Everyone has a story about a tax return gone bad. And this is your chance to turn your bad tax move into a good one…

Have a horrible tax filing story? Car break down blocks from the post office? Ran out of paper in the printer? Dog ate your return? Tell me your worst tax filing story – or simply complain, whine or ramble about the thing (or things) you hate most about filing taxes – and win.

Three lucky readers can win their own Tax Tip Kit from [entity display="Office Depot" type="organization" subtype="company" active="true" key="office-depot" ticker="ODP" exchange="NYSE"]Office Depot[/entity]. Office Depot offers a number of options for taxpayers who want to file at home in addition to being a one stop shop for your tax needs.

The “Tax Tip Kit” features everything you need to navigate the busy tax season, including:

• Office Depot brand receipt file box to stay organized
• Ativa tax calculator
• Ativa USB flash drive loaded with valuable information on Office Depot resources and taxtips from Office Depot
• H&R Block At Home Software to simplify the tax filing experience

All you have to do to enter is share your worst tax move, your biggest tax goof or your silliest tax gaffe. Tell us your story. Leave your response in the space below as a comment (free registration required on Forbes.com). I’ll choose three winners at random from all of the entries.

Here are some more rules because, as you know, I’m a lawyer and I like rules:

• Entries must be posted in the comments section for this blog post in the space below by 11:59 p.m. EST on January 26, 2012.
• While I love my twitter followers and my Facebook fans, responses on twitter or Facebook will not be included for purposes of the contest. Ditto for emails. Comments have to show at this post below.
• Don’t panic if your comment doesn’t show immediately. If it goes to moderation because, for example, you’re new here, the time stamp on your comment is what counts. If you have difficulty registering, please send an email to blogadmin@forbes.com and copy me (tech@taxgirl.com) so that I can help if I need to/can.
• You can enter as many times as you like but you must leave a different story each time you comment.
• Offensive comments or comments that otherwise violate the comment policy will be deleted and will not be considered valid for purposes of the contest.
• Pingbacks and other links will be disregarded for purposes of the contest.
• I have to be able to contact you. That means you have to register with Forbes.com using a valid email address. I won’t publish your email address but I do need contact information for the winning entry.
• Due to shipping considerations, only United States addresses, please. Sorry, Canada, eh?
• I respect your privacy and I will not send you anything unrelated to your entry in this contest.
• By entering the contest, you agree that I may post any part or all of your submission including your name as a part of the contest announcements or promotions, with the exception of your email address.
• Finally, the giveaway is about me, me, me. It’s not affiliated with or endorsed by Forbes. So leave them out of it, okay?

Comment away!Similar Posts:

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• Office Depot Gives Away Free Copies of Tax Returns
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• My Best Tax Advice Ever, Part I: Open Your Mail
• Where The Heck Are My Tax Forms?

Panicked about those new form 1099-K (Merchant Card and Third Party Network Payments) requirements? Take a breath. The IRS has already figured out that things aren’t going terribly smoothly and is, as a result, offering “special transitional relief” for taxpayers and service providers.

Contrary to some internet rumors, this isn’t the same as a free pass. The law is still effective, just bits of it are delayed. As a result of concerns about the new law, the IRS will delay penalty provisions and withholding requirements for a full year, until January 1, 2013. However, the filing requirements are still in place, meaning that reporting for 2011 is still going to happen.

Under the current rules, information reporting for applicable payment card and third party network transactions are due to the IRS by February 28 each year (or March 31, if filed electronically) for the prior calendar year. That means that the first forms 1099-K for calendar year 2011 must be submitted to the IRS by February 28, 2012 (or April 2, 2012, since March 31, 2012, falls ons a Sunday, if filed electronically).

And just like a form 1099-MISC or 1099-DIV, those statements also need to be furnished to the payee. The form 1099-K must be provided to each participating payee by January 31 of each year for the prior calendar year. That means that forms 1099-K for the calendar year 2011 must be furnished to payees by January 31, 2012.

There are some tricky withholding rules that accompany the reporting requirements. Specifically, backup withholding of 28% is required if a payee fails to furnish a correct taxpayer identification number to the payor. The IRS noted that they had received requests to postpone the due date for backup withholding from a “number of payors” due to concerns about the procedure and difficulties in matching TINs to taxpayers in order to comply with the new rules. As a result, the IRS is postponing the effective date for backup withholding (as it applies to section 6050W payments) for an additional year. This means that backup withholding will be required on section 6050W payments made after December 31, 2012.

