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Tax Roundup, 5/23/2013: Iowa property taxes improve, income tax gets worse. Plus: more Apple bites.

Thursday, May 23rd, 2013 by Joe Kristan
If Iowa's income tax were a car, it would look like this.

If Iowa’s income tax were a car, it would look like this.

The Iowa General Assembly nears the end of its annual rampage.  While it finally did something to improve a bad commercial property tax system, it managed to make an already awful income tax a little worse.

The Iowa Senate cleared a property tax plan (SF 295) yesterday to reduce commercial property assessments by 10%, with additional property tax credits for smaller businesses.  Unfortunately, the price was to more than double Iowa’s version of the fraud-plagued Earned Income Tax Credit and, it appears, to clutter up the 1040 with additional petty tax credits — those these provisions are apparently part of a separate bill.

As if that weren’t enough abuse to the income tax, the Senate also increased Iowa’s tax credit corporate welfare budget by $50 million  (HF 620) by increasing the amount of tax credits that the economic development bureacracy can hand out.  They sweetened the corporate welfare pot by enabling the diversion of employee withholding to local crony capitalist slush funds economic development funds.

Another bill, HF 625, increased the popular school tuition credit, a poor substitute for true school choice.

While the politicians will pat themselves vigorously on the back, the net result isn’t very exciting.  Yes, lower rates for commercial property are needed.  But now Iowa’s dysfunctional income tax is larded with even more corrupt special interest favors, which will make it that much harder to ever enact a system that makes sense for taxpayers without lobbyists and connections.

Related:

David Brunori, Soviets Run Mississippi, Planned Economies and All (Tax Analysts Bl0g)

The Quick and Dirty Iowa Tax Reform Plan.

 

TaxProf, The IRS Scandal, Day 14

Going Concern, Lois Lerner Knows What You People Are Thinking

 

Andrew Lundeen, Apple’s Appearance before the Senate Clarifies the Need for Comprehensive Tax Reform (Tax Policy Blog):

Our average combined rate of 39.1 percent is the highest in the industrialized world. In an increasingly globalized world, this matters more today than it did the last time we reformed the code in 1986. Today the U.S. has to compete with countries around the globe who are constantly improving their tax codes. When the U.S. fails to do so itself, American consumers, workers, and shareholders lose out.

Kyle Pomerleau, Another Perspective on the Apple Hearing (Tax Policy Blog):

Politicians created the current corporate tax system and the current system is broken. If you are going to set out a menu of options for corporations to reduce their tax burden, don’t be surprised or upset that corporations take advantage of them.

Indeed.

 

Linda Beale, Citizen for Tax Justice’s Bob McIntyre on Apple’s offshore profit-hoarding.

 

Robert D. Flach, A KIND OF CATCH-22  On the compliance burden of the fraud-ridden Earned Income Tax Credit.

Tax Trials, See You on Tuesday: IRS Furloughs Impact Certain Filing Deadlines & Services

Kay Bell, IRS offices will be closed Friday, May 24. Plan accordingly

Jack Townsend, Tax Perjury and FBAR Charges Related to Illegal Income Fake Art Case

 

Cara Griffith, A Missed Opportunity in Texas (Tax Analysts Blog)  An attempt to enact an independent tax court in Texas fails:

“The importance of an independent tax tribunal is well documented in the pages of tax journals and even mainstream media outlets.” 

Iowa has nothing like an independent tax appeals process.

Me, Playing with fire: Using an IRA to finance your business.  My new post at IowaBiz.com, the Des Moines Business Record blog for entrepreneurs.

 

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Tax Roundup, April 3, 2013: Six days to Iowa Tax Freedom Day.

Wednesday, April 3rd, 2013 by Joe Kristan

Tax Freedom Day for Iowans will arrive April 9, according to the Tax Foundation.  That’s nine days sooner than for the whole country.  From the Tax Policy Blog:

Tax Freedom Day is the day when the nation as a whole has earned enough money to pay its total tax bill for the year. A vivid, calendar-based illustration of the cost of government, Tax Freedom Day divides all federal, state, and local taxes by the nation’s income.

 In 2013, Americans will pay $2.76 trillion in federal taxes and $1.45 trillion in state taxes, for a total tax bill of $4.22 trillion, or 29.4 percent of income. April 18 is 108 days, or 29.4 percent, into the year. Americans will spend more in taxes in 2013 than they will on food,  housing, and clothing combined.

You can find Tax Freedom Day for your state from this Tax Foundation Map:

 20130403-1

The national Tax Freedom Day is five days later than last year:

Tax Freedom Day is five days later than last year, due mainly to the fiscal cliff deal that raised federal taxes on individual income and payroll. Additionally, the Affordable Care Act’s investment tax and excise tax went into effect.

But cheer up!  If taxes were high enough to pay for all government spending without borrowing, it wouldn’t be until May 9.

 

TaxProf, ESPN: Athletes’ Charities Fall Short of IRS, Nonprofit Standards.  Chis Zorich might agree.  Actually, the arguments against athletes setting up their own charitable foundations are the same as those for anybody else.  They take more work and expertise to run than most people realize.  Compliance with federal tax laws and state laws can be costly.  It’s easy to get into trouble with them, like Mr. Zorich did.  It’s much wiser for athletes with a charitable interest to work with an established charity that knows what it’s doing.

 

So you owe the IRS on your 2012 return and cash is tight. What now?.  My new post at IowaBiz.com, The Des Moines Business Record blog for entrepreneurs.

Jason Dinesen,  Taxpayer Identity Theft — Part 14 .  The latest adventures in trying to get the IRS to pay the refund of his client, an identity theft victim, for 2010.  She may have it in “another 6-8 weeks.”  We’ll see.

 

Kaye Thomas,  Last Call for Refundable AMT Credit.  Congress didn’t extend the refundability of long-term alternative minimum tax credits, making the exercise of incentive stock options once again potetially ruinous.

TaxGrrrl,  Taxes From A To Z (2013): R Is For Recapture

 

Kay Bell, What do you plan to do with your tax refund?

Jack Townsend,  FBAR Penalty Collection — Beyond the Collection Suit, Administrative Offsets Loom Large and Long

Tax Trials:  4th Circuit: District Court Abused Discretion by Allowing Evidence of CPA’s Personal Tax Situation in Tax Shelter Promoter Case

Peter Reilly:  Lawyers Unite To Keep Dark Money Dark

Howard Gleckman,  The Economics of Corporate Rate Cuts are More Complicated than Politicians Think

 

Joseph Thorndike: Hate Filing Your Tax Return? Good.  (Tax.com).  Good for those of us who charge money to prepare returns, anyway.

 

Russ Fox,  Bozo Tax Tip #8: 300 Million Witnesses Can’t Be Right:

For a tax blogger, people like Richard Hatch are wonderful. Hatch, for those who don’t remember, was the winner of the first Survivor and won $1 million. About 300 million individuals worldwide saw Hatch take down the $1 million.

Hatch received a Form 1099-MISC for his winnings. In the United States, winnings from contests are taxable. Hatch claims that CBS and/or the producers of Survivor promised him that they would pay his taxes. (Both CBS and the producers of Survivor deny this charge.)

Of course Mr. Hatch failed to pay the taxes on income he earned in front of millions, serving a prison sentence as a result.  Sometimes watching somebody else get into real trouble can be instructive.

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Tax Roundup, 3/7/2013: Consultant says Iowa should do more of what he consults about. Also: how not to file a lawyer’s tax return.

Thursday, March 7th, 2013 by Joe Kristan

http://www.rothcpa.com/misc/20090604-1.JPGAnswering the wrong questions.  The Iowa Chamber Alliance asked a consulting firm that makes money playing the corporate location incentives game whether Iowa should sweeten its corporate location incentives.  Guess how they answered it.

From an Iowa Chamber Alliance press release:

“Iowa has a solid base of state - level economic development incentives tools upon which to build. However, to become more competitive, Iowa may wish to increase the funding level and flexibility of some of the State’s key incentive programs” states Darin Buelow, a Principal with Deloitte Consulting LLP.

It’s hard to imagine the study coming to a different conclusion considering what they were looking for:

At the request of the Iowa Chamber Alliance (ICA), Deloitte Consulting (Deloitte) benchmarked incentives programs in Iowa and in five alternate states, focusing on a high-level analysis of state-level incentive programs, their value, and overall effectiveness in attracting investors.

In other words, they were to look at whether Iowa has more and better giveaways than its neighbors.

I looked for the study in vain for any analysis of the value of Iowa’s tax credits to the economy vs. alternative uses for the funds — like lowering the tax rates of the rest of us who pay for them.  There is no mention of “opportunity cost.”  In looking at the “value” of the programs, it makes unsupported conclusions like this one about the “High Quality Jobs Program:”

Considered effective and competitive in providing benefits to mitigate corporate income tax, refunding sales tax for construction and providing a supplemental refundable research credit.

