners in the hope of getting a quick out of court settlement. They typically ask for an amount that is significantly less than the cost of going to court.

Trump says that he does not pay off these shysters. He makes them go to court. If there was only one or two it would be cheaper to pay them off than to go to court. He takes the position that if he paid off one of them he would be besieged by trivial lawsuits.

As a sidelight here, Al Sharpton’s daughter filed a claim against New York City stating that she had sprained her ankle because she tripped on something on the sidewalk. She went ahead and posted photos on the internet of her dancing in high heels later the day of her supposed accident, and climbing a large hill or small mountain a couple of days later. How stupid can they get?

To take money from a corporation to an individual owner is not difficult. The company can pay a dividend, a management fee, a director’s fee, or some similar thing. All of these would simply go onto a form 1099 and these would be added up, either directly or on a schedule C.

In Canada it used to be necessary to have the owner of a private company receive a draw during the year. Near the end of the year the accountant had to figure how much was a salary and how much was a dividend. The objective was to select the distribution of income types to minimize the total tax bill. Similar calculations are done in the US. Naturally they are more complex when a large number of corporations are involved.

There is an additional complicating factor in Trump’s case. Because he has interests in a couple hundred corporations, some of these are probably treated as separate businesses and some of them consolidate the accounts of some other corporations, which are officially owned by the mother corporations instead of the shareholder. It requires some pretty fancy calculations to figure out the best distribution.

In summary I expect that when his 2015 return is published it will not contain anything interesting because it will only show the funds that went from his companies to his personal account. This will be quite close to his cost of living plus whatever additional amount he wants to put into his stock trading account.

If the Dems really wanted to know what was in his tax return they would instead look at the 104 pages that he filed a few months ago. One financial writer looked at this and found that Trump owned a large amount of shares in a particular company that did not fit in with his other investments. He looked at it, examined the company’s filings, and recommended that his readers all buy shares in it.

Saving Receipts

Some people will tell you that you do not need to keep receipts  for deductible expenses. This is not correct. The IRS or Revenue Canada may ask to see your receipts any time that they want to ask.
When they ask it is your duty and responsibility to provide receipts. If you do not do so they may completely eliminate the business expense. You could end up with a big tax bill. Most likely, if this happens, you will be audited for the next 2 or 3 years.

This brings us to the question of how to collect and categorize your business or employee expenses. The system that seems to be simplest is to put all of January receipts in one envelope, all of February in another and so on. This is not a very good system.

A much better system is to look at last year’s tax form and make a list of the types of expenses that are listed. Prepare an envelope for each one. Place the receipts in the appropriate envelope.  The reason for doing it this way is that whoever prepares your tax return will need to sort them into these categories. If they are already in the correct categories this is no longer necessary.

On some occasions I have spent a long time sorting office supplies from internet service etc. Once they are sorted I like to handle them in the easiest way, which is to take a batch of receipts for one thing and enter them all into an adding machine that produces a paper tape. As soon as I get to the end I wrap the tape around the receipts and put a few staples through the package. Then I write the name of the category on the tape and go on to the next batch. With a little practice this becomes very fast and easy to do.

I use the same system for adding up prescription receipts.

I am sending this to you now because I hope that you do not wait until the last minute to start preparing for your tax preparation.

A new feature this year is that the sales tax that you pay on large items may be deductible if you itemize deductions. The sales tax on an SUV may be a very large figure that would look really good on your Schedule A.

 

Educational deductions

There is one cute little trick that works like a charm to rescue a tax client who has taken a course that has something to do with his or her occupation but has not got an official receipt for this educational course.

I saw this done several times and I did it myself several times. It was never questioned by Revenue Canada and I am pretty sure that the IRS would not object to it either. There was a large school in Vancouver, Canada that offered courses in modelling, hairdressing and such things but was not registered with Revenue Canada so they could not issue official educational receipts.

