Talking Shop Blog

President Obama signed an Executive Order the other day that’s worth noting.

The Order directs government agencies and departments to evaluate their customer service performance and utilize “best practices” to streamline service delivery and improve customer service.

The initiative will include customer surveys “to solicit customer feedback on Government services and using such feedback regularly to make service improvements”.

There are probably a gazillion federal agencies and departments. Of course the one we have contact with the most is the Internal Revenue Service.

And we’re curious to see how the IRS plans to solicit “customer” feedback.

E-mail comes to mind first. It’s efficient, cost effective and green (no paper). But right now the IRS generally doesn’t use e-mail for external communications.

The IRS does use e-mail for internal purposes and they have detailed written policies and standards for using e-mail, which you can find at http://www.irs.gov/irm/part1/irm_01-010-003.html  .

They also have a Customer Satisfaction Survey on IRS e-mail assistance, which seems odd since they generally don’t use e-mail for external purposes.

Anyway, we’ll wait to see how the IRS solicits customer feedback, whether by phone, e-mail or regular U.S. Mail. 

You can find the President’s Executive Order at http://www.whitehouse.gov/the-press-office/2011/04/27/executive-order-streamlining-service-delivery-and-improving-customer-ser

And to see how the next IRS survey might look, check out http://www.irs.gov/help/page/0,,id=13155,00.html

Google “credit counseling” and you get about 6,910,000 results (0.20 seconds). 

Change the search to “credit counseling government” and you’re down to about 2,060,000 results (0.14 seconds). 

One site which caught my attention, Knee Deep in Debt, offers this: 

“If you or someone you know is in financial hot water, consider these options: realistic budgeting, credit counseling from a reputable organization, debt consolidation, or bankruptcy.”

The federal government is knee deep in debt and in financial hot water. 

The national debt stands at over $14.2 trillion and counting. And we’re just a couple of weeks away from reaching the $14.294 trillion debt ceiling. We’ll be maxed out on the credit card.

Of course the ceiling will be raised. It’s been raised 74 times since 1962, including 10 times since 2001.

The question is will the agreement to raise the debt ceiling include significant spending cuts – or will Congress and the Administration “kick the can down the road” again.

We should  know the answer in the next few weeks.

In the meantime, you can watch the debt grow in real time at http://www.usdebtclock.org/ .

And if you or someone you know is knee deep in debt, the Federal Trade Commission offers this advice at   http://www.ftc.gov/bcp/edu/pubs/consumer/credit/cre19.shtm .

Last week President Obama signed the Comprehensive 1099 Taxpayer Protection and Replacement of Exchange Subsidy Overpayments Act of 2011.

The Act repeals the expanded Form 1099 reporting requirements included in the health care reform legislation. Those provisions would have expanded the 1099 reporting to payments for goods and certain rental property expenses.

The catch-all form in the 1099 Series is Form 1099-MISC, Miscellaneous Income. The form has 18 boxes, and some of the items are straightforward, like Rents and Royalties.

Box 3 is pretty broad – “Other Income”. The instructions say that includes, among other things, prizes, awards “or other taxable income”. There’s no definition of “other taxable income”.

You can find Form 1099-Misc at http://www.irs.gov/pub/irs-pdf/f1099msc.pdf

Detailed instructions are at http://www.irs.gov/pub/irs-pdf/i1099msc.pdf . Those instructions will be changed to reflect the repeal mentioned above.

The Department of Energy released its weekly gas price report on Monday.

Last week Chicago had the third highest average pump price in the country at $4.098 a gallon. Los Angeles ranked first at $4.188 a gallon, with San Francisco a close second at $4.176.

Not surprising, the price of crude oil is the biggest driver in gas prices, averaging around 65% of the total retail price at the pump.

Refining costs (14%), and distribution and marketing (8%) also affect the price of gasoline.

And then there’s the tax cost included in the price posted at the pump – which averages 13% according to a DOE report.

It’s no coincidence that Chicago, L. A. and San Francisco have the highest gas prices in the country.

The American Petroleum Institute (API) shows that California has the highest tax cost with combined federal, state and local taxes at 66.1 cents per gallon. Illinois ranks fifth at 61.2 cents per gallon.

You can find the API statistics at http://www.api.org/statistics/fueltaxes/upload/Gasoline-Tax-Map.pdf

And the DOE reports are available at http://tonto.eia.doe.gov/oog/info/gdu/gasdiesel.asp and http://www.eia.doe.gov/oil_gas/petroleum/data_publications/wrgp/mogas_home_page.html

Today is Tax Freedom Day according to The Tax Foundation, a D.C. based tax research organization.

It’s the day they estimate we’ve earned enough money to pay all our federal, state, and local taxes for the year.

Tax Freedom Day is based on national averages for all the states. We’ve got a few more days before it’s actually Tax Freedom Day here in Illinois.

The Foundation says Tax Freedom Day comes on April 15 in Illinois this year. That ranks us #9 in the “Latest Ten” – which is not a good thing.

Next year we’ll no doubt “move up” in the latest rankings – with the 67% tax increase that kicked in the first of the year.

You can find out more about Tax Freedom Day at http://www.taxfoundation.org/news/show/27166.html

And check out the rankings by state at

http://www.taxfoundation.org/UserFiles/Image/Tax-Freedom-Day/2011/tfd_state-map-20110330-2-xL.jpg

At this writing, it looks like we’re headed for a government shutdown at midnight tonight.

Here’s what happens tax wise if there is a shutdown.

First off, the April 18 filing deadline remains in effect and is not extended.

The IRS has also announced it would not process paper returns or refunds and would suspend ongoing audits. However, electronic filing would continue.

The possible shutdown is an added incentive to e-file tax returns because refunds will continue to be issued on electronically-filed returns while refunds on paper-filed returns will not.

And lost in the shutdown shuffle is the expected repeal of the new 1099 reporting requirements.

Earlier this week, the Senate approved a House-passed bill to repeal the expanded information reporting requirements for businesses and rental property owners.

The bill has been sent to President Obama who is expected to sign it into law.

Stay tuned.

Beer’s been in the news a lot.

Last week Anheuser-Busch announced that it was buying Chicago-based Goose Island.

And Sunday’s Chicago Tribune had an article about the growth of craft beers. The article notes that the craft beer industry is seeing double digit growth while total beer sales were down 1% last year.

Now Congress has gotten into the “Act”.

The Small Brew Act, officially known as the “Small Brewer Reinvestment and Expanding Workforce Act” has been introduced in the U.S. House as H.R. 1236.

The bill would reduce the rate of excise tax on beer produced by “small producers”. A small producer is defined as a brewer who produces not more than 6 million barrels of beer during the calendar year.

The Act doesn’t define what “beer” is.

And with so many specialty and flavored “beers”, it’s sometimes hard to tell.

A beverage “made with hibiscus flowers and then blended with kombucha tea” doesn’t sound like beer to me.

Same thing for anything blended with ginger, cinnamon or cocoa nibs.

The Infernal Revenue Code says “the term “beer” means beer, ale, porter, stout, and other similar fermented beverages (including saké or similar products) of any name or description containing one-half of 1 percent or more of alcohol by volume, brewed or produced from malt, wholly or in part, or from any substitute therefor.”  (Sec. 5052(a)).

I’ve never tried Saké and it doesn’t sound like beer to me. Doesn’t matter – it’s taxed anyway.

You can find the Tribune article at http://www.chicagotribune.com/business/ct-biz-0403-craft-beers-20110402,0,6471887.story

We’ll keep you posted on the Brew Act.