Category: Tax

Romanian Witches Use Cat Crap, Canine Corpses to Protest Taxes

The Tea Party is a buncha amateurs.

From the organization formerly known as National Public Radio:

Angry witches are using cat excrement and dead dogs to cast spells on the president and government who are forcing them to pay taxes. Also in the eye of the taxman are fortune tellers, who should have seen it coming.

And President Traian Basescu isn’t laughing it off. In a country where superstition is mainstream, the president and his aides wear purple on Thursdays, allegedly to ward off evil spirits.

And you can bet an eye of a newt that this is serious:

Queen witch Bratara Buzea, 63, who was imprisoned in 1977 for witchcraft under Ceausescu’s repressive communist regime, is furious about the new law.

Sitting cross-legged in her villa in the lake resort of Mogosoaia, just north of Bucharest, she said Wednesday she planned to cast a spell using a particularly effective concoction of cat excrement, a dead dog and a chorus of witches.

“We do harm to those who harm us,” she said. “They want to take the country out of this crisis using us? They should get us out of the crisis because they brought us into it.”

‘My curses always work!” she cackled in a smoky voice. She sat next to her wood-burning stove, surrounded by potions, charms, holy water and ceramic pots.

Angry Witches Cast Spells To Protest Romanian Taxes [NPR via DB]
Earlier:
Just So You’re Aware: Romanian Pols Vote Down Witch Tax Due to Curse Risk

Taxpayer Advocate Nina Olson Would Like the IRS to Quit Slapping Liens on People

Presumably this means celebrities too! That is, until the IRS can show that it’s actually an effective means of collection and not so ‘hard core.’

Olson has accused the agency of relying too heavily on an automated “one-size-fits-all approach.” She said the agency misguidedly files liens against people who have no money and no assets.

“Absent data that show liens make a meaningful contribution to revenue collection and especially in this economy, I find it unacceptable that the IRS continues to torment financially struggling taxpayers in this way,” Olson wrote in a news release accompanying the report.

Perhaps Olson has a point but then Robert Snell over at Tax Watchdog might not have a job and we’d hate to see that happen. The guy is like Raisin Bran™ on the celebrity tax deadbeat.

IRS’s ‘hard-core’ collection tactics needlessly harm taxpayers, report says [WaPo]

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]

Poll: This Balanced Budget Idea Starts with Higher Taxes for the Wealthy

Republicans take control in the House of Representatives this week and boy, are they ever ready. With the ink safely dry on the extension of the Bush tax cuts, the GOP is moving on to spending cuts, supporting the troops, restoring honor, launching investigations and whatever hell else was in that pledge. Wait, that last one wasn’t in there?


Anyhoo, the idea of lower taxes and spending cuts to get the federal budget in ship shape has been the GOP song and dance long before Ronnie had his own float at the Tournament of Roses Parade but a recent poll has discovered that lots of people don’t agree with that sentiment:

Raising taxes on the rich beats out cuts to defense spending, Medicare and Social Security as U.S. adults’ top preference on how to close the deficit, according to a 60 Minutes/Vanity Fair poll.

Sixty-one percent of Americans said that increasing taxes to the wealthy should be the first step toward balancing the budget.

By contrast, 20 percent of respondents preferred cuts to defense spending as the first option, while 4 percent said that cutting Medicare would be the best way to start cutting the deficit. Three percent said they preferred cutting Social Security.

Now you might expect a major backlash from the more affluent citizens, you know, grumbling at polo matches, yacht races and beside the swimming pools filled with gold doubloons but surprisingly, quite a few of them are okay with it:

Increased taxes on the wealthy tops those four options even among higher earners who might be most affected by a tax hike, the poll suggested. Fifty-eight percent of respondents making between $50,000 and $100,000 per year rated tax hikes as the best first step to balancing the budget, while 46 percent of those making more than $100,000 said it was their top choice, as well.

But as we have learned, the GOP isn’t really down with this. Besides, tax rates won’t be an issue again the until the second and third weeks of December 2012, so they’d prefer we concentrate on things that aren’t already safely chiseled into the political dogma.

Making Work Pay Tax Credit May Make Taxpayers Pay

Filed under: ironic press releases from the Treasury that we love to get.

News from our favorite federal taxation authority this morning reveals that while the IRS believes they did everything they were supposed to, some taxpayers may have taken their Making Work Pay credits incorrectly, causing them to actually owe money instead of celebrating free money. Oops! The Treasury Inspector General did their best to warn everyone this could happen and, oh look, it did.

Overall, the Internal Revenue Service (IRS) implemented the Making Work Pay Credit as intended by Congress, according to a report publicly released today by the Treasury Inspector General for Tax Administration (TIGTA).

However, the report also found that approximately 13.4 million taxpayers who received the credit may owe taxes because adjustments to the withholding tables did not take into consideration all taxpayer circumstances. For example, single taxpayers with more than one job, joint filers where both spouses work or one or both of them have more than one job, taxpayers who receive pension payments, and Social Security recipients who receive wages are among those who may be negatively affected.

