Posts Tagged ‘Ellen Kant’

Tax Roundup, 4/22/13: IRS unpaid holidays. And buying a round for the State.

Monday, April 22nd, 2013 by Joe Kristan

Sharing your drink with the state.  The Tax Foundation maps how happy your state is when you wet your whistle:

 

20130422-1

Iowa is #6.

 

 

Just because an LLC is taxed like a partnership doesn’t mean that every LLC owner can act like a general partner, as Colleen MacRae explains:

Last week the Iowa Court of Appeals in Three Minnows, LLC v. Cream LLC, held that a non-managing member did not have the authority to bind an LLC to a contract the member signed on behalf of the limited liability company. 

Not every LLC member can obligate an LLC.

 

TaxProf,  IRS to Close to Public for Five Days Due To Employee Furloughs.  That doesn’t mean the Public can close to the IRS for five days, unfortunately.  Yet another example of how the preparer regulation initiative is a colossal waste of agency resources needed elsewhere.  Related: David Cay Johnston, IRS To Close for Five Days (Tax.com).

 

Peter Reilly,  IRS Not Screening Informant Reports Well .   They have other priorities than dealing with the tax collection opportunities dropped right in their laps.

 

Jim Maule,  The “Rain Tax”?

Kay Bell,  World governments mounting global effort against tax evasion.

TaxGrrrl,  As Many Celebrate 4/20, Feds Still Won’t Budge on Regulation and Taxation of Marijuana.   As long as Sec. 280E keeps even legal pot dealers from deducting expenses, it will be a tough business to make a living in, after tax.

Martin Sullivan, Horse Racing and International Tax (Tax.com)

Russ Fox,  Bayern Munich Head Reports Self for Tax Evasion.  Swiss bank accounts are involved.

Tax Trials,  IRS Announces Special Filing Extension for Boston Area Taxpayers

 

The Critical Question:  Is There Such Thing as a Free Lunch? (Ellen Kant, Tax Policy Blog)

 

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Tax Roundup, 2/7/2013: Iowa Code Conformity Bill goes to Governor. And: West Des Moines denture tax evasion

Thursday, February 7th, 2013 by Joe Kristan

20130117-1The Iowa House of Representatives  passed without changes SF 106, the bill updating Iowa’s income tax to incorporate last month’s Fiscal Cliff tax bill.  The bill conforms to all federal changes except for bonus depreciation, which remains unavailable on Iowa returns.

Now the bill goes to Governor Branstad.  The Governor vetoed a prior conformity bill because it adopted bonus depreciation; he is expected to sign this one.

The early passage of these bills is a relief to taxpayers affected by the federal changes.  Now they know how to file their Iowa 2012 returns.  Among the items affected by the bill:

– Section 179 depreciation.  Iowa now adopts the federal $500,000 limit for 2012 and 2013.

– IRA charitable distributions up to $100,000

– The above-the-line deductions for educator expenses and college tuition

– The optional deduction for state and local sales taxes.

No word yet on when the Governor will act on the bill.

 

West Des Moines denture-maker pleads to tax evasion.  The West Des Moines Patch reports:

Charles R. Barbour, who entered his plea to one count of income tax evasion in a proceeding before U.S. Magistrate Judge Celeste F. Bremer, will be sentenced on May 9.

In it, Barbour admitted that he understated tax year 2006 income in the amount of nearly $81,000, tax year 2007 income in the amount of nearly $51,000, tax year 2008 income in the amount of nearly $52,900 and tax year 2009 income in the amount of $11,300.

From the plea agreement it appears that the charges involve diversion of business receipts from his denture-making business to a personal bank account, and improper deductions:

Barbour willfully claimed false business expenses on the Schedules C for tax years 2007, 2008 and 2009; deducting internet and cable expenses for his residence as advertising expense; rent payments on a condominium and an apartment as rent expense; loan repayments to his parents as equipment repairs and maintenance expense; payments for his daughter’s medical expenses as medical supplies; payments to a local country club as professional development; and child support payments as professional fees and contract labor expenses.

The standard IRS audit programs for business expenses look for personal expenses disguised as business expenses, and an experienced examiner knows where to look.  That makes sneaking personal expenses onto a business return a bad bet — and if you make a habit of it, it can become a much bigger problem than back taxes and penalties.

