The Long Term Investor

My favorite target....the IRS. A poster child for INCOMPETENCE. In spite of all we have heard....things with the good old IRS remain about the same as always.

IRS still has a sizable backlog of returns despite improvements, taxpayer advocate says

https://www.cnbc.com/2023/06/08/the...acklog-of-returns-taxpayer-advocate-says.html

(BOLD is my opinion OR what I consider important content)

"Key Points

• Despite improvements, the IRS still has a sizeable backlog of returns, according to National Taxpayer Advocate Erin Collins.
• After focusing on phone service, the agency is juggling millions of amended returns, filings in suspense and other correspondence.
• Given these challenges, Collins said, she has concerns about the timing of the IRS’ plans for testing a direct filing system.

LAS VEGAS — After a difficult three years for taxpayers, the IRS has made significant improvements. But there’s still work to do, according to National Taxpayer Advocate Erin Collins.

“This filing season has probably been as close to normal as possible,” she said, speaking at the American Institute of Certified Public Accountants’ annual conference, held June 3-6 in Las Vegas.

However, despite customer service boosts, the agency is still working through a sizable backlog — including amended returns, filings in suspense and other correspondence, she said.

Collins heads the Taxpayer Advocate Service, an independent organization within the IRS that provides one-on-one guidance and works for systemic changes. The national taxpayer advocate leads about 80 nationwide offices for struggling filers, consults within the IRS, reports annually to Congress on the agency’s biggest problems and presents legislative proposals.

Collins said the IRS is currently juggling 3.7 million amended returns, 6.8 million “in suspense” with missing information and 5.3 million pieces of correspondence. “Those are pretty big numbers that the IRS is still dealing with,” she said.

This season, the agency has prioritized phone service and answered more than 85% of calls from key phone lines in less than five minutes.

“But it did come at a cost,” Collins said, because phone assistors process paper returns during downtime from answering calls. “The problem is, we are now back to a backlog of paper correspondence and amended returns, similar to where we were a year ago,” she said.

Collins also expressed concerns about the agency’s plans for new programs amid the current backlog.

In May, the IRS announced testing for a free online direct filing system, with a pilot program launching for some taxpayers during the 2024 filing season.

Nearly three-quarters of taxpayers expressed interest in a free IRS-provided filing system, according to a 2022 survey cited in the agency’s feasibility report.

Collins said that while she believes the IRS has the technical capability to implement direct filing, she worries about the timing. “IRS still is not out of the hole that they have dug,” she told CNBC.

“We cannot go into the next filing season with another backlog,” she said. “We need to eliminate that word from the IRS’ vocabulary.”

“No more backlogs,” she added.

Collins also pointed to state tax challenges, especially for more than 40 states that rely on federal returns for residents’ state filings. If you decouple those returns, it could cause issues for state tax administration, she said."

MY COMMENT

TYPICAL. I will NEVER use any sort of filing system or direct filing that is managed or created by the IRS.

 

Speaking of the IRS......I get a notice from them in the mail about every 3 months. I open the mail box and just about CHOKE when I see that notice envelope with the IRS return address.

The former owner of our house.....apparently has some sort of IRS problem. They have also NEVER changed their address with the IRS so their notices come to me.

I mark a big "X" through the address and write "no longer at this address" and stick them in the mail. It never seems to make any difference......the notices continue to come periodically.

 

While I have been ignoring the markets they have been moving to the green. Tech is doing well today. ALL the big averages are nicely in the green. Looking pretty good for the early....first hour and a half for the markets today. The NASDAQ seems to be doing best of all the averages.

I notice that in terms of history e have now ERASED the horrible year we had last year in the SP500. ALL the following time periods are now POSITIVE:

ONE DAY
THREE DAYS
FIVE DAYS
ONE MONTH
THREE MONTHS
SIX MONTHS
YEAR TO DATE
ONE YEAR
THREE YEARS
FIVE YEARS

 

I have no results today. Our power has been off since about noon. I have been using my phone as a hotspot but have not looked.

 

Well the power came back on.

I had a good day today......a nice medium gain. Plus a beat on the SP500 by 0.61%. Six stocks UP and four stocks DOWN. the four were.....NKE, HD, HON, and GOOGL.

Friday tomorrow....lets end the week in style.

 

I guess it is OFFICIAL now.

Stocks rise, S&P 500 enters new bull market

https://finance.yahoo.com/news/stoc...market-stock-market-news-today-200316428.html

(BOLD is my opinion OR what I consider important content)

"Stocks ended the day higher, and the S&P 500 (^GSPC) entered a bull market on Thursday as investors digested fresh economic data ahead of next week's Federal Reserve meeting and a leadership shakeup at GameStop (GME).