The Making Work Pay credit is an economic stimulus provision of the American Recovery and Reinvestment Act of 2009 (Recovery Act). The credit is advanced to taxpayers by their employers through withholding reductions which results in an increase in taxpayers’ take home pay. The credit is effective for Tax Years 2009 and 2010.

“The Making Work Pay Credit is a key tax credit designed to increase spending and stimulate the economy,” said J. Russell George, the Treasury Inspector General for Tax Administration. “However, many taxpayers who are accustomed to receiving refunds when they file their tax returns may have owed taxes and incurred penalties in 2009 and may yet again in 2010 because they were advanced more of the credit than they were entitled to claim,” Mr. George added. “My office issued a report in November 2009 warning of this possibility and encouraging the IRS to increase outreach and waive penalties for taxpayers who may be negatively affected by the credit. We still believe further actions are needed to ensure no taxpayer is unfairly penalized.”

The November 2009 report warning this could go down mentions that some taxpayers were proactive and adjusted their withholding so as not to be impacted by the potential “free money” presented by this “credit” which, for some taxpayers, will turn into money owed back to the Treasury or even tax penalties.

The credit was advanced to taxpayers by their employers through withholding reductions that result in an increase in take home pay, in the hopes that $400 ($800 for joint filers) more in each eligible taxpayer pocket might help increase spending and stimulate the economy. Because of the nature of the credit, however, some taxpayers may have had their taxes underwithheld at the end of the year.

Intended to stimulate whose economy?

(UPDATE 2) Bernie Sanders Didn’t Convince Too Many People (Pretty Much No One!)

~ Update includes clarification on vote tally and addition to first paragraph. ~ Update 2 includes finally vote tally.

Despite Friday’s epic speech by Bernie Sanders, the Senate passed elected to finish debate on the tax cut/unemployment compromise this afternoon to set up the final vote before it moves on to the House.


At 4:12 ET, the vote was 62-7 with Sanders, Patrick Leahy (D-VT), Russ Feingold (D-WI), Tom Udall (D-NM) (CSPAN originally showed Tom as voting “no” and has now disappeared), Jeff Bingaman (D-NM), Kirsten Gillabrand (D-NY) and Sherrod Brown (D-OH) voting “no.”

If you’ve got nothing better to do, you can watch the live feed here.

UPDATE, circa 5:00: Vote is 73-10 with John Ensign (R-NV), Mark Udall (D-CO), Kay Hagan, (D-NC), Carl Levin (D-MI) voting “no.”

UPDATE 2, circa 6:30: Finally vote of 83-15.

Obama’s Appeasement on Tax Cuts

The following post is republished from AccountingWEB, a source of accounting news, information, tips, tools, resources and insight — everything you need to help you prosper and enjoy the accounting profession.

For those of you unfamiliar with the history of World War II, Neville Chamberlain was the prime minister of Great Britain just prior to the advent of World War II. He is most remembered for his “Munich Agreement“, in which he deeded over Czechoslovakia to Nazi Germany with Germany’s promise that it would not pursue further aggression. Of course, this was making a deal with the devil; Adolf Hitler was Satan incarnate, for certain. Consequently, his name has become the emodiment of total naivete, if not utter stupidity and idiocy. You cannot make a deal with the devil. Shown here in the picture to the right is Neville Chamberlin upon his return from Munich in 1938 after meeting with Adolf Hitler with the scrap of paper that was to “ensure peace in our time”; the paper was signed by Hitler.


The question now is whether Barack Obama is another Neville Chamberlain. Obama is supporting the tax cuts for the rich, claiming that unless we agree to these demands by the Republicans, our economy may dip back into recession, as Chamberlain asserted that unless England and Europe gave Nazi Germany Czechoslovakia, that a war with Germany might occur. Whether you are for the tax cuts or against the tax cuts, the majority of Americans were surprised, if not flabbergasted, by Obama’s immediate acquiescence to Republican demands for inclusion of the rich in the tax cuts, including a very generous exemption from estate taxes: under the plan, as much as $10 million may be exempt from any estate tax, with the estate tax rate on any excess being reduced from 55% to 35%!

Certainly, Barack Obama is no Winston Churchill. Maybe he does his fighting only on a basketball court; however, he certainly did not fight the good fight before conceding to the Republican demands, merely accepting in return a 13 month extension of unemployment benefits for 2 million Americans, a reduction in payroll taxes, and an extension of a grab bag of tax credits for college tuition and other items. Like Chamberlain, who only received Hilter’s signature on a scrap of paper promising never to go to war again with England, Obama got very little in return for the big gift to the rich and privileged.

A recent CBS poll found 70% of Americans were not in favor of these tax cuts for the rich—resulting in huge deficits of $700 billion dollars—when our national debt is already $14 trillion. Many feel that no tax cuts would have been preferable to this agreement, since no deal would spare us from an additional $980 billion of debt.

