Posts Tagged ‘Sally Satel’

Tax Roundup, 1/23/2015: Egg donor compensation taxable payment for services. Meanwhile, kidney donor compensation is a felony.

Friday, January 23rd, 2015 by Joe Kristan
"White-&-Brown-Eggs" by Evan-Amos - Own work. Licensed under Public Domain via Wikimedia Commons

“White-&-Brown-Eggs” by Evan-Amos – Own work. Licensed under Public Domain via Wikimedia Commons

The big news in the tax world today is a Tax Court case ruling that payments to an egg donor were compensation for services. The case turned on the language of the contract of between the egg donor and the agency that procured the eggs. Tax Court Judge Holmes ruled that the payments were not excludible as payments for physical damages because there was no tort claim involved.

There are plenty of places you can read more details on this case, including Russ Fox and Tony Nitti. The TaxProf has a roundup.

So there is an organized and legal market for donor eggs, which, if all goes well, turn into an entire new human. That’s a good thing. But if an agency paid you for one of your kidneys to save the life of an already-born child on the kidney donor list, they would face a $50,000 fine and five years in prison under the Gore-Hatch National Organ Transplant Act of 1984.

The National Kidney Foundation reports that 12 people die daily waiting for a donor kidney, and that 4,453 died waiting for a kidney transplant in 2013.  It’s a felony to save any of those lives by buying a kidney from a healthy, willing and fully-informed seller. Meanwhile, nobody dies waiting for a donated egg.

Cite: Perez, 144 T.C. No. 4

Related: The Case for Paying Organ Donors (Sally Satel)

 

Kyle Pomerleau, Richard Borean, More than Half of all Private Sector Workers are Employed by Pass-through Businesses:

53.7% of Iowans work for pass-through businesses taxed on 1040s.

53.7% of Iowans work for pass-through businesses taxed on 1040s.

“Pass-through” income is income earned by S corporations and partnerships, including LLCs. This income is taxed on 1040s. Those who favor ever-increasing individual taxation of “the rich” by definition favor increasing the tax on employment.

 

buzz20140923Robert D. Flach has your Friday Buzz, including thoughts on avoiding scammers claiming to be from IRS and on Wal-Mart’s cash tax refund program: “My advice – avoid this program.”

Kay Bell, IRS gets $1.3 million for Darryl Strawberry’s Mets annuity

Paul Neiffer, IRS Scammers Net $14 Million from 3,000 Victims. If the e-mail says it’s from the IRS, it’s not. If you aren’t expecting a call from the IRS, the caller isn’t from the IRS.

Jason Dinesen, Ridiculous IRS Situations I’ve Recently Dealt With. A continuing series.

Leslie Book, Tax Court Addresses Verification Requirement in Trust Fund CDP Case (Procedurally Taxing)

Robert Wood, Washington Nationals $210M Pitching Contract For Max Scherzer Is About Taxes. “The Home Rule Act prohibits the District from imposing a commuter tax on non-residents.”

Peter ReillyExclusive – Kent Hovind Claims Congressmen Are Looking Into His Case. All you could possibly want to know about the case of the guy who thinks the Flintstones was actually a documentary series.

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Robert Goulder, Reading the Tea Leaves: China’s Jurisdictional Tax Claims (Tax Analysts Blog). Contrary to some reports, even Communist China doesn’t plan to tax worldwide income of non-resident Chinese. The U.S. stands alone in doing that.

Howard Gleckman, A Look at the Territorial Tax Systems in Four Countries Finds No Magic Bullets (TaxVox). No magic beans, either, I’ll bet.

TaxProf, The IRS Scandal, Day 624

 

Career Corner. Here Are Just a Few Questions You’ll Be Asked in a Big 4 Interview (Adrienne Gonzalez, Going Concern).

 

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Tax Roundup, 9/4/2012: Kidney edition. Also: stopping refund theft, and more!

Tuesday, September 4th, 2012 by Joe Kristan

Kidney dialysis patient. Photo via Wikipedia Commons.

Dying for a kidney: the limits of tax incentives.  A new study in the American Journal of Transplantation says that state tax breaks for live organ donations haven’t increased donation rates.  NPR reports:

Seventeen states offer tax incentives to people who donate a kidney, a portion of their liver or bone marrow for transplantation. But a study finds these sweeteners aren’t working.                            

Researchers looked at what happened in the years before and after these tax incentives were passed and found no increase in organ donation rates.

Why don’t organ donation tax breaks work?  NPR approaches the obvious reason:

Typically states offer a deduction of up to $10,000 from taxable income. For a typical family that translates to less than $1,000 in reduced taxes. But the financial burden for a living kidney donor can range from $907 to $3,089, according to one study.

The shortage of donor kidneys kills thousands of patients annually, and many who do finally receive donor organs have to spend years on debilitating and expensive dialysis first.  The tax incentives are a well-intentioned workaround to the real problem, mentioned in passing by NPR:

By federal statute, it’s illegal to pay someone for the organ itself.

