Posts Tagged ‘Norton Francis’

Tax Roundup, 3/4/14: Des Moines votes on refunding illegal tax. And: life after football!

Tuesday, March 4th, 2014 by Joe Kristan

20121002-2Des Moines voters decide today whether to approve a legal tax to refund a similar tax imposed illegally.  The Des Moines Register reports:

A special election Tuesday will determine how the city pays back a portion of a franchise fee it illegally collected from 2004 to 2009.

The Iowa Legislature gave Des Moines the authority to temporarily increase its franchise fee — a tax assessed on anyone who connects to electric and natural gas utilities — to pay off the judgment.

However, if voters reject the proposal, city officials will be forced to raise property taxes for at least 20 years in order to issue and pay municipal bonds to cover the court judgment.

When the tax was ruled illegal, the city appealed all the way to the U.S. Supreme Court before finally conceding that it would have to issue refunds — incurring enormous legal bills in the process, including a $7 million bill to the winning lawyers on the other side.  From the District Court opinion awarding the fee:

This case has been in our courts since 2004.  To say it was highly contested would be a gross understatement.  The history of this case shows that the City, while it was entitled to do so, erected one barrier after another in an attempt to prevent the class from being successful in obtaining a refund.  Almost without exception, class counsel was successful in dismantling each of those barriers.

It just goes to show that the city will do the right thing, once it has exhausted all appeals.  Maybe next time they won’t be so quick to enact an illegal tax.

The state legislature voted to allow Des Moines to impose the tax legally to repay the illegal tax.  Somehow I doubt the legislature would do a similar favor for taxpayers by letting them, say, legally not pay income tax for a few years to help them repay the taxes they had illegally avoided in prior years.  

 

William Perez, Deducting Work-Related Expenses

TaxGrrrl, Taxes From A To Z (2014): A is for Affordable Care Act

Leslie Book, EITC Snapshot: Overclaims and Commercial Preparer Usage (Procedurally Taxing).  “In fact, there is a steady decline in the use of paid preparers among EITC claimants, while the rate of paid preparer usage overall has remained fairly steady.”

Another reason why preparer regulation to cut fraud is like pushing on a string.

Jack Townsend, The Scariest Tax Form? Scary Is in the Eye of the Beholder.  I think the article he cites, which chooses Form 5471, makes a good case, considering the almost-automatic $10,000 fine for filing it late.

Kay Bell,  Tax moves to make in March 2014

 

TaxProf, Tax Court Issues 63-Page Opinion Debunking Cracking the Code Book

 

taxanalystslogoTax Analysts Blog is having a tax reform party:

Clint Stretch, 10 Reasons Republicans Should Embrace the Camp Tax Bill.  This is pretty faint praise:  “2. If they want a credible claim that Obama and Democrats are responsible for the failure of tax reform, they must pass a bill in the House.”

Jeremy Scott, Comparing the Camp and Obama Bank Taxes:

Including the bank tax in his plan is one of Camp’s most intriguing decisions, if only because the gain for him isn’t obvious, even after a closer look. The tax doesn’t raise much money. It is very similar to an Obama proposal that congressional Democrats didn’t really like, meaning it doesn’t buy the chair any bipartisan support. And it comes about four years too late to take advantage of widespread public anger at financial institutions. All Camp seems to have accomplished is legitimizing a revenue raiser for future use by the progressive caucus and undermining his own party’s opposition to this kind of tax increase.

Just… brilliant.  I prefer ending the “too big to fail” subsidy directly, if necessary by denying deposit insurance to such institutions.

Martin Sullivan, 25 Interesting Features of Camp’s New Tax Reform Plan.  “Biggest disappointment. Camp and fellow House Republicans all but promised to reduce the top rate to 25 percent. They failed.”

Christopher Bergin, Tax Reform Only a Mother Could Love:

Many political observers think the GOP has a good chance of not only increasing its majority in the House, but also taking the majority in the Senate. I’m among those who believe that the Republicans will shoot themselves in the foot before that happens. I’ll bet there are more than a few Republicans this week who fear that Camp just put a bullet in the chamber.

I think the Camp plan will be quietly forgotten long before November, but there is still plenty of time for the GOP to demonstrate its skills with a Glock 40.

Norton Francis, Camp Tax Reform Would Create New Challenges for States (TaxVox).  The repeal of the deduction for state and local taxes and limits on muni bonds won’t win friends in the state capitals.

 

National Review, via InstapunditThe IRS Is the Problem:

Representative Camp’s thou-shalt-not list is fine so far as it goes, and, unlike the IRS bureaucracy, Congress does have the authority to rewrite the law. But his proposal falls short in that it assumes that the IRS is a proper and desirable regulator of political speech. It is not. It is not even particularly admirable in its execution of its legitimate mission, the collection of revenue: Its employees have committed felonies in releasing the confidential tax information of such political enemies as the National Organization for Marriage and Mitt Romney, and the agency itself has perversely interpreted federal privacy rules as protecting the criminal leakers at the IRS rather than the victims of their crimes. 

