Posts Tagged ‘William Gale’

Tax Roundup, 9/3/14: Fight the power edition. And: another Iowa film credit economic triumph!

Wednesday, September 3rd, 2014 by Joe Kristan

It’s good to be back.  Sometimes other things take precedence over work.

 

Fight the Power!  Tax Analysts’ Joseph Thorndike defends the corporation income tax as a bulwark against corporate power ($link):

Popular fondness for taxing corporations may reflect an imperfect understanding of the corporate levy’s incidence. But it also reflects a clear-headed view of where the power lies in American society.

That’s interesting.  Lets see where some major institutions stack up in terms of “power,” measured by revenue (an imperfect measure, but one that is at least available for all of them, unlike net worth).

Google: $55 billion.

Apple: $171 billion.

Microsoft: $23 billion.

BP: $379 billion

State of California: $112 billion

United States Government revenue: $2,770 billion.

United States Government spending: $3,450 billion.

 

In handy graph form:

20140902-1

Of course, only one of these outfits can also send in people with guns to settle disputes with all of the others.  So who is going to impose an income tax to rein in the monster on the Potomac?

 

Economic Development, film style: Iowa pays $2 million to settle film lawsuit (Des Moines Register).  But think of the intangible benefits!

 

Kristy Maitre, Kristine Tidgren, ACA’s Thorny Impact On More-Than-2% S Corporation Shareholders

Consequently, in the absence of further guidance, we believe that if an S corporation chooses to increase wages for its employees to make up for its non-ACA-compliant employer payment plan, the more-than-2% shareholders will now have to pay FICA/FUTA taxes on that compensation, just as the other employees will now have to pay income taxes and FICA taxes on the increased wages. These payments are no longer made pursuant to an employer health plan and cannot be excluded from taxation.

You don’t have to have 50 employees to have Obamacare problems.

 

Peter Reilly, IRS Will Not Tax Forfeited Jackpots Of Compulsive Gamblers.  Mighty kind of them.

Kay Bell, Running errands for mom and other September tax moves

TaxGrrrl, Credit Cards, The IRS, Form 1099-K And The $19,399 Reporting Hole

Tony Nitti, Tax Court Says Bank ‘Thank You’ Points Are Taxable Income   

 

 

Scott Hodge, IRS Data Contradicts Kleinbard’s Warnings of Earnings Stripping from Inversions  (Tax Policy Blog)

Ajay Gupta, Yep, Son, We Have Met the Enemy (Tax Analysts Blog).  Mr. Gupta discusses the FIRPTA precedent for the current inversion hysteria:

It turns out that the enemy in the ‘80s was not the pools of offshore money ready to descend on onshore real estate. Nor will the enemy this time be the many offshore tax havens ready to shelter departing onshore companies. The enemy, as always, is closer to home.

Congress would be a good place to look.

 

Robert D. Flach once again gets to the heart of the matter:  “There is absolutely nothing illegal, immoral, or unethical with trying to ‘dodge’ taxes.  By ‘dodge’ I mean ‘avoid’.”

 

20140527-1Joseph Thorndike, When Do-Gooder Taxes Don’t Do Good (Tax Analysts Blog).

I’m no fan of anti-obesity taxes, whether they target soda, candy bars, or any other junk food. They are regressive and arbitrary, not to mention paternalistic and condescending. Supporters have all sorts of genuine good intentions. But ultimately, these taxes are simply an unfair money grab dressed up as a public health initiative.

Now we have some evidence that they may be ineffective, too.

Imagine that.

 

William Gale, Don’t be fooled: America’s deficit is still a problem

Sebastian Johnson, State Rundown: Sept. 2 (Tax Justice Blog).  A left-side rundown of “Oil tax ballot fails in Alaska, film tax credits pass in California, and Ohio needs to do more on EITC expansion. Also: updates on Iowa gubernatorial election and a new report on airline gas tax breaks.”

TaxProf, The IRS Scandal, Day 482

 

And New Coke marketing genius award goes to…  From Going Concern, news of the boldest marketing move since the Edsel.  (Adrienne Gonzalez)

 

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Tax Roundup, 3/10/14: Sioux City $afety Edition. And: rogue dentistry!

Monday, March 10th, 2014 by Joe Kristan

Sioux City Revenue Camera Windfall.  The Des Moines Register today lists the winners from revenue cameras around the state.  Public safety isn’t up there:

Tickets from automatic traffic cameras totaled $19.7 million for nine Iowa cities during the last fiscal year, but more than 34 percent of that money went to out-of-state vendors.

The summary:

20140310-1

Sioux City benefitted richly from Iowa’s status as the only state allowing revenue cameras on interstate highways:

Iowa is the only state in the country that allows speed cameras to be permanently placed on highways and interstates. The data collected by the DOT shows those cameras are the most lucrative: The two placed in a construction zone on Interstate Highway 29 in Sioux City brought in more than $4.5 million for the fiscal year ending in June.

gatsoThe evident failure of the cameras to stop construction zone speeding tells you how much they help public safety.  If they stopped speeding, there wouldn’t be so much revenue.  Of course, Sioux City also has a big incentive to generously define “construction zones” and leave them in place after construction is completed.  I drove through the I-29 zone on a Sunday night (no ticket for me!);  with no no workers around at the time, the only point of the construction zone speed limits when I drove through was camera revenue.

Some good news from the piece: “The number of red-light cameras nationally is dropping, according to a study by the Reason Foundation, a libertarian-leaning think tank.”  That’s because they’re a crock, a corrupt bargain between the operators and the municipalities, and people hate that.

 

William Perez, Need Extra Time to Finish up Your 2013 Tax Return?:

The IRS will grant a person an additional six months to file their tax return. To request this extra time, file an extension with the IRS on or before the deadline.

Filing an extension provides several benefits. Besides extra time to file the tax return, an extension also provides extra time to fund a self-employed retirement plan and to recharacterize IRA contributions.

And, contrary to myth, it doesn’t increase your chances of getting audited.  In contrast, filing an erroneous return to beat the deadline or get a quicker refund definitely increases your audit risk.

TaxGrrrl, Taxes From A To Z (2014): D Is For DRIP   

Kay Bell, Daylight Saving Time + gas taxes = boon for tax collectors, but some money-saving options for added daylight drivers 

Janet Novack, Pensions Create Yet Another Tax Trap For U.S. Expatriates

Russ Fox, False Checks, Trusts, and Ignoring Taxes Lead to Real Prison.  Indeed they do.

 

 Joseph Henchman, State Tax Reforms Are More Than Just Revenue Changes (Tax Policy Blog):

But more to the point, we consider 2013 one of the most successful years for tax reform we’ve seen in a while. We saw North Carolina cut its taxes but, more importantly, massively restructure them to become flatter, simpler, and more competitive. The real improvement in North Carolina wasn’t just the amount of taxes (though they did cut taxes, as noted above), but the structure of the tax code.

