Posts Tagged ‘The Beanwalker’

Tax Roundup, 10/4/2013: Anniversary. And… the Chromaro!

Friday, October 4th, 2013 by Joe Kristan

Wilson___________ Anniversary.  The worst president of the 20th century signed the income tax into law 100 years ago yesterday.  The TaxProf notes that New York Law School Hosts Symposium Today on The 100th Anniversary of the Income Tax.  Sounds like a rockin’ time.

Related: 

Is Today – the Anniversary of the Income Tax – the Worst Day in American History? (Daniel Mitchell)

Don Boudreaux, Don’t Toast This Centenary

William Perez,  100th Anniversary of the Revenue Act of 1913

Kay Bell, Happy official 100th birthday federal income tax.  Happy?

 

 

William Perez, Deducting Home Office Expenses. “New for 2013, the IRS allows for a simplified method of calculating home office expenses at a rate of $5 per square feet up to 300 square feet of office space.”

Paul Neiffer, Is 2013 The Last Year to Deduct Sales Tax

 

Jack Townsend,  Court of Federal Claims Holds that Unlimited Civil Statute of Limitations Requires Taxpayer’s Fraud 

 

Russ Fox,  Some Things Still Work; Others Don’t (IRS Shutdown) ”A piece of bad news:

Wikipedia image courtesy Tallent Show under Creative Commons license

Wikipedia image courtesy Tallent Show under Creative Commons license

Automated Underreporting (AUR) Notices will continue. They’re automated, so there’s no stopping them.”

Tax Justice Blog, Understanding the Government Shutdown and Debt Ceiling Debates

Andrew Lundeen, Obamacare Exchanges Are Open But Sign-up Numbers Are Low (Tax Policy Blog):

The White House says some applicants have signed up, but didn’t say how many. Rumors in the insurance industry hover in the single digits; several health plans say they are unaware of anyone signing up for their plan. BlueCross BlueShield of North Carolina says it has enrolled one person.”

But more than one person will be paying for it.

Donald Marron, Actually, the United States Has Defaulted (TaxVox): “The United States defaulted on some Treasury bills in 1979 (ht: Jason Zweig). And it paid a steep price for stiffing bondholders.”

 

 

They work for picking motorists pockets.  IDOT to Sioux City: Show us proof traffic cameras work.  (via The Beanwalker)

 

TaxProf, The IRS Scandal, Day 148

Hans A. von Spakovsky, Protecting the First Amendment from the IRS

Robert D. Flach has your Friday Buzz!

 

TaxGrrrl performs a valuable bit of journalism by posting a photo of the chrome-plated Camaro (Chromaro?) famously bought by Maurice Larry, the business partner and not-boyfriend of Rashia Wilson, the self-proclaimed “Queen of IRS tax Fraud.”  Here it is:

chromaro

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TaxGrrrl gives us the specs:

The car featured a red leather interior, 48 speakers, five flat screen TVs and 32-inch Forgiato wheels (the kind sported on the likes of Chris Brown’s BMW, Akon’s Lamborghini, Steve Novak’s Mercedes, and Will.I.Am’s Bentley). It was made to attract attention – and it certainly did.

Mr. Larry denies that he was the Queen’s consort, but with her platinum locks, she’d have been fabulous in this ride.  Sadly, after she serves out her 21-year prison sentence, she may be more silver than platinum.

 

 

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Tax Roundup, 7/19/2013: You can run a red light edition. And saving the republic, one tail light at a time.

Friday, July 19th, 2013 by Joe Kristan

gatsoThe first central Iowa town to install revenue cameras has turned them off.  The Des Moines Register reports:

 The Clive City Council on Thursday night voted to discontinue the use of red-light cameras to enforce traffic violations.

The council voted 3-2 to reject a contract with Redflex Traffic Systems Inc., which has provided the city red-light camera service since the program began in 2006. The nine cameras positioned along Hickman Road now will no longer be in service.

So carnage on Hickman Road, now, right?  Yeah, right.  But it’s not over yet:

Mayor Scott Cirksena said after the meeting that city staff would work to reach an agreement with the camera provider that could gather a majority vote.

