Posts Tagged ‘worst commissioner ever’

Tax Roundup, 5/22/2013: Don’t blame me, I’m only the boss. Also: tornado tax relief.

Wednesday, May 22nd, 2013 by Joe Kristan
Former IRS Commissioner Shulman, showing how bad he feels about politcal harassment under his watch.

Former IRS Commissioner Shulman, showing how bad he feels about politcal harassment under his watch.

The Worst Commissioner Ever returned to Washington yesterday to testify before a Senate committee on the IRS scandal.  He bravely took responsibility for the targeting of disfavored political groups and apologized to the victims.

Well, not exactly:

 I certainly am not personally responsible for creating a list that had inappropriate criteria on it. And what I know, with the full facts that are out, is from the inspector general’s report, which doesn’t say that I’m responsible for that. With that said, this happened on my watch. And I very much regret that it happened on my watch.

In other words, I was just the boss, and you can’t blame me for what those crazy kids in Cincinnati do.

 

Just exercising the right they encouraged the Tea Partiers to use – silence.  The IRS functionary who announced the scandal in response to a planted question isn’t going to answer real ones.  From the Wall Street Journal:

Lois Lerner, the head of the Internal Revenue Service office that targeted conservative groups, intends to invoke her constitutional right against self-incrimination and decline to answer questions about the matter when questioned by a congressional committee Wednesday.

Ms. Lerner, director of the tax-exempt-organizations division at the IRS, notified the House Committee on Oversight and Government Reform through her attorney that she wouldn’t answer questions on the matter, according to a committee spokesman.

When it comes to the Bill of Rights, better late than never.

 

Is Washington a suburb of Cincinnati?  Oversight from Washington, All Along    (Eliana Johnson)

TaxProf, The IRS Scandal, Day 13

Watchdog.org, Top 10 quotes about Obama’s #scandalpalooza

Via Don Boudreaux, The Real Lesson of the IRS Scandal (Richard Epstein) and The Autocrat Accountants    (Mark Steyn)

Patrick Temple-West,  White House knew of IRS scandal in April, and more (Tax Break)

Clint Stretch, Targeting tax-exempts and tax reform (Tax Analysts Blog)

Joseph Thorndike, A World Without 501(c)(4)s (Tax Analysts Blog)

Russ Fox, Ms. Lerner Knows the Fifth (IRS Scandal Update)

 

In other news:

Kay Bell, Tornado-ravaged areas of Oklahoma declared major disasters, leading to special tax relief from IRS

Trish McIntire,  Oklahoma DIsaster- Tax Relief.

TaxGrrrl, IRS Announces Tax Relief For Oklahoma Tornado Victims

 

Paul Neiffer, Will Excess Farm Loss Rules Apply With New Farm Bill?

Jason Dinesen, How to Allocate the Deduction for Federal Estimated Tax Payments on Your Iowa Tax Return

Robert D. Flach, TRUE TAX TIME TALES – IRA WITHDRAWALS

 

Brian Strahle,  MARYLAND:  WYNNE CASE UPDATE

On Friday, May 17, 2013, the Maryland Court of Appeals denied the comptroller’s motion for reconsideration in Comptroller v. Wynne,  which struck down the state’s application of credits against pass through income from S corporations; however, the court stayed implementation of the ruling to allow the comptroller to petition the U.S. Supreme Court for certiorari.

Peter Reilly,  RVania Resident Taxed By New Mexico.  State tax problems of folks who live on the road.

 

Kaye Thomas,  Self-Directed IRA Implodes.  The same case I discussed here.

 

 Jack Townsend, Tax Perjury and FBAR Charges Related to Illegal Income Fake Art Case

Jim Maule, Taxation is Not Theft.  It’s not theft when the government does it.

 

 

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Tax Roundup, 11/9/2012: Don’t let the door hit you, Commissioner.

Friday, November 9th, 2012 by Joe Kristan

So long, Worst Commissioner Ever.

Today is the last day in office for IRS Commissioner Doug Shulman.  He gave a validictory speech to the AICPA reciting what he sees as his accomplishments — primarily the crackdown on international tax evasion and alleged progress in IRS technology.  He left out what I consider his most important achievements.  These include:

Wasting IRS resources, practitioner time, and taxpayer money on a futile taxpayer regulation regime.  The new program will expand IRS power over practitioners and help clear the field of competitors for H&R Block and Jackson Hewitt, which is the real goal.  It will increase the cost for taxpayers to have their returns done, driving some to do their own returns without help and others to drop out of the system.  It certainly won’t improve compliance by enough to justify the cost.