Beyond North Carolina’s landmark reform, Indiana under Governor Mike Pence (R) also moved to cut its personal income taxes and abolish its death tax. Wisconsin also made significant income tax cuts accompanied by positive structural changes authored by Representative Dale Kooyenga. Even in states that couldn’t achieve such sweeping reforms, valuable progress was made. Arizona implemented an important simplification of its sales tax code. Governor Martinez of New Mexico worked with her legislature to cut her state’s corporate tax. Texas made some positive reforms to its damaging gross receipts tax, the margin tax.

Notice one state missing there?  Anyone?  Iowa?  The Tax Update’s Quick and Dirty Iowa Tax Reform Plan is ready to go!  How about a 4% top individual rate, repeal of the Iowa corporation tax, and massive simplification — or do you like massive complexity, special favors for special friends, and the nation’s highest stated corporate rate?

 

Eric Todor, Tax Reform’s Quiet Protectionism (TaxVox): “In effect, income from the sale in the United States of goods manufactured overseas by controlled foreign subsidiaries (CFCs) of U.S.-resident multinational companies would be taxed at a higher U.S. rate than other income from the same factory”

 

William Gale, Alan Auerbach, Forgotten but Not Gone: The Long-Term Fiscal Imbalance (TaxVox):

First, ignoring projections for the future, the current debt-GDP ratio is far higher than at any time in U.S. history except for a brief period around World War II. While there is little mystery why the debt-GDP ratio grew substantially over the last six years – largely the recession and, to a smaller extent, countercyclical measures – today’s higher debt-GDP ratio leaves less “fiscal space” for future policy.

Second, while we clearly face no imminent budget crisis, our new projections suggest the 10-year budget outlook remains tenuous and is worse than it was last year, primarily due to changes in economic projections.

And the rich guy can’t pick up the tab.

 

Lois Lerner, ex-IRS, ex-FEC

Lois Lerner, ex-IRS, ex-FEC

George Will, The IRS’s behavior taxes credulity:

Obama breezily says there was nothing more sinister than “boneheaded decisions” by wayward and anonymous IRS underlings. Certainly boneheadedness explains much about this administration. Still, does he consider it interesting that the consequences of IRS boneheadedness were not randomly distributed but thwarted conservatives?

The rules that Obama says befuddled the IRS boneheads — to his benefit — read today exactly as they have read since 1959. For half a century they did not prevent the IRS from processing applications for tax-exempt status in less than three months. Some conservative group should offer $10,000 to anyone who can identify a liberal group that had the experience scores of conservative groups have had — an application delayed more than three years and receipt of an IRS questionnaire containing at least 60 questions.

Believing that there isn’t a “smidgen of corruption” is about as much of an intellectual leap as, say, believing dinosaurs and humans co-existed.

Via Instapundit

TaxProf, The IRS Scandal, Day 305

 

Jack Townsend has a List of 14 Swiss Banks Under Criminal Investigation

Quotable: 

Many smart people think preparers should be regulated. I just don’t agree. There is no market failure. If you don’t like your preparer, find another one. Or better yet, write your representative and ask for a tax system that doesn’t require low-income people to pay preparers.

David Brunori, State Tax Notes ($link)

 

I suspect he won’t need a preparer for awhile now.  From Going Concern:

Xzavier allegedly beat up a tax preparer when he found out the woman he was with wouldn’t be getting her refund in cash. After a security guard intervened, he is accused of whipping out his heat and shooting both the guard and two women. A fourth person was grazed by a bullet but not shot.

I’m sure that really helped her get that refund sooner.

 

Crazy news from Canada: Rogue dentist fined $33,000 for unpaid tax; Tung Sheng Wu practised dentistry illegally in the tri-cities and Burnaby

I’m pretty sure I’ve never seen the phrase “rogue dentist” before.

 

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Tax Roundup, 1/5/14: President proposes $1 million Sec. 1031 cap. And: other doomed stuff!

Wednesday, March 5th, 2014 by Joe Kristan
Economic supergenius

0-99, 0-414

The President trotted out his old petty tax increases in his 2015 budget yesterday, and a few new ones.  The  new taxes would go towards, among other spending increases, an increase in the Earned Income Tax Credit welfare program for childless taxpayers.

If history is a guide, the Obama budget isn’t going to do well in Congress.  His own party leadership in the Senate has already pledged to pass no budget at all.  When his 2013 budget plan came up for a vote in Congress, it was rejected 99 -0 in the Senate and 414-0 in the House.

Still, it is worth mentioning some of the tax proposals, just so you are aware of them and their low likelihood of passage anytime soon.  Also, in light of the recent Camp “tax reform” proposal, apparently no tax provision is too dumb to get bipartisan consideration, so some of these might even pass someday.

– S corporations: the bill would tax as self-employment income 100% of K-1 income from professional S corporations and partnerships of materially-participating owners.  Businesses covered would include health, law, engineering, architecture, accounting, actuarial science, performing arts, consulting, athletics, investment advice or management, brokerage services, and lobbying.  For some reason, regular compensation would no longer be wages, but would instead be self-employment income.  That would wreak havoc on everybody’s 401(k) and profit-sharing plans.

- Like-kind exchange benefits would be capped at $1 million per taxpayer per year.  That won’t be popular with the real estate industry.

The bill also drags out dozens of the old proposals from his prior budgets, including LIFO repeal, ordinary income treatment for carried interests, capping the value of deductions at 28%, and capping build-ups in retirement plans.  Nothing at all is likely to happen before the next election on these proposals, but as many Obama proposals are also included in some form in the GOP Camp plan, they all have to be considered viable next time a major tax bill shows signs of moving.

The TaxProf has a good link-filled roundup.  The official explanation of the revenue-raisers is here.

Other coverage:

Kay Bell, Obama budget proposes more child care help for younger kids

Leslie Book, President’s Budget Proposes Major Procedural and Administrative Changes (Procedurally Taxing).  “The popular media has generally described the plan overall the way Reuters did in reporting that it ‘stands little or no chance of being approved as is by Congress, where Republicans, who control the House of Representatives, disagree with the president’s policy priorities.'”

 

Des Moines Register, Voters OK increasing franchise fee in Des Moines.  The vote is the result of the city being ordered to repay an illegally-collected utility tax:

The money raised by increasing the franchise fee to 7.5 percent from 5 percent for seven years will be used to pay off about $40 million in bonds issued by the city to pay for the refund and administrative costs.

Among the “administrative costs” is $7 million in legal fees Des Moines was ordered to pay to the winning taxpayer attorneys after a scorched-earth court battle by the city to avoid repaying the illegal tax.  Next time, don’t collect an illegal tax, and pay up if you’re called on it.

 

Alan Cole, True Marginal Tax Rates under Chairman Camp’s Proposal (Tax Policy Blog).  Full of high-income phase-outs, it creates all sorts of goofy marginal rate anomalies:

Marginal Tax Rates Camp Tax Reform

Note the spike in rates at the low-end as a result of the earned-income tax credit phase-out.  That doesn’t even include the effect of the state EITCs that piggyback on the federal credit.  All of this is the opposite of tax reform.  Apparently neither party is ready for reform.

