Posts Tagged ‘Nick Gillespie’

Tax Roundup, 5/23/14: We’re sorry. Can we have our funding now?

Friday, May 23rd, 2014 by Joe Kristan
Lois Lerner, ex-IRS, ex-FEC

Lois Lerner, ex-IRS, ex-FEC

The IRS wants its budget back.  The agency has withdrawn the proposed regs that would institutionalize its mistreatment of Tea Party groups.  Accounting Today reports:

The announcement Thursday came in response to the unprecedented number of comments—over 150,000—the IRS received on the proposed rules, which were supposed to govern the types of political activity that would be permissible for groups to maintain tax-exempt status as “social welfare” organizations under Section 501(c)4 of the Tax Code (see Treasury and IRS Issue Guidance for 501(c)4 Tax-Exempt Social Welfare Organizations). The issue has roiled the IRS since last year, when the former director of the IRS’s Exempt Organizations unit, Lois Lerner, admitted that the IRS had used terms such as “Tea Party” and “Patriot” to screen applications from conservative groups applying for tax-exempt status. Those revelations led to the departures of Lerner and a number of other high-ranking officials at the IRS, along with a series of contentious hearings, subpoenas and contempt of Congress charges against Lerner.

The new commissioner, John Koskinen, indicated back in February that the proposed regulations are not likely to be finalized anytime soon and would be subject to heavy revision in response to the thousands of comments the agency received (see IRS Commissioner Koskinen Says Proposed Tax-Exempt Rules Won’t Be Finalized Soon). Republican lawmakers in Congress introduced legislation in February to block the proposed regulations (see Congress Considers Legislation to Block IRS’s Proposed 501(c)4 Regulations).

I suspect it will be a loooong time before they come out with a new set of proposed regulations — comparable to the wait for the final regulations on self-employment taxation of LLC members, which have been “proposed” now since 1997.  This is probably a necessary first step for the IRS to get its full funding restored, given how much it has done lately to demonstrate that it is institutionally opposed to the GOP.  Maybe it would help also to demonstrate some fiscal discipline by dropping its costly pursuit of preparer regulation by “voluntary” means.

 

Related: TaxProf, The IRS Scandal, Day 379

 

Jim Maule, No Deduction If Entitled to Reimbursement.  “It is a long-established principle of federal income tax law that a taxpayer is not permitted to deduct an otherwise deductible expense to the extent that the taxpayer is entitled to reimbursement from the taxpayer’s employer.”

Kay Bell, Summer travel time is prime tax time

Peter Reilly, American Atheists Denied Standing To Challenge Church Tax Breaks.

Robert D. Flach come’s through with the week’s third Buzz!

 

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Christopher Bergin, The Punishment of Credit Suisse Is Not Enough (Tax Analysts Blog). “People need to start going to jail for these types of abuses.”  No, our tax authorities prefer to shoot jaywalkers so we can gently chastise the international money-launderers.

Jack Townsend, Credit Suisse Update – The Aftermath for Credit Suisse #1.  The Federal Tax Crimes blog rounds up coverage of the Credit Suisse plea.

Stephen Olsen, Summary Opinions for 5/16/14 (Procedurally Taxing). The most interesting item to me in this roundup of tax procedure posts is “IRS is doing limited audits on Section 409A plans, and Winston and Straw has some coverage here.”  The horrible Section 409A rules haven’t triggered many audits.  That may be ending, and 20% penalties, plus income taxes, on funds never received will then be on the way as a result of foot-fault violations of the insanely-complex rules governing non-qualified deferred compensation plan distributions.

 

Joseph Henchman, IRS Considering Change in Tax Treatment of Travel Loyalty Points (Tax Policy Blog). What could go wrong?

Len Burman, Why Not Ditch the Medical Device Excise Tax and Boost Cigarette Taxes? You know, if we really wanted to promote public health, we should consider promoting e-cigarettes to get people off the real thing.  Instead, the government wants to tax and restrict them just like real coffin nails.

 

Adam Weinstein, Why Our Political System’s Screwed, in One Very Basic Chart:

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Via Nick Gillespie.

 

News from the Profession: Ex-KPMG Partner Who Gave Insider Tips to His Former Golf Buddy Is Going to Talk About Ethics Before He Goes to Prison (Going Concern)

 

Have a great Memorial Day Weekend!

 

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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, 12/18/2012: Fiscal cliff rumors — higher threshold for rate hikes; deduction benefit limits.

Tuesday, December 18th, 2012 by Joe Kristan

20121116-1iabizThe “Fiscal Cliff” negotiations seem to be heating up.  The inane haggling over the final version of the inevitably awful tax law that we will have for this year and next year seems to have heated up a bit yesterday.  Details are cloudy and could change, but here’s what it looks to me like they are talking about for taxes:

  • An increase of the top ordinary income tax rate to 39.6%, but at a level of $400,000 or higher; the President had been holding out for a $250,000 threshold.
  • Some stupid restriction in the tax benefits of itemized deductions — perhaps capping the value of the deductions at 28%.
  • An AMT patch retroactive to last year and extension of all of the “expiring provisions.”