The IRS is also granting accuracy-related penalty relief. Under section 6050W, forms 1099-K must include the gross amount of reportable payment transactions, as well as the name, address and taxpayer identification number (TIN) of the payee. Penalties apply for failing include all required information or including incorrect information on the form 1099-K sent to the IRS or to the payee – just like with other forms 1099. However, payors were concerned about the potential penalties in light of the new reporting requirements and asked IRS for a break. As a result, the IRS will not impose accuracy-related penalties on payors that file forms 1099-K provided that the payors make good-faith efforts in filing accurate forms. This relief is only applicable to payments made in the calendar year 2011 and doesn’t apply to payors who simply don’t file.

Also on tap? The IRS has indicated that they might have some solutions for those pesky gross income reporting issues. Many practitioners had expressed concern about the requirement to report gross receipts paid out without regard to chargebacks, fees or other adjustments with many worried that such discrepancies would raise flags at IRS. Future guidance on this issue is expected to be released.

In the meantime, you can read more about the relief offered so far in IRS Notice 2011-88 and Notice 2011-89 (each will download as pdf) or check out the FAQ page on the IRS web site.

(Hat tip: @eligabiff)Similar Posts:

• Credit Card Reporting for Tax Purposes Debuts This Month
• Ask the taxgirl: Renewing a Form W-9
• New Credit Card Reporting Requirement Worries Some Taxpayers
• Tax Exempt Organizations Face Crucial Deadline
• Ask the taxgirl: Cash Payments

Ah, insanely crazy debit fees, we hardly knew ye…

Earlier this year, Bank of America announced plans to charge debit card customers a $5 monthly fee for simply existing and then tried to pass off the fees as a tax. The backlash was swift and painful.

Just last week, Bank of America’s competitors, Chase and Wells Fargo, backed off of plans to implement a similar fee after fearing a similar fate listening to customers. Bank of America, for its part, promised to consider “options” for its customers. And by “options” they meant they were trying to gracefully get out of a PR fiasco.

Today, Bank of America bit the bullet and ditched the fees altogether.

In what was an extremely short and clearly a carefully worded statement, David Darnell, a co-COO (I know it looks funny but it’s shorthand for a co- Chief Operating Officer) said:

We have listened to our customers very closely over the last few weeks and recognize their concern with our proposed debit usage fee. As a result, we are not currently charging the fee and will not be moving forward with any additional plans to do so.

Until they think of the next big money-making scheme on the backs of their customers. Yeah, I said it.Similar Posts:

• Big Banks Switch Course on Debit Card Fees
• Bank of America Debit Card Fees Slammed as “Durbin Tax”
• Big Banks Move On… With a Little Help from Their Friends?
• New Credit Card Reporting Requirement Worries Some Taxpayers
• Businesses Get Tax Break

I was wrong.

There, I said it.

I was absolutely convinced that Bank of America‘s plan to charge its own customers fees for using their own debit cards would stick. I was also convinced that Bank of America’s competitors, Chase and Wells Fargo, would jump on the customer gouging bandwagon. After all, it’s happened before, with fees to withdraw from ATMs and fees for not maintaining a significant balance, and each time, customers have reluctantly gotten used to it.

Apparently, not this time.

The backlash from Bank of America’s scheme to pass along increased compliance costs to its customers by charging a $5 monthly fee – which they tried to spin as a tax – was enormous. Angry customers took their accounts elsewhere. Others took to the web to protest what was viewed as yet another step by those “too big to fail” banks to make the rich, richer and well, everyone else, poorer.

And a quite remarkable thing happened.

The big banks listened. And they changed course.

Now, Chase and Wells Fargo have announced that they will not impose fees on customers who use their debit cards. And reportedly, Bank of America is considering “options” for its customers in an effort to avoid the fee.

The man behind much of the debate, Sen. Dick Durbin (D-IL), who is responsible for the so-called “Durbin Amendment” which increased affected banks which offered debit cards, encouraged customers to “vote with their feet” and leave. And customers did.

So it’s over. Maybe.

I am, however, a bit skeptical. Those increased banking regulations haven’t gone away. And remember, banks aren’t charities. They’re businesses. They’re going to find a way to make up those anticipated losses from the Durbin regs one way or another. It just won’t, apparently, involve debit card fees.Similar Posts:

• Bank Of America Officially Ditches Debit Card Fees
• Bank of America Debit Card Fees Slammed as “Durbin Tax”
• PNC and Other Banks Benefit from Bad Debts
• Big Banks Move On… With a Little Help from Their Friends?
• Bankers Lawyer Up to Fight Tax

And you thought bank fees were bad… There’s a new form on the block, Form 1099-K, Merchant Card and Third Party Network Payments, making its debut in a few months, just in time for the 2012 filing season. The form is the result of new compliance reporting requirements for certain credit card and third party network payments (think PayPal). More compliance reporting. You already know where this is going.

