If you wouldn’t have gotten the cash if you had kept your clothes on, it may not be a gift. A “professional adult entertainer” was convicted on tax charges in Sioux Falls last week. She apparently treated cash thrust upon her in performance as nontaxable gifts, according to the Associated Press writeup. Gifts are good to receive for many reasons, not least because they are not taxable income. Of course the tax law is pretty strict about what it takes to be a gift, or we would all be working for nontaxable holiday bonuses. The jury instructions in the case explain what it takes for something to be a gift:
The practical test of whether income is a gift is whether it was received gratuitously and in exchange for nothing. Where the person transferring the money did not act from any sense of generosity, but rather to secure goods, services, or some other such benefit for himself or for another, there is no gift.
I wonder if it ever struck the professional adult entertainer that while men eagerly stuffed dollars into her garter on stage, they seldom stuffed cash into the elastic of her sweats at the local Hy-Vee. It must have occurred to her that there was some connection with what she was wearing, or not, on stage and the generosity of her admirers. If it didn’t before, it probably has now. Sentencing is set for September.
Liz Emmanuel, Richard Borean, State Cigarette Tax Rates in 2014. (Tax Policy Blog):
Robert D. Flach brings your Friday Buzz on Thursday in honor of Independence Day.
Jana Luttenegger, New Simplified Application Form for Small Nonprofits and UPDATE: Form 1023 EZ Released for Small Nonprofits (Davis Brown Tax Law Blog)
Trish McIntire, Why E-file a Tax Return…
TaxGrrrl, Money Literally Flying At World Cup: Is It A Clever Attempt At Tax Avoidance? Strange soccer doings in Ghana.
Jim Maule gets his Tax Myth series underway with The IRS Enacted the Internal Revenue Code and If It’s Not Cash, It’s Not Income. It always bugs me when congresscritters talk about the “IRS Code.” It strikes me as sneaky blame-shifting by the perpetrators.
Cara Griffith, Censorship in New Hampshire? (Tax Analysts Blog):
The DRA can be opposed to the website all it wants. That does not give it the right to monitor it or demand modifications to its content. Yet the DRA is going one step further. It is attempting not only to prohibit the use and publication of information about its general policies, but to impose criminal penalties on the publication of truthful information about a matter of public concern.
It sounds like The New Hampshire Department of Revenue Administration badly needs some exemplary firings.
Lyman Stone, Happy July 2! 14 States Exempt Flags from Their Sales Taxes (Tax Policy Blog).
Roberton Williams, President Obama’s FY 2015 Budget (TaxVox). “Most of the president’s tax proposals have appeared in previous budgets, but he added four new ones this year. TPC delves into those additions in a separate analysis that accompanies the distributional estimates.” None of them will be enacted during the remainder of the Obama presidency.
That would be “zero.” 41 Million July 4th Travelers Would Have a Nicer Trip if Corporations Paid Their Fair Share (Steve Wamhoff, Tax Justice Blog). Why zero? Scott Sumner explains that “There should be no corporate income taxes, which represent triple taxation of wage income.”
TaxProf, The IRS Scandal, Day 420
Has the NHL lost its focus? Hockey aiming to tighten tax loophole
Have a great Independence Day!