Flat tax plans are the hot topic in the republican presidental candidate race. After seeing the popularity of Herman Cain skyrocket after his proposed 9-9-9 flat tax, Texas governor and presidental candidate Rick Perry has proposed his own flat tax plan.

Perry has proposed his own flat tax plan that allows taxpayers the option to continue using the current tax code or pay a flat tax of 20%. Even though the details of his flat tax strategy hasn’t been announced, the tax plan cannot work.

In summary, the Texas governor’s flat tax plan would give taxpayers a choice between filing taxes under the current tax code and an flat tax of 20%. Those who opt for the flat tax could maintain their mortgage deductions if they earn less than half a million dollars, about 99% of taxpayers. Perry’s flat tax plan would allow taxpayers to declare exemptions of $12,500 for each family member.

At first glance the plan might look appealing but it falls short because it won’t foster growth and it would send the federal deficit even higher.

The advantages of implementing a flat tax is to encourage individuals and corporates to invest in businesses instead of looking for tax breaks and tax loopholes. By offering taxpayers the option to choose between a 20% flat tax and the current tax code, big businesses will continue to rely on their tax accountants to file under the current system.

Rick Perry’s 20% flat tax proposal appears to be nothing but a knee-jerk reaction to Herman Cain’s 9-9-9 flat tax plan.

I wonder if the governor read his plan and critiqued it with his tax accountants before announcing it!

The IRS is noticing that there is some confusion about the the Recovery Rebate Credit and whether or not you have to pay taxes on the stimulus check from last year.

“About 15 percent of the returns have errors involving that credit,” said Clay Sanford, a spokesman for the IRS in Dallas.

The Recovery Rebate Credit is a one-time benefit for people who did not receive a stimulus check in 2008 or who did not receive a full economic stimulus payment. These people may have seen their economic circumstances change, making them eligible for the credit.

You may qualify for a Recovery Rebate Credit if:

• Your financial situation changed dramatically from 2007 to 2008
• You did not file a 2007 tax return
• Your family gained an additional qualifying child in 2008
• You were claimed as a dependent on someone else’s return in 2007 but cannot be claimed as a dependent by someone else in 2008.

Under certain circumstances, individuals filing a return can receive a $600 credit, while married couples filing jointly can receive $1,200. People under age 17 may fetch a $300 credit.

LAST YEAR’S STIMULUS PAYMENT IS NOT TAXABLE. But taxpayers need to know how much their stimulus check was so their income tax returns can be properly processed.

The Stimulus checks received last year and the Recovery Rebate Credit available to some this year are completed different. But, they are related when filing tax returns.

People filing paper returns will need to include the size of their stimulus checks when completing a work sheet. For people using tax software, the stimulus payment amount will be needed as well, but the software will figure whether a Recovery Rebate Credit is due.

DO I HAVE TO TAXES ON MY STIMULUS CHECK FROM LAST YEAR? The answer is No, No, No!

For most taxpayers, the correct entry for the Recovery Rebate Credit will either be blank or zero. If there is any question as to the amount that should be reported for that credit, the taxpayer or preparer should enter a zero on the appropriate line. The IRS will determine from records whether a rebate credit is due and for how much.

If you have a specific question about your Federal Tax return you can call the IRS and receive Live Telephone Assistance. Here are the particulars:

Telephone Assistance for Individuals:
Toll-Free, 1-800-829-1040
Hours of Operation: Monday – Friday, 7:00 a.m. – 10:00 p.m. your local time (Alaska & Hawaii follow Pacific Time).

Telephone Assistance for Businesses:
Toll-Free, 1-800-829-4933
Hours of Operation: Monday – Friday, 7:00 a.m. – 10:00 p.m. your local time (Alaska & Hawaii follow Pacific Time).

source: irs.gov

Here we go again.  Another Barack Obama nominee, this time for Health and Human Services secretary, is being investigated for failing to pay back taxes.  Tom Daschle, the former South Dakota Senator waited nearly a month after being nominated before informing President Obama that he had not paid years of back taxes, according to the Washington Post.

Dashle paid  $140,000 in back taxes and interest on January 2, 2009 and a few days later informed the White House and Senate Finance Committee. 

Obama’s transition team discovered in December that $15,000 of the $276,000 in charitable contributions claimed by Daschle lacked proper documentation. But Daschle waited until after amended returns were filed before he mentioned the larger tax liability.

Daschle spokeswoman Jenny Backus said he had known since June 2008 that his luxury car and driver provided by wealthy Democratic donor, longtime friend and business associate Leo Hindery might be taxable, but never expected the amount to be such a “jaw-dropping” sum and “thought it was being taken care of” by his accountant.

Hindery founded InterMedia Partners, a private equity firm, in 1988. Daschle was paid $1 million annually for his consulting services, the Senate Finance Committee said.

Daschle had an unreported consulting income of $88,333, in 2007.

“Senator Daschle is embarrassed and disappointed by these errors,” Backus said. “He apologized for his part in these errors and expressed his deep regret that the committee had to devote time to them.”

The White House acknowledged Friday that Daschle had “some tax issues,” which, the administration said, have been resolved and should not bar his confirmation as secretary.

A statement issued by the White House affirmed that Daschle “is the right person to lead the fight for health care reform.”

“Senator Daschle brought these issues to the Finance Committee’s attention when he submitted his nomination forms and we are confident the committee is going to schedule a hearing for him very soon, and he will be confirmed,” it said.

Why is it that these high ranking politicians are trying to get away with paying taxes.  I mean $140,000 in taxes is by no means an oversight, how could it be?

And in Daschle’s case, he calculated his strategic moves in when to pay the back taxes and when to inform Obama and the Senate Finance Committee.  It is the same old political sleeze that we all hate.  This is very disturbing and brings up the point that maybe elected officials should be held accountable.

And Daschle’s sleezy moves won’t even affect his nomination.  This is a travesty – I don’t care how the constituents spin it.  If someone in the private sector owed $140,000 in federal taxes, do you think they would be treated the same? 

I see no excuse for this and Tom Daschle’s nomination should be voided.  Shame on you! Shame on government!

Something must be done!