Tax Roundup, 8/3/2012: Sales tax holidays, $5 billion in refund fraud, and smoked pot clinic deductions.

August 3rd, 2012 by Joe Kristan
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Flickr image courtesy K@t marsh

Hey, the Iowa Sales Tax Holiday on clothes runs today and tomorrow. Take a cue from our state tax holiday spokesmodel and get a nice outfit to wear to South Carolina later this year for their annual sales tax holiday on guns.

Harry Reid needs to prove he isn’t stealing identities to claim fraudulent refunds.   TIGTA: IRS to Issue $21 Billion in Fraudulent Tax Refunds From Identity Theft Over Next Five Years  (TaxProf).   From the TIGTA report:

Our analysis of tax returns using characteristics of identity theft confirmed by the IRS identified approximately 1.5 million undetected tax returns with potentially fraudulent tax refunds totaling in excess of $5.2 billion. TIGTA estimates the IRS could issue $21 billion in potentially fraudulent tax refunds resulting from identity theft over the next five years.

$5.2 billion in one year.  To put that in perspective of other (ridiculous and shameful) tax evasion assertions, the IRS is giving to thieves a fortune equal to about 21 times Mitt Romney’s net worth every year.  So just maybe passive losses for Rafalca aren’t the biggest tax issue this season.

The Wall Street Journal has more.

Howard Gleckman, Why Romney’s Tax Agenda Doesn’t Add Up, Even if it Isn’t a Middle-Class Tax Hike. Not that the system we have exactly adds up either. (TaxVox)

That’s one way to park your money offshore.  The London Daily Mail Online reports:

The billionaire L’Oreal heiress has sold a Seychelles island for £39 million in the middle of a tax evasion case, the island’s government have said.

Liliane Bettencourt, France’s richest woman sold the tiny island in the Indian Ocean to offshore company Save Our Seas Foundation (SOSF), a Swiss-based campaign group, for £27.7 million more than she bought it for in 1997.

French authorities have also ordered her to pay £85.8 million in unpaid taxes after her island ownership came to light along with a number of undeclared accounts.

That’s one asset that they won’t find  by subpoenaing your Swiss bank.

Is the IRS handing out an illegal tax credit under Obamacare?   (Michael Cannon, Cato-at-liberty.org)

Priorities, people.  Going For Tax-Exempt Gold: Bill Introduced to Eliminate Tax on Olympic Medals  (TaxGrrrl). That will make all of the people forced to pay huge penalties for inadvertent offshore paperwork violations feel a lot better.

Tax Policy Blog: The Two Hardest (But Most Important) Sales Tax Reforms.  No, they don’t involve Amazon.

In November, Michigan voters will decide whether future tax increases will require a two thirds vote of the legislature. It will pass. The people of Michigan are increasingly weary of taxes and the inefficiencies of government.

We should try that here in Iowa, except we’re too busy trying to buy prosperity with tax credits.

News you can use.  Better Move Quick If Your Cataracts Are Acting Up: Tax Court Strikes Blow to Medicinal Marijuana Industry (Anthony Nitti).  Russ Fox has more.

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