The ISU Farm and Urban Tax School is in Waterloo, Iowa today for another sold-out session. Only Red Oak, Denison and Ames after this, so register now! Then I drive to Cedar Rapids to talk about the Net Investment Income Tax and how it affects trusts before heading home tonight. Coffee vendors all over Iowa will have a good day today.
Today seems like a different kind of Waterloo for IRS — their web site is down this morning.
In order to claim the Credit, a 2013 Return must be filed by October 31, 2014, which is the extended due date. To avoid penalty, Iowa income tax returns normally must be filed by and 90% of any tax owed must be paid by April 30. The Credit will be applied to the computed Iowa tax after first applying any other refundable and nonrefundable tax credits. Any amount of the Credit that is in excess of the tax due is not refundable and cannot be carried back or carried forward to another tax year.
The $54 Credit amount and additional information will be reflected in the IA 1040 instructions for the 2013 tax year.
I won’t turn down the $54, but it’s not anything like real tax reform. That would be the Tax Update’s Quick and Dirty Iowa Tax Reform.
Paul Neiffer, CPR for Section 179:
For all farms since 2007, the percentage of Section 179 to total depreciation averaged about 70% and in 2012 the number was slightly over 75%. For purchases over $100,000 the percentages has been even higher. Based on this table, it appears that most farmers have just about fully depreciated their farm equipment purchases over the last few years using Section 179.
Section 179 limits are slated by law to fall to $25,000 next year. I think it’s likely that Congress will eventually extend the $500,000 limit currently in effect to 2014, but it will make a big difference if they don’t.
It turns out that the “Midco” intermediaries were relying on variations of what Joe Kristan calls the Tax Fairy - the magical sprite that can make your taxes go away with fancy tax footwork. Of course as someone who just sold their corporation to someone, that’s not your problem – or so you would like to think. The IRS has been thinking otherwise. Since the corporations that have been sold are dry husks by the time taxes are assessed the IRS has been asserting transferee liability against selling shareholders. Results have been mixed.
There is no Tax Fairy.
Jeffrey Dorfman, Obamacare Will Lift Tax Fraud To A Whole New Level. That’s just what we need, a better class of tax fraud.
Annette Nellen, Affiliate nexus legislation – everyone loses
Phil Hodgen has a New tax ebook for nonresident freelancers.
Paul Caron, The IRS Scandal, Day 193
Crisis! U.S. MexiCoke fans fear effect of Mexico’s new soda tax. (Kay Bell)
been indicted for, among other things, filing liens against the IRS Commissioner. Everyone knows that you can’t just file baseless liens.
Only they can do that.
TaxGrrrl reports on a Michigan couple whose bank account was emptied by the IRS when they suspected they were “structuring” bank deposits to stay below the $10,000 disclosure limit. She takes up the story:
Instead, they insist that the deposits were generally less than $10,000 because their insurance policy covers the theft of cash only up to that sum. As a result, they do not let their employees carry more than that amount at any time, including walking deposits to the local bank.
That didn’t stop the feds from seizing the Dehkos’ remaining funds. Using a process called civil forfeiture, the federal government can seize assets on the basis of suspicion: there is no requirement for firm evidence nor are the property owners entitled to notice. The government didn’t ask the Dehkos about their deposits or they would have found out about the insurance policy.
Months after the seizure, prosecutors had never offered any evidence to prove that the Dehkos were engaged in money laundering or that they were avoiding income tax. In fact, a Bank Secrecy Act examination from last year resulted in a notice stating that “no violations were identified.”
Fortunately, the Institute for Justice stepped up and financed court action by the Dehkos, who run a grocery store in Michigan. The IRS has said it will return their funds. But unlike the California couple who went after the Commissioner, nobody at the IRS will ever be disciplined for slapping a lien on the Michigan grocers and seizing their cash, with no due process and, admittedly, for nothing. This sort of thing will continue until there is a Sauce for the Gander Rule, where taxpayers can sue IRS officials who make baseless filings on the same basis the IRS can sue taxpayers.