Council members Ted Weaver and Michael McCoy said they would like to see the city wean itself away from using red-light revenue for general fund expenditures. City Manager Dennis Henderson said the city expects the red-light camera program to bring in approximately $700,000 during the current fiscal year, which began July 1

It’s obviously about the money, though you find the pro-forma claims that ticketing people who don’t quite stop when making a right turn on red at an empty intersection makes us all safer, if you read down to paragraph nine.  Let’s hope Des Moines and Polk County follow suit, but don’t hold your breath.

 

 

Of course they do.  Four Cedar Rapids-Metro Area Mayors Support Local Option Sales Tax Extension (KCRG.com). And RAGBRAI riders support free beer extension.

 

I bet the IRS heard about this guy through the grapevine.  From Star-Telegram.com:

Larry Lake, part owner of Grapevine Drug Mart, and his son, Travis Lake, who managed the drug store, each failed to report income on their federal tax returns, according to a news release from the U.S. Attorney’s office.

Larry Lake was sentenced to 14 years in prison and ordered to pay a $550,000 fine as well as taxes, interest and penalties, which equal about $25 million, the release said.

The Texas men may well have gotten in trouble not just from evading taxes, but from the way they did their banking:

From August 2006 to November 2009, Larry Lake and his spouse, Kathy Lake, agreed to structure hundreds of currency deposits into at least 13 bank accounts, according to a federal indictment. The couple created at least two shell companies that were used to open up the accounts involved in the structuring scheme, which amounted to $9.3 million, federal officials said.

“Structuring” involves breaking cash deposits up into amounts under $10,000 to avoid the rules requiring banks to report currency transactions.  But banks are also required to report if it looks suspiciously like somebody is trying to get around the $10,000 reporting rule.  You come into a bank enough times with wads of cash, but never $10,000, and the tellers will remember you.

 

TaxProf, The IRS Scandal, Day 71.  A bad day for the “nothing to see here” folks.

Robert W. Wood, IRS Inspector Shellacs Oversight Committee About Tea Party Scandal

 

Kay Bell, Tax reform’s chances are better than 50 percent:

Rep. Dave Camp (R-Mich.), head of the Houses Ways and Means Committee, and Sen. Max Baucus (D-Mont.), leader of the Senate Finance Committee, each put the possibility of tax reform passage at greater than 50 percent.

The gung-ho comments were made during an appearance today at the Economic Club of Washington.

I’d agree, if you are talking about in the time before the sun curls into a cold cinder.  If you are talking about this Congress, I’ll bet the other way.

Kyle Pomerleau, Japan to Lower its Corporate Rate Further? (Tax Policy Blog)

David Cay Johnston, More Tax Dollars There, Not Here (Tax Analysts Blog)

 

Jason Dinesen, Patient-Centered Outcomes Trust Fund Fee – An Exercise in Bureaucratic Futility $100 of cost to compute a $3 tax.

Peter Reilly, Real Estate Pro Status Does Not Mix With Full Time Day Job.   Back from the Civil War, Peter has been busy with new tax posts.  This one explains the difficulty of being a “real estate professional” when you have other work.

 

Sean Raisch,  Medicare Taxes on High Earners (Davis Brown Tax Law Blog)

William Perez, IRS Update for July 19, 2013.  Sort of a web weekly bulletin of IRS releases.

 

Greg Mankiw, The Changing Distribution of Income:

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Mark Perry points out:  “Yes, the middle class has been disappearing, but they haven’t fallen into the lower class, they’ve risen into the upper class.”

It’s Friday, so it’s Buzz Day at Robert D. Flach’s place!

 

The Critical Question:  Do Low-Income Taxpayers Cheat? (TaxVox)  He has a lot more faith in the good nature of humankind than I do.

 

TaxGrrrl, How To Stay Out Of Jail: Lessons Learned From The ‘Queen Of IRS Tax Fraud’:

If you do steal, and you talk about it, don’t do it on Facebook I don’t care what you think you know about privacy settings, when you put something out there on Twitter or on Facebook, it’s not protected. As a taxpayer, that means you should avoid posting personally identifying information like tax ID numbers and your address (the IRS Facebook page won’t allow you to post comments for that reason). And you should certainly avoid posting photos of yourself surrounded by stacks of cash with such gems as:

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Hard to argue with that advice.  Russ Fox has more.