Before we get into the nitty gritty, first, a little background.

A little over three years ago, President Bush signed into law a bill known as The Housing Assistance Tax Act of 2008; it was part of the Housing and Economic Recovery Act of 2008, or HERA. As per usual, the bill was cleverly named so as to sneak something past taxpayers garner support from taxpayers. Even the title of the bill, technically HR 3221, was meant to tug at your sensibilities: A bill to provide needed housing reform and for other purposes.

Cause, c’mon? Who didn’t want housing reform in 2008? Okay, maybe I didn’t. But I was in the minority. The bill passed, putting into place $15.1 billion in tax incentives, including the first effort at the first-time homebuyers’ credit. And then we moved on.

What was forgotten about was that little “for other purposes” bit in the bill. Smack in the middle of the bill was a new requirement for banks and credit card merchants to report certain payments to the IRS. The law was passed in 2008 but the new reporting requirement didn’t kick in until this year (2011); it will show up for the first time when forms 1099-K are issued in early 2012. Yep, that’s just a few months away.

The idea of the law was to “improve voluntary tax compliance by business taxpayers and help the IRS determine whether their tax returns are correct and complete.” Yes, they used the word “voluntary.” Only it’s not so much.

You see, you and I both know that there are hundreds of millions of dollars (if not more) exchanging hands that go unreported every year. This difference between what is actually reported versus actually earned is called the tax gap. A lot of the tax gap is thought to be the result of online transactions. And it’s true. Bloggers, etsy sellers, affiliates, eBay merchants and other small businesses have been able to stay under the radar if their income comes from multiple sources or if they are paid from companies that fail to file report that income (for whatever reason). The form 1099-K is an attempt to put an end to the underground/untaxed economy.

Here’s how it will work: certain payments for goods and services paid by credit card or third party merchants will now be reported to the IRS via the form 1099-K. The look and feel of the form 1099-K is very similar to the form 1099-INT used by banks to report interest and the form 1099-DIV used by banks to report dividends.

The form 1099-K will be required for “reportable payment transactions.” A reportable payment transaction is basically a transaction in which a payment card (such as a credit card or gift card) is accepted as payment or any transaction that is settled through a third party payment network like PayPal. It does not include ATM withdrawals, cash advances against a credit card, a check issued in connection with a payment card, or any transaction in which a payment card is accepted as payment by a merchant or other payee who is related to the issuer of the card.

What this means, basically, is that taxpayers who have a credit card merchant account, Paypal account or similar account and otherwise meet the criteria will receive form 1099-K from their service provider at the end of the year.

The IRS is still working out the details (though they are more or less settled). Exceptions may apply in certain circumstances, such as if the total payments settled for the year are less than $20,000 or if there are fewer than 200 transactions.

It’s the first year that the rule will be in effect which means that there are going to be some issues. And by some issues, I mean lots of issues. The biggest area of concern seems to focus on the fact that the form 1099-K will report the gross amount paid out with no adjustments for fees or chargebacks for returns or mistakes. That means that there are going to be some issues reconciling the forms against income actually received. And again, by some issues, I mean lots of issues.

I don’t want to be a big naysayer here. I actually believe that better compliance should be a goal for the IRS and I also believe that internet based transactions should not escape taxation just because they are easier to hide (yes, hide, as in deliberate).

I am a little skeptical, however, at how smoothly the process of reporting for the first year is going to happen. I don’t think the IRS has done a stellar job of prepping the public for the changes. And while I completely agree that taxpayers who have been receiving credit card and electronic payments should have been reporting their income all along, some clearly haven’t or there wouldn’t be a need for the form in the first place. In other words, if everyone reported just fine, there’s no tax gap, right?

But should that equal a blindside? I don’t think so.

And what about those taxpayers who have been reporting but now find themselves a little confused by – or in disagreement with – the forms they receive? Some financial institutions may be, er, too big to fail but maybe they’re not too big to make a mistake? Or two?