Instapundit comments: “Abolish governmental immunity and make them personally liable for damages for misconduct.”  Hard to argue with that; it would be a good addition to my “Sauce For the Gander” reforms.  I still don’t understand why a nonprofit should lose its exempt status for being primarily political.  Isn’t freewheeling debate a good thing?  The IRS certainly hasn’t shown itself a neutral observer here.

TaxProf, The IRS Scandal, Day 299

 

Scott Drenkard, Johannes Schmidt, Guess Which State Has the Highest Liquor Taxes in the Nation? (Tax Policy Blog).  Think coffee.

 

Preparing for life after football.  Two former members of a Sioux Falls indoor football league team may have to change their post-athletic career plans.  From the Sioux Falls Argus:

A federal grand jury has indicted six people for conspiracy to defraud the United States and aggravated identity theft.

Two of those indicted – Undra Stewart Franks, 27, and Donta Moore, 28 – are former Sioux Falls Storm players.

The new federal indictment says Moore, Franks and the others conspired to defraud victims by using names, Social Security numbers and dates of birth stolen from others to file fraudulent income tax returns that claimed false income tax refunds.

Identity theft isn’t just a Florida thing.  If you deal with Social Security numbers at work, treat them as valuable confidential data — because that’s what they are.  Guard your own identity by never giving out your social security numbers, protecting your bank account info, and being sure never to transmit those things in unencrypted e-mails.  If you need to send documents with that info electronically, use a secure file transfer site, like our rothcpa.filetransfers.net.

 

News from the Profession.  10 People Not Cut Out to Be Partner (Going Concern)

 

Share

Tax Roundup, 11/12/13: Mason City is cold edition. But: a reprieve!

Tuesday, November 12th, 2013 by Joe Kristan

The ISU Center for Agricultural Law and Taxation Farm and Urban Tax School makes its Mason City stop today.  7 degrees and sunny.

20131112

But we have a sold-out house today to keep us warm!  We are also sold out for Thursday in Ottumwa.  Meanwhile Paul Neiffer helps with the second day of the show today in Sheldon and tomorrow here.  Seats are going fast for our remaining sessions in Waterloo, Red Oak, Denison and Ames, so register today!  And if you come to one of the shows, please come up and say hi!

 

The first chart for any tax policy debate is in this post from Andrew Lundeen at the Tax Policy Blog,  Government at All Levels Redistributed $2 Trillion in 2012

 givers and takers

 From the study referenced in the post:

As Chart 1 illustrates, the typical family in the lowest 20 percent in 2012 (with market incomes between $0 and $17,104) pays an average of $6,331 in total taxes and receives $33,402 in spending from all levels of government. Thus, the average amount of redistribution to a typical family in the bottom quintile is estimated to be $27,071. The vast majority of this net benefit, a total of $21,158, comes as a result of federal policies.

Before considering any more taxes on “the rich,” it’s worth stopping to understand what is already happening, and to consider that if this isn’t solving the problem, maybe more of the same isn’t the answer.

 

You don’t get a “reprieve” from something you should look forward to: “Iowa gets Obamacare reprieve.”  Coming from Press-citizen.com, the party newspaper of the People’s Republic of Iowa City, that’s probably not the sort of headline to cheer up the administration.

 

train-wreck Megan McArdle, Hope Is All Obamacare Has Left :

When the tech geeks raised concerns about their ability to deliver the website on time, they are reported to have been told “Failure is not an option.” Unfortunately, this is what happens when you say “failure is not an option”: You don’t develop backup plans, which means that your failure may turn into a disaster.

Great idea!

 

Peter Suderman, Time to Start Considering Obamacare’s Worst Case Scenarios (Reason.com):

But it’s time to start considering the worst-case scenarios: that the exchanges continue to malfunction, that plan cancellations go into effect, that insurers see the political winds shifting and stop playing nice with the administration, and that significant numbers of people are left stranded without coverage as a result. Rather than reforming the individual market, which was flawed but did work for some people, Obamacare will have destroyed it and left only dysfunction and chaos in its wake. 

None of this makes me optimistic for a repeal of the inane 3.8% net investment income tax enacted to finance the debacle.  Cleaning up the disaster will be costly, and they’ll need the money for it.

 

Trish McIntire, The New January 21st.  “Despite the delay in the start of the tax season, taxpayers won’t get extra time to file their returns.”

 

Check out Robert D. Flach’s Tuesday Buzz!

Jack Townsend,  IRS Authority to Settle After Referral to DOJ Tax, a discussion of Ron Isley’s tax troubles.

Brian Mahany,  IRS Makes Important Changes For FBAR Appeals – FBAR Lawyer Blog

Fiduciary Income Tax Blog, Valuation of Indirect Ownership Through a Trust

Norton Francis, Narrow Tax Hikes Win Support in Several States (TaxVox)

 

All the news that’s fit to print.  NY Times: Estate Planning for Sex Toys (TaxProf)

News from the Profession.  Someone With Lots of Spare Time Has Doodled Big 4 Stereotypes (Going Concern).

