Category: Tax

Did Anthony Weiner Pump Up His Itemized Deductions?

The Post reports that Anthony Weiner’s “2010 tax return shows he took $40,521 in unspecified itemized deductions on an income of $156,117.”

It quotes “Manhattan CPA” Jonathan Medows as saying “It’s definitely a very large deduction,” and “[they] appeared to include more than the standard writeoffs for state and local taxes and Weiner’s mortgage.” If you were to guess to where the “unspecified itemized deductions” of $40k were located, they are probably included on line 28 of Schedule A for “Other Miscellaneous Deductions.” Of course what exactly the deductions are, is a mystery. But if you’ve got some ideas, we’d love to hear them. [NYP]

Any Californians with Bright Ideas on Tax Policy Are Invited to Speak Up

God knows it can’t get any worse.

These hearings give you the opportunity to present your ideas, concerns, and recommendations regarding legislation, the quality of agency services, and other issues related to the Board’s administration of its tax programs. At the business taxes hearings you can comment on the administration of sales and use taxes, environmental fees, fuel taxes, and excise taxes. At the property tax hearings you can comment on the property tax programs and laws administered by the Board, and identify ways to resolve any problems identified in the Taxpayers’ Rights Advocates’ 2009-10 Annual Report.

Taxpayers’ Bill of Rights Hearings [BOE via Tax Foundation]

If You Thought Grover Norquist Was Done with Tom Coburn Just Because He Got Some Republicans to Vote for the Ethanol Tax Credit Repeal, You’d Be Wrong

As we’ve mentioned, the scourge of tax policy pragmatism, Grover Norquist, has been battling anyone that utters a word about raising taxes or eliminating tax credits without corresponding tax cuts. His main nemesis in this battle has been Oklahoma Senator Tom Coburn, who was a member of the Gang of Six until he was determined the gang couldn’t get jack squat accomplished.

Today, a vote was held in the Senate that repealed the tax credits for ethanol, something that Coburn has been advocating strongly to his GOP colleagues. The idea has been floated that many Republicans who signed Americans for Tax Reform’s Taxpayer Protection Pledge would be violating said pledge by voting for the repeal, and thus incur the wrath of Grover & Co. Yesterday, Norquist insisted that the vote for the repeal isn’t a pledge violation because Senator Jim DeMint (R-SC) has an estate tax repeal waiting in the wings that would allow these Republicans to atone for their sins and thus making Coburn a loser again:

“Coburn tried. He failed. I’m sure he’ll try again,” Norquist told The Hill, asserting that Coburn had tried to trick his colleagues into voting for a tax increase. “We checkmated him.”

As we said Coburn did try again and now that the ethanol tax credit repeal has passed, Norquist will be counting on those senators wash away their ‘impure thoughts’ with a vote on DeMint’s amendment and allowing he and ATR to prevail once again, like the Roadrunner over Wile E. Coyote or Ronald Reagan over Communism.

He added that he had commitments from Senate GOP leadership to not agree to a deal with what he calls a net tax increase: higher rates or ending tax expenditures without an offset.

“Coburn’s going to be out in the cold by his lonesome,” Norquist said.

Senate kills off ethanol tax credits in possible break with tax pledge [E2 Wire]
Norquist denies he has lost momentum in tax scrap [On the Money]

IRS Issues an Apology to Same Sex Couples It Yelled at For Doing Their Taxes Wrong

Gay and lesbian couples in California got an “I’m sorry” from the IRS last week after robo-letters went out to same-sex couples who filed under new IRS rules which recognize their relationships for the first time in states with community property rules (California, Nevada and Washington). That means joint property is divided 50/50, regardless of who wears the pants (or the dress) in the couple.

Scott James has the scoop via the Bay Citizen:

The change to the tax code, put into effect for 2010, was supposed to be a step toward equal treatment by the I.R.S.

Instead, couples have faced a litany of conflicts. The latest involves at least 300 taxpayers who have had their returns rejected with terse letters signed by an enigmatic I.R.S. employee named J. Bell from Fresno.

“Your return includes income or tax liability for more than one taxpayer, other than husband and wife,” the letters read. Note: husband and wife. Not two husbands, or two wives.

Couples who received the letters had to produce additional paperwork and faced delays in receiving refunds; most were forced to hire tax professionals.

In a statement this week, the I.R.S. said that the letters had been “incorrectly sent” because of a processing error and that it “apologizes for this mistake and sincerely regrets any inconvenience to taxpayers.”

