Posts Tagged ‘James Pethokoukis’

Tax Roundup, 8/23/2013: Don’t die here edition. And the Butch and Sundance approach to tax controversies.

Friday, August 23rd, 2013 by Joe Kristan
Via Wall Street Journal

Via Wall Street Journal

Advice I intend to take this year.  The Wall Street Journal editorial page lists Iowa as a place to not die. But Minnesota is even worse:

The grand prize for self-abuse goes to Minnesota, which this year enacted a new 10% gift tax with a $1 million exemption. A gift tax is a levy on money given away while still alive. This tax is in addition to Minnesota’s 16% estate tax. The new law is all the more punitive because it applies the 16% estate tax (6% on top of the earlier 10% gift tax) to any gift within three years of death.

This is essentially a clawback tax, or more taxation without respiration. Democratic Governor Mark Dayton, who signed the law, is the heir to a department store fortune and knows a lot about inheriting wealth but not much about creating it.

I would expect that Mr. Dayton’s family has done a lot of estate planning, making sure that he won’t be hit hard by his new tax.  Many proponents of high taxes, like Warren Buffett, have no intention of paying any themselves.

 

Nick Gillespie,  The Immense and Growing Price of “Tax Expenditures”: (Reason.com)

Tax expenditures tend to be very popular with the people who benefit from them but they also represent a blatant attempt by the government to engineer behaviors ranging from having children to buying homes rather than renting. As the consensus that our current tax code is overly complicated and inefficient (both in terms of economic activity and revenue generation), all tax expenditures should be on the table for reconsideration and elimination.

Some folks consider every tax break a good thing, no matter how unfair it is to those who don’t benefit from it.  But tax breaks for special interests, (e.g., low-income housing developers) or economic sectors (manufacturing) are more or less direct government direction of the economy.  It’s nice to see a libertarian voice pointing that out.   The 20th century was an uncontrolled experiment demonstrating that such government direction is unwise.

 

Mistakes were made.  A Louisiana politician, Girod Jackson III, is in tax trouble, reports NOLA.com:

Several years ago, there were filing errors on my business tax returns and delayed initial filings arising from accounting errors and oversight. Today, I have accepted the consequences of those mistakes.”

As a part of accepting these consequences, regretfully, I have submitted my letter of resignation to the Secretary of State and The Speaker of the Louisiana House of Representatives. 

Makes you wonder just how those “accounting errors” got there.  It almost sounds like he booked an expense to miscellaneous expense instead of office supplies.

Christopher Bergin, It’s a Cover-Up! (Tax Analysts Blog):

The IRS is not a transparent organization; it is a secretive organization — as secretive as it can get away with. That is why, over the years, Tax Analysts has asked the courts to not let it get away with certain secretive things. But was it a “cover-up” that the IRS did not want to make private letter rulings public? Was it a “cover-up” when the IRS tried to hide field service advice or emails to staff that provided legal interpretation? I don’t think so and Tax Analysts sued over all those issues. I guess it depends on your interpretation of “cover-up.” 

But, sadly, this is what the IRS does, and Tax Analysts is quite familiar with its penchant for secrecy.

When your business is taking people’s money, laying low has its attractions.

 

Andrew Lundeen, Do I Have to Pay Taxes on My Interest from My Savings Account?  The short answer is yes.” (Tax Policy Blog).

 

TaxProf, The IRS Scandal, Day 106

TaxGrrrl,  Pennsylvania Mulls First Statewide Plastic Bag Tax In The U.S. As ‘Small Price To Pay’   Maybe they just want to kill Pennsylvanians.

Howard Gleckman, The Center for American Progress Rethinks Retirement Savings:

Today, workers in 401(k) plans bear full investment risk and often struggle with how to allocate their retirement savings and what to do with their assets when they change jobs or retire. With SAFE, those risks would be mitigated. Enrollment would be automatic, savings fully portable, and investment funds pooled and professionally managed. Accounts would be automatically annuitized as in traditional DB plans. 

One of those “Nudge” things.

 

Tax Justice Blog, Max and Dave Do Silicon Valley

James Pethokoukis, Mad Men economics? No, we can’t return to the sky-high tax rates of postwar America

Kay Bell,  It’s time to eliminate many tax-exempt status designations

Robert D. Flach has his Friday Buzz going.  He also has wise advice in this interview:

And learn how to say “no” to a client when they ask you to do something that is “shaky” or “shady.” It is better to lose the client than to gain the potential problems.

So true.

 

The Critical Question: Will Bradley Manning’s Gender Reassignment Be Tax Deductible?  (Tony Nitti).

 

You probably won’t win a paperwork battle with the IRS this wayFrom a Justice Department press release:

 The Justice Department announced today the unsealing of a superseding indictment returned by a federal grand jury in Sacramento, Calif., charging Teresa Marie Marty, Charles Tingler and Victoria Tingler, all of Placerville, Calif., with conspiracy to defraud the United States and filing multi-million dollar liens against government officials.

Marty is charged with filing liens against the property of three Internal Revenue Service (IRS) employees involved in the collection of taxes she owed the IRS.  She also filed liens of at least $84 million against the property of two Justice Department attorneys involved in a lawsuit filed against her in 2009 to enjoin her and her business, Advanced Financial Services (AFS), from preparing tax returns. 