The President’s most recent offer includes some surprisingly good tax policy in the midst of the general awfulness of the tax increase plans.  From the Wall Street Journal:

On the tax side, the administration’s biggest proposal would permanently
extend relief from the alternative minimum tax. That’s a provision
designed decades ago to target the wealthiest Americans that now hits
tens of millions of middle-class households, in part because it wasn’t
indexed for inflation.

That would be great news.  The politicians play with fire by temporarily increasing the AMT exemption every year or two as a cheap ploy to pretend they will receive additional AMT revenue after the temporary “patch” expires — allowing them to appear slightly less irresponsible.

Also:

The administration’s new proposal also would permanently extend a raft
of temporary tax breaks that Congress has passed over the years,
benefiting businesses as well as individuals. Notable examples include
the research and experimentation credit for businesses, as well as the
deduction for state and local sales tax for individuals.

While I would prefer just letting these expiring provisions expire, I’d rather they be made permanent than going through the charade of re-enacting them every year or two just to play stupid budget games.

Fiscal Cliff Notes:

Nick Gillespie & Veronique de Rugy,  Obama and Boehner, Both Reckless Spenders

New York Times,  Obama’s New Offer on Fiscal Crisis Could Lead to Deal

Russ Fox,  Fiscal Cliff Deal Near?

Kay Bell,  Boehner offers Obama a $1 million top income tax bracket in fiscal cliff talks

Ashlea Ebeling,  Millionaires Are Doing Roth Conversions Before The Fiscal Cliff Hits, Should You Too? (Forbes)

Jason Dinesen,  An Example of What Could Happen if an AMT Patch Isn’t Passed

 

IRS extends employee – independent contractor settlement program.  The IRS yesterday announced (Announcement 2012-46) that it is extending its program to resolve the classification of workers as employees or independent contractors.

 

Rudy Penner,  How Eisenhower and Congressional Democrats Balanced a Budget (TaxVox).  They spent a lot less, that’s for sure.

Dan Alban,  IRS Rule Threatens Tax-Preparing Entrepreneurs

Jeremy Scott,   Democrats Should View Japan as a Warning (Tax.com)

Joseph Henchman,  IRS Reverses Course, Will Continue Providing Migration Data (Tax Policy Blog)

Paul Neiffer,  What Does Unified Credit Mean?

Robert D. Flach,  WHAT’S NEW FOR NEW YORK STATE INCOME TAXES FOR 2012

TaxGrrrl,  Actor Called Out As Unpatriotic For Move Over Taxes Fires Back.  So patriotism means letting them pick your pocket?

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What happens when politicians ‘invest’ your money in your competitors

Wednesday, January 18th, 2012 by Joe Kristan

Reason.com: “Surprise: ‘Tax Breaks for Jobs: Half fall Short’”
From the story:

The South has long led the country in public incentives dished out for corporate relocations. Yet far from increasing jobs and economic growth, such effects have the opposite outcome. They suck money out of the economy and screw over other businesses and taxpayers (who have to pick up the tab).

Tax credits and special breaks always end up favoring those with friends in high places, at the expense of the rest of us.

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Why does ‘the greater good’ always mean more power and money for them?

Wednesday, December 30th, 2009 by Joe Kristan

Nick Gillespie at Reason.com:

There is a looming showdown in American society between public-sector employees and the rest of us, in terms of job security and, especially, unsustainable gold-plated retirement and health benefits that are working hard to bankrupt whole states such as California, New York, and New Jersey

Remember that the next time they want to raise our taxes and we’re told it’s a choice between “individual greed” and “the collective good.”

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Finally, tax increases that will hit Congress

Thursday, May 21st, 2009 by Joe Kristan

Congress seems dead set on doing for your health care what it is doing for the auto, banking and housing industries, but it needs more money to do it to you. Among the policy items up for consideration:
- Capping tax-free employer health benefits.
- Soft drink taxes.
- Tobacco taxes.
- Alcohol Taxes.
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This will put the taxpayers in the perverse position of needing to risk their health to pay for health care. But there is one comforting thought: alcohol taxes are among those hardest for our elected officials to avoid:

And thank you in advance, Sens. Kennedy and Dodd, for personally raising enough tax money so that Little Jimmy can finally get that operation. Indeed, you probably raised enough just by the end of that closed-door (hic!) meeting.

A grand tradition going back to the days of Wilbur Mills!
Kay Bell has more.
Link: Senate Finance White Paper on health care tax increase options.

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