Identity theft refund fraud has become an epidemic on his watch.  While he was busy grabbing regulatory power over preparers and beating up on Americans abroad (see below), street thieves learned that they could steal billions from the taxpayers through ID-theft fraud and debit cards.  It’s a $5 billion annual problem, and only in the last few months has the service stirred itself to begin to address the issue.

The IRS crackdown on international tax fraud has ended up terrorizing thousands of innocent taxpayers.  U.S. citizens employed abroad and accidental citizens who have long since set up residence in other countries — generally owing no U.S. tax  — find themselves hounded and threatened with ruinous fines for failing to comply with busy-work paperwork requirements that they had never heard of.

There’s more, of course.  The IRS Taxpayer Liaison office is being gutted and the Taxpayer Advocate office emasculated, taxpayer service only gets worse, the K-1 matching and self-employment income initiatives send millions of wrong notices to taxpayers, and it’s never been more difficult to get answers out of Washington.   With his replacement to be appointed by a President who loves regulatory excess, taxpayers can only brace themselves for more of the same.

 

TaxProf, Voters Say Yes to Marijuana, IRS Says No, linking to a Forbes piece by Robert Wood.  False move by IRS.  If we all were stoned, the tax law might appear to make sense.

Going Concern,   Chuck Schumer Is Willing to Give John Boehner a Few Days to Warm Up to Higher Taxes

Martin Sullivan,  Tax Reform 2.0 (Tax.com):

 Get rid of the AMT. Simplify rules for pensions and retirement saving. Simplify education incentives. And in our effort to maintain distributional neutrality, don’t reinstate the Pease provision and personal exemption phaseout (as proposed by Obama). And don’t install new phaseouts of itemized deductions (as suggested by Romney). These are just hidden marginal rate increases.

Kay Bell,  Tax compromise or coded tax talk?

Paul Neiffer,  ObamaCare Here To Stay (At least 4 more years)

Especially those of GM, Chrysler, windmill companies…   CEOs vow to work with Obama team, and more   (Patrick Temple-West, TaxBreak)

Phil Hodgen,   Fideicomiso private letter ruling offers some hope:

This is an immensely sane step in the right direction.  Fideicomisos are title-holding mechanisms required by the Mexican Constitution.  A Mexican bank holds title to your real estate but otherwise takes no responsibility whatsoever for anything.  Trustees are required to protect and preserve assets for the beneficiaries.  A fideicomiso does not behave like a trust at all.

Anthony Nitti,   Continuing The Countdown: The 8th Most Noteworthy Tax Case Of 2012

Jim Maule,  Tax Collection Obligation is Not a Taxing Power Issue

Peter Reilly,   Hurricane Sandy Tax Relief – More Than Meets The Eye

Today? Right now?  RETIRE A MILLIONAIRE!  (Robert D. Flach)

 

Have a great weekend!

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Tax Roundup, 11/8/2012: Denison Day! And some things to look forward to.

Thursday, November 8th, 2012 by Joe Kristan

The Tax Update is on the road in beautiful Denison, Iowa, birthplace of Donna Reed!

 

I’m speaking at the Iowa State University Center for Agricultural Law and Taxation Farm and Urban Tax School.  There’s still time to register for the remaining five sessions!

 

“‘There are a lot of sales right now,’ explains Steve Bruere, president of Peoples Co. in West Des Moines.”  From IowaFarmerToday.com:

“I see a drop off (in the number of sales) after the first of the year.”’s one logical response to the looming increase in capital gain rates. 

…

With potential sellers concerned they may have to pay a 20 percent capital gains tax rate instead of 15 percent, and with many of them questioning what other tax changes may be coming, there has been a push to sell now.

The logic says if you were seriously considering a land sale, you would make sure it happened before the end of the year, Bruere says.

Actually, the rate will probably be 23.8%, including the new Obamacare tax on investment income.

More to look forward to:  “The IRS Small Business/Self-Employed Division plans to increase its audit activity for passthrough entities beginning in 2014, SB/SE Commissioner Faris Fink said November 7,”  reports Tax Analysts ($link).  But if you operate a C corporation, don’t be smug:

SB/SE is planning a one-year National Research Program project to study areas of noncompliance. Under the project, the division will examine 2,500 returns from corporations with assets of less than $250,000, Fink said.

Something to look forward to, like a colonoscopy appointment.

 

The Election is over. Now what?