 

Tyler Cowen,  Will health insurance premia rise for young males?

 Look at Table 1– where it says that the average premium for young healthy males will go from $2,000 to a little over $5,000. Yikes.

When the largely-optional penalty for not buying insurance is $695, it doesn’t seem likely that healthy young males will buy a lot of insurance — especially when they can buy it when they get sick because of the rules against pre-existing condition limits.  It’s hard to imagine this working well.

 

Jack Townsend,  Article for Canadians with Unreported Canadian Retirement Plans and Accounts.  More news from the foreign tax compliance jaywalker-shooting front.

Linda Beale,  Soon-to-be Google litigation with IRS over 2003-4 returns?  A disclosure in their 10-K.

Kaye Thomas,  Gaps in Cost Basis Reporting.  Don’t just take as gospel what the broker tells you.

Ellen Kant, Super Bowl Loophole (Tax Policy Blog).  On how the hugely-profitable NFL, and other sports leagues, are tax-exempt.

Elaine Maag, The Immigration Debate: Another Reason We Ought to Separate Work and Family Credits (TaxVox).

Have you ever tried to shoot one?  Oh, I thought you said “Quail.”  There Is Nothing Perplexing About Quill (Cara Griffith, Tax.com):

By saying that Quill created a perplexing inquiry gives credence to the idea that states can get around the physical presence requirement, but they can’t.

Try telling that to Iowa.

 

Russ Fox has a new book out, Tax Strategies for the Small Business OwnerCool!

Yeah, that will solve the deficit. Obama repeats call to end tax break for corporate jets, and more. (Patrick Temple-West, Tax Break).  I’m sure that will be wonderful news at the HondaJet North Carolina production facility that is newly up and running.

TaxGrrrl, Taxpayer Alleges IRS Agent Offered Sex In Exchange For Lower Tax Penalties On Audit.  Sounds far-fetched, but based on what I have seen of IRS agents, it would be a human rights offense.

 

You expected “Days of Our Lives?” The Situation Around the Registered Tax Return Preparer Program Has Become a Really Bad Soap Opera (Going Concern)

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Tax Roundup, 2/6/2013: 4.5% Iowa tax? Flat chance. And hidden dangers of an IRS exam.

Wednesday, February 6th, 2013 by Joe Kristan

20130206-1Shock!  David Osterberg doesn’t like the 4.5% flat Iowa Income tax proposal!  State Tax Notes tracked down former Senate Candidate and Cornell College Econ Prof* David Osterberg for his views on the proposal to create a flat 4.5% income tax in Iowa alongside the current income tax.  Not surprisingly, he doesn’t like it ($link):

     The founder and executive director of the Iowa Policy Project said a Republican-sponsored House bill to create a flat personal income tax option would shift more of the tax burden to low-income residents.

     But David Osterberg said he is not too concerned because he doesn’t think the proposal has a shot at passing the Senate, where Democrats hold a majority…The proposal is “part of this ideology that says we somehow have to take  care of the top 1 percent and things will be good,” Osterberg said. “I don’t think low-income people believe that — we sure don’t.”

State Tax Notes also tracked down Tax Foundation Economist Elizabeth Malm:

     “Iowa’s current income tax system has nine brackets, with rates ranging from 0.36 percent of income to 8.98 percent of income,” Malm said in an e-mail to Tax Analysts. “In 2012, this made Iowa the fifth highest top income tax rate in the country, among those states that levy PITs.”

     Without additional information, Malm declined to say whether the plan is regressive. She did say, however, that the proposal would fail to simplify the tax code because it keeps the current system intact.

     “I’m guessing the rationale behind allowing taxpayers to choose between the two systems is to ease concerns that the flat 4.5 rate would hit low-income individuals harder,” Malm said.

Wrong guess.  The rationale is almost surely to avoid provoking the powerful lobby group Iowans for Tax Relief, which holds sacred the current Iowa individual deduction for federal taxes paid.  Proposing the flat tax as an alternative, rather than a replacement, finesses that problem — but at the cost of adding more complexity.  In this form, the flat tax is what I call an “Alternative Maximum Tax.”