William Gale and Donald Marron, The Macro Effects of Camp’s Tax Reform (TaxVox): “How would Camp’s plan increase growth, and why is the range of estimates so wide?”

 

Paul Neiffer, Additional Tax Reform Items.  “Remember, this is just a proposal and nothing will happen this year.”

Gene Steurle, A Camp-ground for Tax Reformers (TaxVox).

 

20130419-1Russ Fox, Deadlines for Us, but Not for Them:

For practitioners, the current state of the IRS is such that you can expect a lot of delays in responding to notices. Think months instead of weeks. Expect to have to call the IRS to verify that your response was received, and make sure clients are aware that the IRS is moving like molasses rolling uphill. Make sure anything you send is documented: certified mail with proof of receipt if by mail; if faxing, make sure you have the proof of receipt. Given the lengthy delays our clients are going to be in fear for far longer…

For taxpayers, you need to be aware that expediency is not part of today’s IRS. You have to be expedient in responding to notices but don’t expect the IRS to be expedient in getting back to you. Do not worry if it takes a long, long time to resolve something with the IRS. That’s just par for the course today.

Unfortunately, clients generally assume that if the IRS has sent a letter, that means the practitioner screwed up.  Many people, especially old folks, just pay up when they get an IRS notice.

 

William Perez, Tax-Deductible Relocation Expenses

TaxGrrrl, Taxes From A To Z (2014): B Is For Basis   

David Brunori, Taxing Coca Cola while Exempting Broccoli is Bad Policy Even for Native Americans (Tax Analysts Blog):

 In any event, several newspapers reported that one of the sponsors of the proposal was himself obese. He decided to change his life and lost 100 pounds. And he did it without any tax increases or help from the government.

Like so many reformed smokers/overeaters/drinkers, he has become annoying about it.

Tax Justice Blog, State News Quick Hits: State Policy Makers Need a Tax History Lesson

 

TaxProf, The IRS Scandal, Day 300.

 

Cheer up!  Filing Your Tax Return Is Terrible — But It Was Worse 100 Years Ago (Joseph Thorndike, Tax Analysts Blog).

News from the Profession.  The Real Loser at the Oscars This Year Was PwC.  (Going Concern)

20140305-1Jason Dinesen shares his Tax Season Tunes:

Here’s a sampling of other tunes I listen to while working when not getting my Gordon Lightfoot fix:

  • Neil Diamond. Generally not his “famous” songs. I detest — and I mean absolutely revile — “Sweet Caroline,” for example. The original recording is okay, but he’s turned it into a hokey, over-the-top, karaoke show-tune over the last few decades. Blech. I like the more introspective songs like “Shilo,” “If You Know What I Mean,” “Stones,” pretty much anything from his relatively new “12 Songs” and “Home Before Dark” albums,  and a host of other Neil Diamond songs that most people have probably never heard of.

  • An mix of songs that include Billy Joel, pop rock from the 60s and early 70s, Elvis, Willie Nelson, Conway Twitty, AC/DC, Juanes, Bon Jovi, CCR, Johnny Cash and Jimmy Buffett.

In case you were wondering, I believe Jason works alone.

 

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Tax Roundup, 3/3/2014: For whom does the AMT toll this year? And Lois Lerner: will she or won’t she?

Monday, March 3rd, 2014 by Joe Kristan

Laura Saunders, Beware the Stealth Tax; How to minimize the damage of the alternative minimum tax:

…the AMT now applies to eight times as many taxpayers as it did 20 years ago, and common AMT “triggers” often are less esoteric than in the past. “They can be as simple as having three or more children, taking a large capital gain, or—especially—deducting state and local taxes,” says Dave Kautter, managing director at American University’s Kogod Tax Center, who studies the AMT.

20140303-1

That’s pretty much what I see in our practice.  AMT is rare for taxpayers with income under $100,000, and usually occurs in large families.  It can be impossible to avoid AMT in the $200,000 – $500,000 income range, especially in a state with an income tax.  Above $500,000, it typically involves large capital gains.  Both AMT and regular tax have the same 20% tax on capital gains, and the AMT doesn’t let you deduct the related state income taxes, so the AMT will kick in.

 

Lois Lerner, ex-IRS, ex-FEC

Lois Lerner, ex-IRS, ex-FEC

Ann Althouse,  Who put “acute political pressure” on Lois Lerner “to crack down on conservative-leaning organizations,” and why did Lerner need a “plan” to avoid “a per se political project”?:

I think it must mean that it was a political project and they were hard at work figuring out how to make it not look like what she knew it was. That’s a smoking gun.

Phony scandal.  Nothing to see here…

TaxProf, The IRS Scandal, Day 298

WSJ, No Change: Former IRS Official to Take the Fifth.  “A lawyer for former Internal Revenue Service official Lois Lerner said Sunday that she will decline to testify about IRS targeting of grass-roots conservative groups, contradicting a top GOP lawmaker.”  Presumably because there’s not a smidgen of wrongdoing.

 

TaxProf, Mulligan: ObamaCare’s Multiple Taxes Are Shackling the Job Market.  The TaxProf quotes from the University of Chicago’s Casey Mulligan: 

Once we consider that the new law has an employer penalty, too, the labor market will be receiving three blows from the new law: the implicit employment tax, the employer penalty and the implicit income tax. Regardless of how few economists acknowledge the new employment tax, it should be no surprise when the labor market cannot grow under such conditions.20140106-1

It’s funny how the same people can argue for high tobacco taxes to curb smoking insist that employment taxes won’t curb hiring.

 

Jason Dinesen,  Accounting for the 0.9% Medicare Surtax on Iowa Tax Returns

Kay Bell, Delayed Tax Refunds, TC 570 And An Important Distinction .  Don’t jump to conclusions about your delayed refunds.

William Perez, Resources for Filing Corporate Taxes for 2013.  “March 17th, 2014, is the due date for filing corporate tax returns.”

 Kay Bell, 5 ways to maximize tax-deductible business entertainment

Russ Fox, Former Chairman of Woodland Park, NJ Democratic Committee Bribes His Way to ClubFed

Jack Townsend, IRS CI Is Looking at Renunciations of Citizenship Just in Case .  Looking to take one last shot at the fleeing jaywalkers.

 

Jim Maule, Find Some money, Pay Some Tax:20131017-2

Every now and then we read of someone finding something valuable. This time, it’s a California couple who found a stash of gold coins on their property. According to this story, the couple found eight cans containing 1,400 coins, valued at approximately $10 million.

The joy of the moment is tempered, of course, by the existence of income taxes, both federal and state. Must the couple pay tax? Yes. The value of the coins is included in the couple’s gross income. It is ordinary income. The law is settled. 

Easy come, easy go…

 

Martin Sullivan, The Beginning of the End of Tax Reform (Tax Analysts Blog):

Enactment of the research credit in 1981 was the antithesis of simplification. It has a highly complex incremental structure and, even more problematic, it assigns tax directors and IRS agents the impossible task of distinguishing research from ordinary business expense. The Camp draft retains the credit and eliminates expensing. The opposite approach would be more sensible.

