Residents could have save thousands of dollars had Mt. Lebanon cooperated with its taxpayers. It would have been a win-win situation.
But Miss High and Mighty Morgans said that Mt. Lebanon can't violate its Home Rule Charter.
We NEVER make exceptions, do we? What would have happened if we had? If you want reasonable government, consider moving to Upper St. Clair, Peters Township, or Bethel Park. They look out for their residents.
Read more: New tax rules befuddle some property owners, make early birds out of others
Update December 29, 2017 8:51 PM I wanted to share the following with Lebo Citizens Readers. Rudy Bies emailed some more of his thoughts on this topic.
I am sending this just for the record to support why I believe the residents of Mt. Lebanon were treated very poorly by our very own local government.
Below is the link for a PDF of the
LOCAL TAX COLLECTION LAW
Act of May. 25, 1945, P.L. 1050, No. 394
Act of May. 25, 1945, P.L. 1050, No. 394
This is the law that Joe Senko, Mt. Lebanon Treasurer gave to me and it was his excuse as to why he could not accept any 2018 tax payment in 2017.
http://www.legis.state.pa.us/WU01/LI/LI/US/PDF/1945/0/0394..PDF
To make it easy -I have highlighted below what is found near the bottom of page
To make it easy -I have highlighted below what is found near the bottom of page
19 of 37, of the attached PDF, which is a copy of the law.
Section 15. Receiving County Taxes Not Assessed and Adding
Names to Duplicates Prohibited.--It shall not be lawful for any
county treasurer, county commissioner or any tax collector, nor
for any other person, on his or their behalf, to receive payment
or give any receipt for the payment of any taxes that have not
been duly assessed and returns of said assessment made according
to law, nor shall any such treasurer, commissioner or tax
collector, or other person on his or their behalf, receive
payment or give any receipt for the payment of any taxes from
the collection of which the tax collector has been exonerated
according to law....
I have bolded above and underlined the key provisions.
In short - it is unlawful to "receive payment or give any receipt"...
CONCEPT ONE
Most of us taxpayers are quite content to use our cancelled check as a receipt.
So we as taxpayers are not asking anyone one to give us a receipt, at least not at this time, as many are concerned about their federal tax deduction.
CONCEPT TWO
Notice above - how poorly the law is written - it states that the collector is not allowed to receive payment.
The collector has no control over the taxpayer. When a taxpayer chooses to mail their tax payment to the tax office and the tax office opens the mail, the tax payment has obviously been received. That fact can not be changed.
SUMMARY
Please don't read the above law with an approach for what it should say or what may have been intended - I ask that you simply read it for what it actually says and to read it from a perspective of how you could accommodate the taxpayers if you were in a position of "authority".
Notice above that I have highlighted in red that the law also includes the County, yet Allegheny County was quite helpful in accommodating the tax payers - Joe Senko was not.
It would seem that there was absolutely no effort made to accommodate the taxpaying residents of Mt. Lebanon, not by our local government, not by our state legislature, and not by our governor, who could have easily issued an executive order.
28 comments:
Perhaps Mr. Bies could be less disgusted and instead better informed. Is the expectation really that Lebo access taxes for the entire population early so a tiny minority of wealthy residents can shimmy through a fleeting tax loophole?
Selective rule enforcement is a hallmark of the MTL oligarchy.
10:10 was brought to you by Miss High and Mighty Morgans !
Selective rule enforcement can be an issue in MTL but the onus for this problem belongs to elected GOP legislators in Washington, DC who passed a major tax law rewrite with 10 days to go before the end of the year. This gave a very limited timeframe for the IRS to issue clear guidance. Even the IRS guidance referenced by 10:10 is unclear. What is the meaning of the word "assessed" in the IRS guidance?
A simple clause in the new law that would have avoided this issue would have been to let certain Schedule D deductions for this tax year to include some 2018 SALT prepayments be valid until April 16. This is similar to allowing IRA contributions for the previous tax year to be made until tax day.