Obama is justifying these tax cuts through a fear tactic: unless we give the rich these tax cuts, our country may lapse back into another recession.

Dear President Obama: for your information, we are still in this recession. And in 2012, we will still be in this recession in terms of unemployment. Jobs have been going overseas for years now and with the further consolidations of mega-size corporations, more layoffs are looming. Of course, the unemployment numbers will become meaningless since after a certain period of time, the long-term unemployed are no longer included in the current rate of unemployment.

After hearing Harvard’s Larry Sumners endorsement of these tax cuts for the rich and his prediction of another recession if they are not enacted, I suspect that President Obama may still be listening to the counsel of his former Economic Advisor. Consequently, I am not surprised by Obama’s use of fear tactics today to drum support for these tax cuts for the rich.

If this is the kind of way Obama negotiates with Republicans over tax cuts for the rich, imagine how he would negotiate with the Iranians and North Korea? LOL! And then imagine how Hillary Clinton would have negotiated if she had been elected President of the United States. In the immortal words of Yogi Berra, it’s deja vu [Neville Chamberlain] all over again.

(UPDATE) Bernie Sanders Is Getting His Filibuster On

NPR reports that the Vermont Senator has been going for over 90 minutes to delay the vote on the tax deal President Obama made with Republicans and judging by the live feed from CSPAN2, he’s not showing any sign of stopping. NPR quotes Berns:

“You can call what I am doing today whatever you want, you it call it a filibuster, you can call it a very long speech. I’m not here to set any great records or to make a spectacle. I am simply here today to take as long as I can to explain to the American people the fact that we have got to do a lot better than this agreement provides.”

Here’s a snip from feed the (a pie chart!):


And a bar chart!

He’s doing you proud Green Mountain Staters!

UPDATE: Entering hour six! It’s like he’s got an IV of pure Green Mountain joe!

IRS Commish: There’s a Big Difference Between Hiding Money Offshore and Sophisticated International Tax Planning

In a speech before the 23rd Annual Institute on Current Issues in International Taxation, Washington, DC, Doug Shulman (link not yet available on the website) explained how rich dudes schlepping money to Switzerland (but not any more!) or Hong Kong is not even close to the same thing as “Google’s Irrationally Exuberant Tax Strategy.”

As I have said before, I draw a sharp distinction between rooting out individuals hiding their money in foreign tax havens and the IRS and Treasury creating ground rules for multinational corporations operating in a global environment.

It’s no secret that multinational corporations engage in sophisticated international tax planning. We recognize that much of this is perfectly legal and many businesses are trying to get it right. Of course, some are pushing the envelope too far and it’s here that we have issues. Our goal is to differentiate between the two; to be on top of our game in this analysis; and to ensure corporations are compliant with the tax law and stay compliant.

Wesley Snipes’s Prison Sentence Seems Pretty Fair

After suffering in tax and appellate court purgatory for several years, Wesley Snipes is finally reporting to prison today for his conviction of willful failure to file tax returns. There’s a whole slew of stories out there on the subject because a celebrity is going to prison, in case you weren’t aware, is important news.

However, as we told you about last week, some people aren’t convinced that the sentence is fair.

Responding to a post by Tim Cavanagh at Reason, rather than embrace mostly inflammatory nonsense, our friend Joe Kristan writes an objective analysis to get to the bottom of the debate:

Mr. Snipes was convicted of three counts of willfully failing to file tax returns for three years. The federal guidelines for prison sentences on tax crimes are largely based on the “tax loss” determined for the crime. Mr. Snipes’ “tax loss” was determined to be over $40 million, which would by itself indicate a sentence of at least 78 months – 6 1/2 years — under the guidelines. Since the maximum sentence for three counts of failure to file is the three years he got, the sentence is actually smaller than the guidelines would indicate.

Now, you may be saying to yourself, “The sentence is longer because a nasty judge is making an example out of one of the most important American artists in vampire cinema!” Joe checked into that too:

But Mr. Snipes still has a legitimate complaint if he’s the only person getting jailed for criminal failure to file, or he’s getting a much longer sentence than others. Is his sentence exceptional?

I don’t know of any statistical study of tax sentences, so we’ll go to the Google. (prison failure to file -snipes). The first page of results includes:

Anthony Kevin Slicker: $265,477 tax loss, 12 month sentence for failing to file for 1 year.

Steven A. Roebuck, Dentist: unknown tax loss, two-year sentence for failing to file for two years.

Arlan Turley, Dentist: 18 months, unknown tax loss, failure to file for two years.

Contrary to Tim Cavenaugh, then, other people get the maximum sentence 12-month per-year for willful failure to file, even with much lower tax losses.

Will the culture suffer? That’s up for debate. But willful failure to file taxes still happens to be a crime with punishment guidelines. If Wes was really saving all of us from vampires maybe the judge would have a good reason to make an exception. Although, that could make for a decent screenplay (straight to video, natch). Three years should be enough time to nail it down.