QuickBooks-Blog

More Florida Unemployment Insanity - DOL

We now have some more Florida Unemployment insanity. This time it involves the U.S. Department of Labor (DOL). It says that a Florida Unemployment online application violates federal civil rights and nondiscrimination laws.

A Miami Workers Center complained that the Florida Unemployment Compensation (Reemployment Assistance) Program was inaccessible to people with disabilities and those with limited English skills. In August 2011, the state moved to end phone and paper applications. Its online application has a 45-question skill assessment of math, reading and other skills. A 56-page DOL finding said this violates federal law. (Imagine, 56 pages to say a 45 question test is unfair? We know all about Florida Unemployment insanity long ago.)

A state spokesperson said the DOL was aware of the legislative changes before their 2011 passage and raised no objection, but a different DOL division is now challenging the same laws, in response to questionable allegations of a special interest group. The DOL suggested exceptions to online filing for those with language barriers, sending notices to people to apply for retroactive benefits and providing special methods for persons with disabilities.

The state can negotiate voluntary compliance and a conciliation agreement. If it does not, the DOL can enter a final ruling that can disrupt federal funds for Florida. Now that would involve the ultmate in Florida unemployment insanity.

Do You Need a Company Burial Service?

I have long helped clients who need a company burial service. It frees you from endless federal and state tax notices for dead companies.

These aggravating notices, phone calls and visits from government agents can continue for years. They can easily get you to waste thousands of dollars if you are not very careful and very knowledgeable. Now you can avoid almost everything except your liability for sales and payroll taxes withheld. You can even avoid filing corporate income tax returns or paying the company share of payroll tax, penalties and interest.

I have been providing this company burial service for many years, but two frantic clients recently reminded me of it. Your company burial service starts when you sell me the dead company for $1. I become the sole officer, stockholder or managing member. I notify Internal Revenue, the state, the Post Office and anyone else you wish. I also send you proof of the change, so you can respond to the few contacts that still come your way.

The main thing you should so is to send me any later notices promptly, so I can help insure you are not bothered again. I respond to the many forms that various government agencies send for years to come, to the extent legally required. I know which forms to disregard and the laws that limit what the government can do. I also know how to get more government agents to close their files.

So please email or call me if you want the peace of mind of a very inexpensive company burial service.

My Son Makes Lunar Rovers Work Better

This was a recent top Google News post:

Boffins zap 2,000 bugs from Curiosity's
2 MILLION lines of code • The Register

I knew that my normally secretive son, Kenneth Robert Block    (high school picture/painting) was a lead programmer at the Coverity company mentioned. When asked about his involvement in this effort, he replied:

I don't make lunar rovers, but I make lunar rovers work better. The software I develop is in every product Coverity sells, so one would have to conclude that NASA uses software I developed.

This is not surprising. His high school programming won the county Science Fair and he was runner up at the International Science Fair.

Law of Accelerating Enjoyment 2

My new Law of Accelerating Enjoyment shows why you are increasing likely to enjoy yourself more, at an increasingly accelerating rate. I am not writing about this Law to feel better myself or to make you feel better, though understanding it has that effect. I am writing about this Law because it helps us understand why mankind has long been feeling better and why it will increasingly feel (and do) far better, at a rapidly accelerating rate. I also am writing because Google has no record of this very important "Law of Accelerating Enjoyment."

Here are some of those that inspired me, which led to the discovery of the Law of Accelerating Enjoyment:

• Blaise Pascal (1623-1662) was a famous mathematician. He invented the first mechanical calculator. It was unsuccessful because many feared it would put accountants out of business. Please note that Pascal gained lasting fame in only 39 years.
   
• Gordon Moore (1929- ) co-founded Intel and created Moore's Law. It covers computer trends (the number of transistors that manufacturers can inexpensively place on an integrated circuit doubles about every two years). Computer power often doubles even faster, due to more AND faster transistors. This seemed to happen every 18 months, but it may now happen every nine months. Moore once said, "Moore's law is a violation of Murphy's law. Everything gets better and better."^[60] He almost discovered the Law of Accelerating Enjoyment.