The GOP didn't include such language because they wanted to negatively impact high-tax states that usually vote Democratic and to also have additional funds to leverage so the tax law wasn't more deficit inducing than the current $1.5 trillion deficit estimates. The GOP majority at work.
I guess we hate those residents when they want to lower their taxes, and love them when they want to kill deer to preserve the perfection of the garden tour--right Mr. and Ms. Municipality?
This Lebo Resident is happy with the New Tax Law. Exemptions were doubled.
I'm happy too, 12:34 PM. It pays to live "in the ghetto." How many McMansions will be going on the market?
Elaine
I don't think you'll see many McMansions going on the market. Our household income is just under the top 5% of wage earners. My property taxes are below $10,000 annually. The doubling of the deductible will just about cover my itemized deductions. The big benefit of the new tax bill is that I will be able to recharacterize my income into a pass-through. My joint federal tax bill will go down roughly 28%. Many top earners will be able to utilize this pass-through deduction. For those who understand the details, make sure you remember to get your income grossed up to cover payroll and other taxes.
I'm happy with the new tax bill as I'll have more money. I'm very disappointed that the GOP didn't favor the middle-class. Trump gave huge tax relief to top earners while letting everyone else fight for crumbs. Wait until he and the GOP congress start eliminating Social Security COLAs, defunding Medicare and cut other non-defense discretionary because of revenue shortfalls. But that's what people voted for. Are those steel jobs coming back yet?
Good advice, 4:12 PM. Are you aware that going as far back as 1975, there were three years where there were no COLAs? Yep, 2009, 2010, and 2015. In 2016, the Cost of Living Adjustment was 0.3. Guess who was POTUS?
Elaine
There were no Cola,s due to the law, not because of a Presidential cut. drump wants to eliminate them altogether, not tie them in to the cost of living index
Dear Anonymous - many taxpayers do not realize that our federal income tax system includes a concept known as the alternative minimum tax. Commonly referred to as AMT - this has been in the tax law for approximately 50 years. Although complex, in short, the AMT prohibits high income individuals from benefiting from certain tax deductions. See IRS form 6251, you will clearly see that all taxes are not deductible for purposes of the Alternative Minimum TAX. Hope this helps you a little so that you have greater insight into this matter. In short, it is what we have come to call the middle class, which is hurt when local government decides to not do whatever they can, to help the tax paying community. Rudy Bies
4:12 PM, perhaps Rudy will correct me if I am wrong, but I believe the $10,000 cap is for real estate AND income tax. I think you might be in for a rude awakening.
Elaine
Also, I admit that I don't understand what you said about pass-throughs, 4:12 PM, so you may be OK.
Elaine
Yes - the 10,000 cap applies to the combined total of real estate taxes, state income taxes, local income taxes (we sometimes call this a wage tax or an earned income tax). The 10,000 cap applies to our 2018 personal income tax returns. Accordingly, those that would be limited by this change in the law wanted to pay any and all tax that they could in order to obtain a deduction on their 2017 tax return. Also the standard deduction increases in 2018, so if one is itemizing in 2017 there would be a benefit to "bunch" as many deductions into the 2017 tax year as an individual may find that the standard deduction (24,000 married filing joint)exceeds their itemized deductions. I hope I understood your post and hope my answer is clear and helpful. Rudy Bies
I noticed (one of the above posts) that an anonymous individual cited the IRS web site regarding the real estate tax deduction. Much has been written and spoken about the concept that in order to deduct real estate taxes that the tax must be assessed. It is true that that is the position of the IRS. Yet the actual law is silent regarding the requirement of the tax being assessed. Congress, as we know, is responsible for enacting law. I would suggest that it is inappropriate and even wrong for the IRS to publish material that conflicts with the actual law unless of course it happens unintentionally.
Below is the actual law.
26 U.S. Code § 164 - Taxes
US Code
(a) General rule Except as otherwise provided in this section, the following taxes shall be allowed as a deduction for the taxable year within which paid or accrued:
(1) State and local, and foreign, real property taxes.
