October 31, 2017 Richard Thaler Wins Nobel Prize It is rare that we care who wins the Nobel Prize but in this case we salute Richard Thaler, an economist from the University of Chicago, who upended the longstanding notion that individuals make rational decisions about their futures and finances. He helped to advance automatic enrollment in retirement savings plans and automatic increases in contributions to these plans, a major shift in how Americans save money. His theories essentially are what are popularly known as behavioral economics. We believe in behavioral economics in that we believe human and financial behavior is often messier and more complicated than is laid out in traditional mathematical economic models. Equifax Hack Causes IRS Problems The Equifax hack is causing problems for the IRS’s transcript retrieval service. The IRS has used the company to provide identity authentication service on some of its web-based applications, including the popular “Get Transcript” tool, which allows taxpayers to immediately view and print their online tax transcripts. Amazon to Collect Sales Tax By December 2017, many merchants who sell on Amazon are expected to begin collecting state sales taxes in exchange for amnesty from back taxes not collected in about half of US States. Higher prices might reduce sales through Amazon’s Marketplace. Not a Hobby The Tax Court decided a ranching operation that lost millions of dollars was not a hobby. The rancher who ran the venture in addition to his day job as an economist could deduct the losses. In the Court’s view he acted in a businesslike manner, despite not having a written business plan. His multiple ranch activities were integrated. For example, the hay operation provided feed to cattle and horses which were cared for by an on premise veterinary center. He hired a ranch manager and consulted experts. He also took steps to try to increase the profit potential. Welch TC Memo 2017-229 As always, if you have any questions about these or any other matters, do not hesitate to call us. Remember, We’re Here For You!