IRS Collection by Bank Account Levy: Joint Bank Accounts

Per § 6332, the IRS has the right to levy on a delinquent taxpayer's bank account. When the bank is served with a levy, the bank is required to withhold (and after 21 days surrender to the IRS) whatever money was in the delinquent taxpayer's account at the time the levy was served.

Joint Bank Accounts

So what if you have a joint bank account with another person and the IRS garnishes your joint account? According to the Supreme Court, the IRS can levy against a joint bank account of a delinquent taxpayer. As a general proposition, if the delinquent taxpayer had the unqualified right to come in and withdraw the money from the account, then the IRS can levy on it. The IRS steps into the shoes of the delinquent taxpayer and acquires whatever right the taxpayer himself has. If the taxpayer had the right to withdraw the funds, then the IRS has the right to levy on them.

Moral of the story: be careful of joint bank account holders that have (or might have) problems with the IRS!!!

Presidential Hopeful Tax Plans: President Obama

UPDATED: September 13, 2011 with additional details!

Following up on previous posts regarding the tax plans of Presidential hopefuls, here are the tax highlights of President Obama’s plan.

On Thursday, President Obama laid out his plan to create jobs which he calls “The American Jobs Act.” 

The following are some tax highlights from that Plan.  

1. Payroll Taxes
   1. Employee side: reduce the Employee share of payroll taxes from 4.2% (formally 6.2%) to 3.1%. 
   2. Employer side: reduce the Employer share of payroll taxes from 6.2% to 3.1% on the business’s first $5 million in payroll. 
   3. Employer side: For new hires or increased wages, provide a payroll tax credit to fully offset the employer's share on the increased payroll (capped at first $50 million in payroll increases).
2. Deductions
   1. Extend the 100% expensing deduction into 2012.
   2. Limit the ability of "high-income taxpayers" to take deductions to a maximum benefit of 28%.  This means, that if a taxpayer has taxable income in the 39.6% bracket, then the deduction will be limited to 28%.  This applies to married couples making over $250,000.00  and for singles making over $200,000.00.  This provision will affect itemized deductions and “certain other tax expenditures.”
3. Misc.
   
   1. Unemployed Veterans: Provide tax credits from $5,600.00 to $9,600.00 to encourage hiring of unemployed veterans. 
   2. Long-term unemployed: Provide a $4,000 tax credit to employers that hire long-term unemployed workers.
   3. Tax Carried Interest in Investment Partnerships as Ordinary Income.
   4. Close Loophole for Corporate Jet Depreciation.
   5. Disallow a number of deductions for oil and gas industry.
   6. Increase deficit target of Super-Committee to $1.95 Trillion (from $1.5 Trillion).  
   
   
   

In his speech, the President called on Congress to pass the American Jobs Act in order to jumpstart recovery, whether or not Congress will pass the Act, or any portion of it, remains to be seen. 

More info on President Obama's plan can be found here.
The Text of the bill can be found here. 
A nice summary of the bill can be found here. 

Other presidential hopeful tax plans: John Huntsman

Update on Wednesday, January 25, 2012 at 9:05AM by Jess Monnette

In his January 24th, 2012 State of the Union address, President Obama proposed what is in effect a 30% AMT on all households that make more than $1M per year. 

Learn more at the President's "America Built to Last Blueprint."

Presidential Hopeful Tax Plans: Jon Huntsman

Presidential hopeful Jon Huntsman released his “Jobs Plan” last week.  The Tax Reform proposals are as follows:

Simplify the Personal Income Tax Code and Lower Rates.  The Plan “eliminates all deductions and credits in favor of three drastically lower rates of 8%, 14% and 23%.  Eliminating deductions and credits in favor of lower marginal rates will yield a simpler and more efficient tax code, decreasing the burden on taxpayers.”

Eliminate The Alternative Minimum Tax. The Plan will eliminate the Alternative Minimum Tax. 

Eliminate Taxes on Capital Gains & Dividends.  The Plan will eliminate taxes on all capital gains and dividends. 

Reduce The Corporate Rate From 35% To 25%. The Corporate Tax Rate would be reduced from 35% to 25%.  The Plan would shift the US from a “worldwide income” system to a “territorial system” and implement a repatriation holiday for corporate profits earned overseas.   

The full text of the proposal can be found here. 

August employment stats: no new jobs

Following up on a previous post about a bleak May jobs report, new reports show that the US economy created NO net jobs in the month of August.  Additionally, the unemployment rate has held at 9.1%.  The jobs reports just keep getting bleaker and discussion increases about whether or not we are headed for another recession. 

State of Washington to stay in Florida Obamacare litigation, at least for the time being…

The Washington Supreme Court ruled today, that the City of Seattle cannot prevent the Washington State Attorney General McKenna from participating in the Florida state litigation opposing Obamacare in the name of, and on behalf of, the State of Washington.  The Court denied a motion for a writ of mandamus, which would have directed Attorney General McKenna to withdraw the State of Washington from the litigation. 

The court ruled that the writ of mandamus is not available because the Attorney General has no clear duty to withdraw the State of Washington from the federal litigation.  The Court also noted that the Attorney General had statutory authority to participate on behalf of the State.

The Court did not address whether or not the Attorney General would have to withdraw the State of Washington in the event that he and Governor Gregoire disagreed on whether or not to participate in the litigation, and the Governor initiated a petition for writ of mandamus to compel removal of the State.