Lindsey McPherson of Tax Analysts has a great
, but unfortunately gated, article today, “Things to Know About the Tax Extenders’ History” ($link) Update: Tax Analysts has ungated the article, so read it all here for free!) ( It details four points:
1. Two-Year Retroactive Extensions Are Often Passed Late in Election Years
2. Extenders Are Often Attached to Larger Bills
3. Congress Has Never Fully Offset Extenders Legislation
4. Most Extenders Have Been Renewed at Least 3 Times
What does “most” mean? “Of the 55 expired provisions that are the focus of the current debate, 39 have been around since 2008 or longer and thus have been extended at least three times…”
This implies that Congress has no intention of letting the extenders expire. It only passes them temporarily to hide their real cost, because Congressional funky accounting doesn’t treat them as permanent. It also requires lobbyists to come to fund-raising golf outings every year to ensure that they get their pet provisions extended. Honest accounting would at least treat any provision extended twice as permanent, but accounting you and I would do time for is business as usual on the Hill.
TaxProf, The IRS Scandal, Day 427. It has this interesting bit, from the New York Times, Republicans Say Ex-I.R.S. Official May Have Circumvented Email:
Lois Lerner, the former Internal Revenue Service official at the center of an investigation into the agency’s treatment of conservative political groups, may have used an internal instant-messaging system instead of email so that her communications could not be retrieved by investigators, Republican lawmakers said Wednesday.
But the crashed hard drive epidemic is perfectly normal, isn’t it, Commissioner Koskinen?
Tony Nitti, Tax Geek Tuesday(?): The IRS Finally Figures Out The Real Estate Professional Rules. Tony covers the IRS walk-back from its untenable position on the amount of participation required to be a “real estate professional.” My coverage is here.
Paul Neiffer, Watch Out for Spousal Inherited IRAs. “Spouses who inherited IRAs have a couple of elections available to them that non-spouses do not have. However, care must be taken to make sure that the 10% early withdrawal penalty does not apply when distributions are finally taken.”
Accounting Today, IRS Loses Billions on Erroneous Amended Tax Returns. A report from the Treasury Inspector General for Tax Administration faults IRS procedures to review amended returns.
Cara Griffith, The Criminal Side of Sales Tax Compliance (Tax Analysts Blog):
Imagine this scenario: In the middle of an acquisition deal, the due diligence review of a company being acquired reveals that the company has underremitted its sales tax liability. The deal is never finalized because of the problem. The company approaches its tax adviser with the news that it failed to remit some of the sales tax it collected and asks for advice. On hearing that, most state and local tax practitioners would cringe. It doesn’t matter why the company failed to remit the sales tax it collected from customers — the company is in serious trouble and could face both civil collection penalties and criminal prosecution.
You have to be special to legally keep sales tax you collect.
Len Burman, “Pension Smoothing” is a Sham (TaxVox):
In a nutshell, here’s what it does: Companies can postpone contributions to their pension funds. This means that their tax deductions for pension contributions are lower now, but the actual pension obligations don’t change, so contributions later will have to be higher—by the same amount plus interest. In present value terms (that is, accounting for interest costs), this raises exactly zero revenue over the long run.
More of that Congressional accounting.
Jack Townsend, Interesting Article from the Swiss Bankers Side.
Leslie Book, Recent Tax Court Case Shows Challenges Administering Civil Penalties and the EITC Ban (Procedurally Taxing)
Overnight, if you leave the cap off. When Will the Soda Tax Go Flat? (Joseph Thorndike, Tax Analysts Blog)
Scott Eastman, $21,000 Tax Bill Just for Some Potato Salad (Tax Policy Bl0g). I’ve had potato salad that should have been charged more than that.
Adrienne Gonzalez, Tax Superhero and George Michael Among Those Caught Using Tax Shelter in the UK. This is a different type of shelter than the one that caused Mr. Michael’s prior legal troubles.
When they say it’s not about the money, it’s about the money. From the Washington Post, Former New Orleans mayor Ray Nagin sentenced to 10 years in prison:
“I’m not in it for the money,” Nagin said after he was elected to the first of two terms in 2002.
Mayor Nagin was convicted on 20 charges, including four charges of filing false tax returns. Mayor Nagin’s indictment tells a story of pervasive fraud involving kickbacks and bribes for city business, and third-party payment of limo rides and private jet services. But he did a heck of a job with Hurricane Katrina.
One interesting thing about the Post piece: it never mentions that Mayor Nagin is a member of a political party. Unusual, for a politician. Someone should look into that.
Tags: tax crime, TaxProf, Kay Bell, Expiring provisions, Joseph Thorndike, Paul Neiffer, extenders, Jack Townsend, Len Burman, Anthony Nitti, Cara Griffith, Leslie Book, Scott Eastman, Lindsey McPherson, George Michael