No tax fairy in Iowa City. An Iowa City couple and a Nevada accountant have faced tax charges arising out of allegations that they used nominee corporations to help evade taxes. From 8newsnow.com:
Darlene Taylor McCord and James Bert McCord of Iowa City, Iowa, and accountant Wendell Leroy Waite were charged with one count of conspiracy to defraud the United States. Waite also was charged with one count of income tax evasion and four counts of aiding in the preparation and filing of false and fraudulent federal tax returns.
Beginning in November 2004, the McCords allegedly deposited $2.7 million into an Asset Protection Group bank escrow account and/or into one of their corporate accounts to hide money from the IRS. In February 2005, the Asset Protection Group allegedly referred the McCords to Waite for accounting and tax purposes. Over the next two years, Waite allegedly filed multiple fraudulent federal tax returns for the McCords and their nominee corporations, concealing their true income and assets.
The government has yet to prove these allegations. Still, it’s safe to say many people get in this sort of trouble because they believe in the Tax Fairy, who can magically make your taxes go away with trusts or shell companies. There is no Tax Fairy.
Another economic development triumph. The Des Moines Register reports Iowa Speedway lagging on bills, CEO resigns. The track has an innovative deal where it gets to keep the sales taxes it collects for ten years — which means, really, a state subsidy of one entertainment business at the expense of all others. Yet the track apparently is struggling anyway. It’s awful hard for our legislative supergeniuses to keep from subsidizing shiny new things involving celebrities.
Related: Why they do dumb things
Cara Griffith, The Survival of the Multistate Tax Commission (Tax Analysts Blog):
The MTC isn’t going anywhere. Perhaps it will take a different shape or assume different tasks, but 10 years from now, the commission will still play an important role in state and local taxation.
I’m not so sure. The MTC is set up for co-operation, but state politicians really want to tax income from people out-of-state who don’t vote in your election. It’s hard to cooperate with people who want to pick your voters’ pockets.
The TaxProf passes on word of the new book How Money Walks:
-The nine states with no personal income taxes gained $146.2 billion in working wealth
-The nine states with the highest personal income tax rates lost $107.4 billion
-The 10 states with the lowest per capita state-local tax burdens gained $69.9 billion
-The 10 states with the highest per capita state-local tax burdens lost $139 billion Money and people moved from high-tax states to low-tax ones.
Funny how that works.
Kay Bell, Take advantage of education tax breaks
William Perez, SEP-IRA Contributions Due by October 15th
Keith Fogg, Offer In Compromise Problem of “Form” over Substance (Procedurally Taxing)
Wall Street Journal, Lois Lerner’s Own Words:
Emails unearthed by the House Ways and Means Committee between former Director of Exempt Organizations Lois Lerner and her staff raise doubts about IRS claims that the targeting wasn’t politically motivated and that low-level employees in Cincinnati masterminded the operation.
No surprise there.
Peter Reilly, Chamberlain Medal Of Honor Raises Tax Question – Can You Value What Cannot Be Sold ? Somebody found the Medal of Honor awarded to a legendary Civil War general in a book bought at a church sale. You can’t sell those. Does that mean you can’t deduct it if you contribute it to charity? It can’t be harder than holding Little Round Top, can it?
Andrew Lundeen, Depreciation, Expensing and Taxes (Tax Policy Blog): “For tax purposes, it would be nice if we still saw depreciation rules as a merely a gimmick and allowed businesses to expense the full cost of capital investments instead.”
Joseph Thorndike, Republicans Once Hated Debt Even More Than Taxes. (Tax Analysts Blog)
News you can use. Want a Tax Shelter? Just Do It (David Brunori, Tax Analysts Blog)