All posts in Gov’t Help

Small Business Jobs Act of 2010

So, the word on the street is that this Small Business Jobs Act of 2010 is going to make it up to Obama’s office for his signature.  Piggy-backing on what Mr. Blumer blogged this week about the bill, I thought I would chime my two cents in.   The “Small Business Jobs Act” is a misnomer because it carries many tax provisions affecting large as well as small businesses, plus changes that affect individuals, such as eased Roth IRA rules.


  1. Qualifies Real Property Expensing This would be the first time that Code Sec. 179 expensing could be claimed for realty (leasehold improvements).
  2. Startup Expense Deductions Increased. For tax years beginning after Dec. 31, 2009, and before Jan. 1, 2011, the deduction for startup expenses under Code Sec. 195 would be increased from $5,000 to $10,000
  3. Five-year carryback of small business unused general business credits. The general business credit (GBC) generally can’t exceed the excess of the taxpayer’s net income tax over the greater of the taxpayer’s tentative minimum tax or 25% of so much of the taxpayer’s net regular tax liability as exceeds $25,000. Credits in excess of this limitation may be carried back one year and forward up to 20 years. Under the small business jobs bill, the carry back period for eligible small business (ESB) credits would be extended from one to five years.
  4. See Blumer’s Blog

Not so sexy, but important:

  1. 100% exclusion for gain from qualified small business (QSBS) stock. There would be a 100% exclusion of gain from the sale of QSBS stock (a) acquired after the enactment date of the small business jobs bill and before Jan. 1, 2011, and (b) held for at least five years.
  2. Information reporting for rental income. For payments made after Dec. 31, 2010, persons receiving rental income from real property would have to file information returns to IRS and to service providers reporting payments of $600 or more during the year for rental property expenses. Exceptions would be provided for individuals temporarily renting their principal residences (including active members of the military), taxpayers whose rental income doesn’t exceed an IRS-determined minimal amount, and those for whom the reporting requirement would create a hardship.
  3. Increased penalty for failure to timely file information returns. For information returns required to be filed after Dec. 31, 2010, the Code Sec. 6721 penalties for failure to timely file information returns to IRS would be increased. The first-tier penalty would go from $15 to $30, and the calendar year maximum from $75,000 to $250,000. The second-tier penalty would be increased from $30 to $60, and the calendar year maximum from $150,000 to $500,000. The third-tier penalty would be increased from $50 to $100, and the calendar year maximum from $250,000 to $1,500,000. For small business filers, the calendar year maximum would go from $25,000 to $75,000 for the first-tier penalty, from $50,000 to $200,000 for the second-tier penalty, and from $100,000 to $500,000 for the third-tier penalty. The minimum penalty for each failure due to intentional disregard would be increased from $100 to $250.

COD makes me MAD

sad state of America

While reading Diane Kennedy’s blog post on 1099 A&C problems I happened to nod off into a daze and dream a little dream.  In my dream I had a client, who in a six year period, had acquired a personal residence and four rental homes.  For the sake of my dream, lets say this took place between 2002 -2007.  The five properties combined cost him $260,000.  Over the six years he owned the real estate, he managed to refinance the five properties to over $500,000.  WACK!!  My head hits the desk, there is slober on my keyboard, and I am trying to figure out what happened.  This is the part where I wake up and get really angry.

All joking aside, I am working on a case with very similar facts and I am pissed off about it.  Disclaimer: I am not defending my clients actions of refi’ing at every opportunity that came along.  But the more and more I study what happened, my client was refi’ing a property on average EVERY FOUR MONTHS!!!!  WTF?????  Who were these goons preying on the financial non-savvy?  When I asked my client if he sought out the cash, he said, “they would call me.”  I would imagine this post will attract the brightest of comments toward my client, but there is one thing I would like you to remember before you call my client a $%&^()#%%.  My client is your client.  This is happening everywhere around America.  Noticed those commercials late at night, “Do you owe more than $10k to the IRS, if so call us.”  Check your client list, this does not discriminate against race, color, or class.
I think it goes without saying my client is in the process of losing all his properties.  His primary residence and one rental are gone, the rest will be out in 2010.  What’s the lesson here, I do not want to insult my readers, just needed to share.  Thanks for listening.

Chris F.


Random SS#

Thanks to my friends at paycor for providing us with this random information:

Starting in June 2011, the Social Security Administration is adopting a new method,
called “randomization”, which will change the way social security numbers are issued. Randomization will keep the SSA from running out of SSNs in certain states and help protect against identity theft.

The following changes will be implemented by the SSA:

• SSA will no longer issue SSNs by geography;

• SSA will issue SSNs beginning with the number “8”;

• SSA will include all possible SSNs with the number “7” in position 1; and

• The High Group list will be frozen.

These changes will allow the SSA the ability to issue SSNs for the next 30 years without having numbering problems. Some aspects of the SSN assignment will not be changed with randomization. SSA will not issue SSNs beginning with the number “9”, “666” or “000” in positions 1-3, “00” in positions 4-5, “0000” in positions 6-9, or with “123-45-6789”.

The SSA will provide education and outreach to all of the stakeholders that may be affected by randomization.

For more information, visit the Social Security Administration website at