Any tax overhaul “has to be under the total understanding that this can’t be revenue-neutral,” said Reid, a Nevada Democrat. “It can’t be even close to neutral. It has to be a significant tax target.” [Bloomberg]
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Meticulous Records Save Billionaire $27 Million in Taxes
So you’re Julian Robertson and you’re a billionaire right? You’re on the Forbes list &mdash right behind that cheater Raj but ahead of Wilbur Ross! &mdash and you don’t have many worries.
Except for the City of New York trying to nab $27 million dollars from you! Subways stations falling apart, government employees being laid off. Bah. That’s over 1% of your net worth (based on Forbes’ latest count) and you’ll be damned if the City is going to get their grubby mitts on it.
WSJ:
At issue was Mr. Robertson’s whereabouts on four days during [2000]: April 15, July 23, July 31 and Nov. 16. The other 362 days were accounted for, with documentary proof of 183 days spent in the city and 179 spent outside. The New York State Department of Taxation and Finance argued that because he didn’t have documentary proof for the four days, he was therefore a resident and owed city taxes of $26,792,341.
Four days. Four days standing in between you and $27 million. As we mentioned, it’s not like this is a substantial amount but this was one of those qualitative over quantitative decisions: “$27 million, an amount important enough to the hedge-fund manager that he and his staff spent hours and developed a complicated calendar system to track his whereabouts.”
See? It’s the principle. Robertson is bending over backwards to play by the rules since he once told an assistant — who meticulously tracks New York City days and non-New York City days — that crossing the GW Bridge at 11:45 pm is considered a New York City day.
Between the human GPS and Robertson’s wife saying there was no way he was in the City — she doesn’t stand for him being ‘in her hair’ prior to vacay — the court was convinced that he wasn’t a New York City resident. Can’t say Robertson didn’t work for it.
In Tax Case, 4 Days Save Robertson $27 Million [WSJ]
Some People Are Bent Out of Shape Over the ‘Compressed’ Tax Season
Earlier in the roundup, we linked to The Hill story that brought the unfortunate news that anyone itemizing expenses their tax return will “have to wait until mid- to late February to file their returns.”
The IRS is acutely aware of the problem but lucky for all of you, Emancipation Day falls on April 15th this year (and is effectively a national holiday for tax purposes), so the Service extended filing deadline is Monday, April 18th:
The Internal Revenue Service today opened the 2011 tax filing season by announcing that taxpayers have until April 18 to file their tax returns. The IRS reminded taxpayers impacted by recent tax law changes that using e-file is the best way to ensure accurate tax returns and get faster refunds.
Taxpayers will have until Monday, April 18 to file their 2010 tax returns and pay any tax due because Emancipation Day, a holiday observed in the District of Columbia, falls this year on Friday, April 15. By law, District of Columbia holidays impact tax deadlines in the same way that federal holidays do; therefore, all taxpayers will have three extra days to file this year. Taxpayers requesting an extension will have until Oct. 17 to file their 2010 tax returns.
The IRS expects to receive more than 140 million individual tax returns this year, with most of those being filed by the April 18 deadline.
Despite the extra 72 hours of fun, some people would rather focus on this “mid- to late February” business, namely, John Ams of the National Society of Accountants, as reported by NPR:
“What this has done is effectively compress the tax season from three months to just six weeks,” says John Ams, executive vice president of the National Society of Accountants.
Now, we don’t know Mr Ams backgound but his bio over at the NSA states that he is a Chief Audit Executive and we have no doubt that he’s a more than capable accountant. But most abacus wielders we know are pretty familiar with deadlines snafus, doing more work in less time and waiting on additional information. In fact, any accountant worth their salt has plenty of stories of pulling emergency all-nighters for week(s) to make sure a project gets accomplished on time only to get the very last piece of data needed at the 11th hour. NOW, when the IRS explains that Congress – who is only reliable for being unreliable – has forced their hand into this less-than ideal predicament, apparently it’s okay to get all huffy about it. [breathe] Look, the majority of the work on these tax returns can simply be done and then the 1040 jockeys will just wait for the rest of the information. It isn’t – as it’s popular to say – rocket science.
But forget about the shrinking tax season, Mr Ams wants you to think about the Luddites!
Some of the changes to the tax code will be a headache for tax preparers and their clients at the busiest time of the year, Ams says. One rule, for example, requires anyone preparing more than 100 returns per year to file them electronically, while the other forces tax preparers to get an identification number.
“Electronic filing is great and most accounts [sic] love it. But there are many clients out there, in particular the elderly, who still believe computers are the work of the devil,” Ams says. “They don’t want sensitive data like tax information going over the Internet.”
If people don’t want to e-file, Ams says, “we’re supposed to say: ‘Here’s your form. See ya.'”
Christ. We know grandmothers that use text messaging. Plus, CPAs have been saying “Here are your forms. Sign here, here, here and here. Oh, and here. See ya next year (but only if you pay),” for decades and people have made due. Can anyone explain how this is still a problem?
IRS Kicks Off 2011 Tax Season with Deadline Extended to April 18 [IRS]
The Tax Man Cometh, But This Year He’ll Be Late [NPR]