The research credit study industry is full of former Congressional staffers who like things the way they are.

William McBride, Scott Hodge, Top Line Assessment of Camp’s Tax Reform: Increases Progressivity and Taxes on Business and Investment (Tax Policy Blog):

In general, Camp simplifies and lowers tax rates for many taxpayers and businesses, but does so through a net tax increase on businesses and taxpayers earning over $200,000. As a result, the plan makes the individual tax code even more progressive, it increases the amount of redistribution from high-income taxpayers to other taxpayers, and it worsens the current bias against saving and investment—all of which will be a drag on long-run economic growth.

It looks more and more like the Camp plan was a false move.

William Gale, Dave Camp’s pitch to overhaul U.S. taxes: An impossible dream? (TaxVox)

 

It’s getting real in New Jersey, according to the London Daily Mail online:   ‘Ready to plead guilty': Teresa and Joe Giudice set to reach plea deal on 41 charges of fraud and tax evasion.  If they were cheating on taxes, becoming national celebrities could have been a bad move.

 

 

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Tax Roundup, 1/31/14: Earned Income Tax Credit Awareness Day party edition! And: e-filing begins.

Friday, January 31st, 2014 by Joe Kristan


EITC error chart
Yes, for those of you not already taking the day off to observe it, today is Earned Income Tax Credit Awareness Day!  Let’s celebrate with a true story of EITC awareness.

Cedar Rapids tax preparer Demetries Johnson displayed her awareness of the credit in a big way:

Defendant DEMETRIES JOHNSON notified some taxpayers seeking her services that she could obtain larger tax refunds than they would otherwise receive.  To obtain refunds, defendant DEMETRIES JOHNSON would knowingly report false information on taxpayers returns. The claims made in the tax returns were false, fictitious, and fraudulent in that the claims for refunds, for example: 1) falsely reported income when little or no income was earned, thereby substantially and materially overstating taxpayers’ income in a manner that made the taxpayer appear eligible for a refund by virtue of the EITC; and 2) falsely included a child or children on taxpayers’ returns who did not in fact qualify under the EITC.  Through submission of these false claims, defendant DEMETRIES JOHNSON increased payments made by the Internal Revenue Service to the taxpayers or to bank accounts controlled by the defendant.

Her awareness ended up earning a two-year prison sentence after she pleaded guilty to tax charges.  Her keen level of awareness isn’t uncommon; a recent Treasury Inspector General analysis showed that 21-25% of the $13 billion of the credit issued annually is claimed “in error.”  No small amount of those errors are deliberate.

Those who scam the system are especially aware that the credit is “refundable.”  If you claim more credit than you owe in taxes, the IRS will send you a check for the excess.  Like all refundable credits, it attracts fraudsters.

Come to think of it, maybe “awareness” isn’t the real problem with the Earned Income Credit.

 

Flickr image courtesy Shock264 under Creative Commons license

Flickr image courtesy Shock264 under Creative Commons license

When you buy a round, it’s always popular Wind industry fears slowdown as Congress considers future of popular tax credit  (Des Moines Register).  The recipients of wind subsidies delivered through the tax law are annoyed that there is a delay in getting their free stuff.

The headline says the wind turbine subsidy is “popular,” but nothing in the article backs that up, or even repeats the claim.  I suppose it’s as popular with the Warren Buffet-controlled utility that is a big recipient of the credit as the Earned Income Tax Credit was with Demetries Johnson’s clients.

 

Lois Lerner, ex-IRS, ex-FEC

Lois Lerner, ex-IRS, ex-FEC

TaxProf, The IRS Scandal, Day 267.  He highlights today’s Peggy Noonan piece:

 Meanwhile, back in America, conservatives targeted and harassed by the Internal Revenue Service still await answers on their years-long requests for tax exempt status. When news of the IRS targeting broke last spring, agency officials lied about it, and one took the Fifth. The president said he was outraged, had no idea, read about it in the papers, boy was he going to get to the bottom of it. An investigation was announced but somehow never quite materialized. Victims of the targeting waited to be contacted by the FBI to be asked about their experience. Now the Justice Department has made clear its investigation won’t be spearheaded by the FBI but by a department lawyer who is a campaign contributor to the president and the Democratic Party. Sometimes you feel they are just laughing at you, and going too far.

For a case where a key figure promptly hid behind the Fifth Amendment, the FBI was sure quick to conclude there was no crime.

 

William Gale, Benjamin Harris, David John, State of the Union Speech Promotes New Retirement Savings Vehicles (TaxVox):

 Similar to the R-Bond discussed in a recent AARP Public Policy Institute paper written by William Gale, David John and Spencer Smith, MyRA would allow individuals to save in a government bond account similar to the one offered as an option to federal employees through the Thrift Savings Plan. The details are unclear (there’s a WhiteHouse fact sheet here), but MyRA would allow new savers and those with small balances to accumulate retirement savings without either having to pay administrative charges or face market risk.

Just inflation and government policy risk.

 

20130916-1TaxGrrrl, IRS Officially Opens Tax Season Today, Begins Processing Returns and Refunds

William Perez, IRS’s Electronic Filing Systems Opens January 31

Kay Bell, Are you ready to e-file your federal tax return? Here’s how.

Trish McIntire, IRS Notice Prevention

 

Fear the Family (and other related parties).  My new post at IowaBiz.com, the Des Moines Business Record Business Professionals Blog.

 

Kyle Pomerleau notes A Few Contradictions in President Obama’s State of the Union Address (Tax Policy Blog)

Keith Fogg, Does Treasury’s Policy Restraining Referrals to Low Income Tax Clinics Harm Individuals and the Tax System? (Procedurally Taxing)

Robert D. Flach serves up his last Buzz for awhile as he begins his tax season hiatus.  It’s his 43rd tax season.  If I hit my 43d tax season, it will be in my 68th year.  I admire Robert’s endurance, but I have no plans to match it.

 

haroldDirector of Chartered firm among 13 charged over £2.5m film tax fraud (ifaonline.co.uk).  I think film tax credits are the bait car of tax incentives.

Useless tool.   Treasury Nominee Dynan Calls Home Buyer Tax Credit ‘Useful Tool’ (Tax Analysts, $link).  Not only should her nomination be rejected on the basis of her approval of the failed and fraud-ridden credit, she should be presumed self-disqualified from any public position ever.

While I think the court decision ending tax-free treatment for cash parsonage allowances is likely to stand, not everyone agrees.  Zelinsky: The First Amendment and the § 107 Parsonage Allowance (TaxProf)

 

Tax Trials continues its “Famous Fridays” series with Pete Rose, Gambling Winnings Are Income Too.

News from the Profession: PwC Doing Its Part to Keep Dog Tails Wagging in Northeast Ohio (Going Concern)

 

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Tax Roundup, 12/16/2013: Ames! And: if you’re explaining, you’re losing.