 

Nude drunk guy saves the republic. Police: Drunk naked man broke out car tail lights (press-citizen.com, via The Beanwalker):

According to the complaint, Flaherty broke out the tail lights to three cars and told officers that he was breaking the red in the tail lights because red means danger to the republic.

I’ll have what he’s having.

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Tax Roundup, 1/14/2013: Big webcast today! Meanwhile, outlook bleak for Iowa income tax policy.

Monday, January 14th, 2013 by Joe Kristan

20130114-1New law webcast today!  I will be participating in a webcast today on the new Fiscal Cliff law and other recent tax developments.  The webcast, sponsored by the Iowa Bar Association, will start at noon.  I will join Roger McEowen of the ISU Center for Agricultural Law and Taxation, and IRS Taxpayer Liason Christy Maitre.   Cost:  $35 for IBA tax school attendees and attendees of any 2012 CALT Farm and Urban Tax School; $35; $75 otherwise.  Agenda here, registration page here.  2 hours of timely CPE and Tax Update fun!

 

No good will come of this.  The 2013 session of the 85th Iowa General Assembly begins today, and the outlook for improvement in Iowa’s tax system is bleak.  Iowa business groups have firmly embraced a state tax incentive policy based on taking money from all of us to bribe well-connected businesses to do things they would do anyway.  From the Sioux City Journal:

Business groups like the Iowa Chamber Alliance, a non-partisan coalition representing 16 chambers of commerce and economic development organizations, are supporting a variety of tax credits to retain, grow and attract investments in the state. Those credits include restoring the $185 million cap on economic development tax credits that currently stands at $125 million for fiscal 2013.

Jason Hutcheson, chief executive officer of the Greater Burlington Partnership, said tax credits are a highly effective tool that deliver a high return on investment and are essential to retain, expand and recruit businesses and to attract technology and research. ICA members also are lobbying legislators to spend at least $25 million for business development incentives after the line item was shrunk to $15 million for the current fiscal year.

The politicians shed crocodile tears about just being forced to go along with a system based on them granting special favors:

Senate GOP Leader Bill Dix of Shell Rock said there is opposition to government choosing winners and losers with taxpayer-funded incentives, but he added, “There’s no question in my mind that an incentive policy is the world we live in. I don’t appreciate that and wish it wasn’t the case, but we do need a policy that includes incentives.”

You know what would be a real incentive to grow a business in Iowa?  A much simpler tax system with lower rates, one eliminating the corporate income tax altogether.  Something like The Tax Update’s Quick and Dirty Iowa Tax Reform Plan.

Instead, Iowa has a horrible system built around complexity and high rates, made less painful — even lucrative — for those with the connections and lobbyists to score targeted tax credits.  The legislators hear from those people — not from the more numerous businesses  who quietly set up shop in South Dakota or other more friendly tax climates.

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The Iowa Research Credit is refundable, so Iowa writes a check when the credit exceeds the computed tax. The $45.2 million in corporate research credits claimed in 2010 resulted in $43 million in refunds.

The best we can hope for from the legislature is prompt action on ”coupling” legislation to conform Iowa’s 2012 tax law to the federal changes passed earlier this month.  The 2012 filing of many Iowa returns is on hold until they do so.  We’ll see if they can even accomplish that much.

 

What does the Worst IRS Commissioner Ever do for an encore?  He becomes a guest scholar at the Brookings Institution, which may never recover (TaxProf)

Scott Drenkard, Governor Jindal’s Bold New Tax Plan  (TaxPolicy Blog).  Could you live with a higher state sales tax if the income tax goes away?  Even if it taxes accounting services?  Tempting.

Paul Neiffer, Good News – Certain Credits Offset AMT

Jack Townsend, The Big Boys Get Better Treatment in Our Tax System Than Do Minnows

Joseph Thorndike, Peggy Noonan and the Beleaguered 1 Percent

TaxGrrrl, Ask the taxgirl: Filing Your Tax Return Early

News you can use: States to seniors: Good times may be ending, and more (Patrick Temple-West, Tax Break)

The Critical Question: Your Money Or Your Life – Which Can You Deduct ? (Peter Reilly)

That’s what they say, anyway.  White House says no to Death Star.  (Kay Bell)

At least she knows her constitution.  Miss Iowa takes fifth! (TheBeanwalker.com)  UPDATE!!!  Miss America Contestant Says Marijuana Should Only Be Legal For “Recreational Use and Health Care” (Mike Riggs, Reason.com).  So don’t smoke at the office.