Santa Clara University law school professor Patricia Cain has an excellent blog on the subject of same sex taxes. Of the IRS apology, she said “Just to be clear, in my view, the battle is not between us and the IRS. The IRS wants to do the right thing. It wants to tax each citizen on the right amount of income under existing law. That is its job. However, the IRS is seriously hampered from promulgating rules that apply to same-sex couples by the the Defense of Marriage Act (DOMA). The IRS is to be commended for understanding that DOMA cannot usurp state property law. Thus I continue to applaud its decision about how to tax community income of same-sex couples. And now that the IRS understands how difficult it is to communicate these new rules, even to its own employees, I applaud them again — this time for their apology — which, by the way, I accept.”

Let me give the IRS a tip: you need money, right? Same sex couples have it. They do all the things other taxpayers do – buy stuff, work, pay their taxes. All they are asking for is equal treatment under tax laws. If straight couples can get trapped in loveless marriages and file jointly, why can’t gays have the same rights?

We all deserve to be miserable, overtaxed and sexless.

Deloitte Tax Expert Makes Statement That He’s Likely to Regret

“If there are Republicans who break with Grover Norquist’s position, I think that’s an important thing,” said Clint Stretch, managing principal of tax policy at Deloitte Tax LLP in Washington.

“I think it signals a willingness on their part to have the fight with him over whether every tax expenditure is a legitimate reduction in effective tax rate, or whether there are some that should be regarded the way they regard spending programs.” [Bloomberg, Earlier, Earlier]

Number of U.S. Expatriates Still Growing

Had it up to here [bridge of your nose or so] with taxes in the United States? Giving more thought to GTFO and never coming back? You’re not alone.

More people expatriated from the U.S. in the first quarter of 2011 than in the first quarter of 2010. This after the increase in Q1 of ’10 was more than double than Q1 of ’09. Perhaps this is due to some sort of a “I need to get the hell out of this country” resolution but you could also assume that these folks don’t align themselves with the Patriotic Millionaires.

[ITB via TaxProf]

Confirmed: There Is a Shortage of Good Accountants in the Sex Industry

Way back in March of 2010, we shared with you a plight in our country: there simply are not enough good accountants serving professionals working in the sex industry. At the time we learned of Companions (NSFW unless looking at semi-nude women is kosher), an escort service in Salt Lake City whose proprietors slightly underreported their income which resulted in a tax evasion conviction. We wondered if this particular industry was dry of good accountants and tax advisors who might be able to assist entrepreneurs such as these and the professionals they employ to avoid similar situations.

As happens from time to time, someone with direct knowledge reached out to us and we now have at least one person on record confirming our suspicions:

Hello Caleb,

I came across your March 23, 2010 article, Is the Shortage of Good Accountants in the Sex Industry an Opportunity? and felt compelled to write. You see, I am a tax preparer that has been servicing the adult industry since 2006, doing my best to help those in the industry with knowledge and compassion. What began as helping a few phone sex operators and dancers file their tax returns with dignity has grown into a big part of my business. So, the answer to your question is, yes, the shortage of good accountants in the Sex Industry is indeed an opportunity – for those who wish to practice with ethics and respect. If you wish, you may find more about me and what I do from my website www.taxdomme.com.

I am now eager to peruse the rest of your website.

Best,
Lori, The Tax Domme

For anyone in need of services, the Tax Domme has a new office location in downtown Seattle and if you’re looking to carve out your own niche practice, you can get in touch with Lori for tips on anything you might want to know. For example, what happens when a well-to-do john needs a companion on a round-the-world trip? If animals are a regular part of the business, is it better to lease or buy? Would whips, chains, spreaders, etc. purchased by dominatrix be eligible for a §179 deduction? All relevant questions that have no doubt come up in the world of the Tax Domme.

So here’s an opportunity to be had people. As long as you manage to keep things professional you can cater to a virtually recession-proof industry. Can’t say we never told you.

Doug Shulman: Cutting the IRS Budget Will Do Nothing to Help the Deficit

“Cuts such as those in the House budget resolution would actually increase the deficit by decreasing revenue,” IRS Commissioner Douglas Shulman said to the Senate Appropriations Subcommittee on Financial Services and General Government.

He said the House proposal would cut $2 billion from the agency’s budget next fiscal year. “Cuts of this magnitude would be substantial and affect all of IRS operations,” from answering taxpayers’ questions on the phone to being able to conduct audits, he said. Shulman said that for every dollar invested in the IRS, the agency collects roughly $200 in revenue. [Dow Jones]

Democrats Ask Republicans to Blow Off Grover Norquist

Top Republican lawmakers have said that increasing revenues was the one approach off the table when it comes to deficit reduction. But Rep. Jan Schakowsky (D-Ill.) and 108 other House Democrats, in a letter dated Monday, said that position jeopardized the chances for a bipartisan agreement.

“Revenues must be a component of addressing our deficit and debt problems,” the Democrats wrote to Speaker John Boehner (R-Ohio). “Solving our fiscal problems with spending cuts alone would be devastating to our economy, to the middle class, and to vulnerable populations like seniors and low-income families.” [The Hill]