Category Archives: Tax Issues

I’ve Moved!


Well, I haven’t exactly moved, but my blog has.

If you’ve been logging in here to see what I’ve been up to, then click here and head on over to my newly relocated blog at www.ptoddkelly.com

Let me know what you think- over there, not over here. I won’t be checking back in here too often, and will only be posting on the new address.

If you’re interested in having your own blog with your own personalized domain name, feel free to contact me at todd@taxtraxx.com and I’ll help you out with that.

You can also find me at:
http://taxtraxx.com – Providing tax related consulting across the USA.
http://bigrockpubs.com – A publisher of books. A home for writers.
http://ptoddkelly.com – My blog – talking about taxes, politics, government waste and abuse, Christianity, parenting, sports, and entertainment
http://danielcarterbeard.net A blog about old time scouting for old time scouters.(coming soon)
http://scouterblog.com – where scouts and scouters can get their own FREE scout themed blogspace
http://truckloadresources.com – A fantastic new portal for the trucking industry, featuring a massive directory, blog center, news, tax assistance, travel assistance, and points of interest nationwide.

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The ObamaPad


Saw this online and wanted to share with you. The Obamapad. If only people could see .  .  .

What a great analogy for the health care debate / Health Care reform / socialized medicine mess – or government waste. Feel free to pass along the link to your friends.

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Herzog Reads Curious George


In 1986, I took my first film class at the University of Georgia (more on that later).

If you know much about me, you know that I have very diverse tastes in film and television. You may know, that my favorite television program of all time is “Gunsmoke” (to my wife’s utter dismay), with quite a few of them close second (Aha! A future blog entry!) Officially, my favorite movie is and has long been “Sergeant York”, starring Gary Cooper. (Another future bog entry may be how I have based my career as an entrepreneur on “Sgt York”) After all these years, I suppose it is safe to confess that “Sergeant York” is really only my favorite AMERICAN film. My favorite film of all time may be the weird and creepy “Aguirre, Wrath of God” starring Klaus Kinski as a 16th century Spanish Conquistador, who goes completely mad, while searching the Amazon for the fountain of youth. I won’t give away the ending, but the final scene, which I think I recall Professor Eidsvick telling us was a completely ad lib single shot, is worth more than a month’s Netflix fee in and of itself.

Now, about that film class. In that class, Film 101, each student was required to go to the student center theater every Sunday afternoon to watch whatever foreign film was being shown that week. One of those Sundays, the film was “Aguirre”. “Aguirre” was directed by the German filmmaker Werner Herzog, who on that particular day became my favorite movie maker. Herzog is an ego-maniacal, tyrannical genius, whose rants and tirades are only overshadowed by those of his most prolific star, Klaus Kinski. Kinski also starred in a number of other Herzog films, like “Fitzcarraldo”, the story of a European gentleman bringing the Opera (and an enormous Riverboat) over the river and through the woods to the native Amazonians. The making of “Fitzcarraldo”, a partly true story, was documented in the compelling “Burden of Dreams” in which Herzog tells of the tribal wars that occurred during filming, the fights among the actors and crew, about how Mick Jagger was originally cast in the Kinski role, about pulling the actual river boat over a mountain, and how after filming was halfway complete, they scrapped the entire project and started over from scratch.

I’ve haven’t seen “Burden of Dreams” in probably 15 years, since my buddy Darryl @dellrott http://dellrott.wordpress.com, bought it on VHS, but it remains the best documentary not produced by Ken Burns that I have ever seen.

So, comes the 21st Century, and Kinski is no longer with us, but Herzog is still viable filmmaker. He has recently narrated a film that explores 30,000 year old French cave art – I’ll have to see that one – anyone want to join me?

The reason for all the setup above is that last week I ran across this hilarious video on another blog, and wanted to share it with my friends. It’s a parody of Herzog’s narrative style. An impressionist reads the Children’s Classic “Curious George” as the Maniacal Genius himself MIGHT have done it. I hope you enjoy this as much as I have:

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Are You Done Yet? (with your taxes, that is)


As I write this, the calendar has flipped to April 15th – Tax Day, our national celebration day where we pay homage to Big Government programs, politics, government waste, cumbersome bureaucracy, and coffers bloated by the special interest  groups.