Thanks largely to Al Gore, it is a serious crime to attempt to save your life by buying a kidney from a willing seller.  Under federal law, it’s legal to save somebody’s life by giving them your kidney, fully accepting the inherent medical risks, but it is illegal to be compensated for those risks by the donor.  Somewhere there is a market-clearing price that would match donors with the 4,000 or so people who die annually waiting for kidneys.  Until and unless the tax benefits of kidney donation reach that price — and the lack of a market makes it impossible to know what that price is — the tax breaks will be a mere gesture, rather than any kind of solution.

(Disclosure: I served for several years on the board of the Iowa Donor Network, the “OPO” organization that oversees organ donation and distribution in Iowa.  I am not currently on the board, and I don’t speak for them in any way.  Sally Satel powerfully makes the case for compensated donation here.) 

Related:  A Kidney For A Tax Break? (TaxGrrrl)

 

How can Congress stop giving billions annually to thieves?   At the Tax Policy Blog will Freeland explains the basics:

IRS’s National Taxpayer Advocate found that tax code complexity is a contributing factor to the estimated $10 billion to $12 billion in fraudulent or erroneous overpayments made to those claiming the refundable earned income tax credit in 2006. Rather than invest in a costly system of fraud reduction, these social assistance payments could be administered with more oversight by the Social Security Administration or State public assistance offices—agencies that already have such fraud reduction systems in place.

The purpose of taxes should be to fund the necessary functions of government, not to incentivize behavior or pay out social assistance. A simpler tax code that focuses on this core purpose will reduce fraud, in addition to lowering compliance costs and removing economic inefficiencies.

Unfortunately, politicians  don’t mind wasting billions of your dollars on thieves while preening their concern for the downtrodden.

 

Quote of the day.  David Brunori speaks wisely (subscriber link):

Legislative auditors in New Mexico discovered that the state, through its economic development incentives, is spending $31,000 for every job created. The problem is that the jobs purported to have been created pay on average $41,000 a year. What’s more, the legislative staff found that the state did a pretty lousy job of evaluating the incentive programs.

     The head of the Economic Development Department blasted the auditors, calling their assessment wildly inaccurate. I, too, am skeptical of the numbers, but for different reasons. I don’t believe the state is providing any incentive for job creation. Businesses create jobs when they think they’ll get a return on the investment. Although it’s impossible to be sure, I believe that most of those jobs would have been created anyway.

     The legislative auditors called for some good government changes to the incentive programs. For example, the audit report calls for more public disclosure, sunset provisions, and clawbacks. Those are all good policies, of course. But what someone should recommend is that New Mexico stop giving tax dollars to private companies.

That’s just as true in Iowa, whether the tax breaks go to movies, fields of dreams, or windmills.

 

Patrick Temple-West,  Essential reading: Candidates split over tax credit for wind energy, and more (Tax Break)

TaxProf, WaPo: Mitt Romney Exited Bain Capital With Rare Tax Benefits in Retirement

Russ Fox, Joseph Pleads Guilty.  Fortunately it was some other Joseph.

Jack Townsend,  IRS Data-Mining Program re Offshore Accounts; with a Diversion to the Real Golden Rule

William Perez has some tips for Finishing up 2011 Tax Returns for the October 15th Deadline.  Remember, non-1040 extended returns are due September 15.

Kay Bell offers  Tax Carnival #106: Labor Day 2012,

We had a long weekend — but you can still catch a Buzz from Robert D. Flach!

Jim Maule, Tax Labor

It’s a blog, not the 1040 instructions: Please Do Not Prepare Your Tax Return Based on Anything You Read Here (Anthony Nitti)

It was declared out of order by the rules committee?  What Happened to Tax Reform at Mitt Romney’s Convention? (Howard Gleckman)

That clears things up: Google Plays Bess Truman To Jill Stein As Harry (Peter Reilly)

That’s kind of personal.  Are You “Whipped”?  (Brian Strahle)

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Kidney needed

Monday, May 23rd, 2011 by Joe Kristan

The TaxProf passes on a touching plea: “My 13 Year Old Daughter Needs A Kidney. Can You Help?”
The girl is blood-type “O.” You can learn more about her at this Facebook page. You can learn about living donor qualifications at the Iowa Donor Network.
Thousands of people die each year awaiting donor kidneys, while others only receive transplants after years of debilitating and expensive dialysis. Federal law bans compensated organ donations. By preventing willing and healthy people from getting paid for a kidney, the law kills thousands each year. Thanks, Al Gore.
Related:
Taxing organ markets
Sally Satel: Death’s Waiting List

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Taxing organ markets

Tuesday, November 17th, 2009 by Joe Kristan

Kay Bell rounds up a flurry of recent coverage of issues on the taxation of body parts.
While the tax angle is interesting, it’s a side issue. The real story is the flat-out ban on compensated organ donation, enacted largely through the efforts of a younger, trimmer Al Gore in 1984. Thanks to Mr. Gore, people die every day waiting in vain for donor kidneys – tens of thousands since the ban was enacted. Give that man a prize.

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Got Kidneys?

Friday, September 4th, 2009 by Joe Kristan

Federal law has harsh penalties for anybody who buys or sells human kidneys for transplant, helping to ensure that tens of thousands of folks die prematurely after many unhappy and expensive years of dialysis. But forget all that. If you could sell a kidney, you’d have taxable income. Professor Maule explains.

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