• Robert Metcalfe (1946- ) invented Ethernet networking and Metcalfe's Law. This Law says the value of a telecommunications network is proportional to the square of the number of connected users of the system (n²). There has been much debate over the accuracy of this law and whether is continues to work as networks become very large. However, it is logical that networks with only one connected phone or computer have little value, compared to networks with thousands or millions. That is because each connected device (and person) can interact with an increasingly large numbers of users. Getting 100 users may be hard, but it is easy to get 100 more, after you get a million. This relates to having many users promoting the network and lower mass production connection costs. 
   
• Steve Bennett (1956- ) was Intuit CEO for 8 years, during which he tripled revenue and quadrupled earnings. I was on a QuickBooks Advisory Council during this period, though my prior successful tax table boycott may have cost Intuit $40 million. While on the Council, I briefly boycotted TurboTax over copy protection. Instead of dumping me, Steve wrote, "Keep raising hell when Intuit  does something wrong!" He also was well known for saying, "The best is yet to come."
   
• Tim Berners-Lee (1955- ) invented the web and Marc Andreessen (1971- ) helped everyone use it. As Metcalfe wrote,
  • "In the Web's first generation, Tim Berners-Lee launched the Uniform Resource Locator (URL), Hypertext Transfer Protocol (HTTP), and HTML standards with prototype Unix-based servers and browsers. A few people noticed that the Web might be better than Gopher.
  • In the second generation, Marc Andreessen and Eric Bina developed NCSA Mosaic at the University of Illinois. Several million then suddenly noticed that the Web might be better than sex.
  • In the third generation, Andreessen and Bina left NCSA to found Netscape..."
     
• Ray Kurzweil (1948- ), one of our great inventors, is an author, scientist and futurist. He discovered that Moore and Metcalfe's Laws were really a subset of the Law of Accelerating Returns, which had been operating for a much longer period. He measures counts the accelerating returns based on the increasingly rapid growth of the number of people plus the number of computers we have. This leads to the accelerating returns from the better tools that produce better inventions.

Kurzweil deals extensively with our longer and healthier lives, due to technological changes. He not only says we will soon live 150 years, but says that we can live on in computer memories or by cloning. However, his Law of Accelerating Returns still focuses on technology.

Kurzweil and others missed, however, what synthesizes their beliefs into the Law of Accelerating Enjoyment. The most important factor is our rapidly increasing creative lifespan. Few of us accomplish much for our first 15 or 20 years. We lack the knowledge, resources and FREEDOM to do so. Many also accomplish little during our declining years, though we increasingly live healthier for longer periods. However, Kurzweil simply adds population and machine or computer power into the Law of Accelerating Returns. He makes no allowance for our non-productive periods, resources and freedom. Only when we adjust for increases in lifespan, versus rather static non-productive periods, do we see that Kurzweil understated the real Law of Accelerating Returns.

Kurzweil also does not account for the increased productivity associated with increased wealth and freedom, or the trend towards having more wealth and more free people. He does not even account for our rapidly increasing ability to communicate and collaborate with many more people. Communication, collaboration and increased wealth let us raise more capital quickly. That and far longer periods of productive freedom let us accomplish far more. All these fast growing factors lead to the Law of Accelerating Enjoyment.

Let us compare Pascal to Berners-Lee and Andreessen to quantify this. Pascal probably only had about 18 productive years. He also lived during an era when few had the means to accomplish much and many lived short sickly lives. Berners-Lee and Andreessen changed the world in their first five productive years. They then had around 50 MORE productive years, plus an international reputation and access to significant capital. This let them create far more of value and enjoy themselves far more. The Law of Accelerating Returns also let billions of us use their creations, to live far more enjoyable and prosperous lives.