As a tax professional, I try to avoid preparing Personal or Individual Income Tax returns. My business, Tax Traxx, specializes in business taxes, specifically Sales Tax matters in 45 states. Every year about his time, as other accountant-types work double or triple shifts busily preparing their clients’ Tax Returns, people say things to me like, “I know you’re really busy this time of year,” or “I know you’ll be glad when April 16th gets here.”  Even though Personal Income Tax returns are not my specialty, I suffer along with the ever dwindling number of Americans who actually pay taxes.

I prepare an occasional 1040 or 1040EZ form for a client here or there. In fact, I did one today. Let me tell you a little story. Today’s example is a single 21-year-old, recently moved from home and working her first “real” job. Today’s subject had a little over $6,000 in earned income, and paid a little less than $200 in withholding throughout the year. In preparing her return, I realized that she was entitled to claim the full “Making Work Pay” credit, which is a $400 (max.) refundable credit. This whole thing about refundable credits is pure and simple Marxist wealth redistribution. Taxpayers can claim refundable credits that exceed the amount that they paid in withholding during the year, so that they possible receive a refund greater than the amount they paid in. In today’s example, the subject paid a little less than $100 in Withholding, but received a refund of nearly $500. If only she had been 25, she could have also claimed the “Earned Income credit” as well.

Where did that money come from? You and me, brethren.

That’s why every year about this time, I’m shocked when I hear someone say that they didn’t have to pay any taxes – they got ’em back! They say this, not realizing that each of their paychecks throughout the year was chock full of withheld taxes – money that would have been theirs, had our elected representatives not seen fit to confiscate said money and use it for whichever of their own self-serving political purposes they deem to be more worthwhile than allowing “working Americans” to manage their own money.

This is not meant to be a diatribe against taxation, or against the necessity to fund core government services (the basic functions required by the Constitution, not the fabricated social welfare programs that began to choke us after World War I and have never loosened their grip). There’s plenty of blogosphere out there to host the arguments of the proponents of all the different alternative solutions like the Fair Tax, flat tax options, value-added tax options, etc.

The simple fact remains that the current system is bad. Some would call it “fatally flawed” but I don’t think that is a strong enough description.

So, what will you do to “celebrate” the day today?

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If You STILL Can’t Get a Live Person at the GA Dept of Revenue


If you read my previous post on this subject “How To Get A Live Person at the GA Dept of Revenue”, you know that it is difficult, but it CAN be done. Also, in that article, I recommend the following initial steps:

  1. File Electronically
  2. Check for your refund on the website
  3. Check the Refund Inquiry Hotline (877) 423-6711 (both the online system and the phone system update their data once every day. It is unnecessary to continue to call these throughout the day, as the information will be the same.)

So, what do you do if you have exhausted all these resources? Don’t panic.

In my previous article, I gave instruction on what to say to the agents who answer the phones on the Hotline after you press “0”.

If these methods still do not get you the information you require, you do have some options.

  • You may call (404) 417-4480 – that’s a “backdoor” number that also rings into the main menu. You will undoubtedly have a long hold time, but you may be able to get an actual person to answer this phone. Be sure to get their name, direct number, and email address, if possible.
  • You can also call (404) 417-4490 – this is a real backdoor that gets you to the Registration and Licensing Call Center. From here, you can tell the agent you accidentally dialed the number wrong and ask them to transfer you to an EXAMINER in Income Tax (not in Refund Inquiry).
  • As a GA Taxpayer, you are entitled to speak to a live person. The Taxpayer Bill of Rights as revised in Dec 2009, ensures that you have the right to assistance from the Georgia Department of Revenue in complying with Georgia Tax Laws.
  • One of the offices you have access to is the Office of the Taxpayer Advocate.  The phone number for this office is (404) 417-2100. This number also reaches the office of the State Revenue Commissioner, Bart Graham. You will be unlikely to get him on the phone, but the staff in this office is very good at directing your calls to the correct resource to resolve your problem.
  • The email address for the Taxpayer Advocate is taxadv@dor.ga.gov

If you exhaust these methods and still have no answers, please contact us at Tax Traxx and ask for our assistance. We have assisted many taxpayers get a resolution from the GA Dept of Revenue.

Next: What If They Deny My Refund Claim?

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Filed under Georgia Government, Government Waste, Tax Issues

GA DOR Lowers Payment Threshold on GA Businesses


With House Bill 334, the Georgia Department of Revenue has changed Regulation: 560-3-2-.26 “Electronic Funds Transfer, Credit Card Payments, and Electronic Filing” that will have a dramatic effect on virtually all small businesses operating in Georgia.

