Tax Roundup, 8/9/2013: Another international tax enforcement milestone. And don’t count on the ex for a character reference.

August 9th, 2013 by Joe Kristan

Andrew Mitchel,  Number of Expatriates Skyrockets Again (Second Quarter of 2013):

The number of published expatriates for the first two quarters of 2013 (1,809) has already exceeded the highest number of annual published expatriates ever (1,781 in 2011).  Thus, 2013 will clearly be the year with the highest number of published expatriates ever.

 

Chart by International Tax Blog.
Chart by International Tax Blog.

Another triumph for the IRS offshore enforcement program.  If you make being an American abroad a tax nightmare, people will stop being American.

 

TaxProf, The IRS Scandal, Day 92

Phony Scandal Watch: IRS agent: Tax agency is still targeting Tea Party groups. (Washington Examiner, Via Instapundit):

In a remarkable admission that is likely to rock the Internal Revenue Service again, testimony released Thursday by House Ways and Means Committee Chairman Dave Camp reveals that an agent involved in reviewing tax exempt applications from conservative groups told a committee investigator that the agency is still targeting Tea Party groups, three months after the IRS scandal erupted.

We did nothing wrong, it was just a few rogue agents in Cincinnati, and we don’t do it anymore.  Oh, and it’s phony.

TaxGrrrl,  DEA Passed Secret Data, Tips For Covering Up To IRS.   That’s reassuring.

 

Tax Analysts fights the good fight.  Transparency: Worth Fighting For  (Christopher Bergin).  They’ve done more than anyone else to fight the growth of secret tax law, known only to insiders and cronies.

 

Howard Gleckman, Beware of Tax Reform That Promises Deep Rate Cuts.  I worry more about tax reform that doesn’t promise rate cuts at all.

 

Tax Justice Blog,  Politicians Use Tax Breaks to Subsidize Manufacturing. What Could Possibly Go Wrong?  Everything, of course, though the Tax Justice Blog’s solutions would be no improvement.

 

Kyle Pomerleau, Cities, States, and Obamacare’s “Cadillac” Tax (Tax Policy Blog).

No, they shouldn’t. Cheating and Visibility on Taxes: IRS Efforts to Regulate Tax Return Preparers Should Continue (Procedurally Taxing):

Nonetheless, I believe that the IRS’s approach to the return preparer issue, with uniform identification requirements, reasonable competency testing and ongoing education requirements, will greatly enhance visibility in the return preparation process.

This is one of the better arguments I’ve seen for preparer regulation, but it is still not very good.  The preparer regulations impose restrictions on honest preparers that the cheaters will ignore.  It will raise the costs of preparation, causing many taxpayers to self-prepare and others to drop out of the system entirely. The real way to stop cheating is to remove the worst opportunities to cheating, especially refundable tax credits, and to make the law simple enough and the rates low enough that cheating is harder to hide and less attractive.


Watching the watchmen. NYPD cop faces hard time for tax fraud and identity theft. (New York Daily News):

Jonathan Wally, 34, was moonlighting as a tax preparer while working in the 34th Precinct that serves Inwood and Washington Heights. The 10-year NYPD veteran, who resigned upon entering his plea, admitted in Manhattan Federal Court to using bogus Social Security cards to list fictitious dependents.

I’m sure that with a little ethics training from the IRS, he would have turned out differently.

 

Paul Neiffer, Don’t Forget Your Retirement (Plan)!

Brian Strahle, CALIFORNIA:  HOW SHOULD YOU “SHAVE” (FILE YOUR 2012 INCOME TAX RETURN)?

Trish McIntire, Health Insurance Wizard for Business

Russ Fox,  While I Was Out…, where he discusses my post from yesterday, where the Tax Court required an S corporation $877 in taxable income to impute $31,000 in salary income to the owner to incur payroll taxes:

 I do agree with Joe’s conclusion: “When advancing and withdrawing funds from an S corporation, be sure to generate the appropriate prissy paperwork.”  If you have a loan, make it look like a loan: Charge interest and record it!  It’s possible that with good paperwork the owner wouldn’t have received such a ridiculous result.

The more I ponder this Tax Court decision, the more I dislike it.

Freakonomics Blog,  How Much Tax Are Athletes Willing to Pay?

Boxing is particularly interesting because it allows a participant to choose where he performs. If you are a pro golfer or tennis player, you might be inclined to skip a particular event because of a tax situation, but you generally need to play where the event is happening. A top-ranked boxer, meanwhile, can fight where he gets the best deal. Which is why it’s interesting to read that Manny Pacquiao will probably never fight in New York — primarily, says promoter Bob Arum, because of the taxes he’d have to pay.

Yes, tax rates matter.

 

Going Concern, After His Open Victory, It Appears Phil Mickelson Is Doing Some Tax Planning at the PGA Championship.  Yes, taxes are lower if you miss the cut.

 

I hope he didn’t solicit this character referenceA 64-year old Florida executive won’t get to enjoy a golf-course retirement for awhile.  TBO.com reports:

John D. Stanton III stalled an Internal Revenue Service audit for four years, promising he would submit corporate tax returns for his company while secretly diverting tens of millions of dollars to himself.
 
The deception caught up to him Thursday, when a federal judge sentenced him to 10 years in prison for tax evasion.

His ex-wife spoke up for him, pleading for leniency.  Yeah, sure:

The family drama emerged when a letter by ex-wife Susan Stanton was read aloud. In the letter, Stanton called her ex-husband “devious” and said he should be given the maximum prison sentence allowed. John Stanton III fled Tampa in December 2011, the letter said. An arrest warrant on a contempt of court charge was issued, stemming from a divorce case where Stanton defied an order to pay more than $6 million to his ex-wife. “He fled and stayed in $240-a-night hotels,” Susan Stanton wrote. While he was on the run, John Stanton III fathered a child with a 32-year-old woman, the letter said.

Other than that, the break-up was amicable. Now Mr. Stanton gets to spend 10 years in a federal prison, where any money he managed to hide isn’t much use.  When he gets out, assuming his health holds up, he will still have the government ready to seize any hidden cash that slips out.  It seems like the results would have been a lot better if he just had filed his returns.



A note to readers:  I have learned how to embed links to items within longer “Tax Roundup” posts.  I won’t use it for every item, but I will use them for some items that you might want to point out to someone.  There are two that you will find in this post, and they look like this:

No, they shouldn’t.

and

I hope he didn’t solicit this character reference.

Maybe I should just post these things as their own posts, but there you go.

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