 

 

Share

Tax Roundup, 1/11/2013: No, they aren’t paying attention. And it only gets harder.

Friday, January 11th, 2013 by Joe Kristan

20130113-3Don’t forgive them, because they have no idea what they’re doing.  Last night I taught a session on the Fiscal Cliff tax law and the Obamacare Net Investment Income tax to Iowa chapters of the Institute of Management Accountants over the Iowa Cable Network.  Using the controls to talk to remote classrooms in Marshalltown, Dubuque, Marion and Cedar Falls was a challenge, but a piece of cake compared to working with the tax law.

When they passed the Net Investment Income Tax as part of Obamacare, there were only two concerns for the guilty congresscritters:

Did it apply only to “the rich,” as defined that day?  and

Did it raise enough revenue for them to help them pretend that they weren’t raising the deficit?

Nobody who voted for the bill took the time to ask: “should we really set up an all-new tax, unlike anything we have ever done before, requiring all new regulations and recordkeeping requirements, just to collect 3.8% of something?”  And that’s exactly what they did.

If you have any illusions that they have any clue what they are doing, a look at the new bracket schedule for 2013 for single filers should cure you of that:

If taxable income is:                 The tax would be:
--------------------                  ----------
Not over $8,925                       10% of taxable income
Over $8,925 but not                   $892.50 plus 15% of the
  over $36,250                           excess over $8,925
Over $36,250 but not                  $4,991.25 plus 25% of the
  over $87,850                           excess over $36,250
Over $87,850 but not                  $17,891.25 plus 28% of the
  over $183,250                          excess over $87,850
Over $183,250 but not                 $44,603.25 plus 33% of the
  over $398,350                          excess over $183,250
Over $398,350 but not                 $115,586.25 plus 35% of the
  over $400,000                          excess over $398,350
Over $400,000                         $116,163.75 plus 39.6% of the
                                         excess over $400,000

Notice something funky about that 35% bracket?  It covers only $1,650.  While you have to earn $215,100 to get through the 33% bracket, you skip through 35% to 39.6% with only $1,650 of additional income.  Why?  Because the administration wanted to only tax “the rich,” and they decided for that day that “rich” starts at $400,000 income, if you are single.

The only sure cure is to make congresscritters, the President, and the Cabinet prepare their own returns in a live webcast, with a comment bar for viewers to mock them.  It would serve them right if they had to do it a la Robert Flach, with no computer.

 

TaxGrrrl,  Tax Code Hits Nearly 4 Million Words, Taxpayer Advocate Calls It Too Complicated:

What could you do with six billion hours?

Think hard. That’s the equivalent of 8,758 lifetimes. Yes, lifetimes.

It’s also how much time taxpayers spend every year trying to comply with tax filing requirements. That, according to the 2012 annual report as prepared by the National Taxpayer Advocate Nina E. Olson.

It’s not getting easier, either.

Martin Sullivan, Tax Reform Muddle (Tax.com):

Having agreed to tax increases, Republicans are now more insistent than ever that tax reform must be revenue neutral.

The big change is from Democrats– who have become so adamant on the need for tax increases in addition to the $600 billion raised by the fiscal cliff deal, and who realize additional rate hikes are absolutely impossible–are hell-bent on preserving the most politically feasible loophole closers for raising revenue.

It’s a hopeless game.  The deficit is too big to deal with by “loophole closers.”  Behind the push to raise taxes by closing loopholes is a delusion that you can pay for our incontinent government spending just by hitting “the rich” harder.  But the rich guy can’t cover the check.  Either spending comes down or everyone pays a lot more tax.

 

 

Nick Kasprak,  Chart: Effects of Marriage on Income and Payroll Tax Liability (Tax Policy Blog)

 20130111-2

 

Deborah Jacobs, A Married Couple’s Guide To Estate Planning (Forbes, via the TaxProf)

Paul Neiffer, Section 179 Can Create a Farm Loss (In Certain Cases)

Kay Bell,  Top taxpayer problem? Continuing tax code complexity

Christopher Bergin,  Permanent Insanity: “Only in Washington would you find folks who would brag that they did a good thing by making permanent an unfair and indecipherable tax system that wastes billions of dollars to administer.” (Tax.com)

Norton Francis, What the Fiscal Cliff Deal Means for the States (TaxVox):

The good news for states is that American Tax Relief Act of 2012 will  end much of the uncertainty that has plagued the income tax code in recent years. No longer will states have to guess what will happen to many provisions of the federal revenue code that were set to expire. The bad news is some states will lose revenue they were counting on from
scheduled changes in the federal estate tax that won’t happen.

Trish McIntire, Refund Loans

Patrick Temple-West,  Public goals, private interests in ‘Fix the Debt’ campaign, and more

Jack Townsend,  Bank Leumi Signals Cooperation with U.S. on Offshore Accounts.  Israili bank ready to spill the beans on U.S. taxpayers with accounts there.

A Friday Buzz from Robert D. Flach.

The Critical Question:  Shipping Wars’ Token Hot Chick Is a Former Accountant? (Going Concern)

 

Share