Considered effective by whom?  On what basis?  It doesn’t say.

The study says Iowa should enrich its data center corporate welfare — where the rest of us subsidize the infrastructure of Microsoft and Apple.  They also recomment Iowa “consider allowing sale, refund or transfer” of tax credits.

A few years ago, after the film tax credit disaster, Governor Culver tasked a panel with reviewing the effectiveness of Iowa’s dozens of tax credits.  Their report failed to come up with a clear benefit for any of Iowa’s tax credits.  The panel also had this to say about transferable tax credits: (my emphasis)

Transferability of tax credits complicates the projection of revenues and the tracking of credits, creates uncertainty about when credits will be claimed because the purchasing entity may utilize a different fiscal year than the entity awarded the credit, and siphons resources from awarded entities through brokerage fees… Once tax credits are transferred, it creates limited recourse for the State to recover funds claimed in instances where the business awarded the original credit does not fulfill the contracted obligations or if the credit was awarded in error.  Additionally, transferability has also resulted in abuses in some tax credit programs.

It would be better Iowa to not “compete” in taxing its current taxpayers to lure and subsidize their competitors.  Instead Iowa should enact a tax system good enough that we don’t have to pay people to be our friends.   The Quick and Dirty Iowa Tax Reform Plan would be better for Iowa businesses than any number of pocket-picking tax credits.

 

Poor legal move.  From Bloomberglaw.com:

Former Kirkland & Ellis LP senior partner Theodore Freedman pleaded guilty to fraud in connection with the filing of false tax forms.

Freedman changed his plea yesterday from not guilty to guilty of four counts of tax fraud. U.S. District Judge Deborah Batts in Manhattan accepted the plea and set sentencing for Sept. 17. Freedman’s lawyers reached a plea agreement with U.S. attorneys.

Indicted in July 2011, Freedman misrepresented his income as a partner at the law firm by about $2 million, the U.S. said. He also claimed more than $500,000 in expenses for a sole proprietorship that didn’t exist, the government said.

It’s hard to imagine how he thought this would work.  K-1s get matched against tax returns, at least occasionally.  The IRS matching system is cumbersome and inefficient, but it works well enough that you can’t habitually ignore K-1s with six-figure income.  Furthermore, claiming big bogus Schedule C losses like that is practically an engraved invitation for the IRS to visit your return.

Related:  Former Kirkland & Ellis Partner Pleads to Tax Crimes (Jack Townsend)

 

The Colonel knows why your business might have to file returns in other states.  My new post at IowaBiz.com, The Des Moines Business Record blog for entrepreneurs.

William McBride, The Carried Interest Debate: Funding Government for 3.1 Hours (Tax Policy Blog).

Patrick Temple-West,  Cadbury gets tax bill in India, and more (Tax Break).

Daniel Shaviro,  Skepticism about “fundamental tax reform”

Angie Picardo,  Grads – Filing for First the Time (Missouri Tax Guy guest-post)

Brian Strahle,  D.C. Combined Reporting – Transition Rules for 3/15 and 4/15!

Janet Novack,  New IRS Data: Rich Got Richer, But Paid Lower Tax Rate As Stocks Gained

William Perez,  Child Tax Credit for 2012

 

There’s a new Cavalcade of Risk up at Health Business Blog.  It’s always worth the ride at the blog world’s roundup of insurance and risk management!

 

Is that an argument for or against intelligent design?  The Sequester: ‘Designed to be Stupid’ (Cara Griffith, Tax.com).

Because they aren’t in a position to speak for themselves: Ellen DeGeneres Speaks Out For Spanish-American War Widowers (Peter Reilly). 

The Critical Question: Why Is Amy Poehler Going To Hell? And What Does Taylor Swift Have To Do With It? (TaxGrrrl)

 

 

Programming note: This site was pretty much shut down part of yesterday afternoon.  Our valiant hosting service says it was a comment spam attack on the pre-2012 archived posts.  Sorry about that.

 

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Tax Roundup, 2/26/2013: A map of state tax futility. And why bankers don’t like OREOs.

Tuesday, February 26th, 2013 by Joe Kristan

Close enough to zero. Monday Map: Corporate Income Tax Revenue as a Percentage of All State/Local Tax Revenue (Nick Kasprak, Tax Policy Blog):

20130226-2

 

 

IRS Field Attorney Advice: Bank must capitalize indirect costs of holding ”OREO” property under inventory capitalizetion rules.  From FAA  20123201F (my emphasis)

Section 263A applies to property that is acquired for resale. If § 263A applies, the taxpayer must capitalize both the direct costs of acquiring the property and the property’s allocable share of indirect costs.

…

In this case, X clearly acquires OREO in foreclosure (or in lieu of foreclosure) with an intent to resell the property. Bank regulators restrict the holding period for OREO and expect banks to exercise good faith efforts to sell the property. As required by applicable state and federal policies and regulations, it is our understanding that X advertises its OREO properties for sale, including those properties which it rents out. X’s Year6 Annual Report confirms that assets acquired through (or in lieu of) foreclosure are held for sale. In addition, OREO is acquired and held in the ordinary course of X’s trade or business. X’s Year6 Annual Report acknowledges as much when it states that X may foreclose on and take title to properties securing loans “during the ordinary course of business.” X engages in OREO transactions with frequency, regularity, and according to an “OREO disposition strategy.” (Year6 Annual Report, p.17). Thus, the OREO held by X constitutes property held by the taxpayer primarily for sale to customers in the ordinary course of its trade or business.

“OREO” is “other real estate owned,” for you non-bankers.  Bankers don’t care to hold much of that.

 

Joseph Henchman,  Nebraska Governor Withdraws Tax Reform Proposal; Legislature Look to Commission to Develop Alternatives (Tax Policy Blog).  But they aren’t giving up on tax reform.  So should Iowa.  The Quick and Dirty Iowa Tax Reform Plan is tanned, rested and ready!

Paul Neiffer,  Must Have W2 Wages to Deduct DPAD.  A hidden tax trap for the Schedule F farmer.

 

Great minds think alike:

TaxGrrrl,  How Will Your State Be Impacted By Sequestration?

Kay Bell,  How would your state fare under sequestration?

 

TaxProf,  3d Circuit Denies CARDS Tax Shelter.  Another turn-of-the-century tax shelter fails.

Elaine Maag, Education Tax Credits Rival Pell Grant Program in Size: Reforms Proposed (TaxVox).  The more you subsidize it, the more it costs.

Jeremy Scott, Taxing the Rich, Thenardier-Style (Tax.com):

But the influence of Les Miserables doesn’t just extend to the silver screen and stage. President Obama seems to be taking tax policy advice from the musical’s comical antagonist, Thenardier.

Well, that would explain many things.

Trish McIntire,  Referrals – A Double Edged Sword.

Peter Reilly,  What Were They Thinking ?   Another example of the unwisdom of failing to remit payroll taxes.

Linda Beale,  Private equity and real estate managers get a “costly and unjust [tax] perk”.  Not really, but some people really hate carried interests.

Me: Identity theft tax fraud: women’s work?

 

Put the champaign back on ice.  The Income Tax is NOT Turning 100 – Yet. (Joseph Thorndike, Tax.com).

One less metal home in town.  Demise of Another Lustron House.  (IowaBiz.com) These are funky steel houses, not mobile homes.  They don’t build ‘em like that anymore.

 

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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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Tax Roundup, 1/16/2013: Iowa legislators to push Alternative Maximum Tax? Also: new home office deduction option.

Wednesday, January 16th, 2013 by Joe Kristan
20130116-1

Kraig Paulsen

It looks like the Republican leadership in the Iowa House of Representatives will be pushing income tax changes this year.  Unfortunately, it looks like they are pushing the plan I call an “alternative maximum tax” like the one floated by Governor Branstad last year and quietly dropped after the election.  O. Kay Henderson reports:

House Republicans are calling for a “flat” state income tax. If their idea becomes law, Iowans would have the option of filing their personal income taxes under the current system — which has a top rate of nearly nine percent — or opting to pay a four-and-a-half percent rate, with no deductions.

 The governor has made it clear property tax reform is his top priority,
but House Speaker Kraig Paulsen of Hiawatha, the top Republican in the
legislature, says Branstad hasn’t said no to cutting income taxes.

20130116-2Any tax practitioner will point out that this will in practice just be one more complication in computing Iowa taxes.  Taxpayers will compute their taxes under both the current system and the flat system and choose the one that results in the lower tax.  I assume the legislative leaders are resorting to this awkward plan to get around the implacable opposition of the powerful Muscatine-based Iowans for Tax Relief to any tax reform that would repeal the deduction for federal taxes on Iowa returns.  Their plan is likely based on that proposed by Iowans for Discounted Taxes.