The S&P rose 0.62% while the Nasdaq Composite (^IXIC) popped 1.02% and the Dow Jones Industrial Average (^DJI) was up 0.50%, or 168 points. The S&P 500 has now increased more than 20% from its October 2022 lows.

The Nasdaq 100 snapped a four-day winning streak on Wednesday as the artificial intelligence-infused rally appears to have hit a standstill. The S&P 500 has been chasing bull-market territory all week, needing a close above 4,292.44.

In single stock moves, GameStop, a meme stock favorite, reported first quarter earnings and announced the firing of CEO Matthew Furlong as part of the release. GameStop board chairman Ryan Cohen was named executive chairman. Financially, GameStop's first quarter came in worse than Wall Street had hoped for, with revenue of $1.24 billion coming in short of analysts' expectations for $1.4 billion.

The company didn't hold an earnings call, typically an industry standard, to explain its quarterly results or the executive shakeup. Shares of the company fell 18% at the market open on Thursday.

"We remain convinced that GameStop is doomed, with declining physical software sales and a shift of sales to subscription services and digital downloads sealing its fate," Wedbush managing director Michael Pachter wrote in a note to clients on Thursday. "While we think that the chain might have some value if run in order to harvest profits, we don’t see a turnaround on the horizon without capable management."

Meanwhile, shares of Carvana (CVNA) soared on Thursday as the company announced an improved second quarter outlook. The company projected second quarter adjusted EBITDA of $50 million. Analysts had been expecting a loss of $3.6 million, per Bloomberg. Carvana stock gained more than 57% on the news.

Amazon (AMZN) helped lead tech higher with shares rising nearly 3%. Analysts at UBS wrote in a note to clients that the tech giant's AI efforts could materially increase Amazon Web Services revenue by the fourth quarter of this year.

Warner Brothers Discovery (WBD) is one of the biggest winners in the S&P 500 rising near 7% on Thursday. Shares are now up more than 20% over the past week. This comes as CNN Chief Chris Licht departed the company on Tuesday after a tumultuous time at the network, which has included mass layoffs, a failed foray into streaming with CNN+, and historically low ratings.

On the economic front, new data from the Department of Labor showed 261,000 jobless claims were filed in the week ending June 3. Economists surveyed by Bloomberg were expecting 235,000 claims. Thursday's report marks an increase from the week prior's 233,000 claims.

While not considered a major indicator on a weekly basis in the Fed's decision making, this week's jobless claims will be one of the final economic data points for the Federal Reserve ahead of the Federal Open Market Committee meeting set to begin next Tuesday. As of Thursday morning, markets are pricing in a 65% chance that the Federal Reserve pauses its historic interest rate hiking campaign at that meeting, per the CME FedWatch Tool."

MY COMMENT

I cant believe that this GameStop stuff is in the news news. Simply a joke.

Now the real news......the new BULL MARKET......has finally been oficially acknowledged. CONGRATULATIONS SP500.......and....all the long term investors that held on and are now reaping the benefits of being long term and fully invested.

 

Some review for people still saving for retirement.

Secure Act 2.0: A Refresher on Retirement Rule Changes

https://www.fisherinvestments.com/e...-act-2-a-refresher-on-retirement-rule-changes

(BOLD is my opinion OR what I consider important content)

"Revisiting retirement rule changes set to start taking effect this year.

Following 2019’s Setting Every Community Up for Retirement Enhancement (SECURE) Act, its successor, Secure Act 2.0, squeaked through Congress in late December. These measures went, in many cases, little noticed, as few seem to consume retirement planning articles between Christmas and New Year’s. Here are some helpful updates to be aware of if you are saving for, nearing or in retirement.

Less Ornery RMDs

First, and importantly for retirees, the required minimum distribution (RMD) age was bumped from 72 to 73 in 2023. Because traditional retirement accounts like 401(k)s and IRAs are funded with pretax income and don’t tax capital gain and loss, IRS rules require you to withdraw a certain amount every year, which is taxable as income. This amount, the RMD, ensures the IRS gets its pound of flesh.

Those turning 73 this year will need to take their first annual RMD by April 1, 2024—and each successive one by yearend thereafter. Also new this year, perhaps a bit of relief: If by chance you miss one of those pesky RMDs, the penalty is much less severe—and correctable. Rather than 50% of the RMD amount not taken, it is now 25%—and 10% if you rectify it within two years. Moreover, there is a three-year statute of limitations for the IRS to assess any penalty, versus none before. Note too, the IRS can waive a penalty altogether if you give reasonable cause for the delay (using Form 5329). But in our view, better to avoid the need altogether and just take it before it is due.

Meanwhile, for those approaching RMD age, Secure Act 2.0 further raises it to 74 in 2029 and 75 in 2033. There is a dual benefit to these incremental increases. With lifespans rising on average, the later date allows retirement funds to grow tax-free for longer—thereby reducing longevity risk and improving long-term financial flexibility and security in the process.