TaxProf, Boehner Would Accept ‘New Revenue’ Under ’Right Conditions’

Going Concern, Hold the Phone, John Boehner Didn’t Say Anything About Taxes Going Up

 Martin Sullivan,   Wanna-Be Tax Reformers Need a Dose of Reality (Tax.com)

Daniel Shaviro,  Boehner on the possible terms for a fiscal cliff deal

Kay Bell,  Investors sell stock ahead of fiscal cliff, plus locking in 15 percent capital gains

Patrick Temple-West,  How far can Obama push on key issues including tax increases, and more

Anthony  Nitti,  With The Election Over, We Can Finally Do Some Meaningful Tax Planning. Six Year-End Steps To Consider.  #6 is bold planning indeed.

 

In other news… 

Robert D. Flach,  DEDUCTING SANDY

William Perez,  New Jersey Tax Relief for Hurricane Sandy

Linda Beale,  Tax Relief for Victims of Sandy

Richard Morrison,   Chart of the Day: Can Taxing Millionaires Eliminate the Deficit?  (No).

Brian Strahle,  How Virginia Based Companies Can Reduce Their State Income Tax Liability

TaxGrrrl, IRS Commissioner Says Public Goodbye After Election 2012

Jack Townsend,  Commissioner’s Swan Song – Excerpts on Offshore Bank Initiatives

 

Tomorrow is Doug Shulman’s last day as IRS Commissioner.  So how is the fight against tax refund fraud going?

Tampa Police Chief Jane Castor went public with her irritation at the slow pace of the investigation into a piece of the tax fraud scourge spreading among street criminals. Authorities say hundreds of millions of dollars in bogus income tax returns have been processed from the Tampa area alone.

“We have an individual that we know did in the ballpark of $9 million in tax fraud,” Castor said in February. “He was arrested and charged in September. And there’s no reason for us to believe that he’s slowed down at all.”

In March, Tampa Police Detective Sal Augeri testified before a U.S. Senate subcommittee in Washington about tax refund fraud and described the Simmons case without naming him.

“We have no reason to believe he has stopped committing this crime,” Augeri said then.

Russell B. Simmons, the man referred to above, pleaded guilty this week to tax fraud. He has to give up ill-gotten goods, including “… a $60,000 Bentley coupe and diamond jewelry that included a $30,000, 18-karat gold Rolex watch with a diamond dial; a 14-karat gold men’s bracelet with 2,420 diamonds; a 14-karat chain and “RS” pendant with 703 diamonds; and a 14-karat ring with 110 diamonds.”

Every day the IRS let the identity thief continue to operate, he created new little nightmares, like those experienced by Jason Dinesen’s client, for the innocent taxpayers whose identities he stole.  Meanwhile, Commissioner Shulman was focusing IRS resources on creating a big, expensive and futile preparer regulation bureaucracy.  A man has to have priorities, after all.

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Tax Roundup, 11/5/2012: Last week for the commissioner!

Monday, November 5th, 2012 by Joe Kristan

Soon-to-be-former-IRS Commissioner Douglas Shulman

Little disasters every day, courtesy Doug Shulman’s IRS.  We shouldn’t be surprised that the federal government is once again making a hash out of disaster relief.  They can’t even handle one-victim disasters at the IRS.  Jason Dinesen has posted two more installments (9, 10) of the infuriating saga of a client’s struggle with identity theft after her husband died.  From the latest installment:

I then proceeded to point out that it’s been 33 months since Brian died, 18 months since we filed the tax return, and 12+ months since we sent the original Form 14039 to the IRS. Again, can’t they use common sense and wrap this up?

The answer was, no.

Contrast that with the prompt issuance of a tax refund to the identity thief over a year ago.

Jason’s client ID theft problem was almost certainly the result of a glaring problem that has been known in the agency for years involving the use of social security numbers of recently-dead taxpayers published by the government by identity thieves.  The IRS is only now taking steps to fight it, while billions of tax dollars continue to go out to the thieves annually.  Meanwhile, they’ve found time to institute an expensive and futile preparer regulation scheme and power-grab.  They have their priorities, after all.

One thing voters of all parties can look forward to this week is the Friday expiration of the term of Doug Shulman, The Worst IRS Commissioner Ever.