What we did was place the school expenses on a business statement and then show nominal income on the same statement. As an example if the client had taken a hairdressing course we would show a business statement as a hairdresser and show say $25 income as a hairdresser and $800 or whatever had actually been paid as a business expense. The client then had a $775 business loss instead of an $800 educational expense. We might have done this statement for free or charged $5 for it because we had to fill in a bunch of stuff at the top of the page but it was still a really good deal for the client.

This worked first of all because it was very close to what had actually occurred, and secondly because Revenue Canada expected to see income from this business in future.

There are many more little dodges like this that can be used when a taxpayer has an expense that does not quite fit into any particular category but clearly has a business purpose. Using any of these little dodges must be done very carefully because if the paperwork is not clear the tax authorities will deny the deduction and maybe do more than that. It is necessary to balance the chance of trouble with the tax authorities against the loss of a legitimate business expense.

Recently I saw some expense claims that were ridiculous. One woman charged a new fur coat as an expense of advertising her business but her business had nothing to do with fur. I could not see any connection with her advertising and neither did the IRS. I think that they hit her with a penalty for this claim.

Border Hijinks

There are many strange things that happen at international borders. It seems like many politicians and bureaucrats make up rules for some purpose known only to themselves. Let me fill you in on some of those that happen at the US-Canada border.

For many years a white woman who lived in eastern Canada was hassled every time she crossed the line into the US. The reason was that a black man with the same date of birth and a similar name had done something in the US to attract police attention. Apparently it took her over half an hour every time to convince the border guards that she was not the bad guy. How long does it take you to tell the difference between a white woman and a black man?

The Canadian border guards will usually refuse entry to anyone who has been convicted of impaired driving. This created a problem once when a man who was in charge of the FBI for a couple of states came to Canada, with an invitation from the prime minister’s office, and was refused entry because of an impaired driving conviction. Going the other direction, a Canadian with a conviction for shoplifting was refused entry to the US.

In the US the right to bear arms is guaranteed under the constitution. The same does not apply in Canada. Many US citizens drive into Canada without realizing that it is illegal to transport guns across the border. Please be careful about this. Check the glove box of your car before entering Canada.

My friend George had several problems at the border. He was a citizen of India. He had taken part of his education, including his CPA and a Master’s degree in taxation, in the US. I could not imagine how a CPA could make such a stupid mistake but he let his visa lapse. He drove into Ontario on a vacation and tried to re-enter the US. He was told that since he had overstayed his visa he would not be allowed to re-enter the US for a set period, five years I think.

For some reason that was not clear to me he was really upset that it was a female officer who gave him this message. I do not believe that a male officer would have treated him any differently. I am not sure how he got a Canadian work permit but apparently he did not have a problem doing that. Eventually he applied for and received a waiver on the bar, which cut his exile time from about 5 years to about 3. He also applied for and received Canadian citizenship.

There is a type of visa that is usually referred to as a TN. It applies to the NAFTA countries. It allows entry for anyone who has a job offer in one of about 120 different occupations, generally those that require a bachelor’s degree. George got one as a Canadian citizen. On the north border these are given out at the border.

A little later he was working in California as a CPA. His visa was near expiry so he went across the border to Tijuana and attempted to return and get another TN visa. He was not allowed to do so. I do not know where he should have gone, possibly Mexico City. After a day or two he got a permit allowing him to go back into California, pick up his gear, and drive north to Vancouver. He arrived one evening and we had a nice chat. The next day he went to the border and asked for a TN visa. They gave it to him with no problem and he went back to his job in California.

A couple of times I prepared US and Canadian income tax forms for a Canadian man who was working in California as a Chief Operating Officer of a software company. Sometime after this job ended and he had returned to Canada he tried to enter the US using his Canadian passport. He was told that this was incorrect, since he had a green card and was supposed to present it. They stated that this was entering the US under false pretenses. They kept him at the border while his wife went back to their home in Vancouver to pick up his green card. They processed it and let him go. He was told that if she had not brought his green card he would have gone to jail.