We tend to fear what we don’t know and right now, we just don’t really know how this is going to play out. The first forms will be issued in January 2012, assuming all goes as planned. But for now, you can check out a draft of the 2011 form 1099K (downloadable as a pdf). Are you ready for it?Similar Posts:

• Credit Card Reporting for Tax Purposes Debuts This Month
• Online Merchants Brace for New Reporting Requirements
• IRS Offers Relief for Credit Card Reporting Requirements
• IRS Again Pursuing Offshore Funds
• Ask the taxgirl: Forms W-9 and 1099 for Groups

I know I’m dating myself but I remember when people used to pay for purchases in cash and occasionally, with checks.

Not so much anymore.

Now, debit cards are all the rage. You know the ones (of course, since you likely have one). They look and function much like credit cards – only except instead of extending credit via the card, banks allow purchases up to the amount of money in your checking account. It’s a plastic check if you will. And awfully darn convenient. It’s also about to become expensive.

Last week, Bank of America shocked customers when it announced that it would begin charging $5 per month for using their (well, your) debit cards. The fee kicks in beginning 2012 and would apply to debit cards to make purchases but would not apply to ATM withdrawals (those are subject to other fees), online bill payments (also subject to other fees) or mobile phone transfers (may be subject to other fees).

Bank of America isn’t alone. Wells Fargo has made noise about a new $3 per month fee for debit card usage and J.P. Morgan Chase has signaled that they would impose a similar fee.

It’s just another way that big banks stink, right? Or is it? Is there something else going on here?

Perhaps.

It turns out that there may be a method to Bank of America’s madness. The bank claims that the move is in response to a pretty big anticipated loss in profit as a result of the so-called “Durbin Amendment.” The Durbin Amendment is an add-on to the Dodd–Frank Wall Street Reform and Consumer Protection Act (Public Law No. 111-203), signed into law by President Barack Obama on July 21, 2010. The Act was meant to protect us from all of those banks that were too big to fail – you know, the whole banking/financial sector meltdown that we just lived through.

The Durbin Amendment, named after Sen. Dick Durbin (D-IL), was added to the bill after flopping around for the better part of a year. The law applies to those big banks – the ones over $10 billion in assets – and was ostensibly passed as an effort to increase competition. It was supposed to be pro-consumer.

But here’s the kicker: the Amendment gave the Federal Reserve the power to regulate debit card interchange fees and other bits of banking admin, which they’ve done. Over the summer, the Fed released the final rule on the matter. The combination of fees, restrictions and caps is thought to cost banks subject to the amendment nearly $14 billion annually.Similar Posts:

• Big Banks Switch Course on Debit Card Fees
• Bank Of America Officially Ditches Debit Card Fees
• PNC and Other Banks Benefit from Bad Debts
• Bankers Lawyer Up to Fight Tax
• Scrooge Comes Early This Year With “Christmas Tree Tax”

Just a few days ago, we found out exactly what airlines thought of consumers when, after a lapse in the law allowed travelers to catch a bit of a break, a number of major carriers found a way to turn it to their advantage. The glitch meant that airlines wouldn’t be collecting taxes while the Federal Aviation Administration (FAA) budget remained unconfirmed. That should have meant reduced fares for travelers. Instead, the airlines kept fares level and pocketed the difference.

Nice, right?

Sadly, travelers seemed to accept the airlines’ money grab as inevitable, shrugging their shoulders with a kind of “did you really expect any different?” kind of resignation.

Congress has not been so kind.

Congressional leaders, responding to the airlines, are demanding that airlines either hold the money in trust for the government pending a budget resolution or pass along the savings to travelers. Specifically, Aviation Operations, Safety and Security Subcommittee Chairwoman Maria Cantwell (D-WA) and Chairman John D. (Jay) Rockefeller IV (D-WV) sent a letter to Mr. Richard Anderson, CEO of Delta Airlines and Chairman of the Air Transport Association, calling for an end to the profiteering, noting:

We are deeply perplexed by the industry’s pocketing of passenger tax revenue even though they expired on July 22, 2011.  Most of ATA members have elected not to pass the savings along to consumers through reduced ticket prices, but rather have decided to increase the base fare of airline tickets…We urge the nation’s airlines to put all of the profits that they are making from the lapse of the aviation taxes into an escrow account so that they can be transferred back into the Airport and Airway Trust Fund when Congress reinstates the taxes.

Cantwell and Rockefeller went on to point out that the very airline taxes that have recently (and temporarily) disappeared have been blamed for airline woes and consumer prices:

As we have heard from airlines for many years, these fees, all of which are passed on to the consumer, depress the demand for air travel, hurting the industry’s bottom line.

And yet, the airlines’ rush to now pocket those very fees would imply different.