In case you’re wondering, the IRS doesn’t care for people to slap their employees with false liens.  They also don’t like this:

The indictment alleges that as part of the conspiracy, Harris and Marty engaged a commercial collection agency to collect one of the three false liens that Mr. Tingler had filed, one of which was in the amount of $500,000.

These folks were already in trouble on charges of filing false refund claims.  It sounds like they responded by going on the offensive.  It’s the tax controversy equivalent of Butch and Sundance charging the Bolivian Army.

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Tax Roundup: 1/8/2013: Iowa to issue mortgage credit certificates. And: got change for a trillion?

Tuesday, January 8th, 2013 by Joe Kristan

 

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Dave Jamison

Iowa issuing new certificates for federal mortgage interest tax credits.  The Iowa Finance Authority yesterday announced that it will issue mortgage credit certificates that enable Iowans to qualify for the federal mortgage interest credit.  O. Kay Henderson reports:

The Iowa Finance Authority is offering a new tax credit for new homeowners who fall under limits on annual income and the purchase price of their home. Iowa Finance Authority director Dave Jamison says it’s a credit linked to the mortgage interest new homeowners are paying.

“Yet another way that Iowans who meet our program guidelines can experience the many benefits of home ownership,” Jamison says.

Iowans with the certificates may be able to claim the federal credit on Form 8396.  The IRS describes the credit here.  They note that interest that qualifies for the credit does not qualify for the home mortgage deduction.  You only qualify for the credit if you have a mortgage credit certificate from a qualifying agency; in Iowa, that agency is the Iowa Finance Authority.

The credit isn’t for everyone; there are limits based on income and home price.  From the O. Kay Henderson story:

Eligibility guidelines are different for each Iowa county. In the state’s largest county, Polk County, a couple with an annual income of up to $75,000 could qualify for the credit on a home that was purchased for $250,000 or less.

More from  WHOTV.com.

 

Nick Kasprak, Monday Map: Percentage of Taxpayers with AGI over $500,000 (Tax Policy Blog)

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Fiscal Cliff Notes

TaxGrrrl,  IRS Issues Statement On Tax Legislation, Makes No Promises About Start Of Tax Season:

The delay means that now, there are a lot of new forms to be printed, a lot of software programs to finagle. I’d be surprised – and wildly impressed, mind you – to see tax season kick off on time this year for all taxpayers. But fingers crossed, right?

I think the federal tax season won’t be too bad.  With all of the retroactive conformity problems in the new law, though, a lot of states are likely to give taxpayers fits.

Kevin D. Williamson,  You Cannot Raise Taxes on the Rich:

Tax hikes on the so-called rich may decrease the private sector’s share of income, but they probably will not do much to decrease the real income of high-wage workers and may in reality increase government revenue at the expense of low-wage workers in the long term, though it is very difficult to disaggregate the complex relationships between taxes, wages, and prices. But those who say that they are most interested in economic inequality would do well to follow Kenworthy’s example and look at transfers rather than taxes.

James Pethokoukis,  New study undercuts Obama’s income inequality argument

Washington’s tax hike on wealthier Americans won’t accelerate economic growth, won’t create jobs, and won’t lower the debt by an more than a rounding error. So what was the point of all that debate about the fiscal cliff? Why did President Obama insist on those upper-income tax increases, especially when the economy continues to struggle?

Simple: It was a way — even if mostly symbolic — of addressing what President Obama views as America’s biggest problem: rising income inequality.

A falling tide lowers all boats.

Freakonomics,  How Much Financial Inequality Is Due to Financial Illiteracy?  Is that illiteracy of the people who are unequal, or those who think it’s a big deal.

Jeremy Scott, Both Parties Should Have Pushed Payroll Tax Cut (Tax.com)

 Hani Sarji,  More Estate Tax Changes Could Follow Fiscal Cliff Deal (via the TaxProf)

Patrick Temple-West, More tax revenue to IRS before cliff, and more

 All the talk about the fiscal cliff and the inadequacy of the last-minute deal to avert it obscures one fact: It probably provided the government with tens of billions of dollars in unexpected tax receipts.

Many taxpayers accelerated income and deferred deductions anticipating the rate increases.

Wall Street Journal, The Stealth Tax Hike: Why the New $450,000 Income Threshold Is a Political Fiction:

Paul Neiffer, Fiscal Cliff Tax Bill May Increase Divorce Rate!

 

Russ Fox,  The Problem with PEOs.  No, not these PEOs.

Trish McIntire, More ITIN Info

Missouri Tax Guy,  Married Filing ….

Jack Townsend, HSBC Depositor Pleads Guilty to Conspiracy

Kay Bell, Tax moves to make in January 2013

I like the first half. Let There Be Wine (And Taxes)  (Jason Dinesen)

The Critical Question: Can You Distinguish a Tax from a Ransom Payment? (Robert Goulder, Tax.com)

I wasn’t serious about her anyway.  Ex-KPMG Chief to Auditors: You Are All Flirting With Irrelevance  (Going Concern)

Hope and change.  A lot of change, if you use it to buy coffee.   Should the President Mint a $1 Trillion Platinum Coin? (Megan McArdle)

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