Another Canadian man was not so lucky. He was a client of the company I was preparing income taxes for but I never met him. He went across the border to the US on a Sunday morning. At the border he told them that he and his wife were going shopping in Bellingham, a small town just over the border. Then he drove to the Bellingham airport. The border people had someone on duty at the airport and they closed in on him because this did not match what he had told them at the border. They searched him and discovered that he had scheduled a job interview in California. They were going to take him to jail in Seattle but my employer intervened and persuaded them to send him back to Canada. I am not sure if he got a 5-year or a 10-year bar from entering the US but he definitely could not take the job that he wanted to interview for.

Several years ago they ran a bus every week. It started at Seattle and went all the way to the Mexican border. At every stop along the way they picked up illegals from Mexico and Central America. At the border they told them all not to come back. We all thought that it was hilarious that sometimes some of the passengers were back in Seattle before the bus came back the next week.

Two different people made the same totally idiotic mistake. One had moved from the Deep South, say Alabama, to Canada many years before. He began driving into the US frequently. He saw that some people went right across, bypassing the lines of cars that were waiting at the border. About 2006 he inquired and was told that if he wanted to join them he could fill in a form to get approved. He filled it in and sent it off. Sometime later he got a message telling him to come to the US Customs office to pick up his certificate. He arrived and was told that he was on his way to a murder trial in Alabama. He was to be the defendant.

A few years later another man made virtually the same mistake. There are charter airlines that take Canadians to Mexican beach resorts. They usually go once a week. It is a direct flight. One man was on this and missed his return flight. He decided to take another flight, and selected one that changed planes in the US. As he went through Immigration he was informed that his travel plans had to be changed because the state of Washington was going to put him on trial for murder.

I cannot imagine what these guys thought they were doing. In both cases the charge was about 28 years old but no law enforcement agency writes off a murder.

I am passing them on to you because I thought that some of you might be interested. I do not want you to make the same mistakes.

As stated in another post here, I prepare US and Canadian income tax forms and would appreciate the chance to do yours this year.

Tax Season is Here

Today I interviewed by phone for a tax preparation job in Vancouver. It was with an accounting company. I do not know if they will offer me a job or not. The job was preparing T1 returns. They did not seem to be interested in my experience preparing 1040s.

US taxes are much more complex than Canadian taxes. This is because individual US legislators can add complexities to the tax code. This is usually done to provide a benefit to either a campaign contributor or a constituent. In Canada only the Finance Minister can add a complication.

The US taxes their citizens no matter where in the world they live. The only other country that does this is Eritrea. The US provides a system of deductions for earned income in other countries.

I have only ever seen 2 US citizens living in Canada who had to pay US tax after figuring their Canadian taxes. This is because they can treat their Canada Pension Plan and Employment Insurance as taxes. The only ones who have to pay are usually only in this category because they have made a capital gain that is taxable at a higher rate in the US.

If you want a price quotation give me an idea of the type and number of information slips. If you have financial accounts outside the US and the maximum value of these accounts is more than 10,000 I need to know how many of these accounts you have.

If you want to send me your job to do, do not send originals. Send only copies. Better yet, instead of sending me copies, use your printer-scanner to make images, then send me the images attached to an email. This simplifies the whole process.

I will prepare the returns and send them back to you as PDF files so that you can print them out, sign them and send them in. I can efile Canadian returns now. I hope to be able to efile US returns in late March but it is not possible to determine when the IRS will give me permission. It is to their advantage to have forms efiled because it means that they do not have to input them manually. I should note here that the Canada Revenue Agency charges tax preparation firms $25 per return for handling paper returns unless the firm prepares only a small number of returns.

It is very important to determine if your financial accounts outside the US add up to 10,000 or more. For this purpose take the maximum value that each account had during the year. Often if you take out a loan the loan amount appears in your checking or savings account for only a few minutes but this still counts for determining the limit.

If the total of the maximum value of each account comes over 10,000 then you need to include every financial account that you have signing authority for, even tiny ones like your gardening club, your kid’s Boy Scout troop, or anything like that.