 

Richard Morrison,   Chart of the Day: Trends in Business Income (Tax Policy Blog)

 

Brutal Assault on Reason Watch: 

TaxGrrrl,  Election Day Primer: Comparing the Obama and Romney Tax Plans

TaxProf,  Johnson: Tax Reform and the Presidential Election

Kay Bell, Voters get their say Nov. 6 on 30 tax-related state ballot initiatives

Joseph Thorndike,  Muzzling CRS is a Bad Idea — Even for Republicans (Tax.com)

Len Burman,  Which presidents spend the most? You might be surprised. (TaxVox)  For some reason he stops in 2001.

Paul Neiffer,  Get Ready For The New Medicare Tax Increase on Earned Income

Anthony Nitti,  Victims of Superstorm Sandy May Be Able To Exclude Assistance Payments From Taxable Income

Jack Townsend notes an Article on Erosion of Swiss Secrecy

Peter Reilly,  Unfair Tax Court Decisions On Life Insurance Are Tip Of Unclaimed Property Iceberg

Missouri Tax Guy,  Advantages of Filing a Tax Return Extension

Robert D. Flach,  TOP TEN LIST ADDENDUM.  This is so true:

More than half of the balance due notices that are sent out by the Internal Revenue Service and state tax agencies are incorrect.  If you receive such a notice send it to your tax professional ASAP.

I would love to see an accounting of how much revenue the government steals from taxpayers who write checks because they are afraid of the revenue agencies, or because the amounts are known to be wrong, but the taxpayer doesn’t think they are worth the fight.

 

Bad News you can Use:  Bad News for German Poker Players (Russ Fox)

 

Richman, Dumdum man.  The story you are about to read is true.  Then names have been left the same to protect the humor.  CBSlocal from Chicago reports:

He wasn’t too smart about paying federal income taxes, and now Rimando Dumdum man is going to prison. 

WBBM’s Bernie Tafoya reports the 44-year-old Morton Grove tax preparer, who came to the U.S. from the Philippines in 1989, owned a company called “Richman Tax Solutions.”

Apparently it’s easier for a camel to pass through the eye of a needle than for a Richman to get a tax return right.  But all things are possible:

According to his plea agreement, he helped clients illegally trim an average of $1,400 from their tax bills. In all, between his clients’ returns, and his own tax fraud, Dumdum cheated the federal government out of $232,000 in all.

However, prosecutors said he likely helped clients evade $3.5 million in taxes, citing an audit showing his company falsified 99 percent of the tax returns it filed.

The way he looks out for the 99%, he should be a favorite of the Occupy people.  I wonder if the 1% of his customers who didn’t get phony returns feels cheated somehow.

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Tax Roundup, 10/11/12: Don’t let the door hit you edition.

Thursday, October 11th, 2012 by Joe Kristan

Hey, everybody, those extended 1040s are due Monday!  

Doug Shulman shows how much he cares.

Doug Shulman steps down November 9.   (TaxProf). Meanwhile, his legacy lives on:

Federal authorities Wednesday stepped up their assault on the viral-like crime of identity theft and tax fraud, arresting dozens of South Florida suspects on charges of filing fake returns totaling millions of dollars.

  Three homes were raided Wednesday in an effort to crack down on rampant tax fraud in the Tampa Bay area.

Under Commissioner Shulman’s watch, identity theft tax refund fraud has reached epidemic proportions.  The IRS mails perhaps $5 billion of your hard-earned tax dollars to thieves annually, while creating nightmares for taxpayers whose tax lives are disrupted and refunds held up.

Meanwhile, Commissioner Shulman has spent his time terrifying innocent Americans who have foot-faulted their obscure information reporting responsibilities and imposing a useless but expensive preparer regulation regime.  Way to go, Commissioner.

 

Attorney for West Des Moines payroll service says firm will catch up on unremitted client taxes (West Des Moines Patch)

No. If Europe Adds a Financial Transactions Tax, Will We Follow? (Linda Beale)

Martin Sullivan,  Don’t Count on Dynamic Scoring (Tax.com).  Meanwhile, William McBride, in How Far we are from the Enlightenment (Tax Policy Blog), doesn’t seem to fully agree with Mr. Sullivan.

Patrick Temple-West,  Essential reading: Romney pledges to keep tax deductions for mortgages, and more

Peter Reilly,  Three Candidates And Carried Interest:

I sometimes think that I am the only person who writes about taxes in a non-technical publication, really understands what “carried interest” is all about and does not find it particularly upsetting. 

I guess that makes the Tax Update a technical publication.  I don’t think carried interests — profits interests in partnerships — are bad things, and I think the proffered “cures” are.