Monday, December 16th, 2013 by Joe Kristan

It’s a cold day In Ames, Iowa, but it’s toasty warm with 315 or so eager participants in the last session of this year’s ISU Center for Agricultural Law and Taxation Farm and Urban Tax Schools!  

20131216-1

The Ames Crowd!

It’s a fun school, with lots of good attendees with great, challenging questions.  I’ve enjoyed working on the Day 1 panel with emcee Roger McEowen and IRS Taxpayer Liason Kristy Maitre

 

20120906-1“In economic development, if you’re explaining, you’re losing.”  An article at WCFcourier.com makes an often-overlooked point about how economic development spiffs that complicate the tax law end up backfiring:

A simpler tax system may top all other requests from the business groups, said Steve Firman, director of government relations for the Greater Cedar Valley Alliance and Chamber.

Firman pointed out that Iowa ranked 40th among states in the Tax Foundation’s 2014 tax climate comparisons because it is tough to explain the complexity of federal deductibility that blurs Iowa’s true tax picture.

Firman, explaining his position, pulled out a line he said he likes to use:

“In economic development, if you’re explaining, you’re losing,” he said.

Iowa’s byzantine tax system, with its dozens of special breaks, requires a lot of explaining.  The Tax Update’s Quick and Dirty Tax Reform Plan, with low individual rates and no corporate tax, would be a much better sell.

 

William Gale,  The Year in Taxes: From the Fiscal Cliff to Tax Reform Talks (TaxVox):

Although Camp and Baucus do not appear to have reached agreement on how much revenue should be raised or on how to raise it, the two leaders have nonetheless raised some interesting ideas. But the sorry state of tax reform can probably best be summed up by a small business owner who attended the New Jersey stop of a listening tour that the two chairmen held last summer. She urged the two leaders to “get rid of the deductions that don’t affect me.” As long as that attitude prevails, meaningful tax reform will not happen.

The same dynamic is at work in Iowa.

 

TaxGrrrl, Budget Faces Challenge From Senators Wary Of Spending, User Fees To Taxpayers   

William Perez, Use Fundsin a Health Care Flexible Spending Account (Year-End Tax Tips)

Kay Bell, Tax deductible mileage rate drops a half-cent in 2014

Annette Nellen, What’s My Rate? Challenges of Understanding 2013 Federal Taxes

Paul Neiffer, How Many 2013 Tax Brackets

 

IrwinIrwinIrwinirwin.jpgPeter Reilly, Euro Pacific Capital’s Peter Schiff Defends His Tax Protesting Father Irwin Schiff   Peter has a lot of interesting background on tax protester Irwin and his controversial, but much more prudent, son. And: “I can’t blame Peter Schiff for sticking up for his dad.  I would too, if I still had one.”

 

 

Irwin

TaxProf, The IRS Scandal, Day 221

Jack Townsend, Article on New Sentencing Guidelines on Unclaimed Deductions and Credits

 

Robert Rizzo

Robert Rizzo

Russ Fox, Former Bell Administrator Pleads Guilty to Tax Fraud; That’s the Least of His Problems:

 In what is (and was) a huge scandal, Mr. Rizzo and his cronies basically used the City of Bell as their own personal piggy bank. He’s going to be going to state prison for 10 to 12 years (his sentencing will be in March). The scandal allegedly included salaries of up to $800,000; gas tax money being used for these salaries; and falsifying city documents to hide the salaries. The city council members from that time period are awaiting trial.ta

Just a humble public servant.

 

News from the Professon:  Grant Thornton Employees Break Out Dynamic Christmas Sweaters for Holiday Party

Jason Dinesen,  North Dakota Taxes, Same-Sex Marriage, And a Really Bizarre Twist 

The party’s over.  Unemployed German couple accused of tax fraud after caught hosting sex parties.   They had a $250, er, cover charge.

 

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Tax Roundup, 10/24/13: Payroll tax grief in Cedar Rapids. Also: suits, geeks, and Obamacare.

Thursday, October 24th, 2013 by Joe Kristan

bureauofprisonsNever borrow withheld taxes. A little story out of Cedar Rapids this morning has a big lesson for business owners: Former owner of Cedar Rapids security firm sentenced on tax charge (Dar Danielson, Radio Iowa).  In its entirety:

A former eastern Iowa business owner will spend over two years in prison on a tax violation. Forty-six-year-old Eric Holub of Clarence pled guilty to failing to forward withholding taxes he took out of his employee’s checks to the IRS.

Holub admitted to failing to send $460,000 in withholding taxes from January 2008 to December of 2009 for Premier Security, a private business he owned in Cedar Rapids. Holub was sentenced to 30 months in prison and three years supervised release.

Two paragraphs – just enough to tell an alert reader a story of financial catastrophe.    Court documents tell a bit more of the defendant’s story.  He had to use a public defender, so he’s broke.  He’s married with six kids, three under 10.  Even though he’s going away for 2 1/2 years, he still has to pay the IRS $438,426.17 somehow.  Small wonder he’s being treated for depression.

What we don’t learn is why he didn’t pay over his payroll taxes.  I handled payroll in the early days of our firm, and there were times when it sure would have been handy to not remit the payroll taxes right away, given other pressing cash needs.  Maybe cash was tight, and it seemed like a good way to pay vendors.  Maybe he figured he’d get caught up someday, but when the IRS didn’t react immediately, catching up seemed like it wasn’t so important.

In any case, it’s a huge mistake to not remit payroll taxes on time.  Penalties start running up immediately, and bankruptcy or using a corporation will not make the liability go away.  And more and more, the government isn’t satisfied the with getting the cash; they want jail time too.  30 months plus principal, interest and penalties for “borrowing” payroll taxes makes car title loans look like a bargain.

Links:

Indictment

Judgement

 

20130320-1Iowa R.V. Owners come in from the cold.  Iowa’s amnesty for R.V. owners who had skipped Iowa registration fees by registering their vehicles in Montana ended yesterday with “dozens” of settlements and “just over $100,000″ in fees collected, reports the Des Moines Register.  The idea that you could use a Montana LLC to skip registration fees in Iowa never seemed remotely plausible to me, but people will believe just about anything if it might save them a few bucks.

 

 

Arnold Kling, The Obamacare Suits/Geeks Divide:

In response to the WaPo story, I wrote a letter to the editor, which they published (mine is the third letter on this page). This is not a technical screw-up, and it will not be fixed by technical people. It is an organizational screw-up. And until that is recognized, it probably will get worse. I write,

In my experience, communication failures between technical staff and management reflect an atmosphere of fear and lack of mutual respect.

I call this the suits-geeks divide. I saw it during the financial crisis, when it was evident that many mortgage credit-risk geeks warned of problems at their firms but management went out of the way not to listen. Merrill Lynch and Freddie Mac were particularly well-documented cases.  

It’s starting to look like a delay of the individual mandate — the key tax provision that holds Obamacare together — is inevitable.   It may take some time yet for the administration to swallow this bitter pill, just after they shut down the government rather than accept a GOP-sponsored delay.