Please send your tax questions

Please send me your tax questions. This time of year I am advertising my tax preparation services.

I do both Canadian and US tax returns, and of course I do returns for taxpayers who have to file in both countries. There is a tax treaty that determines which country gets to tax which income. This is important in cases where a person gets income from both countries in any one year, or when a US citizen is working or living in Canada.

If you want a price quotation give me an idea of the type and number of information slips. If you have financial accounts outside the US and the maximum value of these accounts is more than 10,000 I need to know how many of these accounts you have.

If you want to send me your job to do, do not send originals. Send only copies. Better yet, instead of sending me copies, use your printer-scanner to make images, then send me the images attached to an email. This simplifies the whole process.

I will prepare the returns and send them back to you as PDF files so that you can print them out, sign them and send them in. I can efile Canadian returns now. I hope to be able to efile US returns in late March but it is not possible to determine when the IRS will give me permission. It is to their advantage to have forms efiled because it means that they do not have to input them manually.

All Ready for Tax Year 2015

I am finally ready for Tax Year 2015. All that is left is to connect to the FBARs. For some reason this is slow this year.(but see below)

I do both Canadian and US tax returns, and of course I do returns for taxpayers who have to file in both countries. There is a tax treaty that determines which country gets to tax which income. This is important in cases where a person gets income from both countries in any one year, or when a US citizen is working or living in Canada.

If you want a price quotation give me an idea of the type and number of information slips. If you have financial accounts outside the US and the maximum value of these accounts is more than 10,000 I need to know how many of these accounts you have.

If you want to send me your job to do, do not send originals. Send only copies. Better yet, instead of sending me copies, use your printer-scanner to make images, then send me the images attached to an email. This simplifies the whole process.

I will prepare the returns and send them back to you as PDF files so that you can print them out, sign them and send them in. I can efile Canadian returns now. I hope to be able to efile US returns in late March but it is not possible to determine when the IRS will give me permission. It is to their advantage to have forms efiled because it means that they do not have to input them manually. I should note here that the Canada Revenue Agency charges tax preparation firms $25 per return for handling paper returns unless the firm prepares only a small number of returns.

It is very important to determine if your financial accounts outside the US add up to 10,000 or more. For this purpose take the maximum value that each account had during the year. Often if you take out a loan the loan amount appears in your checking or savings account for only a few minutes but this still counts for determining the limit.

If the total of the maximum value of each account comes over 10,000 then you need to include every financial account that you have signing authority for, even tiny ones like your gardening club, your kid’s Boy Scout troop, or anything like that.

Preparing the statements for these financial accounts is sometimes more work than preparing the income tax statements. They need the complete street address of each financial institution, the account number and the maximum value of the account. I prepare two sets of statements with this information, one to go with your return and another to go to a different branch of the Treasury Department. There must be some logic behind this but I do not see it.

A couple of weeks ago I read that of all the taxpayers who are eligible to receive education credits on their returns only about 2 of every 3 actually make the claims. It is usually necessary to see what has been done in previous years because the American Opportunity Credit is only available for a limited time. The Lifetime Learning Credit has different restrictions.The credit is substantial. I do not know why so many taxpayers miss it. One possible reason is that many tax preparers do not want to take the time to go through the different possibilities so they do not ask about it.

If you are filing a 1040 or 1040NR and have pages and pages of stock transactions I can set up a direct connection between your broker and my software so that the information can be transferred directly. You do not have to tell me your trading password, you only have to tell it to Intuit.

Since writing the above I have found a solution for the FBARs. It took 2 20-minute phone calls to find out what the problem was. Somehow their system had decided that my account was inactive because I had not used it since last tax season. There are several places where they say that FBARs can only be submitted during tax season. I do not see why an account should be declared inactive when it is not used during a time period when it is not supposed to be used, but that is bureaucracy for you.

Please remember that the deadlines are April 15 and probably May 2 in Canada.

Asset Seizures

Many governments are desperate for cash. The asset seizures are examples of what governments will do when they need cash. Do not expect the IRS to miss this fact. I am posting this to make sure that you understand just how much they want your money.

