Category: Tax

Paul Ryan: Tax Reform Hero?

It is fine for Republicans to refuse to raise taxes as long as they admit we must have significant cuts in entitlements. Ryan is leading the way for the Republicans. For this he deserves kudos. It is fine for Democrats to refuse cutting entitlements as long as they admit we must have significant tax increases. Nobody is leading the Democrats. And politics requires that the President stall because he cannot even hint at a tax increase before the 2012 election. [Martin Sullivan]

Office Depot Loses Tax Credits; CFO May Have Lost His Lunch

Office Depot CFO Mike Newman can’t handle – CAN’T HANDLE – the bad news handed down by the IRS:

“I’m sick about it,” Newman said of the mistake the company and its advisors made in thinking Office Depot could use tax credits of $80 million last year and $63 million this year, calling the mistake his responsibility. Office Depot and its tax advisors believed the company was eligible to use prior losses to get tax credits under the American Recovery and Reinvestment Act of 2009, but the IRS told the company that other tax rules superseded the ones under which Office Depot was using to determine eligibility.

Of course we’d love to know who this “advisor” is that Newman is referring to. Since Deloitte earned over $589k in tax fees for fiscal year ’10 you could conclude that he’s referring to D. It’s certainly possible that it’s someone else so we invite you to come up with some theories.

Office Depot Off; Explains Impact Of IRS Tax-Credit Denial [Dow Jones]

IRS Commish Admits That a Government Shutdown During Tax Season Would Be Kinda Weird

The head of the IRS said Thursday that a government shutdown during tax season would be a challenge the agency has never confronted before — and one that would become more complicated as the April filing deadline draws closer. Doug Shulman, the IRS commissioner, also signaled at a House Ways and Means subcommittee hearing that his agency was discussing how to address a potential shutdown with the Obama administration, though he did not spell out any details of those talks. “We run a $13 billion financial services operation, so the idea of stopping it for a few days or a few weeks is strange,” Shulman said, adding that he was hopeful, based on ongoing negotiations, that a shutdown could be averted. [The Hill]

Did the Georgia Tea Party Call Grover Norquist a Socialist?

Maybe! As you know, Grover Norquist is the President of Americans For Tax Reform and has a staunch record of opposing any legislation – federal or state – that increases taxes and evokes Ronald Reagan (who hated taxes, dontchaknow) in every possible context, no matter how irrelevant. Grover and ATR are willing to get into a tussle (usually by sternly-worded letter) with whomever thinks that raising taxes will amount to anything positive (because that’s impossible). From the Illinois legislature to the American Lung Association to Lance Armstrong, if you give the slightest impression that higher taxes are a good idea, you can expect Grover & Co. to get Viking on your ass.


However, we learned this morning that in ATR’s most recent spat with the Georgia Legislature over that state’s tax overhaul bill, it appears that Grover has been out-Grovered by the Georgia Tea Party. You see, GN has informed the Georgia pols that he won’t give them any shit for supporting HB 387 after opposing their initial efforts.

This however, did not sit well with the GTP (our emphasis):

”One can not just look at the tax rate cut, one has to look at the deductions/exemptions that are slashed and, in many cases, removed in this bill. Taxes will be raised for some and will be cut for others. In other words, this bill re-distributes wealth.“

Okay, so…WHOA. Maybe we’re reading too much into this but take a gander at “socialism” and tell us what you think. So far there doesn’t appear to be a response over at ATR but this sort of aggression will likely elicit some sort of a response.

Your morning jolt: Grover Norquist, tea party split on tax overhaul [AJC via Joseph Thorndike]

How Do You Like VAT?