The new rule lowers the threshold at which businesses must submit tax payments electronically. That threshold was $10,000 for all tax payments made prior to January 1, 2007. It has been $5,000 for all tax payments made after January 1, 2007; but, it gets progressively lower 2010 and 2011.

“Effective for tax periods beginning on or after January 1, 2010, the threshold will decrease

to $1,000. Therefore, any person or business with any single sales and use tax or
withholding tax payment that is greater than $1,000 will need to both file electronically and
remit their payment by EFT as well as for all future payments and filings.”

The threshold goes down to $500, beginning with payments due January 2011 or later.

What does this mean? It means that, going forward, business taxpayers will have to begin making electronic payments for Sales and Use Tax and Withholding Tax, if any of their tax payments are greater than $1,000 (beginning January 2010) or $500 (beginning January 2011). And, once you cross that threshold, you have to make ALL subsequent payments electronically, even if subsequent payments drop below the threshold.

This eliminates the notorious “float” of several weeks that it normally took the GA DOR to process checks. It eliminates filing early, but sending payments later. It gives the department access to your bank account.

What should you do to protect yourself as a small business person? I would recommend that you work with a tax preparer, who can offer filing services, and who can warehouse your payment until the very last possible day to process it, in order to avoid late payment penalties and interest. Remember, that in Georgia, you have until the 20th of the month to file the previous month’s Sales and Use tax return – but only until 3 PM on the 19th of the month to pay the amount due.

I’m a sales tax guy (my website is here), so I think in terms of Sales and Use tax, primarily, but the other tax types are in play as well. If the 20th falls on a weekend or holiday, you really only have until 3 PM on the Friday BEFORE the 20th to make your payment.

Most other states (and I file sales and use tax returns in 44 of them) allow the due date to slip back to the Monday or Tuesday AFTER the due date, if the due date falls on a weekend of holiday. Even those states whose due dates fall on the last day of the month allow the due date to slip to the Monday or Tuesday afterwards in this case. (I’m unsure why Georgia is the only state with this rule in place. But that’s a different article altogether.)

So, what happens if you fail to comply? The penalty is also spelled out in the new law:

Each failure to remit payment by EFT will result in the assessment of a 10% penalty of the payment due. An additional penalty equal to the greater of $25.00 or 5% of the entire tax due (before payments and credits) will be assessed for each return not submitted electronically.”

I’ll give credit to the policy makers at the Georgia Department of Revenue, though. They have finally carried through on a pledge that the State Revenue Commissioner made when he was appointed in 2003, to require as many taxpayers as possible to file and pay electronically.

Link to the House Bill 334

Link to my Website

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JSmith’s Email, The Response


If you’re reading this, I hope it’s because you read last night’s post about JSmith’s Nasy Email. If not, click here. We’ll wait.

One of the most important lessons I learned in my life as a “government insider” was the ability to answer correspondence of this kind of tone with patience and thoroughness. To illustrate, please see the abridged text of my response to my client’s employee’s husband (Oh, and don’t miss the constitutional history lesson!):

“Dear Mr. xxxxxx

“I have just received your email and wish to address your concerns. First, let me say how sorry I am that I have caused you such obvious alarm and concern. Having been in this business for some time, I perhaps take for granted that everyone understands the intricacies and peculiarities of alcohol law.

“Second, I am not an attorney, but an experienced consultant, who specializes in helping his clients navigate the processes of obtaining business and alcohol licenses in various municipal and state governments.  TaxTraxx (www.taxtraxx.com), is a company I started three years ago, after serving approximately eight years in numerous capacities at the Georgia Department of Revenue. My firm facilitates projects like this for a number of business across the southeast. To date, we have an excellent record of providing services to our clients and we work with individuals of many different nationalities. We also file Sales Tax returns for our clients in 44 of the 45 states that collect Sales and Use Tax (North Dakota is the only exception). On our website, you will see some case studies of services that we have provided for our clients.

‘In this case, my firm has been engaged by xxxxxx, whom I am copying on this message. xxxxxx specializes in the sale of convenience stores and other types of businesses. xxxxxx contracted my services for the purposes of securing business licenses and alcohol licenses for several xxxxxxxx stations in metro Atlanta that are being sold to independent owners.