Let us compare Pascal to Berners-Lee and Andreessen to quantify this. Pascal probably only had about 18 productive years. He also lived during an era when few had the means to accomplish much and many lived short sickly lives. Berners-Lee and Andreessen changed the world in their first five productive years. Unlike Pascal, they then had around 50 more productive years, plus an international reputation and access to substantially unlimited capital. This let them create far more of value and enjoy themselves far more than anyone could consider in Pascal's time. The Law of Accelerating Enjoyment also let billions of us use their creations, to live far more enjoyable and prosperous lives. Our use of these creations then let the Law of Accelerating Enjoyment further accelerate the future enjoyment.

Yes, change resistance is a big factor. We have a natural tendency to resist change and stick with what is safe and comfortable. Google actually has 109 million images related to change resistance. However, change is like filling a cup of water. At first, you only increase the number of particles within the cup. However, when the cup overflows, water goes everywhere quickly. Change is like that. It takes a rather small improvement to get some to try it. However, most mutations and other changes die out because they do not offer significant advantages. Only the best changes flourish according to the Law of Accelerating Enjoyment. An increasing number of us get more time to wear down the change resistance of later adopters, while showing the safety and benefits of the change.

I am not sayng that the Law of Accelerating Enjoyment predicts faster change than Kurzweil predicts due to the Law of Accelerating Enjoyment. I have no reason to expect more progress in the next 100 years than we had in the last 20,000, as Kurzweil predicts. However, I believe that what Kurzweil obviously missed means that the Law of Acceletating returns may understate our future progress and our related increased enjoyment of life.

I have much more to say about the Law of Accelerating Enjoyment, but not now.

IRS Small Business Attacks

An IRS study shows it is planning many serious small business attacks. These IRS small business attacks are in a study of the tax gap (supposed uncollected taxes). This gap increased from $345 billion in 2001 to $450 billion in 2006. IRS says 83% of it is due to to underreporting (understating income and overstating deductions). The IRS small business and other attacks will try to narrow the supposed gap with pre-refund notices and return rejections, under reporter inquiries and audits. It audits areas that seem to have the highest misreporting.

 IRS attacks will address:

1. Misreporting stock basis: A new law requires stock brokers and mutual fund companies to report basis and other information for most 2011 stock purchases and all 2012 and later purchases. Form 1099-B will report this to investors and IRS. IRS will use under reporter programs and audits for this.
2. Offshore tax disclosure: IRS is continuing to press foreign financial institutions to disclose US account holders. It also has a voluntary disclosure program for taxpayers.
3. Underreporting business income: IRS now require Form 1099-K for recipients of payment card transactions or payments through third-party networks, such as PayPal. IRS expects more than 56 million 2012 Forms 1099-K for matching against filed and unfiled returns.
4. Worker classification: IRS employment tax research concluded that 17% of the tax gap is due to underpayment of tax. The main issue is worker classification (independent contractor or employee). IRS employment audits have an 86% change rate.  Form W-2 recipients are 99% compliant in reporting income, but 43% of independent contractors and small business owners report improperly.

The last two of these are IRS small business attacks, though IRS says small business underreporting makes up only 40% of the tax gap. IRS will continue to focus on:

1. Cash-based businesses: Taxpayers who do not get information statements, such as small cash-based businesses, are the most noncompliant. Information reports, fear of an audit and personal integrity were important in getting compliance. IRS will continue to focus on retail, web and service businesses to find unreported income.
2. S corporation and partnership losses: A 2009 Government Accountability Office report said 68% of all S corp returns misreported at least one item. Inaccurate S corp losses were often on shareholder returns because of insufficient basis. The average error was $21,600. More than 90% of S corps use a paid preparer, so IRS will use tax preparers to correct this with preparer penalties.
3. S corporation shareholder compensation: The 2009 study found that S corporation shareholders underpay themselves to avoid employment tax. About 13% of S corps pay inadequate wages, as S corp distributions are not subject to self-employment tax (unlike partnership distributions). Average underpaid shareholder compensation was $20,127 ($1.5 billion a year in unreported tax). The IRS expects to examine more 2011 S corporation returns.