 

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Tax Roundup, 11/26/2012: Is there a good side to tax evasion? Plus more fiscal cliff jumping!

Monday, November 26th, 2012 by Joe Kristan

Via Wikipedia

Is it better to cheat on business taxes than to be out of business?  A British researcher says much of the UK economy is only possible through tax evasion.  From FastCompany.com:

As he and colleagues argue in a recent paper, the informal economy isn’t just for shady figures looking to squeeze out as much profit as possible; in large measure, it’s inhabited by entrepreneurs whose fledgling businesses might simply fail if they played strictly by the rules.

As taxes and regulations get more complicated and difficult to comply with, more businesses will fall on the wrong side of the law (never a good idea, by the way).  The politicians who make compliance prohibitively difficult and expensive will then blame “greed.”

 

That’s why they are called plea “bargains.”  From the Newport Beach Patch:

A 52-year-old woman who pleaded guilty in 2009 in connection with a $2.5-million tax fraud and money laundering scheme that included two Newport Beach properties and was later allowed to withdraw her plea was convicted today following a jury trial.

Safieh Fard had struck a plea bargain in May 2009 with federal prosecutors that recommended a 30-month prison sentence. Now Fard could face up to 20 years in prison, her attorney Correen Ferrentino said.

Sadly, prosecutors can overcharge to force a plea bargain.  Even when a defendant thinks she is innocent, the risk of a long prison sentence can make it hard to keep fighting.   It will be interesting to see how long the sentence turns out.

 

Really?  Not all tax prosecutions are justified?  No.  Tax Analysts today carries an appalling story from New York State (unfortunately available for now only to subscribers) where a small businessman was falsely accused of evading taxes on $1 million of income.  The indictment was based on shockingly lazy investigation; a close reading of the taxpayer’s return alone would have cleared the taxpayer.

It was almost as though the prosecution believed that once the department demonstrated that Monsour had received the money deposited into his accounts, the burden had somehow shifted to Monsour to prove that the receipts were not taxable income. That approach might have applicability in a civil tax audit, but it has no place in a criminal prosecution. In a criminal case, it is always the people’s burden to prove every element of the offense, whether before the grand jury or at trial, and in this case the people had to show that Monsour knowingly and fraudulently filed a false return that misrepresented his income. Showing that he had received money without also showing that the money received was taxable income was not enough, and the prosecution would have known that mistake if Monsour had been alerted to the investigation before he was indicted.

The taxpayer had borrowed money and sold property (reporting the sales properly on his return), accounting for the bank account deposits that led to the indictment.  Those calling for ever-harsher punishment and looser prosecution standards for tax crimes ought to be the first to experience it.

 

Tom Harkin, cliff jumper.  From thefiscaltimes.com:

In a recent call with reporters, Democratic Sen. Tom Harkin of Iowa signaled he was willing to let the country topple over the fiscal cliff unless President Obama and Congress strike a deal to force wealthy Americans to pay more in taxes and that protects Medicare and Medicaid from deep cuts.

“No deal is better than a bad deal, because things will change after Jan. 1, the positions will change,” Harkin explained. “Quite frankly, if we don’t get a good deal, we’ll just take it up in January or February.”

The deal is already bad.  The only question is how much worse it will get.

TaxProf,  Should the Top Marginal Income Tax Rate Be 73 Percent?  Short answer: no.

Martin Sullivan,   Should CEOs Lobby for a Carbon Tax?  (Tax.com) They might as well lobby for an oxygen tax, for all the good it would do.

Jim Maule,   Is Grover Norquist Singing a New Tax Tune?

Maybe not:  Members of Congress Appear Ready to Break With Anti-Tax Pledge As Norquist Doubles Down (TaxGrrrl)

Peter Reilly,  S To LLC As A Fiscal Cliff Acceleration Strategy ?  That means paying tax on all of your built-in gains now, but at a 15% rate.  It’s a strategy only for taxpayers with cash reserves to pay taxes now.  It makes the most sense if a sale is likely in a few years anyway, but at a higher tax rate.  The biggest risk is that the value of the business will go south before you sell the business, and you pay tax on gain that won’t be there when it’s time to cash out.