Far better to just clean up Iowa’s tax law.  Repeal the special interest loopholes and corporate welfare tax credits, get rid of all non-federal deductions, get rid of the deduction for federal taxes, tie the tax law to the federal code, drastically lower the rates, and eliminate the corporation income tax entirely.  In short, enact The Quick and Dirty Iowa Tax Reform Plan.

 

Flickr image courtesy e53 under Creative Commons license

Flickr image courtesy e53 under Creative Commons license

Whether or not Governor Branstad wants to deal with income taxes, he may have to.  His neighbor in Nebraska may be forcing his hand.  1011Now.com reports:

Gov. Dave Heineman is calling for an overhaul of Nebraska’s tax system, saying the state needs to get rid of its individual and corporate income taxes and make up the lost revenue by shutting off as much as $2.4 billion in tax breaks for businesses.

The Republican governor unveiled his tax plan Tuesday during his annual State of the State address to lawmakers.

Heineman says his plan would keep the state competitive with two neighboring states, Wyoming and South Dakota. Both have no individual income tax.

It sounds much like the plan proposed by Louisiana Governor Jindal this week.   If the other states massively improve their income tax systems and Iowa doesn’t, all of the fertilizer tax credits in the world won’t help Iowa’s business climate.

 

 

IRS unveils simplified home office deduction for 2013.  The IRS yesterday unveiled a new optional way to compute home office deductions.  From IR-2013-5:

The new optional deduction, capped at $1,500 per year based on $5 a square foot for up to 300 square feet, will reduce the paperwork and recordkeeping burden on small businesses by an estimated 1.6 million hours annually.

…

Though homeowners using the new option cannot depreciate the portion of their home used in a trade or business, they can claim allowable mortgage interest, real estate taxes and casualty losses on the home as itemized deductions on Schedule A. These deductions need not be allocated between personal and business use, as is required under the regular method.

This will be handy.  When you depreciate part of your home for a home office deduction, you lose the ability to exclude that much gain on a later home sale.  Home office deductions are also complicated and a magnet for IRS examiners.  This looks like it will be useful for the growing ranks of people who run businesses out of their home.  Taxpayers will still be allowed to opt out of this new method and compute their home office deductions the old way.  Full details are found in Revenue Procedure 2013-13.

Other coverage:

TaxProf,  IRS Announces Optional $1,500 Home Office Deduction in Lieu of Depreciation

Russ Fox, Is A Simplified Home Office Deduction Better?  “The reality is that $5 per square foot understates the cost of most home offices, especially when factoring in depreciation.”

 

Paul Neiffer,  Senator Grassley Wants Extension of March 1 Filing Deadline:

Due to the passage of the new tax law, the ability of the IRS to accept most farmers tax returns by March 1 is very uncertain.  Senator Grassley’s letter indicates that the IRS has granted an extension in the  past, most recently last year when the MF Global mess occurred.  In that case, the IRS did not actually extend the filing date, but granted  waivers of the penalty for any estimated tax penalty caused by MF Global  untimely mailing of form 1099.

Farmers don’t have to make estimated tax payments if they file by March 1.  If they can’t do that, the IRS can impose estimated tax penalties on the whole balance due.  The late enactment of new tax laws for 2012 may make it impossible for the IRS to process returns by then.

 

January: the month to start your 2013 year-end tax planning!  My new post at IowaBiz.com, the Des Moines Business Record’s blog for entrepreneurs.

Jason Dinesen, Rental Properties and Basis Allocation

TaxGrrrl,  IRS Announces 2013 Tax Rates, Standard Deduction Amounts and More

Mary Ellen Goode,  A Stark Reminder of the Excessive Cost of Complying with the Tax Code

Rush Nigut,  Iowa Business Specialty Court Pilot Project.  I hope it leads to a specialized Iowa Court for tax cases.  Taxpayers are at a huge disadvantage arguing before District Court judges with no tax expertise.

Kay Bell, The 1040 is ready! The 1040 is ready!

Anthony Nitti,  Dear America: Your Higher Payroll Taxes Are Not The Result Of A Tax Increase.  Only if the multi-year payroll tax break didn’t count as a tax cut.

Janet Novack,  11 Ways To Tap Retirement Cash Early, Without A 10% Penalty

David Brunori, Virginia’s Gas Tax Reform (Tax.com)

Howard Gleckman,  A Budget Deal is Staring Them in the Face, But Here’s Why Lawmakers Won’t Compromise in 2013 (TaxVox)

Robert D. Flach has a new Buzz!  He responds to my take on his take on CPAs.

Jim Maule,  Still More Joys of IRC Section 86.

 

Kyle Pomerleau, New Paper on Estate Tax Misses the Mark.  (Tax Policy Bl0g). It’s about…

Caron & Repetti: Occupy the Tax Code: Using the Estate Tax to Reduce Inequality (TaxProf)

My experience in tax practice convinces me that the estate tax is unnecessary to break up and dissipate large estates.  Beneficiaries take care of that just fine.

 

Hey!  I said I was sorry!  Defendant Screws Up His Acceptance of Responsibility (Jack Townsend):

Although the defendant claimed remorse, his actions after the time of the guilty plea continued the obstructive conduct.  Hence, this defendant got no benefit from pleading guilty, and saving the Government and the court the time and expense of trial.  Not only that, his obstructive conduct convinced the judge to sentence him at the top of the unreduced Guideline range.

If you want the judge on your side, it might be a good idea to stop committing the crime for awhile.

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Tax Roundup, 12/20/2012: Blizzard! And meeting interesting people via social media.

Thursday, December 20th, 2012 by Joe Kristan

20121220-3Yes, the blizzard came.  It’s still snowing at 6 a.m., with up to 14 inches.  Here’s what happens next:

* WINDS/VISIBILITY…NORTHWEST WINDS WILL BECOME VERY STRONG AND CONTINUE THROUGH THIS AFTERNOON. SUSTAINED WINDS OF 30 TO 40 MPH WITH GUSTS OVER 50 MPH ARE LIKELY. BLIZZARD CONDITIONS WILL BE WIDESPREAD BY 6 AM WITH BLOWING AND DRIFTING SNOW LEADING TO WHITEOUT CONDITIONS AT TIMES THROUGH THE DAY.

* IMPACTS…LIFE-THREATENING BLIZZARD CONDITIONS ARE EXPECTED INTO THURSDAY MORNING. TRAVEL WILL BECOME DIFFICULT…IF NOT IMPOSSIBLE DUE TO BLOWING AND DRIFTING SNOW. THE IOWA DEPARTMENT OF TRANSPORTATION ADVISES NO TRAVEL! POWER OUTAGES MAY BECOME MORE PREVALENT BY MORNING AS HEAVY SNOW IS WEIGHING DOWN TREES AND STRONG WINDS BY MORNING AND AFTERNOON MAY FELL TREES ON POWER LINES…RESULTING IN POWER OUTAGES.

So, telecommuting.

Still dancing on the edge of the cliff.  The President has threatened to veto House Speaker “Plan B” tax bill (see yesterday’s Tax Roundup).  The House is planning to vote on the bill today.  The Wall Street Journal reports ($link):

The talks remained frozen Wednesday as both sides awaited the outcome of Thursday’s vote. Messrs. Obama and Boehner (R., Ohio) have not negotiated since Monday and continued to take shots at each other in public.

“There are a lot of gyrations, tensions and difficulties, and this could still go awry,” said Rep. Tom Cole (R., Okla.). “But we are closer on Wednesday than we were on Friday. All the other major budget deals were all last-minute deals.”

Peter Suderman has tweeted:

20121220-1

Maybe so.  Forgive me if I’m not reassured.  Not when the acting IRS Commissioner has this to say (my emphasis):

As I stated in my letter dated November 13, 2012, the IRS has maintained the programming of its systems assuming that the AMT will be patched as it has been in previous years. I also indicated that if an AMT patch is not enacted by the end of this year, the IRS would need to make significant programming changes to conform our systems to reflect the expiration of the patch. In that event, given the magnitude and complexity of the changes needed, I want to reiterate that most taxpayers may not be able to file their 2012 tax returns until late in March of 2013, or even later.

…

As we consider the impact of the current policy uncertainty on the upcoming tax filing season, it is becoming apparent that an even larger number of taxpayers — 80 to 100 million of the 150 million total returns expected to be filed — may be unable to file.

That would make tax season even more fun!

Fiscal Cliff Notes:

Nick Kasprak, How do Personal Income Tax Increases Affect Small Business?  (Tax Policy Blog).  The post shows how much income that will be taxed under the President’s proposals and “Plan B” will be business income.  In Iowa, 25.1% of the adjusted gross income on returns with AGI over $200,000 is business income; the percentage is 37.24% on returns with AGI over $1 million.  In other words, increases in taxes on “the rich” punish Iowa employers.

