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Some Of The Tax Developments I Covered In 2022

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Some Of The Tax Developments I Covered In 2022

I have been a tax writer of sorts for thirteen years. What I write about is stuff that I find interesting. And I have to tell you that 2022 does not rate that high for interesting. Still there were a few things worth remembering. On reflecting on what I find interesting I realized that it breaks down into three rough categories. Stories that have practical utility. Stories that are humorous or contain a lot of human interest. Stories that raise other issues – just about everything from gender equity to religious freedom and beyond end up having a tax angle. I also find that some stories end up having long arcs and I feel kind of responsible for them. So with that in mind here is what I find memorable in 2022.

Separate Returns And The Triumph Of #TaxTwitter

One of the broken records I frequently play is reminding people that filing joint returns is an election – Reilly’s Twelfth Law of Tax Planning – Joint filing is an election. It is not one of your marital vows. The reason for this is the joint and several liabilities that joint returns give rise to. Lowering a couple’s overall tax by joint filing can be counterproductive if the resulting balance is still not paid – Reilly’s Tenth Law of Tax Planning – Once the tax is more than you can pay it might not matter how much more. That revision to the Twelfth law was a 2022 event thanks to the story behind Spouse Liable On Unsigned Joint Return which published in May.

2022 was different though. It is very rare that the total tax will be lower when separate returns are filed instead of joint. Rare enough that people don’t even bother to check. Not in 2022 though. Almost to the wire I put out Married Couples May Save Thousands By Filing Form 1040 Separately For 2021. It had to do with the way stimulus payments and advance child credits interact with adjusted gross income.

What is really intriguing is how I discovered this story. It was from #TaxTwitter. #TaxTwitter which thankfully seems to be holding out against reportedly massive Twitter desertion, is a place where client facing tax professionals go to commiserate and swap recipes. Often it makes me very grateful that I retired from active practice in 2018. Mike Sylvester CPA had figured out the potential advantage of separate filing while doing 2020 returns and spread the word of #TaxTwitter. Roughly speaking the possibility needed to be explored by couples with children and AGI from $150,000 to $400,000, The largest reported saving from the technique was $13,000.

The fondness I have for the folks on #TaxTwitter reminds me of the words of Edmund Burke:

“To be attached to the subdivision, to love the little platoon we belong to in society, is the first principle (the germ as it were) of public affections. It is the first link in the series by which we proceed towards a love to our country, and to mankind.”

By the way, the biggest pointer I can give you from following #TaxTwitter is that if you are going to need help with your return, line somebody up now as there seems to be limited capacity and a lot of them are mad as hell and not going to take it anymore.

The Industry Based On Nonsense

I did a separate roundup on the IRS struggle with conservation easements – IRS Versus Dubious Conservation Easements In 2022 – Mixed Results. The massive spending bill that passed both houses includes an amendment to Code Section 170(h) that will stop some of the most egregious abuses. The Land Trust Alliance which has worked hard for this legislation issued a celebratory release which included

“In spite of federal efforts to stop abusive syndicated conservation easement transactions during the past decade, they have continued and have cost taxpayers billions of dollars. It has been clear for years that Congress alone had the power to stop these bad actors by enacting sensible, narrowly targeted legislation that would end the abuse and protect an invaluable conservation tool. Today, Congress exercised that power and, in the process, preserved the integrity of our tax laws and protected those who work tirelessly and ethically to conserve our country’s irreplaceable working and natural lands. (Emphasis added)”

They are right about the narrowness of the targeting. I suspect there will still be room for a large amount of valuation abuse. It will be just a lot harder to spread the benefits to high income people with insubstantial net worth.

Other Issues

I could not get excited about the tax provisions of the Inflation Reduction Act although the boost to the IRS budget generated some excitement as #TaxTwitter came to the defense of Adam Markowitz who dared to suggest that people concerned about more audits might consider becoming more compliant. Several of the long story arcs that I though pretty well closed popped up again. The parsonage exclusion came up in the Warnock/Walker senate runoff in Georgia. One of Kent Hovind’s advisers, Glenn Stoll has a collection suit going against him. I recently spoke with Stoll and I got a sense of how people can find his views persuasive.

The Stab At Travel Writing

The most amusing story of the year is actually amusing in a sort of meta sense. My life partner was also my business partner and we retired together. She often remarks that I should find more interesting things to write about. She maintains a blog about our post-retirement travels. We recently sold our RV and I came up with the notion of doing an accounting. I received dispensation to go out of my tax lane and the result was Two Retired Accountants Toured The US In An RV And It Cost $209 Per Night. That ended up being the most popular story by far this year.

Nevertheless, I will stick with taxes. At the moment 2023 does not look like that promising a year. Donald Trump’s tax returns do not excite me and the prospect of another round of hearings about the IRS is mind numbing. We want to see.

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