 

Megan McArdle,  Why Obamacare Is Like Three Mile Island. “All the pieces are interdependent, so a failure in one part is apt to cascade throughout the market. This is not a system where you want to start pulling out one piece to see how well the rest can get along without it.”

 

Des Moines Register, Lawmakers are warned of unfunded liabilities in pensions:

Iowa’s public employee pension funds face billions of dollars in unfunded liabilities, and tough scrutiny is needed to ensure taxpayers and public employees are protected, state lawmakers were told Wednesday.

Public defined benefit plans are lies.  The only question is whether the beneficiaries are being lied to with promises that won’t be kept, or the taxpayers are being lied to by politicians hiding the real cost of government payroll.  Probably both.

20130419-1TaxGrrrl,  IRS Issues More Guidance On Post-Shutdown Operations 

Kay Bell, IRS seeks volunteers for tax-exempt advisory panel.  I bet they get some Tea Party applicants.

 

William Gale,  The Illogic of the McConnell Debt Limit Rule (TaxVox)

TaxProf, TIGTA: Hundreds of Employees of IRS Contractors Owe Millions in Taxes

Dan Mitchell, Welfare Fraud Is another Reason to Replace the IRS with a Flat Tax.  More on the TIGTA EITC report we mentioned yesterday.

William McBride,  Ripe for Reform: Improper EITC Payments Exceed $11 Billion per Year (Tax Policy Blog)

Tax Justice Blog,  Illinois Ruling Strengthens Case for a Federal Solution to Online Tax Collection

Cara Griffith, In Defense of State Treasurers (Tax Analysts Blog)

 

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Tax Roundup, 10/3/2013: Three-day shutdown retroactively responsible for 8-month ID theft refund delay! And… standards!

Thursday, October 3rd, 2013 by Joe Kristan
Wikipedia image courtesy Tallent Show under Creative Commons license

Wikipedia image courtesy Tallent Show under Creative Commons license

Never mind the last eight months, it’s the last three days that are the problem.  KCRG.com reports:  Government Shutdown Holding Up Tax Refund for Local Family:

A Cedar Rapids woman and her family have been waiting for a $3,250 tax refund for 8 months now, and with late bills piling up, she doesn’t know how much longer she can hold out.

The problem is that during a government shutdown, there’s no way for her to contact the Internal Revenue Service to find out where her check is.
The troubles began for Autumn Alicea when she filed for her tax return back in February. A while later, she discovered someone in Florida had stolen her identity. Alicea said it took the IRS several weeks to investigate and verify that she was the real Autumn Alicea. “So they said it would take about 8 weeks to process my return now that they knew the one from Iowa was indeed the valid return, and the one from Florida was not.”

So the shut down for the last three days is responsible for the late refund?  Not likely.  It can take a lot longer than eight weeks for the IRS to get a stolen refund back in the right hands in the best of times.  It took 121 weeks to for Jason Dinesen’s widowed ID theft client to get hers.

It’s fascinating what the government considers “essential.”  Paying people to keep 90-year old veterans away from an unstaffed open-air memorial and to barricade private businesses is “essential,” but getting money it fairly owes to honest taxpayers after carelessly mailing it to two-bit grifters, well, that’s strictly optional.

 

More shutdown coverage:

William Gale, It’s Groundhog Day Over the Debt Ceiling

Christopher Bergin, ‘Your Voice at the IRS’ Silenced (Tax Analysts Blog).  Like I said, interesting priorities.

Kay Bell,  ‘Essential’ Representatives, Senators get paid during shutdown.  If they paid truly essential politicians, the federal payroll would go to about zero.

 

 

20131003-1Casey Mulligan, How ObamaCare Wrecks the Work Ethic (Wall Street Journal)

The chart nearby shows an index of marginal tax rates for non-elderly household heads and spouses with median earnings potential. The index, a population-weighted average over various ages, occupations, employment decisions (full-time, part-time, multiple jobs, etc.) and family sizes, reflects the extra taxes paid and government benefits forgone as a consequence of working.

Like many other “anti-poverty” programs, it fights poverty by punishing efforts to escape poverty.

(Via Greg Mankiw)

David Brunori, State Taxes and the Poor (Tax Analysts Blog): “As importantly, ITEP highlights the problems with states reducing their earned income tax credits”  I think the high implied marginal tax rate of EITC phaseouts on taxpayers trying to escape poverty is underappreciated.

 

TaxProf, IRS Waives Individual Mandate for Americans Living Abroad.  Finally a portion of the tax law where Americans abroad actually get better treatment than the rest of us.

 

Wikipedia image

Wikipedia image

It’s official.  Beanie Babies Creator Pleads Guilty to Tax Evasion (Wall Street Journal).  The article cites Tax Crimes Blog proprietor Jack Townsend: 

An analysis done earlier this year found U.S. courts have been more lenient in cases tied to the government crackdown on secret offshore accounts. The average sentence in criminal offshore cases has been about half as long as in tax shelter schemes, according to a comparison of Internal Revenue Service statistics and data compiled by Houston attorney Jack Townsend, who publishes the Federal Tax Crimes blog. In many cases, judges are also opting for shorter sentences than recommended under federal guidelines.

He will have to pay $53.6 million in FBAR penalties under the plea agreement.

 

Related: Jack Townsend, Ty Warner, Beanie Babies Creator, Pleads Guilty

Slightly related:  Green card received in 2006? Give it up in 2013 (Phil Hodgen)

 

Me, Creativity fails to protect custom homebuilder from capitalizing costs.  Section 263A snags custom homebuilder.

Andrew Lundeen, Blank Slate Tax Reform Could Damage Economic Growth (Tax Policy Blog)

Why partisan tax law enforcement is always a scandal.   Vietnam dissident Le Quoc Quan jailed over tax evasion (BBC).  I think “dissident” is key to understanding the “jailed” part.

Tax Justice Blog,  State News Quick Hits: Andrew Cuomo Loves Tax Cuts, So Does ADM, and More

Cara Griffith, Floating on a State Tax Revenue Bubble (Tax Analysts Blog):

According to a report by Lucy Dadayan and Donald Boyd of the Rockefeller Institute, the record income tax receipts are a “temporary ‘bubble.’” 

Related: Iowa tax revenue up 4.1 percent past three months (Des Moines Register)

 

 

Robert D. Flach,  STANDARDS? DON’T MAKE ME LAUGH:

I had to laugh at the H+R official referring to “the same standards as we do”.  I am not aware of any evidence of such standards.  In fact the evidence is to the contrary.

They have high standards of placing their people in high places in the IRS, at least.

 

Speaking of high standards:

Cop used his job to commit identity theft, feds say. (sun-sentinel.com)

Ex-W. Pa. deputy faces fed tax evasion sentence (AP)

 

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Tax Roundup, 4/9/2013: We assume it is so, and that makes it so.