Elaine Maag, Toppling Over the Fiscal Cliff Could Cost low-Income Families $1,000 in Reduced Tax Credits (TaxVox)

Patrick Temple-West, Boehner’s backup tax plan shakes up ‘fiscal cliff’ negotiations, and more (Tax Break)

Year-end techniques from the edge of the Fiscal Cliff.  My new post at IowaBiz.com, The Des Moines Business Record’s blog for entrepreneurs.

 

Cara Smith, Just Do It. A bad idea when a big company comes to the state looking for a special tax break.

Russ Fox, “Tax Guys” Get Taxing Result.   It seems that two Michigan preparers specialized in inventing earned income for clients to commit earned income tax credit fraud.

Paul Neiffer,  Annual Exclusion Update  Paul explains the annual gift tax exclusion.

TaxProf, Ninth Circuit: NOL ‘Carryover’ Does Not Include NOL ‘Carryback’

Jack Townsend,  More Swiss Bank Enablers Indicted

Peter Reilly,  No Bankruptcy Escape From Bad Tax Shelter And Compound Interest

William Perez,  Tax Software for Planning Out Your Year-End Tax Moves.

Kay Bell, Donder says harvest investment losses; Reindeer Year-end Tax Games Tip #7

 

Oversharing.  Social media experts caution us to be discreet in what we share on our Facebook pages.  A Florida woman failed to follow that advice, reports Tampa Bay Times:

TAMPA — Rashia Wilson all but dared investigators to catch her, court records show.

“I’m Rashia, the queen of IRS tax fraud,” Wilson said May 22 on her Facebook page, according to investigators. “I’m a millionaire for the record. So if you think that indicting me will be easy, it won’t. I promise you. I won’t do no time, dumb b——.”

It’s also bad form to make promises you may not be able to keep:

Grand jurors apparently got the message and responded with a 57-count indictment charging Wilson, 27, of Wimauma and her boyfriend, Maurice Larry, 26, of Tampa with mail fraud, filing false tax returns, conspiracy, aggravated identity theft and theft of government property.

She is charged with stealing over $1 million.  If the case is like many others coming out of the Tampa area, it involves identity theft.  It shows that the IRS is just sharp enough to go after you if you go out of your way to tell the world that you are tax fraud royalty.

 

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Tax Roundup, 10/26/2012: Central Iowa ESOP flunks out in Tax Court. And lots more!

Friday, October 26th, 2012 by Joe Kristan

What is it about Iowa and ESOPs?  Iowa seems to have more than its fair share of tax litigation involving Employee Stock Ownership Plans. (See here, here, and here for examples)  Iowa’s unusual prominence in this obscure area of the tax law is due in part to a group of Iowa accountants who pushed the plans heavily in the 1970s and 1980s, touting “The Miracle of ESOP.”

An Iowa ESOP will need a miracle on appeal after being revoked retroactively yesterday by the Tax Court.  Judge Gerber upheld the 2010 revocation of the plan back to 1995 for several reasons, including failure to timely amend plan documents for tax law changes and failure to get a properly-documented appraisal of the ESOP stock.

Judge Gerber discussed the appraisal problem:

     Thielking was the person selected to appraise common stock of a company’s employee stock ownership plan (ESOP) in another case before this Court. In that case, involving similar taxable years, this Court addressed Thielking’s failure to set forth his qualifications as follows:

Petitioner asserts that Thielking was a permissible appraiser of the ESOT’s stock in petitioner. We hold otherwise. Section 401(a)(28)(C) provides that all employer securities which are not readily tradable on an established securities market must be valued by an “independent appraiser”. Since petitioner’s stock is not traded on an established securities market, an independent appraiser had to value the ESOT’s holdings of that stock. As relevant here, an “independent appraiser” means a “qualified appraiser” as defined by section 1.170A-13(c)(5)(i), Income Tax Regs.

The ESOP fails at least two requirements of that section. First, section 1.170A-13(c)(5)(i), Income Tax Regs., requires that the appraisal summary contain a declaration that the individual holds himself out to the public as an appraiser. The appraisal letters covering the 2001 through 2003 plan years state that “The undersigned holds himself out to be an appraiser”. However, there is no signature below that statement on any of the letters (there is an unsigned line for a signature with the word “appraiser” typed below). Second, section 1.170A-13(c)(3)(ii)(F) and (5)(i)(B), Income Tax Regs., requires that the qualified appraiser who signs the appraisal must list his or her background, experience, education, and membership, if any, in professional appraisal associations. The appraisal here is not signed, and the appraisal summary does not list the referenced information.

Hollen v. Commissioner, T.C. Memo. 2011-2, slip op. at 9-10, aff’d, 437 Fed. Appx. 525 (8th Cir. 2011). Thielking’s failure to set forth his qualifications was part of the basis for this Court’s holding that the common stock in that case was not appraised by a “qualified appraiser”.

     The circumstances in Hollen were substantially similar to the circumstances in this case.

The appraiser in this case once was associated with a man who told a client I worked with in the 1980s that (I paraphrase) ”Sure, you can use a fancy-pants appraiser and spend a lot of money.  You can also use an expensive lawyer for a divorce or you can file your own papers.  You’ll be just as divorced, and you’ll save the legal fees.”  That apparently works about as well in ESOPs as in contested divorces.

ESOPs can be great tools, but they are not easy to use.  15 years of plan disqualification is likely to be pricey.

Cite: CHURCHILL, LTD. EMPLOYEE STOCK OWNERSHIP PLAN & TRUST.

 

Wonder what wind energy credits are really all about?   Investors Worth $800 Billion Lobby for Wind Energy Tax Credit (Environment News Service)

Unintended but entirely predictable consequences of refundable credits. Investigators: Child tax credit allows fraudsters a chance to cheat (WRAL.com)

TaxGrrrl,   IRS Announces Increase In Annual Exclusion For Gifts, Rest Remains a Mystery

Anthony Nitti,  The Top Ten Tax Cases of 2012: #10 -The IRS Wages War With The Medicinal Marijuana Industry

Trish McIntire,  Playing Chicken With a Career

Patrick Temple-West,  Essential reading: CEOs call for deficit action, and more (TaxBreak)

Martin Sullivan,  A Watershed Moment: CEOs Say Raise Taxes.  (Tax.com).  They are free to write their own checks any old time.

 

Brutal Assault on Reason Watch: 

Howard Gleckman,  What Is Barack Obama’s Tax Plan?

Kay Bell,  What happens if the electoral vote is tied?

Linda Beale,  Romney, Family Business, Carried Interest, and potential conflicts of interest

 

It’s five o’clock somewhere, so catch tomorrow’s Buzz today at Robert D. Flach’s place!

I have lots of ideas.   How Not to Spend Tax Revenues (Jim Maule)

News you can use. Toilets Are a Funny Thing (IowaBiz.com)

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Tax Roundup, 10/25/2012: Extra services at the post office. And there’s no such thing as a free sandwich.

Thursday, October 25th, 2012 by Joe Kristan

Opportunities with the postal service.  A mail carrier in Alabama has been accused of picking up more than letters on his route.  A Department of Justice press release says Mr. Harrison, a postman, served as a courier for a tax refund ID-theft ring:

Members of the conspiracy filed false tax returns using stolen identities from various locations including the Northern District of Alabama. The fraudulent tax refunds were directed to debit cards that were mailed to addresses on Harrison’s postal route in Montgomery, Ala. Harrison retrieved the debit cards from the mail and, for a fee, provided them to a co-conspirator.

The moral?  When it absolutely, positively needs to get there, be the top bidder for your mailman.

 

Richard Morrison,  Chart of the Day: The Demographics of Income Inequality (Tax Policy Blog):

Russ Fox,  Nevada Business Tax Initiative Ruled Invalid

My new post at IowaBiz.com:   Payroll taxes: Once is enough

Keep firing.  Hollywood tax incentives come under fire (NBCnews.com)

Patrick Temple-West, Essential reading: For some of the wealthy, a 0 percent tax on capital gains, and more (Tax Break)

Trish McIntire,  Basics of Retirement Tax Planning

 

Brutal Assault on Reason Watch: 

Anthony Nitti,  President Obama Releases Agenda For A Potential Second Term: Dissecting the Tax Aspects

Kay Bell,  We think Congress is doing a better job.  Since they went home, coincidentally.

Daniel Shaviro,  Paul Krugman on the worst case scenario if Romney wins

Linda Beale,  Tax Questions about the Romney-Ryan Ticket–from Romney’s Tax Returns to Ryan’s Vouchercare

 

Attention is great, but links are better.  Amy Hamilton at Tax Analysts quotes my post from yesterday extensively ($link)

 The governor is suggesting “a new tax plan that would exist side-by-side with Iowa’s current complex and loophole-ridden mess,” Kristan said, adding that the plan would require taxpayers to compute their taxes under each system and file whichever return produced the lowest tax.

Thanks!  But two quibbles.  First – no link?  I link to you, you link to me — manners!  Second, you didn’t even mention The Quick and Dirty Iowa Tax Reform plan in a discussion of Iowa Tax Reform.   Isn’t that like talking about the World Series without mentioning the Giants?