Interestingly, despite the fact that Democrats and Republicans can’t agree on a budget, they do appear to agree that the airlines don’t deserve to turn this into a loss for customers. Rep. John Mica (R-FL) told CNN:

I expect airlines across the country to be good stewards of taxpayer dollars. Either voluntarily or through statute or through our next (FAA budget) extension, we’ll make certain that the money does go into the trust fund and it isn’t pocketed by the big airlines.

There’s enough indignation to go around.

Just not by the airlines.

As expected, a public relations defense is being mounted by the airlines as we speak. The Air Transportation Association of America – the same one that said less than two weeks ago that “hiking aviation taxes would slow economic recovery, further burden customers and cost jobs” now seems to take the position that price doesn’t really matter.

ATA spokesman Steve Lott said about pocketing the difference:

Customers are not impacted and are paying the same ticket prices they were last week.

Whew. Cause here I was thinking that lower prices might translate into a better economy and benefit customers. I have to stop reading those ATA press releases.Similar Posts:

• Senate Passes on $1.2 Billion in Guaranteed Revenue
• Five Things You Need To Know About the Current Airline Ticket Tax Controversy
• Congress Offers Tax Free Flights… For Now
• IRS, Congress Now Say No to Ticket Tax Refunds
• Obama’s Plan for Higher Airline Taxes Sees Not So Friendly Skies Ahead

As Congress and the President collectively stomp their feet and stick their tongues out at each other over the debt ceiling, frequent travelers are catching something of a break…

It turns out that one of the tax measures that has not been resolved involves federal taxes on airline tickets. Since Congress has not confirmed the Federal Aviation Administration (FAA) budget – putting 4,000 FAA employees on furlough – the laws which authorize the collection of federal taxes on airline tickets have expired. That means that tickets sold after July 22, 2011 won’t include these federal excise taxes.

So how much can you save? It could be quite a bit. Depending on your destination, airline tickets are generally subject to a 7.5% passenger ticket tax, a $3.70 segment tax, a $16.30 international departure tax and a $16.30 international arrival tax, among other fees and add-ons. Those taxes aren’t being collected right now which means that, depending on the original cost of your ticket and where you’re headed, you could save some significant cash.

Unless you fly American and US Airways, that is. Those airlines have boosted their prices in advance of the tax expiration to offset – you know, just because they can. And no, it’s not coincidental. American spokesman Tim Smith was clear that the airline “adjusted prices so the bottom-line price of a ticket remains the same as it was before … expiration of federal excise taxes.” That price adjustment means that cash out of your pocket will go directly into theirs.

Virgin America, however, has turned the whole mess into a savvy promo opportunity. The airline is touting the tax free flights as a holiday with the tagline: Evade Taxes. Take Flight. Book a Tax Holiday. Grab a Seat With Fewer Federal Taxes.

But you have to act fast: there’s no guarantee that the “tax free” flights will continue on any given day.

Congress is supposed to be fixing things (insert hysterical laughter here) but in the meantime, there’s no clear direction for taxpayers. As a result, the IRS issued the following statement:

The laws authorizing the airline ticket tax and other aviation-related taxes expired at midnight on Friday, July 22. The IRS continues to monitor pending legislation related to this issue. The IRS will continue to work with the airline industry to address issues relating to the collection and payment of the taxes involved. Taxpayers do not need to take any action at this time. The IRS will provide further guidance on this issue in the near future.

So how much is this glitch costing us? The Transportation Department has put the price tag on the failure to renew the excise taxes at about $200 million per week. It’s a good thing we don’t need the money.Similar Posts:

• Five Things You Need To Know About the Current Airline Ticket Tax Controversy
• IRS, Congress Now Say No to Ticket Tax Refunds
• Congress Tells Airlines To Stop Pocketing Extra Fares
• Congress Still Trying to Clean Up Housing Mess on Taxpayers’ Dime
• Airline Taxes, Job Cuts Tied to Fights Over Subsidies and Unions

Quick, show of hands: who wants to pay more in taxes?

That’s what I thought.

Clearly, Amazon.com is right.

The online retail giant is planning on asking voters to chime in on whether they want to pay more in taxes. Okay, not exactly. They’re really asking voters in California to overturn the controversial new state law requiring companies to collect sales tax from customers if they have actual operations or sales affiliates in the state.