Several cynics have said that there is no reason to go into politics unless you want to spend other people’s money. There are far too many politicians who act on this viewpoint. They do not consider taxpayer funds as being real money. The final result is, as you might expect, that many if not most government bodies spend far more money than they can obtain by legal means. The amounts involved are much larger than the average person can comprehend and this results in even more spending.

Many years ago I heard a story about a fellow who was a bit of a spendthrift. Someone asked him why he did not live within his means and he replied that he was having difficulty living within his means PLUS his credit. He was the archetype of many government bodies.
This has resulted in borrowing ridiculous amounts of money, in many cases far more than can ever be repaid.

It is not only federal and state governments who have done this. Unconfirmed reports say that several cities are still paying interest on bonds that were sold to raise money to build sports stadiums that have already been demolished. It is hard to see that cities have any business building sports stadiums in the first place. The team managements convinced the city fathers that a new sports stadium would make the city appear to be big-league, and that the team should get a tax break as well. This lasts until the team manages to sucker in another group of city fathers. Then they move and the stadium becomes a white elephant.

The state and federal governments have borrowed as much as they can and now they have decided to take over the business that the mafia have lost recently. They are going into theft in a big way. According to the Washington Post the amount stolen using various asset forfeiture schemes is more than the amount stolen in burglaries by a margin of 4.5 billion to 3.9 billion. These forfeitures are illegal under the 4th, 5th, 6th, and 7th amendments to the US Constitution.

This is often stated as being a part of the War on Drugs. The Departments of Homeland Security and Justice have provided training and financial support to train police officers in how to engage in the practice of “highway interdiction.” This involves using minor infractions as excuses to stop citizens, request warrantless searches, and seize cash.

These remind me of something that happened in the 1950s. There were many speed traps set up on the highway that went from the northeast to Florida. A magazine, possibly Popular Mechanics, published a big article describing every one of these. They told drivers where to slow down so that they would not get a speeding ticket for disobeying a speed limit sign that was hidden behind a shrub or something similar.

Attempts are now being made to nationalize retirement accounts. A new type of retirement account called MyRA has been announced which consists almost entirely of lending money to the federal government, although they said that it was simply to buy government bonds.
FATCA’s purpose is to keep track of any funds that US taxpayers manage to get outside of the US. The net result has been that many financial companies all over the world have closed out all accounts owned by US taxpayers and refused to open new ones for them.

Several months ago James Dale Davidson, who is an international investor among other things, reported that he had tried to wire money, probably a couple million, from his bank to make an offshore investment. He had made many similar international investments in the past, but this time his banker told him that he, the banker, would go to jail if he allowed Davidson to make this investment. Apparently someone in the Treasury Department thought that if he wired this money offshore he might not be wiring it back. The fact that Davidson had paid US income tax on offshore investments many times in the past was not enough to outweigh the fear that he might not bring this one back.

There are several big problems associated with “highway interdiction.” One of the most important it that it destroys trust in police. The basic idea behind police activities is that the citizens will notify the police when they see a crime being committed. Someone who has been robbed by a police officer is much less likely to do this.

One important step that you should take is to never ever give an officer permission to search anything on your person or in your car,

An international body has suggested that all governments should levy a one-time-only 10 % wealth tax to get money to keep their spendthrift ways going. If this actually happens it will not be one time only. It will be announced that way but then it will be repeated a few more times.

It is difficult to see how voters can rein in the big spenders in legislatures. The only method that I know of is to follow the advice of Martin Luther King. A group of black people came to him and said that they were now registered as voters but they had to choose between two white segregationist candidates. He told them to vote against the incumbent. This worked so well that there are probably only a few people under the age of 60 who have ever seen the name of a white segregationist candidate on a ballot.

I would like to suggest that you consider following this procedure next year.

Getting ready for tax year 2015

I specialize in cross-border income taxes. There are believed to be about a million US citizens living in Canada and about the same number of Canadian citizens living in the US.