 

Expensive free sandwiches.  From Going Concern:

A St. Louis accountant has allegedly been taking the cheap thing just a little too far by scamming unsuspecting restaurateurs in the area for free sandwiches. Yup, you read that right: free sandwiches.

They call him the Scamwich Artist and it seems he’s been making the rounds, complaining about getting bad food in exchange for gift cards and, well, more food.

The story quotes restaurant personnel as saying the accountant was caught red-handed, and the guy’s picture, taken by a restaurant manager with a smart phone, is now all over St. Louis and the Internet.  It will make for interesting conversation at his next client meeting.

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Tax Roundup, 10/2/2012: Des Moines has to repay $40 million in illegally-collected taxes. Also: Kansas City tax shelter figure arrested.

Tuesday, October 2nd, 2012 by Joe Kristan

The City of Des Moines will finally do the right thing, having exhausted all venues to do otherwise.  The Supreme Court yesterday ruled that the city must repay $40 million of an illegally-imposed franchise fee on utility bills.  The Des Moines Register reports:

The high court’s ruling centers on franchise fees that are added to customers’ gas and electricity bills. A lower court ruled that the city charged excessive fees for a period of years, in essence an illegal tax. The high court declined to review the lower court’s order requiring the city to repay roughly $40 million to residents who paid the illegal tax.

Mayor Cownie predicts disaster and famine:

City lawyers have fought the case for years by arguing, in part, that any refunds would lead inevitably to higher property taxes — in essence taking money out of one pocket of city residents to place cash in another.

Cownie said the city would pursue options fairest to citizens while balancing the long-term realities of a beleaguered city budget. Any franchise fee repayment from the city would likely come from a mixture of property tax increases and cuts to city services, he said.

“We’re not just cutting away fat. We’re cutting away muscle and bone and tendons,” he said.

It’s useful to imagine how much sympathy the city would offer a taxpayer who had illegally collected money from the city.  “I’m not just cutting away fat.  I’m cutting away essential services for myself and my family, like my house and my car.”  Of course, the city has compounded its own problems by litigating all the way to the U.S. Supreme Court, piling up legal fees and interest on top of the refunds.

The city now has to pay up, though the Register story makes it look like the city isn’t exactly racing to cut the refund checks.

The Moral?  Next time, don’t collect an illegal tax, and if you do, repay it. 

 

Supreme Court declines to review West Des Moines S corporation compensation case.  In addition to denying Des Moines’ franchise tax appeal, the Supreme Court yesterday denied a hearing in an important case involving the so-called “John Edwards Shelter,” named after the former vice-presidential nominee and model husband who ran his law practice in an S corporation.

A U.S. district court held that an area CPA who reported $24,000 of wage income and around $200,000 of K-1 income from his S corporation had to report as compensation around $90,000 of the income; the Eighth Circuit upheld the ruling in February (David E. Watson, P.C. v. U.S).   The tax law imposes payroll taxes on compensation, but not S corporation K-1 income, so the taxpayer must pay payroll taxes on the additional compensation.    The denial is reported on page 50 here.

 

Being enjoined is bad.  Being indicted is worse.  An attorney who was enjoined from promoting some extremely aggressive tax shelters in the Kansas City area now has worse problems, as outlined in a press release from the California Franchise Tax Board:  Los Angeles Tax Professionals Arrested for Illegal Tax Schemes Costing State $7.6 Million:

A Cerritos CPA and Los Angeles attorney were  arrested today on felony charges of conspiracy and tax evasion, the Franchise  Tax Board announced.

Victor George Kawana, 53, and Blair Stover,  51, each own one-third of Kruse Mennillo, LLP. According to FTB special agents,  Kawana and Stover allegedly promoted an abusive tax avoidance transaction  (ATAT) to more than 100 clients during the years 2002-2005. The fraudulent  activity cost the state more than $7.6 million in tax liability.

They each face three felony counts of aiding  in the preparation of false state income tax returns and one felony count of conspiracy.  Each tax count carries a maximum sentence of three years in state prison.

The charges appear to arise from the same sorts of shelters Mr. Stover was enjoined from promoting:

They instructed their clients to utilize an  ATAT involving the creation of Nevada corporations and Roth IRA or Employee  Stock Option Plans (ESOP) as the sole shareholders. The ATAT was formed with a  series of related transactions with no valid business purpose other than tax  evasion.

Kawana and Stover were recently arrested and  both pleaded not guilty at their arraignments.

Mr. Stover got his start at national firm Coopers and Lybrand in St. Louis, later moving to their Kansas City office.  He joined the Grant Thornton office there before going to Kruse Menillo, LLP.

While a number of the tax shelters involved did poorly in court, that doesn’t make it a crime to promote them; the defendants are innocent until proven guilty.  Whatever the outcome of the trial, we can safely assume that the shelters relied on taxpayers’ eternal pursuit of the tax fairy, that mythical creature who can magically make income taxes go away without pain and without risk.  There is no tax fairy. 

Thanks to an alert reader for the tip.

 
Martin Sullivan,  Romney Advisor Advocates Tax Hikes (Tax.com): “He proposes putting a cap on everyone’s tax benefits from deductions and credits equal to some percentage (perhaps 2 or 3 percent) of adjusted gross income and using the revenue gained for both rate cuts and deficit reduction”

Richard Morrison,  Chart of the Day: The Average Tax Rate for the Rich (Tax Policy Blog):

 

Patrick Temple-West,  Essential reading: Payroll tax cut is unlikely to survive into next year, and more

TaxGrrrl,  Comment for the Cure: Cancer, Comments, Cures and Yeah, Taxes

Trish McIntire,  Chicken or Egg Tax Cut

Jack Townsend has two more posts on the affirmation of sentences for figures in the “Aegis” tax shelter case:  Aegis Convictions Affirmed Installment #4 – the Conspiracy Conviction and  Aegis Convictions Affirmed Installment #5 – IRS Notices and Harmless Error

Kay Bell,  Tax moves to make in October 2012

William Perez,  Consider Accelerating Salary Income into 2012

Howard Gleckman,  If Congress Goes Over the Fiscal Cliff Your Taxes Will Likely Go Up (TaxVox):

If Congressional gridlock sends the U.S. government tumbling over the fiscal cliff later this year, Americans could face an average tax hike of almost $3,500 in 2013. Nearly 9 of every 10 households would pay higher taxes. Every income group would see their taxes rise by at least 3.5 percent, but high-income households would suffer the biggest hit by far, according to a new Tax Policy Center analysis.

TPC found that if the tax hikes last the entire year—a big ”if”–those in the top 0.1 percent would pay an average $633,000 more than if today’s tax rules were extended. However, even middle income households would take a hit: they’d pay an average of almost $2,000 more, and see their after-tax income fall by more than 4 percent. Such tax hikes would be “unprecedented,” said the paper’s authors, Bob Williams, Eric Toder, Donald Marron, and Hang Nguyen.

So, have a nice day!

 

Kaye A. Thomas, Roth Conversions Ahead of 2013 Tax Increases.

The Critical Question: What is this “Fiscal Cliff,” and why are we in this handbasket?  My new post at IowaBiz.com, the Des Moines Business Record blog for entrepreneurs.

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Tax Roundup, September 18, 2012: 47% frenzy! And New Jersey tries to rival Iowa.

Tuesday, September 18th, 2012 by Joe Kristan

Do 47% of taxpayers really pay no federal taxes? Close enough for government work.

Mitt Romney’s “Secret Tape” has stirred up talk about the “47%.”   Let’s look at a newly-issued table from the center-left Tax Policy Center for 2012 figures:

 

The lowest 20% would be at zero without counting their share of the corporate tax burden, borne in the form of lost investment income and wages.  The next 20% get to positive territory on the basis of payroll taxes, but I think Robert D. Flach gets this right:

In my opinion, the FICA tax is not a tax.  It is a contribution to a retirement plan (Social Security) and a payment for future health insurance (Medicare). 
Payments of Social Security “tax” allow the individual to collect a pension at retirement, and payments of Medicare “tax” allow the individual to receive extensive health care coverage at a very cheap rate (less than $100 per month) at age 65.

Of course, both Medicare and Social Security are actuarially insolvent, so these taxes don’t even cover their own costs.  The shortfall falls on those who actually pay a positive income tax.  So while this table doesn’t tell us exactly where the cut-off is, 47% can’t be too far off, with the only debate being over counting the payroll taxes that are already inadequate for their purposes.

Focusing only on income taxes also ignores benefits.  When welfare benefits and subsidies are taken into account, the 47% number Mitt Romney used seems low.   2004 figures from The Heritage Foundation showed that the bottom 60% of households receive more in benefis than they pay in taxes.   I will post more current figures if I find them, but I suspect that this “dependency ratio” has only worsened since 2004.