Howard Gleckman,  What Happens if Congress Extends Tax Cuts for Those Making $500,000?  (TaxVox)  It just changes where the harmful and futile policy begins.

 

That’s one way to use the $5 million lifetime gift exemption before it goes away next year.   Lindsay Lohan gets $100,000 gift from Charlie Sheen to pay toward IRS bill; Sheen now faces estate, gift tax issues  (Kay Bell)

Paul Neiffer,   IRS Bumps 2013 Standard Mileage Rates by a Penny per Mile

Jack Townsend,   The Cheek Defense in IRS Disbarment Proceedings.  Tax protest guru and former IRS agent Joe Banister is barred from practicing before the IRS; he was unable to convince the Ninth Circuit that his belief in the silly “Section 861 argument” is reasonable.

 

News you can use:  SWANS ARE EXPENSIVE! (Robert D. Flach)

I would have read the article, but I decided not to risk it.  Optometrists warn: Don’t stare at your computer screen too long (Radio Iowa, via The Beanwalker)

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Tax Roundup, 11/14/2012: So what about the other $8.4 trillion?

Wednesday, November 14th, 2012 by Joe Kristan

Tell me when they get serious about the budget.  The federal budget deficit is running about $1 trillion annually.  So how does the President propose to address it?  Primarily by increasing taxes by $1.6 trillion — over 10 years.  And, of course, no real spending cuts.  The TaxProf links this:

Wall Street Journal:  Obama Sets Steep Tax Target: President to Seek $1.6 Trillion More in Revenue, Double Level From 2011 Talks:

President Barack Obama will begin budget negotiations with congressional leaders Friday by calling for $1.6 trillion in additional tax revenue over the next decade, far more than Republicans are likely to accept and double the $800 billion discussed in talks with GOP leaders during the summer of 2011. …

Kevin Smith, a spokesman for House Speaker John Boehner (R., Ohio), dismissed the president’s opening position for the negotiations. He said Mr. Boehner’s proposal to revamp the tax code and entitlement programs is “consistent with the president’s call for a ‘balanced’ approach.” …

In negotiations between Messrs. Boehner and Obama in mid-2011, the two sides neared agreement on a plan to cut the deficit by $4 trillion over 10 years, including $800 billion in new revenue. The deal fell apart after Mr. Obama asked to raise the revenue component to $1.2 trillion, and to this day each side blames the other for the collapse. Based on that history, some senior GOP aides said they believed a likely compromise would call for about $1 trillion in new tax revenue, possibly from capping deductions for wealthier taxpayers.

As noted here, a straight dollar cap on itemized deductions would still be a tax increase on pass-through businesses.  Taxpayers who report business income on their personal returns have to deduct the state income taxes as itemized deductions, rather than as “above-the-line” business expenses.  A straight deduction cap would eliminate the deduction for state income taxes on business income.

How would you be able to tell if they are serious?  When they admit that to have government benefits for everybody, you have to increase taxes for everybody, and that cutting spending by cutting “fraud, abuse and waste” never happens.  The rich guy isn’t buying.

Chart 29. The federal deficit has grown so large that tax increases only on America’s millionaires will not be our silver bullet. Even if the government took all of the income earned by those who have an after-tax income of $1 million or more, the amount of revenue generated would fall far short of eliminating the deficit. The expected federal deficit for 2012 is about $1.2 trillion. The latest IRS data indicates that the total after-tax income for all millionaires is roughly $709 billion. If every penny of that after-tax income were taken by the government through a 100% tax rate, and we assume that no spending cuts are made to accompany the tax increase, this would account for only about 60% of the amount needed to erase the deficit. With numbers like this, one thing is clear: soaking the wealthy with increasingly higher tax rates simply cannot be the only answer to our nation’s fiscal problems.