Daniel Shaviro,  1986-style tax reform: a good idea whose time has passed

Anthony Nitti,  Tax Court: In Order to Take A Worthless Debt Deduction, the Debt Need Actually Be Worthless

Kay Bell,  5 tax-saving deductions & credits

Ain’t that the truth:  Return Still Not Done (Trish McIntire)

Paul Neiffer,  Is the True US Deficit $76 Trillion Instead of $16 Trillion

Need continuing education?  Registration is open for this year’s fall tax schools at the ISU Center for Agricultural Law and Taxation.  I’m on the Day 1 teaching schedule.  Yes, there’s farm stuff, but there’s plenty for us city folk too.

News you can use: If You Equate Long Hours with Hard Work Then You Aren’t “Committed” But You May Be a Dumbass (Going Concern)

 

This won’t work out well.  From Post-Gazette.com

Joseph E. Gump’s trial for evading taxes from 2003 through 2006 had been set to start Tuesday. But Mr. Gump told the court last week that he would plead guilty, prompting the judge to cancel a call for 50 prospective jurors.
Then Mr. Gump wrote to U.S. Judge Terrence F. McVerry’s staff saying that a guilty plea “would be a lie” and demanding a trial.
Why?
He said he understood that any prison sentence will likely be less if he pleads guilty, but said he did not believe he engaged in any evasion.

Mr. Gump was accused in a 2011 indictment of indicating “none” as his taxable income for four years during which he earned a total of $250,333 and owed a total of $49,370. He has argued in court filings that the income tax can only be legally levied on federal lands.

Good luck convincing a jury that files returns every April of that.
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Tax Roundup, 8/30/2012: Hey, I said I’m sorry edition. But the IRS isn’t apologizing!

Thursday, August 30th, 2012 by Joe Kristan

Sorry about that $2.1 million.  Remember the world’s thriftiest tax cheat, the one who stole $2.1 million from Oregon and used it to buy a 1999 Dodge Caravan and some tires?  An apology from the director of the Oregon Department of Revenue didn’t go well, according to this report from OregonLive.com:

SALEM — A contrite director of the Oregon Department of Revenue appeared before a legislative committee Wednesday and apologized repeatedly for dropping the ball on a $2.1 million fraudulent tax refund. But both Democrats and Republicans weren’t in a forgiving mood, demanding to know why four workers who failed to catch the return weren’t fired and whether the agency can do its job.

“It’s not going to be enough to sit here and say you’re sorry,” said Rep. Cliff Bentz, R-Ontario.


 


Why are they so upset?  He said he was sorry, after all?


 




Two managers and one administrative clerk received written reprimands but no change in their salaries. A fourth worker was demoted and transferred to another part of the agency. That person, an administrative specialist, got a pay cut from $45,396 a year to $41,208.  






Most private sector clerks have problems beyond reprimands if they let $2.1 million go out the door to a theif.  Still, while the apology may not seem like much, it’s more than we’ve gotten from IRS Director Doug Shulman for letting over $5 billion per year go out the door to identity thieves.






Why is Doug Shulman too darn busy to apologize for letting ID thieves loot the Treasury?  Maybe because he’s spending his time making life miserable for Canadians.  Tax Notes reports ($link) that Frustration Grows for Canadians in OVDI:


Taxpayers and their advisers asked the IRS for guidance on how to deal with RRSPs [Canadian retirement accounts] in the summer of 2011 but received inconsistent replies     The IRS’s delay in issuing the guidance…  annoyed taxpayers because, at least regarding the requests for a letter ruling granting 9100 relief, it caused them to incur professional fees that turned out to be unnecessary.


“This decision could have been made in September, October, even November, and the clients could have avoided the additional costs,” said [attorney] Ciraolo. “While we appreciate the 9100 relief offered under FAQ 54, the fact that the IRS failed to acknowledge the inconvenience and cost caused by the delayed guidance, and failed to address whether the Canadians in the OVDI would be eligible for the new program open on September 1, only furthered the belief of the Canadian taxpayers that the IRS is acting without due consideration to the circumstances of those taxpayers who entered the OVDI in good faith.”


Of course.  The program has been haphazardly administered, treating innocent noncompliance with obscure IRS rules as presumptive evidence of offshore money-laundering.






The frustration that the delayed guidance on late elections to file Form 8891 has caused for U.S. practitioners and their Canadian clients exacerbated an increasingly tense diplomatic situation and perhaps convinced some Canadian taxpayers who sat out the 2011 OVDI that noncompliance was the right choice.