So while Mitt Romney’s “secret tape” statements might be politically awkward, it’s only because they are pretty much true.  The cost of government has shifted more and more to “the rich.”

This can’t continue forever because the math doesn’t work.  The rich guy isn’t buying because he can’t.

Related coverage:

Janet Novack, Memo To Mitt Romney: The 47% Pay Taxes Too

Kay Bell,  47 percent don’t pay federal income taxes, but do hand over payroll, other taxes

Tax Policy Center, Who doesn’t pay federal taxes

Robert D. Flach,  THE AMERICAN TAX NON-PAYER

Ramesh Ponnuri, Makers and Takers

Reason.com:  Will Americans Think They’re Romney’s “47 Percent”? Or One of the “53 Percent”?;  Romney’s 47 Percent Line Is a Common GOP Trope, and it’s Wrong*;  Secret Romney Tape Means We Can Finally Stop Talking About Obama’s Failed Foreign & Domestic Policy!;  Forget Romney: Should We Be Concerned That 49 Percent of Households Get Government Money?

Update: the TaxProf rounds up the frenzy.

CRS: Nothing Affects Economic Growth (William McBride):

A study by the Congressional Research Service (CRS) is getting a lot of attention, because it finds that tax cuts are not associated with economic growth.   Although less reported, the study also finds nothing is associated with economic growth, including all the standard factors such as education, population growth, and government spending. 

So close the schools, stop spending money, and raise taxes to 100%!

 

He probably wants to get his sentence out of the way so he can get on with his life.  When he’s 109.  Wasendorf kept in jail after court appearance  (Des Moines Register).  The 64 year-old, who has pleaded guilty to looting the Peregrine Financial Group, can expect to serve at least 90 percent of his expected 50-year sentence.

 

David Brunori,  Cowardly New Jersey Cronyism:

The not so courageous New Jersey’s Economic Development Authority approved a $40 million tax credit for Honeywell International to keep it from moving its headquarters to Pennsylvania.  Then the authority not so courageously approved a $40 million Grow New Jersey tax credit for Dotcom Distribution, an e-commerce warehousing and fulfillment company, so that it can build a facility and not move to Pennsylvania. Then the authority not so courageously approved a $50 million tax credit for developers to build a supermarket in Camden!  Where is the outrage? Where are the political leaders who have the courage to say that this is the worst kind of economic policy?

Not in Iowa, for sure.

 

TaxProf,  CRS: Corporate Tax Rate Could Drop to 29.4% in Revenue-Neutral Tax Reform.   I think the current  35% rate could go significantly lower than 29.5% if they really tried, without lowering revenues.  Of course, they won’t really try.

 

Russ Fox,  Is the IRS Time-Barred From Imposing a Penalty on a Frivolous Amended Return?  Short answer: no.

Jack Townsend,  Credit Suisse Continues Ratting on It Own and Expects Deposit Outflow.  Yes, that will do it.

Paul Neiffer,  Mistakes to Avoid in Lifetime Giving – Final

Timing is everything: capital investments for the last quarter of 2012. My new post at IowaBiz.com, the Des Moines Business Record blog for entrepreneurs.

News you can use:  The Tax Court Doesn’t Believe That You’re Not a Person (Anthony Nitti)

 

 

 

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Tax Update, 9/11/2012. Did you ask about that $107 million? Look, Blago! Also: wind and hot air; never forget.

Tuesday, September 11th, 2012 by Joe Kristan

Look, there’s Rod Blagojevich!  Governor Branstad defended the big smokestack-chasing tax credit package awarded to the Orascom Lee County fertilizer plant.  From QCTimes.com:

Branstad criticized President Barack Obama for “picking winners and losers in the marketplace” in an opinion piece distributed last week. It was the same week he announced the richest incentive package in state history that would be used to land the biggest single capital investment in state history.

…

As far as picking winners and losers, the governor cracked, “Illinois is the loser, Iowa is the winner.”

Branstad then took some more shots at the Land of Lincoln, describing it as “dysfunctional” and “willing to promise you the moon, then pulling the rug out from under your feet.” The state, he said, has “a reputation for corruption.”

Yes, corruption is unknown in Iowa.  Oh, wait…

Ramona Cunningham, currently serving time in federal prison for looting the Central Iowa (“no corruption here!”) Employment and Training Consortium, at the dedication of the CIETC Tom Harkin Learning Center.

This is fascinating:

Asked during his weekly news conference about how his column jibes with what he approved for the fertilizer plant, Branstad said the incentive package will be a catalyst for reforming the state’s tax system.

“A catalyst for reforming the state’s tax system?”  What does that mean?  That the award is so outrageous that it will finally spur legislators to replace Iowa’s futile, loophole-ridden system of high rates and complexity, sweetened with special deals for insiders?  “Stop me before I spend again?”  If it shocks legislators into adopting the Tax Update’s Quick and Dirty Iowa Tax Reform plan, it might almost be worth it.

More from the Des Moines Register.

 

Grounded.  Former Us Airways Pilot Sentenced in North Carolina to 10 Years in Prison for Tax Fraud (Dept. of Justice Press Release):

Charles A. Davis, 63, formerly of Mooresville, N.C. was sentenced today in U.S. District Court to 120 months in prison for committing tax fraud, the Justice Department and Internal Revenue Service (IRS) announced. U.S. Judge Richard L. Voorhees in the Western District of North Carolina also ordered Davis to serve twelve months of supervised release after his prison term and pay $538,569 as restitution to the IRS.  

…

Trial evidence established that in April 2006, Davis filed five fraudulent amended income tax returns for 1996 through 2000, falsely claiming that he earned little or no adjusted gross income in each of those years. And from April 2008 to February 2009, Davis filed five fraudulent individual income tax returns for 2004 through 2008, reporting false amounts of federal income tax withheld for each of those years and requesting fraudulent refunds from the IRS in amounts up to approximately $1.5 million. The evidence also established that during the time he failed to pay his taxes, the defendant drove a Ferrari and a Mercedes, and lived in a lakefront home on Lake Norman, N.C.

Well, he lived high for awhile.  Ten years imprisonment will bring down the average on his lifestyle.

 

Russ Fox,  A Modest Proposal on Tax-Related Identity Theft:

The IRS should check the address of every filed return versus the address on file for the taxpayer.  If the Jetsons’ return is filed with the same address as used last year, it’s likely the return is legitimate.  If not, then the IRS should put a hold on processing the return, and send a letter to the taxpayers at the address used in the prior year (with forwarding requested).

With this Russ has already done more to solve the $5 billion annual theft problem than Doug Shulman has done in over four years as IRS Commissioner.

 

Rob Smith, Residential wind energy a lot of hot air? (IowaBiz.com):

I can buy electricity from MidAmerican Energy at about 9 cents a KWH. My electric bill last month was $100.  At that rate, which is during the summer peak load, the investment would take 20-25 years to pay for itself.  My suggestion instead is to conserve energy or do other measures like insulation or new windows.

Indeed.

 

Robert D. Flach, NEVER FORGET.

TaxGrrrl,  The Post I Swore I Wouldn’t Write (Redux)

TaxProf,  6th Circuit: Severance Pay Is Not Subject to Employment Taxes

Jason Dinesen  On Mike Holmes and Going Cheap.  I like the quote he uses.

Peter Reilly,  Are Divorce Attorneys Trying To Whipsaw IRS ?

Patrick Temple-West,  Essential news: Travelers to Chicago pay steep taxes, and more.  I visited Chicago over Labor Day; he’s right.

Brian Strahle,  District of Columbia Extends Deadline for Combined Report!!

Politicians?  Describe the White House candidates in one (printable please!) word (Kay Bell)

You do?   You Have To Admire the Persistence of E&Y’s Partners (Anthony Nitti)

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Tax Roundup, 8/16/2012: Kansas bleeds again. Also: super-PACs and lottery punks.

Thursday, August 16th, 2012 by Joe Kristan

Kansas, since 1861.  In a decision that will prevent a new era of border ruffians, a Federal Appeals Court has ruled that Kansas is indeed part of the United States, and Kansas citizenship doesn’t get you out of paying income tax.

From the opinion:

Mr. Richmond does not challenge the mathematical computations underlying the notice of deficiency and the Tax Court’s decision.

     Instead, he contends that he is “a citizen of Kansas that earned a living through activities occurring solely under the jurisdiction of Kansas” and that he has not received “income,” as that term is defined for tax purposes, because he has not “engag[ed] in optional, or privileged activities that fall under Federal jurisdiction and result in a meaningful gain.”

Surprise, that doesn’t work.  IRS wins.

Cite: Richmond, CA-10, No. 12-9000.