 

TaxProf,  Democrats Embrace Romney’s Tax Plan to Limit Deductions

Patrick Temple-West,  Essential reading: Democrats like a Romney idea on income tax, and more (Tax Break)

Tell me when they get serious about the budget II: Branstad, Grassley push for extension of wind tax credit (Radio Iowa, via The Beanwalker)

So much for that deficit solution.  ‘Fat Tax’ in Denmark Is Repealed After Criticism (New York Times)

Howard Gleckman,  Congress Can’t Avoid Tax Rate Hikes By Closing “Loopholes” (TaxVox)

 

 

Meanwhile, this upcoming tax season is likely to be horrible.  Acting IRS Commissioner Steven T. Miller tells the IRS that many taxpayers may have to wait until late March next year to file, depending on whether and when an “AMT Patch” is enacted (my emphasis):

Without an AMT patch, about 28 million taxpayers would be faced with a very large, unexpected tax liability for the current tax year (2012). In addition, in order to allow time for the IRS to make the programming changes necessary to conform our processing systems to reflect expiration of the AMT patch and the credit ordering rules, the IRS would, at minimum, need to instruct more than 60 million taxpayers that they may not file their tax returns or receive a refund until the IRS completes the necessary systems changes. Because of the magnitude and complexity of the changes, it is entirely possible that these taxpayers would not be able to file until late March 2013, if not even later. Tens of millions of these taxpayers would unexpectedly have to pay additional income tax for 2012, leaving them with a balance due return or a much smaller refund than expected.

Tax season has become more compressed into the last few weeks before April 15 because 1099s and K-1s are issued later every year as a result of tax law complexity.  It looks like it could get much worse.

 

You Gotti like it.   John A. Gotti, son of the convicted organized crime figure, scores a legal victory, convincing the Tax Court not to grant summary judgment for the IRS in a tax case involving a corporation he controls with his wife.  It involves a dispute over whether IRS correspondence mailed to a jail address was a proper notification at the taxpayer’s “last known address.”

 

Another sign of the apocolypse.  There is now on online exchange for trading transferable film tax credits.  Tax Analysts reports ($link)

The newly launched Online Incentives Exchange LLC (OIX) purports to be the first “truly national, transparent, liquid exchange for the trading of state tax credits,” competing against direct brokerages in the trading of transferable and/or refundable state tax credits.

Right now, only Louisiana tax credits are trading on the exchange. Organizers plan to enable trading of California and Georgia credits in December and to eventually list on the exchange transferable and refundable tax credits in the 45 states where those incentives are available.

I prefer Iowa’s new practice of imprisoning filmmakers, myself.

 

Richard Morrison,  What Canada Can Teach Us about Corporate Taxes (Tax Policy Blog)

William Perez,  TIGTA Reveals Cause of Refund Delays that Occurred in Early 2012

Kay Bell,  Superstorm Sandy tax considerations; California cities’ soda tax falls flat

Paul Neiffer,  IRS Announces It Does Not Like Fixed Dollar Gifts

Jason Dinesen,   No to Additional Preparer Testing, Yes to CPE Requirements. I say no to the entire preparer regulation scheme.

Brian Strahle,  What Are Your Year-End State and Local Tax Needs?

Robert D. Flach has an exasperated Buzz.

 

Worse than a computer virus?  McAfee On The Run: Murder and Mayhem (But Few Taxes) In Belize  (TaxGrrrl)

In these troubled times, it’s good to know there are still things we can believe in.  Sixth Circuit Agrees That Cliff Claven Is Not A Thief (Peter Reilly)

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Tax Roundup, October 22, 2012: can houses have cowl lamps? And why Iowa tax reform will be hard.

Monday, October 22nd, 2012 by Joe Kristan

20110119-1.jpgIt’s the housing version of “cowl lamp violations.”  A few years ago an Iowa county prosecutor ended up in hot water over the practice of rewriting serious traffic offenses, like drunk driving, down to “cowl lamp” violations, sometimes in exchange for contributions to charities or government agencies.  Cowl lamps are something your great-grandpa’s car might have had.

That may have given the Iowa Civil Rights Commission an idea.  From Reason.com:

The Des Moines Register reports that for five years ending in February 2011, the Iowa Civil Rights Commission shook down landlords for “voluntary contributions” in exchange for dropping discrimination complaints. The Register obtained copies of 27 settlement agreements involving about $20,000 in contributions. Unlike money from fines, which end up in the state’s general fund, the donations went directly to the commission, creating “the impression that justice is for sale,” as state court administrator David Boyd puts it. The commission ended the practice after Winterset attorney Mark Smith questioned its propriety.