 “The store where Mrs. xxxxxxx works, is being sold to xxxxxxx, which is 100% owned by a resident of xxxxxxx.  

“Because the new owner is not a resident of Georgia, the City of xxxxxxxx requires a United States Citizen who is a current employee of the business to be listed as “Registered Agent” for the purposes of securing the new alcohol license. The main purpose for a registered agent is to have a local (within Georgia) contact for process of service, or to send mail in the event that mail might be undeliverable to the business address. The current owner, xxxxxxxxx, and the new owner asked Mrs. xxxxxx if she would be willing to serve in this capacity on behalf of the xxxxxx. From experience, I know this to be a common practice among municipal governments – over the past three years, I have worked with more than 80 different municipalities in Georgia alone. In the city of xxxxxxx, this requirement is specifically governed by Section x-xx of the City Ordinance. On the state level, this requirement is governed by O.C.G.A 3-4-23.

“To answer your specific question about why we asked Mrs. xxxxxxxx for your information, I will direct you to the  Application for Sale of Distilled Spirits, Malt Beverages, and Wine .  Specifically, pp. 3, 6, 9 and 10 are those that Mrs. xxxxxx filled out with me today. Page 3 is the only place on the application that asks for spouse’s information. This information is requested for one purpose only – to provide proof that neither the applicant nor the applicant’s spouse are currently engaged in any other business(es) manufacturing, distributing or serving alcohol. As far as I am aware, none of these agencies are allowed to run credit checks. They are, however, allowed to run NCIC and GCIC criminal background checks, fingerprints, and to check that all tax returns have been filed and tax obligations paid to the relevant local and state governments.

“There is a great deal of legal history related to the manufacture, distribution, and sale of alcohol in the United States. As you know, the manufacture, distribution and sale of alcohol was prohibited by the 18th Amendment to the US Constitution in 1922 and that prohibition was repealed by the 21st Amendment in 1934. At the time that prohibition was lifted, the US Government went to great lengths to create a 3-tier system for the production, distribution and sale of alcohol in this country. Because of certain federal laws, still on the books, it is illegal to be a participant in more than one tier of the three-tier system at a given time (i.e. a person who owns a distillery cannot also own a distributorship or a retail establishment. Or, a person who owns a bar may not also manufacture distilled spirits.) There have been some very limited exceptions allowed under federal law, specifically wine tastings at vineyards and brewpubs, wherein malt beverages are both manufactured and sold at retail. However, these exceptions are tightly governed by other, equally stringent laws. (As a side note, both tobacco and motor fuel have similar 3-tier systems and laws in place.)

“To your point questioning the legality of inquiring about marital status, I believe you will find that this exclusion only applies to employment-related matters. Mrs. xxxxxx was neither being interviewed for a job, nor was she told that her job would be in jeopardy if she did not provide that information. As a general rule, it is not illegal to inquire about marital status.

‘Regarding your allegation that I would use your personal information for any benefit, I assure you that the only entities having access to your or your wife’s information will be the xxxxxx County Sheriff’s Department, the City of xxxxxxx and myself. I am keenly aware that this seems like an odd practice. Frankly, I’m surprised that in three years of private consulting, yours is the first protest of this kind that I have ever received.

“At this point, I do not have any of your personal information. I have submitted Mrs. xxxxxx’s information to the xxxxxx County Sheriff’s Office. The City of xxxxxx, though, will not accept this application, because it is incomplete without your information.

“In your message, you requested contact information for xxxxx Realty, which I am providing below:

xxxxxx

“My contact information follows in the signature.

“Mr. xxxxxx I applaud you for your concerns and for your candor. Again, I assure you that you have nothing to fear from me or from my associates regarding this application, your information or your wife’s information.

“I further hope that my response has given you a sample of the thoroughness I employ when completing a project and a feel for my experience level and discretion and that you will feel comfortable in asking any further questions you may have. The choice is yours and Mrs. xxxxxx’s, of course,  whether she continues as the Registered Agent on this application. If she decides to no longer be considered, the new owner will have to find someone else to fill this role. Regardless your decision, I wish you nothing but the best. Sincerely, P. Todd Kelly”

See? I gave him enough data and background information so that he could not object to my objections. I anticipated his follow up questions and answered them in this reply, mitigating his rejoinder. (Note: I don’t talk like that in real life.)

Let me know what you think. In part 3, I’ll share his response.

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