*Disclosure: I once borrowed his shotgun at Cornell.  It had dust bunnies in the tubes.

 

David Brunori, Who Pays? Who Cares? You Should (Tax.com):

No matter your views on government, there is no justification for asking the poor to pay more than the rich. I do not favor dramatically increasing the tax burdens on the wealthy, particularly income tax burdens. But there are a lot of policies that can be enacted that could even the playing field. Broader base consumption taxes, less reliance on excise taxes, and larger income exemptions for low wage taxpayers would go a long way.

None of these are incompatible with lower top tax rates.

Tracy Gordon,  The Downside of States as Laboratories for Tax Reform (TaxVox)

 

Needed, but impossible.  Tax Notes has a sad-but-true headline that brilliantly summarizes the state of our national tax policy: Urban Institute Panelists Agree Tax Reform Necessary but Unlikely. ($link)

Linda Beale, More on PTINs for previously unregulated tax return preparers:

We have seen considerable evidence of tax return preparers who do not understand the tax laws or who intentionally misapply them (in the home office deduction, etc.).  It is imperative that those who assist others in preparing tax returns demonstrate minimal competency in the tax law as demonstrated by the qualifying exam.

The “qualifying exam” is open book — really more of a literacy test.  The IRS can make preparers show they can read.  They can’t make them competent.  When you consider the Big 4 tax shelter scandals, and the hopeless complexity of the tax law, it’s funny to say that the problem is really “people who do not understand the tax laws.”

 

Peter Reilly, Future Baseball Commissioner Tackles Tax Laws As Complex As Infield Fly Rule

Tough tax return choice for 2012: Pay more now to save later?  My new post at IowaBiz.com, the Des Moines Business Record Blog for Entrepreneurs, discussing whether maximizing 2012 deductions is really a good idea.

Jason Dinesen, Taxpayer Identity Theft — Part 12 .  More Kafkaesque obstacles to resolving an identity theft for his client.

William Perez, IRS Provides Further Disaster Relief for Hurricane Sandy

Kay Bell, Tax Carnival #112: Super Bowl of Taxes

Jim Maule, Tax Ignorance As Persistent as Death and Taxes

Missouri Tax Guy:  Missouri does not mail  Form 1099-G.  You have to get it online.  One more little blow to tax compliance for small taxpayers.

Trish McIntire, Low Cost Tax Preparation Options

TaxGrrrl,  U.S. Postal Service To Eliminate Saturday Delivery: Will It Save Tax Dollars?  Next they’ll shut down the Pony Express.

Patrick Temple-West, Waiting on the phone for the IRS, and more (Tax Break)

Ellen Kant, William McBride, Super Bowl Tax Bill (Tax Policy Blog)

Russ Fox,  Will the Third Time be the Charm for Appeals?  A case where the “independent” IRS appeals function failed twice.

Howard Gleckman, Can the Income Tax Fund the Government We Want?  (TaxVox).  I can’t speak for “we,” but it could easily cover all of the government I want.

 

The Critical Question: Et Tu, Sarkozy? (David Goulder, Tax.com)

If they can spell their address, tax cheating should be easy for them: Massapequa Restaurant Owners Sentenced for Tax Fraud (Massapequa Patch).

Isn’t that conspiracy?  Tax fraud: We have a plan, authorities say (Myfoxtampabay.com)

Screwed either way.  Taxpayer Sues IRS, Claims Agent Coerced Him Into Having Sex to Avoid Adverse Audit  (TaxProf).

 

But not hotirsagent.com?  I guess there really are stupid easy ways to earn internet money.  A Kansan found one, but then got in trouble by not paying his taxes.  KFDI.com reports:

Dallen Harris, 39, pleaded guilty to one count of tax evasion. He reported a taxable income of a little more than $164,000 in 2010, when it was actually more than $1 million. 

Harris’ income came from Internet domain names, according to court ecords from a related civil forfeiture case in federal court. The government is seeking to forfeit Harris’ houses, cars and bank accounts in that case. The domain names included celebritysextape.tv, adultkingdom.net, Porntesters.com, hardcorefilms.tv, celebritynakedpic.com and sextape.com. 

No, I won’t link to any of those.  It doesn’t sound like they need any help generating traffic anyway.

 

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