Creates the “impression?”  Creates the fact.   Instapundit explains:

I think that all revenue collected by all agencies should go to the general fund.  Otherwise, it doesn’t just give the impression of corruption, it’s corrupting. 

 

Why Iowa tax reform will be hard.  The politicians will no longer get articles like this from Radio Iowa:

State economic development officials approved financial help for six companies Friday. The Iowa Economic Development Authority awarded tax benefits to Alfagomma America to move its stainless steel tube production from its plant in Italy to its only U.S. plant in Burlington.

The company is investing 1.3 million dollars and is expected to create 14 new jobs.

With a non-corrupt system where everybody is treated the same, there would be no more press releases.  The state economy would be much stronger, but the politicians wouldn’t get to cut any ribbons.

In a more just world, the economic development bureaucrats would have to call a press conference any time a business closed or fled as a result of Iowa’s whimsical, byzantine and sometimes punishing state tax system.

 

Crime doesn’t pay, but turning state’s evidence might.  The ex-wife of a Minnesota real estate magnate gets three months after cooperating in the case against him.  He got 4 1/2 years.

 

That won’t stop them for a minute?  “Do education tax benefits produce more educated Americans? Congress has no idea.”  (Marie Spirie, Tax Analysts – subscriber link)

 

Andrew Mitchel,  Repatriate Now? (Before the Bush Tax Cuts Expire).  “There may never be another opportunity for individuals to pull cash out of foreign corporations at such a low U.S. tax cost.”

Roberton Williams,   Understanding TPC’s Analysis of Limiting Deductions (TaxVox)

Anthony Nitti,  Tax Court: Spec Home That Was Never Built Was Not A Trade Or Business

Jim Maule,  The Expensing Deduction is an Expensive and Broken Idea

Peter Reilly,  Beware Of Partnership Status Sneaking Up On Your Business Venture

Alisa Martin,  Things That You Can Do To Get Ready For Tax Season (Guest post at the Missouri Tax Guy)

TaxGrrrl,  Gun and Ammo Tax Proposal Draws Fire.  Yes, that will put Chicago’s violent criminals out of business…

The weekend Buzz from Robert D. Flach.  This part is very true: “In my 40+ years in ‘the business’ I have found that IRS notices are more often than not incorrect (and state notices even more so).”

And I’m eight feet tall!   Maryland Governor O’Malley Says State Has Third Lowest Taxes in the Country! (Joseph Henchman,Tax Policy Blog).

Going Concern,  Arthur Andersen’s Bones Still Have Some Meat on Them.  Not very tasty by now.

Fortunately, the election will be over in about two weeks.  Smelly, destructive bug entering Iowa (TheBeanwalker.com)

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Tax Roundup, 10/9/2012: Area employers find their payroll provider hasn’t been remitting their taxes. Also: taxes are easy, for drug dealers.

Tuesday, October 9th, 2012 by Joe Kristan

http://www.rothcpa.com/misc/EFTPS.JPGIt can happen here.  IRS Files Liens to Recover $3.8 Million from West Des Moines HR Outsourcing Company.   From the West Des Moines Patch:

On Friday, court documents show the IRS filed a nearly $1.2 million federal tax lien against InFocus Partners and its subsidiary, ILC Staffing Inc., seeking to collect taxes that should have been paid on behalf of the company’s clients.

Not only did InFocus Partners fail to pay taxes for each of the past two quarters, according to the lien filing on the Iowa Secretary of State’s website, InFocus and its affiliated companies have been behind in tax payments off and on since 2006. The latest filing is part of an overall $3.8 million collection effort.

A woman answering the telephone at the InFocus office at 5930 Grand Ave. said company founder and owner John Vratsinas was not available for comment. She also said the company’s president, Charles Ganske, and at least two other top officers reportedly resigned Friday after learning of the liens against their employer.

