Tax Roundup, 9/19/2012: 47% Frenzy, Day 2! And the dangers of filing unneeded returns.

September 19th, 2012 by Joe Kristan

Who know tax policy would finally take center stage in the presidential campaign?  The Romney “secret video” saying 47% of taxpayers won’t be interested in him because they pay no taxes continues to crowd high unemployment and foreign policy disaster from the headlines.  Will Freeland of the Tax Policy Blog takes an approach nobody else (besides me) seems to have, looking at both taxing and recipients of government spending.  It’s worse than 47%:

 

The red top line is the top 1% of taxpayers; the remaing lines are quintiles of taxpayers, top to bottom. The bottom 3 quintiles (60%) receive more in government payments than they pay in taxes.

If this controls voting (and it doesn’t), Mitt is doomed.

More 47% frenzy coverage:

Kelly Phillips Erb (TaxGrrrl):  Note to Romney: We’re all on the dole (USA Today)

Christopher Bergin,  Romney Steps in Taxes, Again (Tax.com)

Roberton Williams,  Why Do People Pay No Federal Income Tax?  (TaxVox)

Peter Reilly,  Mitt Romney And The 47% All A Matter Of Context

Trish McIntire,  Stoning Glass Houses – Again

Linda Beale,  Romney’s Tax Views Lead to Blooper Comments Denigrating America’s Elderly and Poor

Tyler Durden,  Your Taxes At Work: All You Need To Know About Who Pays What Taxes In The US (Via Instapundit)

 

 

If you’ve ever been snookered into buying a lame extended warranty for a car, you’ll like this.  From the St. Louis Post Dispatch:

Cory Atkinson, a former co-owner of what was once one of the nation’s largest seller of auto service contracts, was sentenced in federal court here Tuesday to 40 months in prison on charges of tax fraud conspiracy and tax fraud charges for bilking both consumers and the IRS.

Atkinson, 42, of Chesterfield, will also have to pay $4.49 million in back taxes.

40 months? that’s less than a lot of extended warranties.

The company’s profit on a typically contract worth $2,000 or more was often more than $1,200. Fidelis kept 60 percent of that.

Unhappy customers canceled, sometimes at a rate as high as 60 percent, but US Fidelis staffers were told to arbitrarily withhold 10 percent to 40 percent of their money, according to plea documents.

I suspect few of the extended warranty customers will miss being able to work with this guy for the next 40 months.

 

You don’t want to give me more money?  Traitor!   As Taxes Edge Upwards, Leaders Question Taxpayer Patriotism  (TaxGrrrl). 

True that:   Tales from the Tax Field: Don’t “Start a Business” Just to Get Tax Deductions  (Jason Dinesen)

Jana Luttenegger,  Top Tax Errors in Estate Planning  (Davis Brown Tax Law Blog)

William Perez:  Avoid the Medicare Surtax by Giving Incoming-Producing Investments to Minor Children

Missouri Tax Guy,  Tax Misperceptions – Small Business

Jack Townsend,  The Role of the DOJ Tax Division in Criminal Tax Enforcement

It’s Wednesday, so it’s time for a Buzz!  Robert D. Flach Obliges.

Going Concern:  Audit Finds That IRS Small Business Division Not So Different From That Attractive Person at the Bar That Seemed Really Interested in You

Get ’er done, Iowans!   Could Iowans get any fatter? Yes, new study concludesRelated?  ISU economist says now may be the time to stock up on meat

 

I’m going to get even with you by getting myself sent to federal prison!  A Nebraska couple has a funny idea of vengeance, based on this item from the North Platte Bulletin:

Evidence presented at trial showed that the Kleensangs had not filed any tax returns in 2003-06 or in 2008-11, U.S. Attorney Deb Gilg said.

The Kleensangs testified under oath in state court proceedings in Sheridan County that they did not have to file tax returns because they were not federal employees and did not live in the District of Columbia.

However, in 2008, together they filed a total of 67 returns for 2007, with David Kleensang filing 57 separate returns for himself and Bernita Kleensang filing 10 separate returns on her behalf.

That’s a lot of returns if you don’t have to file.  What’s that all about?

During the investigation, Gilg said the Kleensangs admitted that they filed the bogus returns to “get justice” for judgments that were rendered against them in Sheridan County. The total amount of the refunds they claimed was $48.4 million.

Yeah, we’ll file bogus tax returns.  That’ll teach Sheridan County!  What could go wrong?

The frivolous returns were detected by the Frivolous Return Program Unit, established by the Internal Revenue Service around 2001, Gilg said. Frivolous returns are pulled and the filer is sent a warning letter that says if the returns are not corrected, the filer could be assessed a $5,000 penalty.

Not only did the Kleensangs not correct their initial returns, they continued to file similar returns for nearly four months, seeking refunds, Gilg said.

So they ended up convicted of fraud and false claims charges.  It will be a long time before Sheridan County messes with that couple — six years, anyway.

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