So we’ve provoked our closest neighbor while convincng many that non-compliance is safer than expecting the IRS to be fair.  Well done, Commissioner! 




Jack Townsend,  AICPA Complains to IRS About Form 3520 Administration Issues.  Form 3520 is a form that must be filed by taxpayers with interests in foreign trusts.  You’ll be shocked to hear that Doug Shulman’s IRS is botching it:






The AICPA letter described six specific errors the IRS letters claim taxpayers have made, including filing Form 3520 late when it was filed on time.






When you make it harder to follow the rules than to ignore them, the results won’t be good.  









This looks like one of those kinds of things that happen when staffing at a government agency is reduced beyond what is reasonable for the kinds of tasks that have to be carried out. 






I’d be more sympathetic to that argument if Doug Shulman’s IRS hadn’t taken it upon itself to devote massive resources to an intrusive and futile preparer regulatory scheme at the behest of the big national tax preparation firms and to requiring massive amounts of futile paperwork for international compliance.






How Bain Capital execs lower their taxes (Dan Primack, Fortune, via Going Concern):




There has been lots of talk over the past few days about how Bain Capital executives have used management fee waivers to effectively lower their tax payments (a tactic that is not unique to Bain). Some academics have argued that such waivers are an illegal dodge, while private equity tax attorneys I’ve spoken with call it “aggressive but accepted by the IRS.”


Here is the basic structure: Bain officially charges 2% management fees to investors in its private equity funds. The idea is to cover overhead, such as salaries, office leases, electric bills, etc.  But Bain has lots of other business lines (venture capital funds, hedge funds, etc.) that generate sufficient cash flow, so it “waives” the PE fund management fees…


By doing so, Bain partners don’t pay ordinary income taxes on their management fees. Instead, they pay at capital gains rates if/when the deals generate profit (because it’s now considered carried interest).


Many commentators seem to think that Mitt Romney should have gone out of his way to pay the highest tax possible, rather than doing what his tax advisors and the rest of his industry did.  I doubt that they direct their own preparers to forego deductions and exclusions that they think are poor policy or the result of poor administrative interpretations of the tax law.


 


TaxProf: Mitt Romney’s Tax Mysteries: A Reading Guide


Dan Meyer, The Annual Tax Extenders Legislation Addressed by the Senate.  But it has a long way to go.


Peter Reilly, Challenge To Clergy Tax  Break Gets Green Light — Next Stop, Scientology?


 Jason Dinesen has incorporated.


Anthony Nitti, How Does a “Go Shop” Provision Impact the Treatment of Transaction Costs?


 




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Tax Roundup, August 22, 2012: ID theft; the economist-politician gap; free subtlety and nuance!

				Wednesday, August 22nd, 2012 by Joe Kristan

				

					
Doug Shulman, showing how much he cares.


The IRS does a bang-up job shoveling our cash to identity thieves,   as we have mentioned.  Too bad they don’t do as well helping out the theft victims.  Jason Dinesen tells what he has learned helping a widow deal with the theft of her husband’s identity:




    

  • The IRS is woefully under-equipped to deal with identity theft on tax returns.
    • 

  • The departments of the IRS don’t communicate with each other — or with themselves. Things I told the practitioner hotline were lost to the wind, as my conversations with them were not available to the collections department. And even within the collections department, it takes them 9+ weeks to open the mail, and not every call gets logged.
    • 

  • I really wish the IRS would tell you whose desk a tax return is sitting on. This is true even in cases not involving identity theft. It’s almost impossible to get answers when you call the IRS, because you — and the IRS rep you talk to when you call — don’t know which IRS employee is actually looking at the return.
    • 

  • Congress needs to do something to fix the problem with the Death Master File. It’s ridiculous that the government publishes something that is such a goldmine for identity theft.
    • 





Apparently IRS Commissioner Shulman has other priorities.


Related:  Missouri Tax Guy,  Avoid Identity Theft


 


TaxProf, Six Policies Economists Love (And Politicians Hate):


NPR, Six Policies Economists Love (And Politicians Hate): 


    

  1. 

    Eliminate the mortgage tax deduction. …
    

    2. 

  2. 

    End the tax deduction companies get for providing health-care to employees. …
    

    3. 

  3. 

    Eliminate the corporate income tax. …
    

    4. 

  4. 

    Eliminate all income and payroll taxes. All of them. For everyone. Taxes discourage whatever you’re taxing, but we like income, so why tax it? Payroll taxes discourage creating jobs. Not such a good idea. Instead, impose a consumption tax, designed to be progressive to protect lower-income households.
    