The Des Moines Business Record quotes the company’s attorney as saying the nonpayment is an “administrative mistake” that will be corrected.  One hopes so.  If the company doesn’t remit the payroll taxes withheld for employees, the IRS and Iowa will come after the employers, who will end up paying the payroll taxes twice — a painful expense, and to some businesses a potentially fatal one.

That’s why you should verify your employment tax payments even if you outsource your payroll compliance function.  You can do this by signing up for EFTPS, the Electronic Federal Tax Payment System.  Employers enrolled in EFTPS can go online to verify that their employment taxes are being remitted.  If your payroll outsourcing provider doesn’t remit in a way that lets you verify via EFTPS, that means you can’t verify, but only trust.  That can end badly.

 

If true, the Romneys can start ordering furniture.    Election is a Referendum on Tax Hikes  (Martin Sullivan, Tax.com):

The latest predictions are that if Obama wins Republicans will allow passage of tax increases for the wealthy and if Romney wins Republicans will make no concessions.

Ask President Mondale how his advocacy of tax hikes worked out for his campaign.

Anthony Nitti,  The Tax Foundation: If You Account for Economic Growth, the Romney Tax Proposal Can Work, Be Revenue Neutral

 

TaxGrrrl,  Tax Deadline Approaching.  October 15 is it for extended 1040s; there is no second extension.

Kay Bell,  Tax procrastinators, the Oct. 15 final filing deadline countdown — and tax tips to help you get there — start today!

Paul Neiffer,  Maintain Flexibility with Deferred Payment Contracts.  One of the many great tax planning tools available to farmers only.

Bill Hanigan,  New Taxes on Farmland Sales for 2013 (Davis Brown Law Firm Tax Blog).  How Obamacare may make it best to sell the farm this year.

William Perez,  Consider Funding a Coverdell Education Savings Account:

Coverdell ESA’s are tax-advantaged savings plans combining tax-deferral on investment earnings and tax-free withdrawals if the beneficiary of the savings plan withdraws funds to pay for qualified education expenses. Coverdell ESAs are funded using post-tax dollars (no deduction is allowed for contributing to the account) and allow for contributions up to $2,000 per year per beneficiary.

How about next Friday night, then?  Smith: The Timing is Wrong to Reduce the Estate Tax on the Wealthiest Americans (TaxProf)

Russ Fox,  Escort Service Operator Charged with Structuring

Standing up to the menace of undocumented bugs:  Area men document Iowa’s moths (Gazette.com, via TheBeanwalker.com)

Who said taxes were hard?   Bogus tax returns easy money for drug dealers; Local law enforcement officials call on IRS to crack down on fraud (Reading Eagle)

Another triumph of tax simplification for Doug Shulman’s IRS.

 

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Tax Roundup, 4/4/2012

Wednesday, April 4th, 2012 by Joe Kristan

http://www.hiwtc.com/photo/products/22/20/14/201422.jpgBut don’t you dare give the bank the client’s return with only oral permission, because that would be unauthorized disclosure: “TIGTA: IRS Is Not Monitoring 34% of its Servers, Putting Taxpayer Data at Risk” (TaxProf).

Pennies on the dollar for late-night cable operators: “TaxMasters Leaves CNN, Fox News, MSNBC Holding Empty Bag” (Janet Novack)

Gee, who didn’t see this coming?  Iowa jacks up its cigarette taxes.  Taxpayers respond creatively.  Iowa tries to close the “loophole.”  Taxpayers will respond creatively again.  (Radio Iowa.com, via TheBeanwalker.com.)

Deducting that home office?  Jason Dinesen warns us to Beware of Depreciation Recapture on Home Office Deduction.

“Zappers” aren’t just a Canadian thing anymore: States target tax fraud software.

The tax fraud bet didn’t work out:Northridge woman gets 18 months for tax fraud.”  The story quotes the prosecutor saying “She’s someone who liked to go to Las Vegas.”

Harold Hill would approve: Alabama Education Funding Diverted to Pay for Film Incentives. (Tax Policy Blog)  UPDATE: Not that education there necessarily deserves funding.

It’s a long way down from Patty Hearst and O.J. Simpson: F. Lee Bailey as Lionel Hutz (Anthony Nitti).

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Of course they did

Thursday, February 23rd, 2012 by Joe Kristan

Costs rise for downtown C.R. projects – The city

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