Tuesday, April 9th, 2013 by Joe Kristan

Radio Iowa runs with this headline “$8.7 million from “Development Fund” creates 600+ jobs.”  This headline arises out a “study” paid for by the economic development bureaucracy (meaning: taxpayers) to demonstrate the tremendous job-creating skills of people who give your money to other people.  How did this study demonstrate this job creation?

By assuming it.

From the “study”:

A survey of past recipients of Demonstration Fund investments was conducted by the Iowa Innovation Corporation to determine, among other things, how large these companies are now as compared to their pre-investment levels. This growth in size – in annual revenues and in head count – can be attributed in part to the involvement of and investment by the Demonstration Fund.

Furthermore, the resulting economic impact is greater than the direct increase in expenditures and head count, since those increases lead to a series of spillover effects, whereby the impact of new company spending and employee earnings ripples through local economies and supports additional economic activity and job creation. Job impact estimates are determined by using standard input-output methodologies and multipliers, as provided by the US Department of Commerce.

In other words, they assumed:

– that multipliers work – a shaky assumption.

– that the businesses and jobs wouldn’t happen without the wonderful effects of your money being directed by politicians to those businesses.

– that the money wouldn’t have also generated jobs if it had been spent elsewhere.

That’s the same kind of thinking behind the 2009 stimulus spending spree.  The results were less than assumed.  The dark line is what government projected that spending would do to unemployment, using “standard multipliers.”  The lighter blue line was the grim fate awaiting us absent a government binge.  The red dots are the actual post-binge unemployment rates.

20130409-2

The study does not have the two words that could have given it credibility:opportunity cost.”  They assume that the money left in the hands of taxpayers would have done nothing.  But it would have been spent elsewhere, undirected by politicians; it would have bought things, creating profits and jobs.  But as they would have gone unclaimed by economic development officials, no press conference could have been called, so they don’t count.

 

Jeremy Scott, What Should Be in the Obama Budget (Tax.com):

Obama consistently ignores the statutory timeline for releasing his budget, and this year is the latest he has ever put forward a fiscal proposal.  On all things administrative, the president is frequently dilatory.  But those waiting with bated breath for Obama’s proposals will be disappointed — the budget will be more of the same and has little chance of actually being passed or even taken up by Congress.

Good news.

Does President Obama Want To Tax Your Retirement?  His budget proposes a cap on the size of retirement accounts, but see the item above.

 

TaxProf,  WSJ: Taxing Lunch at Google and Facebook?.  Will the IRS start putting free meals for techies on their W-2s?  Just don’t tax my busy season office donuts.

Tax Trials, New York’s Highest Court Affirms Constitutionality of Click-Through Nexus

Nostalgia.  Today in History: Income Tax Ruled Unconstitutional in Pollock v. Farmers Loan Trust Co. (Joseph Henchman, Tax Policy Blog)

William Gale, Tax Policy Should Consider New Business, Not Small Business (TaxVox)

Martin Sullivan, How Should the U.S. Stop Profit Shifting? (Tax.com)

 

Trish McIntire, One Week Warning

Kay Bell,  Taxes are due in a week! Don’t panic. Use 7-day filing plan

William Perez,  What to Do if You Owe Taxes for 2012

Russ Fox, Bozo Tax Tip #4: Procrastinate!

 

Jim Maule,  How Not to Litigate a Tax Case

Peter Reilly, Wesley Snipes Raises Creationist Hopes For Kent Hovind

Definitely not a problem for me this year:  Bragging About Winning Your NCAA Pool On Facebook May Cost You Come Tax Time (Tony Nitti)

 

News you can use: The Definitive ‘I’m Quitting Public Accounting’ Checklist (Going Concern)

 

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Tax Roundup, 3/13/2013: Governor, legislators battle over who to give your money to. Plus: Education credit returns bog down.

Wednesday, March 13th, 2013 by Joe Kristan

GovBranstadI will fight for the right to tax you to subsidize other people.  Governor Branstad is touchy about criticism of the massive tax breaks for the Southeast Iowa Orascom fertilizer plant.  Radio Iowa reports:

“I’m here to make it clear that the chief executive of this state is on your side and we will fight for these jobs and I want to make it clear that when we make a promise to Lee County — or to any county in Iowa for that matter — it’s a promise we’re going to keep, no matter what they might say in Des Moines in any committee meeting,”

Never mind the high possibility that the plant would have been built without our tax money.  Never mind the moral problem of taxing existing businesses and taxpayers to lure and subsidize outsiders.  Never mind that political allocations of investment capital are always and everywhere unwise.  Forget the lost opportunities for taxpayers to spend the money on their own projects.  Jobs!

The Governor also hinted at darker forces opposing the tax credits, reports KCCI.com:

And he said he believed the Koch brothers were behind some opposition to the plant because it would hurt their fertilizer business.

So Iowa Democrats opposing the subsidies are tools of the libertarian Koch brothers.  Who knew?

Prior coverage here.




In other bad state tax policy news, the Senate Ways and Means Committee Democrats advanced an increase in the Iowa earned income credit from 7% of the federal amount to 20%.  Unfortunately, it would also be a huge increase in the marginal Iowa tax rate of families working their way out of poverty.  The phase-outs of the credit create a hidden high marginal tax rate that punishes families emerging from poverty.

 

The EITC is a refundable credit, which means the tax man writes checks to folks with no taxes.  Naturally EITC fraud is rampant.

 

 

TaxGrrrl, Hundreds Of Thousands Of Taxpayers Thought To Be Impacted By Education Credit Snafu

IRS agent pleads guilty to charges resulting form selling out a whistleblower.  Jack Townsend has the scoop.

Kay Bell,  2013 tax filing season gets crazier for some H&R Block, TurboTax customers

Jason Dinesen,  Small Business Health Insurance Credit, Part 2

Elizabeth Malm,  Texas Considering Drastic Modifications to Margin Tax (Tax Policy Blog).  Good.

Patrick Temple-West,  Yankees embrace frugality to dodge tax, and more.  Who says taxes don’t influence behavior?

Jeremy Scott, Carl Levin Changed the Face of Tax Enforcement (Tax.com)

Howard Gleckman,  Taxes and Paul Ryan’s Budget (TaxVox)

William Gale, A Carbon Tax is a Win-Win for the Economy and the Environment (TaxVox)

 

David Brunori, Things to Read, Sites to Visit(Tax.com).  He shares some online resources, but tragically fails to mention the Tax Update.

Peter Reilly,  No Fans Of Sister Wives At The IRS ?   As far as I’m concerned, the possibility of consolidated individual returns should be all the argument needed against polygamy.

The Critical Question:  Why Is My Refund Short? (Trish McIntire)

 

News you can use.  Note to Drivers: All Wheel Drive Does Not Give You Superpowers, Just a Dangerous Overconfidence (Megan McArdle). 

So you think you’re having a bad busy season?  It could be worse: Upstanding San Leandro Accountant Finds Himself on Oakland’s Most Wanted ListGoing Concern has the news of law enforcement gone awry.

 

 

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Tax Roundup, 2/11/2013: Suing the driver of the getaway car for not going fast enough.