    5. 

  5. 

    Tax carbon emissions. …
    

    6. 

  6. 

    Legalize marijuana. …
    

    7. 





 


Stephen Moore,  The U.S. Tax System: Who Really Pays?:


The Tax Policy Center, which is run by the Urban Institute and the Brookings Institution, recently studied payroll and income taxes paid by every income group. It found that the highest-income 1 percent of Americans still pay a combined (income plus payroll) average rate of 26.[1] percent, while the poorest fifth of Americans receive a refund of 0.9 percent, largely through the Earned Income Tax Credit. As Figure 3 illustrates, even when the regressive effects of the payroll tax are counted, the rich contribute a greater fraction of their income, and make a greater contribution to federal tax revenues, than other income groups.


It’s a powerful antidote to arguments that we just need to beat up on the rich some more.  The rich guy isn’t buying this round.


 


William Perez,  IRS Offers Tips for Correcting Tax Returns.  Paul Ryan knows how that works.


Jim Maule, How Not to Claim a Casualty Loss Deduction


Kay Bell, Bush tax cuts: slur, boast or both?


Janet Novack, Pssst! Florida! Obama And Ryan Both Want Seniors To Pay More For Medicare


Peter Reilly, Real Reason Romney Returns Not Being Released ?


Robert D. Flach has a new Wednesday Buzz.


Maybe that Swiss bank account wasn’t such a hot idea.  Credit Suisse / Wegelin Client Pleads Guilty to FBAR Violation in SDNY (Jack Townsend)


Dear Readers: Is my opinion of Commissioner Shulman too nuanced and subtle?


Fair Tax Gives Gary Johnson Some Hiccups On The Trail (Garrett Quinn, Reason.com):


When Libertarian presidential nominee Gary Johnson brought up the Fair Tax at his party’s nominating convention in Las Vegas, he was occasionally booed and even heckled by some of the delegates in the hall. It was the only thing his chief rival for the nomination, Lee Wrights, could really attack him on from a policy standpoint.


While I’m not holding my breath for a Gary Johnson presidency (alas), I remain puzzled by the continued embrace of the “Fair Tax” by otherwise-sensible politicians.   A 30% national sales tax (and that’s the rate, even though the 23% claimed by advocates is bad enough) on a narrow consumption base would never work.  And based on this story, it isn’t even very popular among audiences with selective tastes.


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Tax Roundup, 8/8/12: IRS goes for the gold.  Also: ID theft in Iowa, and dating taxes!

				Wednesday, August 8th, 2012 by Joe Kristan

				

					
Hour of gold, hour of lead: Olympic Legends Jackie Joyner-Kersee And Bobby Kersee Face New Tax Troubles (Janet Novack):


Olympic legends Jacqueline (Jackie) Joyner-Kersee and husband/coach Robert (Bobby) Kersee are facing a new round of financial troubles, with the Internal Revenue Service claiming they owe $386,000 in added taxes and penalties on $1.5 million of taxable income  for 2007 through 2010. The couple, who reported a total of just $703,000 in taxable income for those four years, is disputing the bill in a previously unreported lawsuit they filed in U.S. Tax Court in June.


They probably won’t care for “Tax-Free Olympic Boodle is Gold Medal Stupidity” from Howard Gleckman.


After shooting himself in the leg, it seems to taxdood that football player Plaxico Buress is Now Shooting Himself in the Foot.


Jason Dinesen has the second installment of his experience with identity theft:


But we sent the paperwork to the IRS, and then waited for a response.


And waited.


And waited.


Nothing at all from the IRS.




Then the ominous-sounding IRS notices started coming.




IRS Commissioner Shulman has invested enormous IRS resources in regulating preparers.  Meanwhile, he has let identity thieves steal $5 billlion a year from the taxpayers while creating paperwork nightmares for widows like Jason’s client.  He gets the gold medal for worst commissioner ever.


Daugerdas Defendant Whose Conviction Was Not Dismissed Claims Ineffective Assistance of Counsel (Jack Townsend):  


From my perspective, I think Judge Pauley erred originally in punishing Parse because of his attorneys’ alleged conduct / deficiencies that Parse did not knowing approve. I think Judge Pauley had a window to give the relief — a new trial, which is going to occur anyway for the other defendants.


Missouri Tax Guy: Tax Court Ruling may help Small Business Owners


Anthony Nitti, Scoring the Romney Tax Proposal


Kay Bell, Expired tax breaks get Senate panel OK


Robert D. Flach has a new Buzz.