 

In other Kansas News,  Federal Court in Kansas City, Kansas, Shuts Down 
Tax-return Preparer (Department of Justice Press Release).  The manager of an Instant Tax Service franchise was permanently barred from the tax prep business.  From the press release:

The government complaint  in the Kansas case alleges that Goitom managed an Instant Tax Service store in Kansas City, Kan., where he prepared false and fraudulent income tax returns for others. The United States accused Goitom of forging forms W-2, filing returns improperly based on paycheck stubs rather than W-2 wage statements, fabricating income for phony businesses to obtain larger tax credits, claiming false education tax credits and filing tax returns without customer authorization. The complaint also alleges that Goitom sold false and deceptive loan products to Instant Tax Service customers.

It’s a safe bet that his clients have heard from the IRS about their great refunds.

 

TaxProf, CRS: 501(c)(4)s and the Gift Tax. Paul Caron passes on a Congressional Research Service analysis of whether donations to political advocacy groups are subject to gift tax.  CRS says “the stronger argument” is that they are taxable, but the IRS has historically not attempted to tax such donations.  The report does address the argument I find persuasive, but pooh-poohs it (my emphasis):

…some have argued that while contributions to 501(c)(4) groups may be generally subject to the gift tax, those contributions made for advocacy-related purposes (e.g., issue advocacy, campaign activity, or lobbying) are exempt. Part of this argument is statutorily based, with the assertion that these types of donations may not be taxable gifts under at least three theories: (1) the donor may receive full and adequate consideration in the form of the organization’s advocacy on his or her behalf; (2) some are made within the ordinary course of business; and (3) advocacy related contributions were not the type of transfer that Congress intended the gift tax to cover. There is case law, albeit minimal, to support some of these conclusions; however, the holdings in these cases are not without controversy, and it is not clear the extent to which other courts would agree with their analysis.

The gift tax exists as a backstop for the estate tax.  It keeps people from getting their estates to the next generation tax-free by not waiting to die before passing it on.  Gifts to super-PACs don’t accomplish this.  Also, such gifts aren’t the “disinterested generosity” of a true gift; the giver gives the money to get the 501(c)(4) to advance the donor’s political point of view.

 

Jason Dinesen has the newest installment of his report on the nightmare his client faced when her recently-deceased husband’s identity was stolen:

So how did Brian’s identity get stolen? My guess is that someone looked on the “Death Master File.”

This is a file published by the government that gives all the information an identity thief could want. Basically, whenever someone dies, their name goes in this file, along with their date of birth, date of death and Social Security Number.

The continuing publication of the social security numbers of the newly-dead is a continuing scandal; it’s mind-boggling that the government hasn’t stopped making it so easy for identity thieves.

 

Janet Novack asks,  How Much Tax Would You Owe On A $320 Million Powerball Jackpot?  Well, Do you feel lucky, lottery punk? (Kay Bell)

Wisconsin trucker skids into “self-rental” rule.  My new post at IowaBiz.com, the Des Moines Business Record’s blog for entrepreneurs.

Tax Foundation, A Global Perspective on Territorial Taxation: (Via the TaxProf)

TaxGrrrl, What Romney and I Have in Common With More Than 10 Million Taxpayers.  He extends his return, like I do.  TaxGrrrl explains why extensions are often the right tax move.

Peter Reilly, American Working Abroad Gets Nasty State Income Tax Surprise

Anthony Nitti, Plaxico Burress Shoots Self in Foot (Not Literally This Time), Fails to Pay Taxes

Why blogging is better than buying ads:  Here’s 10 Embarrassing and Irrelevant Examples of Accounting Firm Advertising (Going Concern)

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Tax Roundup, 8/2/2012: You pay for everything. If you pay less, where’s my benefit? Plus beating the sales tax holiday to death, but missing the film credit story again.

Thursday, August 2nd, 2012 by Joe Kristan

TPC: Romney Plan Would Cut Taxes for Rich, Raise Taxes on Middle Class and Poor.  (Tax Prof).  Some news, folks: if spending doesn’t come down drastically, taxes are going up for the middle class and the poor anyway.  If you raised the rates on “the rich” to 100%, it still wouldn’t cover what the government is spending now.

How Did the Tax Code Get So Progressive? (William McBride, Tax Policy Blog) talks about the TPC study:

The main thing missing here is the context of our current federal income tax code.  Imagine a society with 5 people, where the two richest people pay all the taxes, the middle person pays nothing, and the two poorest people actually have a negative tax rate, meaning the rich are paying them through the tax code.  Then any cut in the tax rate will disproportionately benefit the rich guys.  This is the federal income tax code, in a nutshell.  According to the CBO, the top 20 percent of households pays 94 percent of federal income taxes.  The bottom 40 percent actually have a negative income tax rate, and the middle quintile pays close to zero. 

An illustration:

 

If “the rich”  pay all the taxes, then of course tax cuts will disproportionally benefit them.

We’ve cut government spending to the bone!  The bone just seems to keep getting bigger (Donald Marron, TaxVox)

 If you look at the two lines on the chart, you can see that spending on “goods and services” isn’t going up much.  That means they’re just taking a lot more of your money to give to their friends.

Still no media coverage of the last film tax credit trial.  Seeing that the Des Moines Register just jacked up home delivery for my usually-unread papers to $25 per month, it would be nice if they actually covered something.  Well, there’s this: Celeb tweets to Gabby Douglas.  Of course, they all missed the real story when the film tax credit was enacted, so at least they’re consistent.

Missouri Taxpayers paying taxes to cover the K.C. Royals payroll taxes.  (810whb.com, via Going Concern)

In case you haven’t heard, Iowans, the Annual sales tax holiday is Friday and Saturday (Dar Danielson, Radio Iowa). It applies for clothes and shoes. Jason Dinesen reminds us about Back to School Supplies and the Iowa Tuition and Textbook Credit.

Big charitable contribution, no deduction?   My new post at IowaBiz.com covers traps in appreciated property charitable contributions.

Phil Hodgen is back from a scouting trip to Quetico Provincial Park, the Canadian side of the Boundary Waters wilderness, with Basis step-up on assets inherited from nonresident. 

Sort-of related: more pictures from my recent Boundary Waters scout trip.

Peter Reilly, IRA Rollovers – Let’s Be Careful Out There

Patrick Temple-West, Essential reading: Payroll tax cut on track to quietly expire (Tax Break)

Trish McIntire, Drought, Farms and Taxes.

TaxGrrrl, Marriage Or Divorce Can Be A Name Changer

Kay Bell, Tax moves to make in August 2012

The New Jersey Tax Guy is fleeing to Pennsylvania.  Good luck with the move, Robert!

Asking the tough questions: Why Am I Paying for a Prancing Horse? (Christopher Bergin, Tax.com) and  Should Our Olympic Heroes Pay Tax on Their Winnings? (Anthony Nitti)

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Tax Roundup, 7/23/2012: Chasing smokestacks, catching smoke. Also: final film credit trial starts; 1040s and summer homes.

Monday, July 23rd, 2012 by Joe Kristan

So the guy who swindled customers in his commodity brokerage in Cedar Falls also swindled Iowa “economic development” smokestack chasers.  From QCTimes.com and AP (via State 29):

Even before its dramatic collapse last week, an Iowa-based brokerage implicated in a $200 million fraud scandal had defaulted on the terms of a $1.24 million state incentives package that helped the firm build a state-of-the-art headquarters, newly released records show.

The Iowa Economic Development Authority warned Peregrine Financial Group, Inc. in March that it had violated its contract by paying employees lower salaries than promised and must pay back some of its aid immediately, according to a letter released in response to a request from The Associated Press.

It’s yet more evidence for what I’ve long said about “economic development incentives”:

When Iowa tries to pay other businesses to come here, it’s like a guy who brings his wife’s purse into a bar to buy drinks for the girls. The girls aren’t impressed, and any he does pick up aren’t worth much.

That’s something Iowa should ponder before it signs the check to bribe a fertilizer plant to locate in Iowa with tax money paid in part by competing fertilizer plants that are already here.

Who pays the bills? The Tax Foundation has a map showing the Percentage of Federal Income Tax Revenue from Filers Making Over $200,000:

Airball. The former owner of a Kansas City minor league basketball team will go away for 51 months for crimes that included not remitting payroll tax withholidngs, reports CJOnline.com:

James Clark, 53, of Overland Park, a former owner of the Kansas City Knights basketball team, pleaded guilty to one count of tax fraud and one count of bank fraud. Clark admitted that he withheld payroll taxes from employees of his company, SWISH Holding Corp., while failing to pay more than $502,000 to the Internal Revenue Service. He diverted the funds and used them for his own purposes, including the operation of the basketball franchise.

Many people think that they are just “borrowing” money when they fail to remit withheld taxes.  It can be tempting when suppliers are howling for cash.  This case shows that failure to remit withholdings can have consequences much more serious than cash late penalties and interest.