Roth Accounts’ New Advantages

Secure Act 2.0 also makes Roth (after-tax) 401(k) and IRA contributions more user-friendly. Employees can designate their employers’ matching contributions be made as a Roth (with employees paying income tax on the amount). Before, Roth 401(k) matches were (confusingly) pretax only, housed separately from the Roth plan. Roth 401(k)s were also subject to RMDs, unlike Roth IRAs. This never made sense, and Secure Act 2.0 fixes the error, eliminating Roth 401(k) RMD requirements next year.

Simplified Employee Pension (SEP) and Savings Incentive Match Plan for Employees (SIMPLE) IRAs for small businesses—fewer than 100 employees—now have Roth options, too. SEP plans are employer-contributed only, while SIMPLE plans receive both employer and employee contributions.

Broadening 401(k)s’ Reach

Besides more attractive options, the new retirement legislation encourages businesses that lack plans to start them via tax incentives and new Starter 401(k) plans. Qualified companies starting a plan can now get tax credits offsetting up to 100% of plan costs for three years. Helping make this easier, low-cost Starter 401(k)s available next year will offer eligible employees automatic enrollment with an annual contribution limit of $6000.

But Wait, There’s More!

Other new benefits worth a look:

• The 10% early withdrawal penalty from retirement accounts before age 59½ has more exceptions for unforeseen emergency expenses arising from terminal illness, domestic abuse and natural disaster.
• While it doesn’t start until 2025, higher 401(k) catch-up contributions will let workers age 60 to 63 sock away the greater of $10,000 or 150% of the standard, inflation-indexed catch-up limit for those 50+ years old, currently $7500 (on top of the $22,500 allowed this year). Also for participants earning over $145,000 annually, keep in mind catch-up contributions must be made into Roth accounts next year.
• Employers will be able to “match” qualified employees’ student loan payments beginning in 2024. Employees unable to make 401(k), 403(b), governmental 457(b) or SIMPLE IRA contributions because of student loans can now get employer-matching retirement plan contributions on the amount of their payments, using the same parameters the employer matches the employee’s retirement contributions on. We would suggest keeping good records of payments to support the match, but the law itself doesn’t state this is necessary. These matches may be especially timely with the COVID-era federal student loan payment moratorium set to end soon.
• Also beginning next year, beneficiaries can roll over their unused 529 college-savings plan funds—if held for 15 years with no contributions over the last 5 years—into Roth IRAs. The amount is subject to annual Roth IRA contribution caps and cannot exceed an aggregate $35,000 lifetime limit. The IRA owner must also have earned income of the rollover amount.

These are Secure Act 2.0’s main provisions in effect currently or on the near horizon. But that isn’t all. Retirement planning rule changes may make your eyes glaze over, but keeping abreast of them can save you some dough—and headache—down the road."

MY COMMENT

Plan, plan, plan.....that is the key for any investing....especially retirement money. Awareness of the rules is important because it allows you to play all the angles to your advantage.

 

WOW.....some of my views are becoming absolutely mainstream......first the BULL MARKET and now NO recession.

Wall Street economists are increasingly less worried about a 2023 recession

https://finance.yahoo.com/news/wall...worried-about-a-2023-recession-093041009.html

(BOLD is my opinion OR what I consider important content)

"The much discussed recession of 2023 still isn't here, and economists are becoming less confident it will come at all.

This week, Wells Fargo's team of economists became the latest group to dial back its recession outlook. The firm now sees a recession hitting at the beginning of 2024 as recent economic data reveals an economy "not yet on the brink of recession."

"While we still expect the delayed effects of monetary tightening and tighter credit availability to dampen economic growth, the economy has proven to be more resilient than we anticipated," Wells Fargo's team of economists wrote in a note to clients on Wednesday. "As a result, we have pushed back our expectations for the start of economic contraction to Q1-2024."

Wells Fargo isn't the only one becoming more optimistic on the outlook for economic expansion in 2023. Goldman Sachs cut its odds of a recession this year from 35% down to 25% earlier this week. Capital Economics teased in a Wednesday note it plans to push back its third-quarter recession call. Bank of America chief Economist Michael Gapen explained to Yahoo Finance Live there's an increasing path to a "soft landing," or a mild recession. There's even a case for no recession per what Goldman Sachs COO John Waldron told Bloomberg earlier this week.

The positive outlooks follow economic data that economists often refer to as "resilient." The U.S. labor market added 339,000 jobs in May, the largest monthly increase since January. April job openings surprised to the upside, too. All while consumers continue to spend despite sticky inflation.

