Iowa Senate passes conformity bill. The Iowa Senate sent the 2015 “code conformity” bill (SF 126) to the House yesterday on a 49-0 vote. The bill, conforms Iowa’s 2014 tax law to reflect December’s “extender” legislation, including the $500,000 “Section 179″ deduction, but not including bonus depreciation.
The House could vote on the bill as early as today, though it’s not on this morning’s House debate calendar. Still, with the bill out of the Senate, it seems like a sure thing, even if it has to wait until next week.
The “information” containing the charges outlines an energetic looting of the company that brought in a host of helpers — and potential informants. For example:
In about September 2009, a conspirator asked an Arrow Trucking Company employee to have a telephonic communication with a representative of Transportation Alliance Bank with respect to an audit and to falsely verify the authenticity of fraudulent invoices.
Well, that’s one witness right there. And here’s another.
In about December 2009, a conspirator asked an Arrow Trucking Company employee to have a telephonic communication with a representative of Transportation Alliance Bank with respect to an audit and to falsely verify the authenticity of fraudulent invoices.
Well, no harm no foul — they had pretty much made sure the IRS would catch up with them, if the information is to be believed. They failed to file the federal Form 941 payroll tax returns for 2009, or to remit the payroll taxes for those quarters. That’s a sure way to attract IRS attention. And once the IRS started sniffing around, they left a lot of clues for the IRS in the alternative uses they made of the withheld taxes. These other things included payment of $20,000 in company funds to an ex-wife. But that didn’t mean the next ex was slighted:
During the year 2009, Arrow Trucking Company funds were used to make payments to The Events Company for a conspirators wedding.
They should have been able to leave the wedding in style:
During 2009, Arrow Trucking Company Funds were used to make payments related to a Bentley automobile for the benefit of a conspirator.
Or maybe, honey, we want something a little sportier:
During 2009, Arrow Trucking Company Funds were used to make payments related to a Maserati automobile for the benefit of a conspirator.
It all seems like fun and games, but that fun led to this:
In December 2009, the carrier left hundreds of its drivers stranded on highways across the United States after a Utah bank voided company fuel cards.
Between halting payroll tax returns, using company funds for lavish toys, and getting employees to lie for them, they pretty much made sure the feds would visit, belt and suspenders. The IRS audit program for businesses is designed to find such things, but it sounds like they left a pretty easy trail to follow.
Peter Reilly, Mr. Koskinen’s Last Chance To End The Form 3115 Madness:
Here is the crisis. Some very smart people with a lot of influence in the tax industry are telling all the rest of us the following story. You know those new regulations are telling you to change your accounting methods. Even if you look at what you’ve done over the years and decide that there is no income or expense to be picked up it is still an accounting method change. Given all the new concepts you could not possibly have been using those methods. So if your client has any sort of a trade or business, there are one or more Forms 3115 that have to be filed.
If he was as keen on preserving limited IRS resources as he keeps telling Congress, he would announce that taxpayers could adopt the new accounting methods without a 3115 by attaching an election to their return, if they prefer it that way. That would save forests, and enormous amounts of IRS storage space. But if he were serious about maximizing agency resources, he also wouldn’t allow 200 IRS employees to collect government checks for union work, and he wouldn’t divert IRS resources into a “voluntary” preparer regulation scheme.
TaxProf, The IRS Scandal, Day 637. This edition links to a Bloomberg piece about the Commissioner’s recent Senate testimony: IRS Chief: I Don’t Want to Be Seen As Influencing 2016. I take that as meaning he wouldn’t mind influencing the elections; he just doesn’t want to be seen doing so.
Robert Wood, Coming Soon: No Travel Or Passport If You Owe IRS. What could go wrong?
Kay Bell, Seven tax extenders approved by Ways & Means Committee. Similar to the permanent extenders that passed the house and died last year, they can be seen as a counter to the President’s tax proposals in his budget.
Robert Goulder, Smart Tax Reform: Parity for Passthroughs (Tax Analysts Blog):
An obvious difficulty in business-only tax reform is devising a means to level the playing field between corporate and noncorporate entities. The overwhelming majority of commercial enterprises in the United States (roughly 90 percent) are not organized as corporations. They take alternate forms such as S corporations, partnerships, LLCs, or sole proprietorships. The primary difference, of course, is the lack of entity-level taxation for noncorporate businesses.
Unless you hate pass-throughs, as the administration seems to.
Kyle Pomerleau, The President Proposes Changing the International Tax System for Corporations (Tax Policy Blog)
Cara Griffith, Texas Comptroller to Look to Legislature for Guidance on Taxing Aircraft (Tax Analysts Blog)
Tracy Gordon, A Fuller Accounting of How State and Local Governments Fared in the Great Recession (TaxVox).
News from the Profession. Let’s Catch This PwC Partner Up on the Fun Stuff She Missed Over the Last 20 Years (Adrienne Gonzalez, Going Concern)