Monday, February 11th, 2013 by Joe Kristan

When a convicted criminal feels he has been ill-used by an accomplice, the normal recourse tends to involve unpleasant events in the prison gallery.  Lawyers are rarely consulted.  But when international tax cheating is involved, it apparently works differently.

A group of clients of Swiss bank UBS who claim that bad things happened to them as a result of their Swiss accounts sued UBS.  Seventh Circuit appeals judge Posner was distinctly unsympathetic (my emphasis):

The plaintiffs are tax cheats, and it is very odd, to say the least, for tax cheats to seek to recover their penalties (let alone interest, which might simply compensate the IRS for the time value of money rightfully belonging to it rather than to the taxpayers) from the source, in this case UBS, of the income concealed from the IRS. One might have expected the plaintiffs to try to show that they had forgotten they had accounts with UBS (though that would be preposterous, for these were significant investments for each of the plaintiffs). Or that UBS had told them that income earned in those accounts was somehow tax exempt and moreover that the accounts themselves were somehow not foreign bank accounts within the meaning of the tax code and so the plaintiffs didn’t have to acknowledge having accounts with UBS. They don’t make any of these feeble arguments. They do argue, as we’ll see, that UBS was obligated to give them accurate tax advice and failed to do so, but not that it gave them inaccurate, as distinct from no, advice.

While the IRS offshore compliance programs have abused many innocent Americans who have foot-fault violations, that doesn’t appear to be the case here.  A U.S. resident who set up a Swiss bank account probably didn’t do so to ensure tax compliance.

At worst, UBS, as we’re about to see, violated an agreement with the IRS designed to prevent the kind of evasion that the plaintiffs engaged in. That might conceivably make UBS an aider or abettor of the plaintiffs’s tax evasion and so make this case a distant relative to Everet v. Williams (Ex. 1725), better known as The Highwayman’s Case and eventually reported under that name in 9 L.Q. Rev. 197 (1893). A highwayman had sued his partner in crime for an accounting of the illegal profits of their criminal activity. The court refused to adjudicate the case, and both parties were hanged. Minus the hanging and with certain exceptions (such as contribution and indemnity) irrelevant to this case, the principle enunciated in The Highwayman’s Case applies to accomplices in civil wrongdoing, as noted in our recent decision in Schlueter v. Latek, 683 F.3d 350, 355-56 (7th Cir. 2012). In The Highwayman’s Case one accomplice was seeking a bigger share of the profit from the crime from the other one; here one accomplice is seeking a smaller share of the costs of the crime from the other one. The principle is the same; the law leaves the quarreling accomplices where it finds them.

The moral?  Your banker isn’t your tax advisor, and when you are cheating, you are on your own.  At least in Judge Posner’s court.

More coverage: TaxProf, Posner:  Tax Cheats Suing UBS for Not Stopping Them From Cheating Like Suing Parents for Not Raising Them to be Honest

 

Overwhelming?  A Tax Analysts story on the fallout from the Loving decision overturning the IRS preparer regulation program reports:

“There is overwhelming support for registration” among EAs, said Frank Degen, president of the National Association of Enrolled Agents. While preparers are watching to see what an appeals court will do — as the IRS said it would file an appeal soon — “most practitioners are just interested in cranking out those 1040s right now,” Degen said.

I’d want to see some polling showing that “overwhelming” support.  The preparer regulation program strikes me as potentially fatal for the Enrolled Agent brand.  EA’s, who have to pass a much stricter test and more stringent continuing education requirements than the registered preparers would have to, already have difficulty marketing their additional qualification.  The IRS blessing of a competing bargain brand could easily bury the EA designation.  At the very least, I see no overwhelming support for the preparer registration program from EA-bloggers Jason Dinesen and Russ Fox.

 

To your health!  Compliance with ObamaCare Estimated to Take 127.6 Million Hours (Kyle Pomerleau, Tax Policy Blog).

Martin Sullivan, State of the Union: Stasis or Progress on Taxes? (Tax.com).  My bet is on stasis.

Doom.  What You Should Know About the Budget Outlook (William Gale, TaxVox).:

Even if seemingly everything goes right – in economic terms and in political terms – we are still on the edge of dangerously high debt and deficit levels with little room to spare.

Nah, we’re over the edge:

20130211-1

 

Jana Luttenegger,  Social Media and Other Digital “Assets” After Death. (Davis Brown Tax Law Blog)  If I die, please take me out of my high school reunion Facebook group.

William Perez,  IRS Announces Start Dates For Processing Some Tax Returns.  Y0u can file a return with depreciation starting today, and one with education credits starting Thursday.

Claudia Hill, Can This Tax Filing Season Be Saved? (Via @janetnovack’s Twitter Feed).

Paul Neiffer, Crop Insurance Proceeds on Feed Consumed by Livestock

And then pay your bill timely.  4 ways to be a better tax client (Kay Bell)

Patrick Temple-West, Higher payroll tax pinches those with the least to spare, and more

Jack Townsend, A Tax Curmudgeon Offers Ideas on Tax Compliance

Tax Trials,  IRS Releases Schedule UTP Statistics for 2011.  1,783 taxpayers filed forms disclosing Uncertain Tax Positions for 2011.  Seems low.

Peter Reilly,  Is IRS Persecuting Kent Hovind For Creationism ?  His tax planning shows little evidence of intelligent design, anyway.

Proposed by a guy wearing wing-tips, no doubt.  Lawmaker Proposes Sneaker Tax, Retailers Opposed (TaxGrrrl)

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Tax Roundup, 3/29/12

Thursday, March 29th, 2012 by Joe Kristan

Jacob Sullum at Reason reminds us that even if Obamacare survives the Supreme Court, the penalty for not buying insurance will be a collection nightmare for the IRS.

Instant Tax Service, the nations “fourth largest” tax preparer, should be shut down, according to a Department of Justice lawsuit.  Trish McIntire has some useful background, including an attempt by Instant Tax Service to intimidate her into pulling a post mentioning ITS problems.

William Gale at TaxVox says Ryan Would Shift the Fiscal Burden to Low and Middle-Income Households.  News flash, William: the Rich Guy isn’t buying.

20080701-1.JPGRamona Cunningham, serving time in federal prison for looting an obscure Iowa “jobs training” agency, continues to hustle the taxpayer.  She has collected over $150,000 in state pension payments while paying only $1,100 in restitution

The   “Field of Dreams” tax hustle, which could allow an athletic complex proposed at the site where the Kevin Costner movie was filmed to keep sales taxes it collects for itself, advanced from the Iowa Senate Ways and Means Committee yesterday.   Our legislators are slow to catch on.

The Ukraine dictatorship presses more tax charges against former president Yulia Tymoshenko, reminding us that presidential humor about using the IRS as a weapon isn’t funny.

 

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The more we tax, the more you save

Thursday, September 22nd, 2011 by Joe Kristan

William Gale, has posted a defense of the President’s all new set of warmed-over tax proposals at TaxVox. This part tells me his heart really isn’t in it:

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