US citizens or green card holders need to file no matter where in the world they live unless their income is below the minimum. This minimum changes from year to year and depends on your age and family status. I should have the 2015 numbers sometime in January.

Canada only requires people to file for the part of the year that they are in Canada, and also for property, such as real estate, that they own when they are outside the country. When I was working for another agency the head man told me that the agency got Canadians the year that they moved to the US and again the year that they moved back to Canada. In those years they had to file in both countries. The returns work better if the two are prepared at the same time by the same person.

Since one or two years ago the IRS has taken the position that if you were legally married to anyone anywhere you are still married even if you live in a state that does not recognize gay marriage unless you have been divorced somewhere that accepts gay divorce. Canada is more open about it. They have accepted gay marriage and common-law marriage for many years. They have only accepted gay divorce since 2005. The agency head I mentioned above and I were talking to a gay client and the agency head told him that gay divorce was the next logical step to take. The first gay divorce was granted about a month later in Nanaimo, BC. Two lesbian women got married in 2003, separated in 2004, and divorced in 2005.

I have been informed that the software that I use for US taxes will be ready on January 14. It will allow me to get information from clients’ stock trading accounts and then place this information in their tax returns directly. Of course this will only be possible if the client decides to provide me with the necessary authorization.

It will still be necessary to look at the information very closely. Many small companies amalgamate with other companies, do consolidations, and change names frequently. These are often difficult to follow. This has been a very difficult year financially for small mining companies so I will have to be extra careful with these. Today I read that a company that was named after Isis, the Egyptian goddess, has had to change their name.

I will be able to efile Canadian tax returns as soon as the software for these returns is available, probably near January 14. My authorization for efile for US tax returns will not come until later in the year, probably near the end of March. Until then I will have to either send paper copies or pdf files of these returns to the client.

There are advantages of efiling returns. First of all, instead of sending paper returns and then having someone at Canada Revenue Agency or the IRS enter them into a program to produce a computer file, we simply send the computer file that we have produced. This decreases the problems caused by data entry errors. It also speeds up the process.

US citizens who live in Canada should not take out Tax Free Savings Accounts. The IRS considers these to be trusts and there is a big form involved. In one case they instructed me to take out an Employer Identification Number for a TFSA. This was for a $2000 bank account in Calgary. I could not imagine it having employees anywhere, especially not in the US, but this is what they asked for so it was what I provided. After making this application I told the client that it looked like we had been providing training for some new IRS employees.

It will still be necessary to file information on foreign financial accounts twice, to different branches of the IRS. I do not know why they want this information twice but we are stuck doing what they ask. The second set, which was due the end of June for many years, is now due at the same time as the main form 1040.

This is necessary if the maximum value of foreign accounts at any time in the year is USD 10,000 or more. This includes not only your own accounts, but any accounts for which you have signing authority, be they for a Boy Scout troop, a service club, a garden club or your child’s college fund. If money for something like a property purchase goes through your savings account and out again the same day this is counted as part of the $10,000.

Of course I would be happy to prepare your returns for you. If you want to send paper copies (I specifically mean copies, not originals) please write to me at dave@daves-income-tax-online.com to make sure that you have my correct address before sending them. If you are using your multi-functional printer to make the copies you can simply email me the images that your scanner makes so that I can print them out at my end instead of sending them through the mail or using a messenger service.

Recently I read that last tax season a USPS employee noticed that he or she was delivering hundreds of tax refund checks to one address. The IRS was notified. They had sent millions of dollars of phony refunds to the same address. I have no idea why their computers did not notice this, but as you should be aware an ordinary computer cannot do anything that its programmers did not include in its instructions.

The exception to this rule is Watson, the computer that beat human experts at playing Jeopardy. I have been granted access to Watson and will try to use it to predict the stock market. If I make a million dollars on the stock market using Watson’s predictions I will get out of the income tax preparation business and go into the business of decreasing my own income taxes.

That makes it pretty clear that I intend to stay in the income tax preparation business for a long time to come.