As of Thursday, the Atlanta Fed is projecting the U.S. economy will grow 2.2% in the second quarter, which would mark the fourth-straight quarter gross domestic product expansion. Typically, two consecutive quarters of GDP declines would be considered an official recession mark.

"We now suspect that the economy is unlikely to fall into recession as soon as the third quarter, as we had previously anticipated, and that it will take longer for a meaningful downturn in the labor market to materialize," Capital Economics wrote on Wednesday.

The recession debate comes as Wall Street wonders how the economy will react to the Federal Reserve's most aggressive interest rate hike campaign in 40 years. The economy could come down from the interest rate hikes with a 'hard landing', where the Fed induces a deep recession and unemployment jumps significantly, or a soft landing, where the U.S. economy only slows down slightly.

Gapen notes that the "mild recession" he and BofA are projecting is in line with the description of a soft landing. The odds of this have increased overall the last several weeks as credit fallout from the Silicon Valley Bank Collapse seems to have moderated and the debt ceiling debate in Washington has been resolved.

"Unless bank stress gets worse and a credit crunch is revealed, it's harder to see where that hard landing risk is coming from at present," Gapen told Yahoo Finance Live.

There are still bearish calls on the economy out there. Morgan Stanley sees corporate earnings dropping 16% by the end of the year while analysis from Bespoke Investment Group showed investors haven't bet this heavily on a drop in the S&P 500 since 2007.

But the stock market is considered a forward-looking indicator, and the Nasdaq is rallying over 26% this year while the S&P 500 is nearly in a bull market. So if a hard-hitting recession is still coming in 2023, markets aren't pricing it in."

MY COMMENT

Sooner or later the economists have to admit the OBVIOUS. Not that it matters to anyone. What really matters is REALITY.....NOT predictions.

It is now clear.....baring some disastrous BLACK SWAN......that the markets are NOT anticipating a recession. If there is a recession it will simply be technical and NOT significant.

I STILL dont expect a recession this year......AT ALL.

 

I just finished looking at all the real estate listings in my area of 4200 homes.

We have 43 active listings. WAY below what used to be normal. I also noticed that the high end of the market....from $1MIL to $7MIL.....is now selling. There were many homes in this range now pending. A few months ago there were just a handful.

The market is STILL being impacted by a severe lack of inventory. It most be a pretty bad time to be a real estate agent.

One thing is sure.....I dont see any evidence at all that prices are going down. Sellers appear to be slowly winning the stand off between sellers and buyers. In my area I suspect that over 50% of the higher end sales are all cash.

 

I am enjoying the ride. It is a nice day today.

I was up early and got most of my reading out of the way early. It is easy to do lately since there is NOTHING going on and not much being said. Even with the FED meeting within just a few days....there is little to nothing being said about the FED and the markets. We are in a BIG PAUSE over the last week or two in terms of media fear mongering. I guess they exhausted themselves.

I looked at my account early today......doing well, as expected. Although I am seeing my typical day lately with six stocks up and four down at this moment. My down stocks today are NKE, COST, HON and HD.

All the averages are dong well.....early.....today. BUT....it is still a shallow market and it can turn on a dime. so....there is no guarantee how we will close today to end the week.

We DO have a good shot at another positive week......but I would not call it a "probability" since we have to get past the dreaded....Friday, late day FADE.

 

TESLA is on a tear today. Here is much of the reason. Once again the VISION of Elon Musk is on parade. How smart was it to do charging stations and not just manufacture EV cars? EXTREMELY smart.

Tesla jumps as GM deal takes Supercharger network closer to US standard

https://finance.yahoo.com/news/tesla-shares-jump-ev-charging-113051077.html

MY COMMENT

So with Elon.....we have a person that has established himself at a relatively young age as.......the USA space program.....the driving force and dominant company when it comes to EV vehicles.....the future of media and internet and communications with StarLink.....a dominant player in AI......etc, etc, etc. AMAZING.

 

A small gain for me today....but.....at least it was a gain. I did lose out to the SP500 today by 0.05%.

AND we ended the week with two days of gains in a row......so.....ONWARD AND UPWARD.......to FED WEEK and BEYOND.

 

A MOSTLY good week this week.

DOW year to date +2.20%
DOW for the week +0.34%

SP500 year to date +11.96%
SP500 for the week +0.39%

NASDAQ 100 year to date +33.13%
NASDAQ 100 for the week (-0.04%)

NASDAQ year to date +26.68%
NASDAQ for the week +0.14%

RUSSELL year to date +5.93%
RUSSEEL for the week +1.60%

My personal result for my entire portfolio.....year to date....+27.86%. A week ago I was at......+28.28%.

 

I am finishing up since I have to pack the car and do a little 150 mile road trip for a show tonight and tomorrow. SO........have a great weekend EVERYONE.