Tax PSA

"Nearly 1 of every 6 tax returns filed so far includes errors in reporting last year’s federal stimulus payments, the Internal Revenue Service said, blaming confusion among professional tax preparers and early releases of tax software."


Software can understandably be flawed, especially early releases of something new.  I would like to know how many of these professional tax preparers are getting this wrong because clearly this degree of incompetence in their profession is something that should be highlighted.  I understand if people didn't remember that it wasn't taxable (I won't go as far to excuse not knowing because the letter which came with the check did clearly state that it wasn't taxable).  I will not excuse a professional for this disregard.


A week ago I got some prior returns from a prospective client.  In order to estimate their fees I reviewed their return in detail in order to determine their complexity.  I found in my short review 2 glaring errors that to me are so Tax 101 that I'm embarrassed that a professional practitioner did not catch it.  In the end our fees were likely too high and this client will go to some other practitioner but I included a letter with my observation of the errors so they could hopefully realize the value of a professional reviewing a return rather than the individual practitioners who claim to be professionals.  It's a matter of pride.

Nice Package

"We don't want a package that is too small because that will end up just wasting money. On the other hand, we're very leery of having an enormous package that would not be necessary and would just boost the federal deficit," Collins said as Sen. Ben Nelson, D-Nebraska, nodded in agreement.


If you didn't laugh while reading that then there's something wrong with you.  

Microsoft can be a little Insensitive

Open a contact in Microsoft Outlook.  Click the details tab.  Look at the birthday field.  See what I mean?

Unless you have a date entered, Outlook just stares back at you with the following: "Birthday: None"  How sad.

I feel like I need to populate all of my birthday fields now, even for people I don't know.  Maybe I should check and see if they have any anniversaries I should recognize as well.  This could take me all day!

How Times have Changed

From MSNBC: "Former Merrill Lynch Chief Executive John Thain said Monday he plans to reimburse Bank of America for a $1.2 million renovation of his office a year ago, calling the cost “a mistake in light of the world we live in today.”


I agree with Mr. Thain that our world has changed a lot.  A year ago is was a great idea to spend $1.2M on office renovations.  Only today, in light of the recession and the deterioration of ones firm does it seem like a bad idea.  At least he didn't try to spin it like he was trying to bolster the economy with spending!

Who was in this Think Tank?

If you read the article linked in the headline you'll get more details on the new device Verizon wants to sell to consumers.  It's for customers who have dropped their landline, but still like the landline functionality.  It does some pretty minor stuff like look up traffic and weather through your broadband and receive text messages.  The suggestion is that it works with your Verizon cell-phone for phone calls you place through it.  What's truly astounding is that they want to charge $200 for the unit and $35/month subscription fee for the service, which essentially just gives you unlimited minutes when using the device.

Even though it's not explicit, the press release suggests that a broadband connection is required, so this is essentially a Vonage type device (Vonage being only $25/month for the same service offerings except it doesn't use the same telephone number as your cell phone).  If you're already paying for the cell phone minutes, and perhaps getting unlimited nights and weekend minutes with that plan, it's a total ripoff that you're paying for overlapping unlimited minutes, especially when a service like Skype can offer calls for as little as pennies a minute from a device such as this.

I know that this is all designed for the uninformed consumer to continue wasting money and handing it to Verizon (and just like those sweet financial blogs I'll say that I'm a shareholder of Verizon and yadda yadda yadda) but I wish some company would come up with an innovative and useful product instead of one designed purely to take advantage.  Imagine the sucker that's paying $70/month for their cell phone, $35/month for their Verizon DLS, and pitching in another $35/month for a phone that overlaps the functions of those two services they're already paying for!  Instead, Verizon should be selling the unit at MSRP with no monthly fee and allowing the consumer to bridge their services (thus tying them to the Verizon brand and making Verizon look like some sort of leader in technology).

The Problems with Stocks

Stock ownership seems like a no-brainer for our society, because it seems like all large companies are publicly held and the ones that aren't are just privately held by investors who bought up all of the stock.  In a bull market everyone seems to benefit from this ownership, whether it be their 401k or personal investment.  Even if you aren't invested in your own company, the fact that you aren't invested doesn't leave you worse off in a bull market.

In a bear market/recession the situation is very different.  Investors in a company have no feelings for the employees that work at the company.  And even if there aren't investors specifically knocking on the CEO's door telling him to be more profitable, the CEO is obligated through a fiduciary duty to do his best to maximize shareholder value.  In tough times this can seem all the more shocking and heartless to the employees of a company who are jettisoned so that investors can have some security.  So Microsoft, which has around $20 Billion in cash is cutting 5,000 jobs in a bad economy to save $1.5 Billion over the next 18 months.  A private company might be allowed to say "Let's ride this out and cut back on hiring" but a public company has to answer to some bloodthirsty money grubbing imaginary entity and from some of the investor responses I've read, they're actually saying "Too little too late" or "This should have happened a year ago."

It's hard to hypothesize what our society would be like if the outside investor angle was removed from the equation.  I read this story from MSNBC that reflects at least one possibility, but this was a completely optional choice, not something mandated.  Some wouldn't even find this fair and would believe that the family who owned the business was entitled to all the profits of its sale.  In reality, what they did was right because the business grew at least in part based on the performance of the employees, and while their salaries compensated them for that, a windfall of "profits" seems like it should also be equally shared.  Big companies don't operate that way, which is why the Waltons have billions while the employees make minimum wage and are supplemented by government healthcare.  The irony in bringing up the Waltons is that unlike Microsoft, which has no person with a controlling interest, if the Waltons wanted to say that Walmart would have the best healthcare of any company in the country they could do it, and it would just decrease the bulge in their pockets a small amount.  If the Waltons had the moral fiber of the Spungen family, maybe everyone would see Walmart in a different light.

Investor Lawsuits

In the wake of the SEC probing Apple about their statements regarding Steve Jobs' health I just have one question: Who benefits from a shareholder/investor lawsuit?

To put it more robustly, if the shareholders were to win a lawsuit against Apple that said that Apple mislead them in reporting that Steve Jobs was healthy when in fact he wasn't, doesn't Apple have to pay damages in that lawsuit?  And if Apple pays damages, wouldn't it just come out of the company and therefor the value of the shares would drop?  The only real winner in the scenario of a shareholder lawsuit is a person so manic that they bought the shares at a high point after hearing the healthy news and sold them after later reports said he was unhealthy.  If you're still holding on to the shares you're just taking money from one pocket and putting it in another.  I'm sure there are some people out there who are manic enough to have been trading based on the news of the health of one individual, and since those people are clearly gambling they should be ignored or encouraged to do their own research (aka dumpster diving outside of medical clinics to find records) rather than relying on PR statements about someone's health.