sequestration « Roth & Company, P.C

Posts Tagged ‘sequestration’

Tax Roundup, 3/1/2013: Apocalypse, Day 1. Also: Iowa “flat tax” advances.

Friday, March 1st, 2013 by Joe Kristan

Post-sequester commuting.

So the sequester takes effect. That made my commute like “Mad Max,” where I threaded my car between craters on shattered, lawless roadways before picking up the office Friday bagels, ignoring les miserables begging for a bagel crumb outside the door.

Well, OK, it was like my usual Friday commute, but with snow. But we will keep our eyes open for the chaos we know is right around the corner!

Iowa Senate advances limited property tax bill. The Sioux City Journal reports:

Senate Study Bill 1136, which passed the Senate Ways and Means Committee on a 9-6 party-line vote, would enable all businesses to be taxed at a lower rate on the first $324,000 of their assessed property value. Commercial property values above that threshold would be taxed at the current 100 percent rate.

$324,ooo isn’t really that much property for a business, even at Iowa property values. The Governor proposes to reduce the taxable value to 80% of the value for all commercial property over four years.

House GOP advances “flat tax” idea (Radio Iowa). The Iowa House Ways and Means Committee sent HF 3 t0 the House floor yesterday. The bill would enact an optional income tax of 4.5% of adjusted gross income; taxpayers could elect to file under the HF 3 system or Iowa’s current system.

I don’t see this as a serious effort to pass a bill, given the flaws in using AGI as a tax base that I have pointed out. It has next to no chance of approval in the Iowa Senate, controlled by Democrats. At best it’s an attempt to keep much-needed income tax reform alive at a time when the Governor seems only interested in property taxes. Maybe next time they’ll get serious and pursue The Tax Update Quick and Dirty Iowa Tax Reform Plan.

Russ Fox, Important Court Ruling for Entities Owned by Californians Located Outside of California. A California owner shouldn’t by itself make your corporation taxable there.

TaxProf, Dow Chemical Loses $1 Billion Tax Shelter Case

Brian Mahany, Dow Chemical Suffers Billion Dollar Tax Shelter Loss – Accounting Malpractice

Jack Townsend, Mr. Cummings’ Defense of Aggressive Tax Shelter Professionals

Kyle Pomerleau and William McBride, Another Misleading Analysis of Income Inequality (with Pictures!) (Tax Policy Blog). They call out David Cay Johnston.

Martin Sullivan, A Moral Obligation to Aggressively Lobby (Tax.com)

Signs of sequester apocalypse:

TaxProf, The Impact of Sequestration on the IRS

Kay Bell, Despite sequestration, IRS plans to continue filing season as planned, start accepting more updated forms next week

TaxGrrrl, IRS Won’t Delay Tax Season For Sequestration

Howard Gleckman, The Sequester is Not Too Big, It is Too Stupid

Patrick Temple-West, Obama sees leverage in tax fight, and more

Paul Neiffer, Farmers Should Be Able to File Tax Returns by Monday

The Saratogian, Rapper Ja Rule in New York City jail on tax evasion charges; scheduled for July release

Huffington Post: Matthew Bender, Detroit Tax Preparer, Charged with Fraud For Preparing False Returns. Really, since Lexis-Nexis pulled the plug, it’s been all downhill for him.

Going Concern, Let the sequester blamestorming begin!

Tags: Brian Mahany, Going Concern, Howard Gleckman, Ja Rule, Jack Townsend, Kay Bell, Kyle Pomerleau, Martin Sullivan, Patrick Temple-West, Paul Neiffer, Russ Fox, sequestration, tax crime, TaxGrrrl, TaxProf, William McBride
Posted in Eye on the Legislature, Eye on the Legislature 2013, Tax Roundup | No Comments »

Tax Roundup, 2/28/2013: Sequester freak-out edition.

Thursday, February 28th, 2013 by Joe Kristan

If Congress fails to act today, automatic spending cuts take effect that drastically reduce government outlays to more than they were last year. Some commentary:

Gene Steurle, How to Avoid Sequester and Give Both Parties What They Want (TaxVox)

Michael Giberson, Sequester Reporting Scavenger Hunt: Official Rules (Knowledge Problem): “If you find a news story emphasizing the pain of sequester budget cuts that also clearly indicates that alternatives such as raising taxes or increasing the national debt also cause pain, you are a winner.”

The last refuge of rich scoundrels. Patriotic Millionaires Slam Congress on the Sequester Stall (press release)

Fire and brimstone coming down from the skies! Boehner Tells Members They Have to Fly Commercial

Real wrath-of-God stuff. Potential effects of U.S. cuts on Iowans remain a mystery (Des Moines Register)

Kay Bell, Tax cheating is unacceptable, say most Americans

Joseph Henchman, Wisconsin Governor Walker Proposes Income Tax Reduction. He would leave the top rate at 7.75%. Still too high. It’s even above Iowa, if you take Iowa’s deduction for federal taxes into account.