(2) State and local personal property taxes.
(3) State and local, and foreign, income, war profits, and excess profits taxes.
Yes, Rudy, thank you.
Looking at my mail today, MTL taxpayers got a real kick in the teeth. We were billed the 2018 Rain Tax today. Yes, Dave Brumfield was real proud that his rain tax, I mean, stormwater fee was one of his accomplishments. It isn't a tax, but a fee, he told us. Thanks, Dave.
Elaine
Get ready soon for Lebo’s newest fee/tax since the disinformation office is starting its PR effort to sell us on PAYT. Which once broken out of your property taxes can’t be used as a tax deduction on your federal filing.
“From The Bin To The Curb To The Plant” Written by Merle Jantz
Mr. Jantz’s article claims:: ““Right now, China is paying record prices, but only if the material is the highest quality.”
China may be paying top dollar, but not for our waste according to The Wall Street Journal article below!.
“Trash Talk: Price of Recyclables Sinks After China Bans U.S. Scrap - WSJ”
“The import ban, announced in July, sent global prices for waste paper and plastic into a tailspin. Without access to their Chinese customers, U.S. waste and recycling firms are scrambling to find new buyers for the scrap they collect from curbside bins.”
https://www.wsj.com/articles/less-cash-to-buy-trash-after-chinas-ban-1508493603
Those who tried to pay their taxes and were denied might have a case against Mt. Lebanon under the Equal Protection Clause. I'm not an attorney, but it may be applicable as persons living in PA are being treated differently under the same law.
Elaine, I am quite aware that the $10,000 applies to both property and income tax. Thank you for pointing that out as others may have not realized. As for me, I'll be fine. For a basic explanation on pass-throughs https://www.nytimes.com/interactive/2017/12/20/us/politics/small-business-tax-cut-pass-throughs.html?_r=0
While I'm all for lower taxes I predict this tax bill will not result in the anticipated GDP growth and will combine with reduced government tax revenues. This will increase the deficit and then drive the secondary purpose of this bill is to reduce Social Security payments, reduced Medicare payments and reduce or eliminate in other entitlement programs. While I'm all for prudent government spending, those on Social Security and Medicare now should be very worried.
7:39 AM, thanks for the explanation. I don't have a small business, so I now understand why I didn't know about pass-throughs. I have been on Social Security for three years, and of course, I am worried. Thanks to Mt. Lebanon's Susan Morgans and then commissioner Dave Brumfield, I spent thousands of dollars to protect myself when both threatened to sue me. And then there was the time when Mt. Lebanon took me to court because the PA Office of Open Records sided with ME and Mt. Lebanon didn't like that. That cost me thousands too. I am also "Disgusted with Government."
I am quite interested in your suggestion about the "Equal Protection Clause." Rudy Bies is a CPA, and watches out for his clients, as most CPAs do. He had spent six hours calling up his clients and telling them about prepaying their 2018 taxes in 2017. One client living outside of Mt. Lebanon, thanked Rudy because he saved his client FIVE THOUSAND DOLLARS. To his surprise, Rudy found out that many of his clients were able to take advantage of this, but couldn't do it himself because of Mt. Lebanon Treasurer Joe Senko's decision. If just one client had saved $5,000, I wonder how much it cost Mt. Lebanon residents, in total. Also, how much money was turned away? I completely understand why Rudy was quoted as saying "Disgusted with Government."
Elaine
I was trying to find some pro-tax examples and explanations and I found one on the Seeking Alpha website to be balanced. https://seekingalpha.com/article/4134423-tax-reform-will-affect. The writer is pro-tax cut. His analysis had an example for a Pittsburgh business owning couple,
"A small business owning couple in Pittsburgh with income of $300,000 who would benefit from the change in pass-through income (20% deduction) rule, lives in a $400,000 house with a mortgage balance of $150,000 and has two children. The effective federal tax rate for this couple would drop by 7.11% (from 18.69% to 11.58%). Tax reduction amount = $21,375."