 The last scheduled trial of an Iowa film tax credit fiasco figure is slated  to start today.  Chad Witter, an accountant who worked as a middleman in obtaining and marketing film credits, will go on trial in Polk County District Court on charges of theft, fraudulent practice and ongoing criminal conduct.  Dennis Brouse, a producer who worked with Mr. Witter, was sentened to ten years in prison earlier this year on charges arising out of the disastrous program to bribe filmmakers to come to Iowa with transferable tax credits.

How Government Limits Upward Mobility (Howard Gleckman, TaxVox):

True, social welfare programs provide a valuable safety net for the very poor. For instance, the Earned Income Tax Credit and the Child Tax Credit are important income supports for low-income families.

But because these safety net programs phase out as incomes rise, some people face marginal tax rates as high as 80 percent for getting a better job or even a raise.  A new Urban Institute calculator shows how this works.

Related:  Taxing the heck out of the top 400 taxpayers won’t help the bottom 20 million

Will your 1040 help pay for your vacation home? My latest post at Iowabiz.com, the Des Moines Business Record group blog for entrepreneurs.

WSJ: IRS Audit of Romney Donor Raises Questions About Presidential Enemies List (TaxProf Blog)

Jana Luttenegger, Summer Camp Tax Credits (DavisBrown Law Firm Tax Blog)

Or somewhere darker: The IRS Art Advisory Panel Has Its Head In The Clouds (Janet Novack)

Kay Bell, Bicycling commuters, you might qualify for a tax-free workplace benefit

Russ Fox, Two Sets of Books Aren’t Better than One.  At least when  one set doesn’t include the skimmed receipts.

Jason Dinesen, Medicare Part B and Same-Sex Married Couples

Jack Townsend, Form 8938 Resource

Peter Reilly wades into the swamp of the tax treatment of Scientology.

TaxGrrrl, Saban Suggests Penn State Tickets Should Be Taxed To Pay For Scandal.  I read that as “Satan” at first.

News you can use: The General Crapiness of Your Life Does Not Relieve You of Your Tax Obligations (Anthony Nitti)

Robert D. Flach will save $11,000 in taxes annually by fleeing New Jersey.  He’s getting paid to do something most of us would be happy to do for free.

Help Wanted: The Hunt for a New Going Concern Freelancer Goes On.  If you have a Big 4 bad attitude, what are you waiting for?

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Tax Roundup, 7/3/2012: A solution to ID-theft refund fraud? Plus lots of Obamacare, and Zombies!

Tuesday, July 3rd, 2012 by Joe Kristan

And yet our leaders don’t lift a finger to stop it. Olson: Death master file data encourages tax fraud (Fiercegovernmentit.com):

In making public the death master file, the Social Security Administration is actually facilitating tax-related identity theft, said Nina Olson, taxpayer advocate for the Internal Revenue Service. Olson testified June 28 before the House Judiciary subcommittee on crime, terrorism and homeland security.

There are some legal questions as to whether or not SSA can restrict access to the DMF, which includes recently-deceased individuals’ full names, social security numbers, dates of birth, dates of death, and the states and zip codes of the last address on record, said Olson.  

“For that reason, I strongly support legislation to restrict public access to the DMF. However, I believe the SSA has at least a reasonable basis for seeking to limit public access to the DMF and if legislation is not enacted, I encourage SSA to act on its own,” she said.

This has been common knowledge among practitioners for years.  Many parents have had the heartbreak of child death compounded by identity theives filing refunds for their dead kid off the master file, leading to long paperwork duels with the IRS.  Yet IRS Commissioner Shulman has been too busy creating a government-controlled class of tax preparers to care.

So maybe citizens are taking matters into their own hands?  ”Signs of tax refund fraud found in home of man targeted in shooting” (Tampa Bay Times)  More from TBO.com.

Taxpayer Advocate Service Warns Congress About Late Tax Changes (Tax Policy Blog):

With wholesale changes to American tax law scheduled for January, many tax analysts are rightly concerned about the serious complications that will arise, both for individuals and the IRS. Tax Analysts published an article (subscription required) on June 28th covering a report by the Taxpayer Advocate Service, which argued that Congress’s “continual enactment” of tax law in late 2011 delayed millions of tax returns, a disturbing trend that threatens to add a significant compliance burden to the public at large. 

Just one more reason to require congresscritters to prepare their own returns in a live, archived webcast with a rolling comment bar to enable us to provide running commentary and, um, encouragement.  Update, 7/11/12: full article available here.

What the tax changes in Obamacare mean for entrepreneurs in 2013.  My latest post at IowaBiz.com, the Des Moines Business Record blog for entrepreneurs.

TaxGrrrl: Professionals Offer Thoughts, Perspective on Supreme Court Health Care Ruling

State 29: Obamacare Screws Families Who Use Health Flex Spending Accounts In 2013

Anthony Nitti: The Clock Is Ticking on the Investment Income Surtax. What Should You Do?

William Perez, Tax Impacts of the Supreme Court’s Health Care Decision

Martin Sullivan: The Economic Case for Unlocking Foreign Profits (Tax.com)

Peter Reilly, prepared for anything: Zombies And The Estate Tax – Law Professor Questions How Dead Are The Undead ?

Today in History: Union troops at Gettysburg broke Pickett’s Charge 149 years ago today, marking the “high water mark” of Vampire power in the U.S.

Because boredom isn’t frightening?  Yes Auditors, It Is Possible to Explain Your Job Without Scaring People Away (Going Concern)

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Tax Roundup, 5/17/2012: Athletic welfare queen edition

Thursday, May 17th, 2012 by Joe Kristan

From Minnesota to the Gulf, Corporate welfare for wealthy athletes and wealthier team owners flows like a big muddy river.  The Tax Policy Blog passes on the bad news for the taxpayers who are picking up the tab:

A new sports facility has an extremely small (perhaps even negative) effect on overall economic activity and employment. No recent facility appears to have earned anything approaching a reasonable return on investment. No recent facility has been self-financing in terms of its impact on net tax revenues. Regardless of whether the unit of analysis is a local neighborhood, a city, or an entire metropolitan area, the economic benefits of sports facilities are de minimus.

But, but… the Vikings!

Do corporate welfare queens wear bloody socks? Rhode Island has invested $75 million in a video game company started by Curt Schilling. It’s starting to get ugly. (Hat tip: alert reader Brendan).

David Brunori ponders taxes on “violent” video games:

Do violent video games make people more likely to commit crimes? Supporters pointed to a real-life cop killer who was known to play Grand Theft Auto — in 2003. The real Nazis (not the zombies) committed the most horrific acts known to mankind without once watching a violent video game. Perhaps World War II wouldn’t have occurred if we had taxed Mein Kampf?

Unless the characters somehow emerge from the screen and start shooting up the house, it’s hard to see how something that happens only on a computer screen is “violent.”

TaxProf: Tax Savings From Facebook Co-Founder’s Renunciation of U.S. Citizenship: $67 Million

Jack Townsend: Renunciation of U.S. Citizenship to Save U.S. Tax

What’s your all-in cost of government? The AICPA has posted an online calculator to estimate your total liability for federal, state and local taxes. It’s easy to use, and the results are sobering. 

You negotiated a debt workout? The IRS may be glad to hear that. My newest post at IowaBiz.com, the Des Moines Business Record’s group blog for entrepreneurs.

Kay Bell: Tax record keeping tips and the statute of limitations on IRS audits

Adding insult to fatal injury: Deputies: Jailed murder suspect tries tax fraud with victim’s ID (TBO.com, Tampa)

Anthony Nitti: Bobby From Birmingham Does Little to Further the Cause of the Persecuted CPA

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Still no tax fairy

Friday, February 17th, 2012 by Joe Kristan

There is no tax fairy, or tax lady, to get you out of your taxes at pennies on the dollar. Find out why at my new post at IowaBiz.com, the Des Moines Business Record group blog for entrepreneurs.



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Doing battle around the web

				Wednesday, January 18th, 2012 by Joe Kristan

				

					
I’m quoted today in the Des Moines Register lead page 1 story explaining why the proposed special Iowa capital gain break on Iowa returns for sales to ESOPs is a bad idea. The story nowhere discusses the existing federal break for sales to ESOPs under Section 1042, which also applies to Iowa, nor does it mention the existing “10 and 10″ Iowa gain exclusion on asset sales. There is a better way to improve Iowa’s business climate.

I pick a fight with advocates for increased IRS funding at Going Concern.

I pick a fight with no one (I think) at IowaBiz.com when I say that you shouldn’t try to file your return before you have all of your W-2s, 1099s and K-1s.


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What’s new for 2011 taxes?

				Thursday, January 5th, 2012 by Joe Kristan

				

					
My new post at IowaBiz.com, the Des Moines Business Record blog for entrepreneurs. William Perez has some related thoughts.

If you really want to bone up on the new filing season, the Center for Agricultural Law and Taxation and the Iowa Bar Association are sponsoring a one-hour webinar at noon today. You can register here. I’m sitting this one out, but Roger McEowen will present and get things rocking.


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