Tony Nitti, House Republicans Take First Stab At Killing Off The Tax Code

Dan Meyer, Another Tax Season, Another Warning: Watch Out for “IRS e-mail” Scams

Russ Fox, Illinois’ Pension Problems Get Worse; Lottery Checks Bounce

Cara Griffith, Stealth Lobbying (Tax.com)

You’re as young as you feel. UBS Client, 78, Charged With Tax Evasion in Illinois Case (Bloomberg.com)

The worst part is, they don’t have PTINs or continuing education. IRS: Gang members stealing tax returns (ABC-7.com)

Tags: Anthony Nitti, Cara Griffith, Dan Meyer, Gene Steurle, identity theft, Joseph Henchman, Kay Bell, Michael Giberson, Patriotic Scoundrels, Russ Fox, sequestration, tax crime
Posted in Tax Roundup | No Comments »

Tax Roundup, February 25, 2013: And the award for the dumbest economic development tax credit goes to…

Monday, February 25th, 2013 by Joe Kristan

Field of bad dreams. TheFiscalTimes.com says Iowa is the ninth worst state for taxes:

The Hawkeye State gets a black eye for being the second worst state for corporate taxes, with a 12 percent rate. It also ranks 37th in property taxes, 33rd in individual income taxes and 34th in unemployment insurance taxes.

They accompany the article with this photo of the “Field of Dreams” — an unwitting illustration of the problems of Iowa tax policy. The Governor last year signed a proposal giving a special sales tax exemption to a private athletic complex being built around the field, made slightly famous in the Kevin Costner movie. It’s special carve-outs like this that make for high rates and complicated taxes all around.

Speaking of movie-related scams, Instapundit Glenn Reynolds writes in the Wall Street Journal The Hollywood Tax Story They Won’t Tell at the Oscars. Here he talks about how it worked out in Michigan:

State leaders ballyhooed the plan as a way of moving from old-style industry to new.

Despite tens of millions of dollars in state investment, the promised 3,000-plus jobs didn’t appear. As the Detroit Free Press reported last year, the studio employed only 15-20 people. That isn’t boffo. That’s a bust. The studio has defaulted on interest payments on state-issued bonds, and the guarantors—the state’s already stressed pension funds—may wind up holding the bag. “In retrospect, it was a mistake,” conceded Robert Kleine, the former state treasurer who signed off on the plans in 2010.

He doesn’t neglect Iowa’s film fiasco:

Iowa ended its motion-picture subsidies in 2010, after officials misused $26 million in state money, leading to criminal charges. According to a 2008 investigation by Iowa Auditor David Vaudt, 80% of tax credits issued under the state’s film-subsidy program had been issued improperly (to production companies that weren’t even spending the money in Iowa, for example).

Two film credit recipients are now serving 10-year sentences on theft charges arising from the program. That’s fine, but I really want to see a groveling public apology from the Governor who signed the program into law, the “economic development officials” who turned the keys to the state treasury over to a former Walgreens photo desk clerk in charge of the program, and to the legislators — all but three out of 150 — who voted the moronic program into existence.

Related: And the film tax credit goes to … (Kay Bell); Oscar Night Gift Bags Are Taxable; Cast Of Twilight Franchise Relieved To Dodge Bullet (Tony Nitti)

Sequestration panic at the IRS. Politico adds IRS cuts to the least of things we’re supposed to freak out about in the face of the tiny impending sequestration spending cuts:

“At a minimum, it’s probably going to take longer for people to get through on the phone; it’s going to take longer for refunds to be processed,” said Floyd Williams, a senior tax counsel at Public Strategies Washington.

Williams, who worked for the IRS for nearly two decades and directed the agency’s legislative affairs office for 16 years, says the sequester could also be a boon to those who purposely commit fraud, or accidentally fill out returns incorrectly.

Good thing the IRS can redirect the employees who had been assigned to the preparer regulation program to do something useful, now that the courts have shut down that futile enterprise. The IRS can’t stand their good fortune, though; Tax Analysts reports ($link) that the IRS is appealing the court decision.

It would be even better if Congress stopped using the IRS as the Swiss Army Knife of public policy. Given the agency’s new mandate to take care of our health insurance, their performance at the job of actually collecting taxes is only going to get worse.

TaxGrrrl, How Will Your State Be Impacted By Sequestration?

Preparers gone bad. Accounting Today rounds up the week in preparer fraud, including a guy in New Mexico who, while serving time for identity theft-related charges, has been hit with 56 counts of fraud and embezzlement. That would be overachieving in underachieving.

Hak Ghun will travel. To Club Fed. From DurangoHerald.com:

Durango man pleaded guilty to tax evasion this week in federal court in New Mexico.

Hak Ghun, 62, is facing 12 to 18 months in prison after signing a plea agreement with the U.S. Attorney’s Office. He also will be required to pay $249,567 in restitution to the Internal Revenue Service.

The man was accused of embezzling from a company that had received investments from the Navajo Nation. For those who don’t get the old TV show reference, here you go.