A 7.11% drop in absolute terms but a drop equating to a 38.04% decrease in their Federal tax rate. The couple gets a $1,781 per month benefit. The pass-through deduction is a huge giveaway meant to starve the Federal coffers so the GOP can attack Social Security, Medicare and other entitlements for the lower and middle class wage earners. If you rely on Social Security as a large component of your income, and you vote GOP, in my opinion you're voting to cut off the hand that feeds you.
It's difficult to explain how this one change is so impactful. It helps me greatly and even I'm saying it's going to hurt a lot of people.
There's no equal protection case. All Lebo residents are being treated equally, in that no 2018 assessment was conducted in 2017.
ALL LEBO RESIDENTS ARE BEING SCREWED EQUALLY COMPARED TO OTHERS IN THE PITTSBURGH AREA AND STATE. 4:16 READ MORE CAREFULLY.
4:36 PM, I am sure there is an attorney out there who would love to do a class action suit against Mt. Lebanon. I'm sure it would be worthwhile for those who were screwed. 4:16 PM is just drinking the Kool aid.
Elaine
4:16PM might not be drinking Kool-Aid. This may seem counterintuitive but 4:16 may be right. If the IRS guidance is correct, then unless you fit within the constraints of the guidance it appears you should not have been allowed to pay your PA 2018 property tax in 2017. Just being clinical and trying to determine if the pre-payments are legally allowed or not. For the sake of argument, assume they are not allowed unless you already had a 2018 tax bill or 2017 bill with 2018 payments in the payment structure.
I'm not a lawyer, but unless you meet the constraints, then a properly structured class action suit under Equal Protection may require that a plaintiff be someone from a town like USC that accepted tax payments and who didn't pay the tax because of the IRS Guidance. Then it would be the people who actually paid that tax were treated special violating the equal protection of those who didn't.
This one is very odd. Clearly PA residents were treated unequally, but it may be those who paid that were given the unequal treatment and may not be allowed to claim what they already paid for on their 2017 taxes. Welcome to the Far Side.
Elaine starting the new year just like the old year. Encouraging frivolous lawsuits and criticizing someone for the timing of sympathy post. Congrats Elaine. You remain the lowest of the low.
So this is what you do at 1:00 AM on New Years Eve? I just went to bed early. You, too, are starting the new year just like the old year. Larry Lebowitz likes to tell people that they have reached a new low. I am glad that I remain the lowest of the low.
Happy New Year, 12:59 AM.
Elaine
Federal Law was changed to allow local taxes paid on December 28 could be deducted from Federal taxes on your 2017 tax return.
Joe Senco said NO and many Mt. Lebanon taxpayers will not be allowed to deduct their local property taxes because Joe Senko and the Mt. Lebanon Solicitor said NO. BOTH SHOULD BE REPLACED.
JORDAN TAX SERVICE TOOK PAYMENTS FOR ALLTHE COMMUNITIES FOR WHICH JORDAN COLLECTS TAXES.
UPPER ST, CLAIR TOOK THE EARLY PAYMENTS TOO.
Remember this when you can't take a Federal tax deduction and again when Joe Senko is up for re-election in two years.
Federal Law was changed to allow local taxes paid on December 28 could be deducted from Federal taxes on your 2017 tax return.
Joe Senco said NO and many Mt. Lebanon taxpayers will not be allowed to deduct their local property taxes because Joe Senko and the Mt. Lebanon Solicitor said NO. BOTH SHOULD BE REPLACED.
JORDAN TAX SERVICE TOOK PAYMENTS FOR ALLTHE COMMUNITIES FOR WHICH JORDAN COLLECTS TAXES.
UPPER ST, CLAIR TOOK THE EARLY PAYMENTS TOO.
Remember this when you can't take a Federal tax deduction and again when Joe Senko is up for re-election in two years.
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