Getting the law overturned isn’t as easy as asking for a show of hands, however. There is a legal process to get the measure on the ballot. Laws that have already been passed in the state can be effectively vetoed by a referendum (sometimes called the “people’s veto”). To get on the ballot as a referendum, a referendum petition must have been signed by at least 5% of the number of voters in the previous gubernatorial election. That means that Amazon has to collect 504,760 signatures to get the measure on the next ballot. Once they turn those signature in, the Secretary of State has to randomly verify a number of the signatures. If the numbers stand, the referendum qualifies to go on the ballot. Once on the ballot, the law is repealed if voters say no more times than they say yes – in other words, a simple majority rule.

The whole process takes some effort which is why it doesn’t happen very often. Getting the word out and getting signatures and votes requires a public platform and some cash. Fortunately for Amazon, it has both.

What it doesn’t have is time. To date, Amazon has refused to collect the tax under the new law, which was effective on July 1. It believes that the new law is unconstitutional and it wants voters to agree.

That kind of thinking makes me nervous. I’m all about democracy. And if the voters decide that forcing online merchants to collect sales tax based on the presence of affiliates is not good tax policy, then by all means, they should be allowed to say no. That’s what votes are about – making your voice heard.

But if it’s a question of constitutionality, that’s something that the courts should decide, no? Realistically, most voters in California – heck, in any state – haven’t actually read their own constitution. That’s not judge-y. It’s a fact. I’ll totally admit that I haven’t read the entire Pennsylvania constitution – and I’m a lawyer.

But court cases, however, can be expensive. And long. And ugly. And Amazon must think their chances are better in the court of public opinion. And they’re likely right.

Courts have struck down admittedly ongoing challenges to similar laws in places like New York. So, Amazon is well aware of the risks. The odds are probably best for them by just asking the public. And why not? Customers in the state are getting the equivalent of a 10% discount if they avoid the tax altogether even though, in theory, if they don’t pay the sales tax at purchase, they should pay the use tax (pardon me while I grab my sides as I chuckle heartily on that one).

Brick and mortar stores in the state are crying foul at Amazon’s attempts to get out of collecting the tax. And it’s not just mom and pop stores. Big names like Target, Wal-Mart and Home Depot have found themselves side by side with smaller retailers that they once endeavored to run out of business in support of the new law. What is it about politics and bedfellows again?

Of course, while those big name retailers have the resources to throw at a campaign to prevent the law from being overturned (and trust me, dollars will fly), others hope that it won’t be necessary. It’s a question of equity in the minds of many. Those folks, like Betty Yee, who sits on the California Board of Equalization, are hopeful that Amazon will give up on efforts to block the tax. Yee issued a press release (downloads as a pdf) after the passage of the new law calling on Amazon “to do the right thing and work with the state of California to comply with the law.”

Let’s see that show of hands again… Yeah, Amazon giving up on this one doesn’t look very likely.Similar Posts:

• California Steps Up Efforts to Tax Online Sales
• “Amazon Tax” Repealed Under New Law
• Dramatic Turnabout in Amazon’s Fight with California
• Election Season Isn’t Over Yet
• Amazon Does Cayce: Will Porn Keep the Online Giant Out of SC?

It’s the return of Fix the Tax Code Friday!

Earlier this month, executives from Boeing Co., Sears Holding Management Corp., Emerson Electric Co. and Perrigo Co., told members of Congress that they would will be willing to give up tax breaks in exchange for a lower corporate tax rate. This is consistent with a recent survey of top officials at U.S. companies which found that more than 60% of those corporate taxpayers would elect to keep their existing tax breaks unless the corporate rate was reduced to 25%. Interestingly, 17% of those surveyed responded that they wanted to keep their tax breaks no matter how low the rate dropped (GE, perhaps?).

The rationale, of course, offered for the shift is simplicity and constancy. I agree that a simple tax system that offers consistency and certainty to taxpayers makes sense in the abstract. But as I’ve said before that when they say they want a simple tax system, what they really mean is that they want fewer taxes. Nobody really wants to give up their tax breaks (home mortgage interest deduction, anyone?).

But maybe I’m wrong about this.

So today’s “Fix the Tax Code Friday” question is:

Like many U.S. corporations, would you be willing to give up your tax breaks – including deductions, exemptions and credits – for a lower tax rate? And if so, how long would the rate have to be?

Similar Posts:

• Fix the Tax Code Friday: Pay Per Mile Tax
• Fix the Tax Code Friday: Corporate Tax Breaks and Reputations
• Fix the Tax Code Friday: Tax Breaks for Companies
• Fix the Tax Code Friday: Federal Tax Amnesty
• Fix the Tax Code Friday: Tax Cut-a-palooza