[A]s globalization increases demand for a more competitive tax system, the United States must consider shifting from a system that primarily relies on income taxation to one that relies primarily on consumption taxation. Most other major economies around the world depend more heavily on consumption taxation than does the United States. And all indications are reliance on consumption taxes is increasing. [Martin Sullivan]

Senator Tom Coburn Would Like ATR to Back Off a Bit

“Rather than demanding that Senate conservatives violate their consciences and support distortions in the tax code that increase spending and maintain Washington’s power over taxpayer’s lives, your organization should assist our efforts. Calling for the elimination of tax earmarks without qualifications would be a good start,” Coburn wrote. “Continuing to issue blanket defenses of all tax expenditures is a profoundly misguided embrace of progressive, activist government and a strategy for tax complexity, tax deferment, excessive spending and unsustainable deficits.” [The Hill]

Tax Cheater Profile: That Young Single Guy Who Lies About the Fly in His Soup

Sound like anyone you know?

While only 15% of Americans surveyed fessed up to fudging their tax returns, 64% of those people were men, according to the survey of consumer attitudes and behavior. Thirty-five percent were single (47% when including people who have been divorced or widowed), and 55% were under the age of 45.

As if cheating on your taxes wasn’t deplorable enough, this person will most likely to pocket money that isn’t theirs, gets a friend to pose as a former boss and would cook up a finger-in-the-chili story:

While 73% of cheaters admitted to working a job under the table, only 20% of non-cheaters did. Self-proclaimed cheaters are also much more likely to keep the wrong change given to them by a cashier, to ask a friend to pretend to be a former boss for a reference check and to lie about their income to qualify for government aid.

Many of them also said they would wear an outfit once and return it, file false insurance claims, keep money they see someone drop on the floor, or lie about finding something inappropriate in their food just to get a free meal.

If you know a scumbag like this, at least you can report your suspicions safely now.

Tax cheats: Single, young and male [CNN via DB]

Plante & Moran Encourages Employees to Make Tax Season a Family Affair

Plante & Moran, PLLC is encouraging its accountants and staff to bring their children to work on Saturdays during tax season, a tradition the firm has practiced for almost 20 years. The certified public accounting and business advisory firm offers free Saturday daycare in 11 of its Midwest offices – including Grand Rapids – during the height of tax season. Children ages 6 months to 18 are welcome to attend the drop-in program, which offers games, crafts, snacks, activities, movies – and an opportunity to enjoy lunch with Mom or Dad. [P&M]

GE Seems to Have Its Tax Planning Figured Out

[caption id="attachment_27566" align="alignright" width="150" caption="Immelt\'s Pre-GE \'fro"][/caption]

And by “figured out,” I’m referring to “worldwide profits of $14.2 billion, and […] $5.1 billion of the total came from its operations in the United States,” combined with a grand total $0.00 in taxes. “In fact, G.E. claimed a tax benefit of $3.2 billion,” reports the Times.


Sure the Internal Revenue Code is complex but if you’re aggressive, have a few lobbyists at your disposal and your tax department is “often referred to as the best tax law firm,” the IRC is a cakewalk.

Its extraordinary success is based on an aggressive strategy that mixes fierce lobbying for tax breaks and innovative accounting that enables it to concentrate its profits offshore. G.E.’s giant tax department, led by a bow-tied former Treasury official named John Samuels, is often referred to as the world’s best tax law firm. Indeed, the company’s slogan “Imagination at Work” fits this department well. The team includes former officials not just from the Treasury, but also from the I.R.S. and virtually all the tax-writing committees in Congress.

G.E.’s Strategies Let It Avoid Taxes Altogether [NYT]
See also:
On GE’s Pathological Aversion To Paying Taxes [ZH]

Eric Cantor Prefers a Friendly Crowd When Speaking About the Mortgage Interest Deduction

Speaking to a crowd of real estate professionals in his hometown, Cantor said the tax would be considered as part of the larger tax reform discussion. But he suggested a change is probably not in the cards. “Honestly, there’s not a lot of support for getting rid of the mortgage deduction on Capitol Hill,” Cantor said to loud applause from the audience. Cantor was speaking to nearly 200 members of the Richmond Association of REALTORs. [The Hill]