Peter Reilly, Convicted Cicero Town President Learns Silence Not Golden In Tax Court.  Tax Update coverage of the same case here.


Deborah L. Jacobs, Estate Planning Questions Advisors Ask When They Get Together (Forbes)


Sequels are never as good as the original. The Tax Consequences of Being Paid to Date: The Sequel


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IRS Commissioner Shulman: you obey the law. Me, that’s different.

				Monday, February 20th, 2012 by Joe Kristan

				

					
The IRS hasn’t been known for sympathy for inadvertent violators of the foreign account reporting rules. Americans inheriting foreign property from distant relatives, young Americans who moved abroad to start a career, children born in the U.S. who have lived abroad since infancy — all face stern wrath, and big fines, for not filing foreign financial account disclosures that they had no idea existed.

You would think that a Commissioner so stern about punishing foot-faults would be extra careful about obeying the rules itself, if he had a smidgen of shame or self-awareness. Apparently not.

Tax Analysts reports that IRS Commissioner Doug Shulman will simply ignore his statutory duty to respond to a Taxpayer Advocate Directive on abuses of offshore taxpayers in the Offshore Voluntary Disclosure program. From the story ($link):


IRS Commissioner Douglas Shulman has no plans to respond in writing to National Taxpayer Advocate Nina Olson’s taxpayer advocate directive (TAD) on the IRS offshore voluntary disclosure program (OVDP) despite a statutory requirement that taxpayer advocate recommendations be responded to within 90 days, Olson said February 17.

According to Olson, who spoke at the Individual and Family Taxation session of the American Bar Association Section of Taxation meeting in San Diego, Shulman told her that section 7803(c), which requires the commissioner to formally respond to any taxpayer advocate recommendation within three months of its submission, applies only to the taxpayer advocate’s annual report and not to recommendations made through TADs or taxpayer assistance orders (TAOs).


How convenient for him. Let’s see what Section 7803(c) says:


(3) Responsibilities of Commissioner

The Commissioner shall establish procedures requiring a formal response to all recommendations submitted to the Commissioner by the National Taxpayer Advocate within 3 months after submission to the Commissioner.


That’s “all recommendations.” Not “all recommendations submitted in the annual report of the Taxpayer Advocate.” Not “all recommendations under this Section.” Just “all recommendations.” If there was a 50% annual penalty assessed on the balance of the Commissioner’s bank and retirement accounts for failing to respond on time — the same penalty that he is gleefully assessing on offshore account non-reporters — I bet he would have responded. After all, unlike the unwitting victims of the offshore compliance jaywalker hunt, it’s clear the Commissioner is well aware of this requirement.


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IRS to sue for peace in war against Americans in Canada; war against other Americans abroad continues

				Monday, December 5th, 2011 by Joe Kristan

				

					
After bringing the nation to the verge of war with Canada, the IRS is preparing a retreat. Tax Analysts reports ($link) that the IRS is backing off of its aggressive approach to penalizing Americans in Canada who haven’t been reporting their Canadian financial accounts:


While the IRS spokesperson didn’t provide any details on what that guidance will provide, [U.S. Ambassador to Canada David] Jacobson said in the Globe and Mail interview that the IRS will make it clear that if a dual citizen living in Canada files a U.S. tax return late and owes no taxes, there will be no penalties for failure to file. The guidance also will provide that those who were unaware of the FBAR filing requirement will be able to file previous reports now, along with a statement explaining why they’re filing late, and that no penalty will be imposed if the IRS determines that there is reasonable cause. Finally, individuals who took part in the IRS’s 2011 offshore voluntary disclosure initiative or in the 2009 special offshore voluntary disclosure program will be able to get back penalties already paid, according to Jacobson.


That’s all well and good, but the IRS is still using the tactics that triggered the outrage in Canada on Americans worldwide. If it’s outrageous and unreasonable for Americans in Canada, it’s so everywhere.

Related:

Shulman’s great Canadian Pension Raid

Why IRS agents seldom transfer to the Foreign Service


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Who needs the State Department when you have IRS?

				Tuesday, October 4th, 2011 by Joe Kristan

				

					
IRS Commissioner Shulman’s efforts to provoke war with Canada continue apace. Phil Hodgen reports:


The Premier of New Brunswick is in the OVDI. In an article published on Saturday in the online Telegraph-Journal, we see a prominent Canadian politician


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