- Caleb Newquist
- October 19, 2009
These days the rich get hated on pretty much everywhere but millionaires in California have extra room to bitch now. The California Court of Appeals has rejected a taxpayer’s challenge to Proposition 63, “which imposed a 1% tax on annual incomes in excess of $1 million to fund state mental health services”.
The plaintiffs were claiming that they (and their fellow millionaires) were singled out: “In [the plaintiff’s] view, wealthy individuals are singled out to bear the burden of a public expense, while others are excused from that burden.” Yeah, non-millionaires. You mind chipping in?
Plus, the plaintiffs don’t really see the how their money and helping non-millionaire crazy people are even connected. From Jensen v. California Franchise Tax Board:
In this instance, the Taxpayers object that individuals with high incomes do not have a particular need or use for the mental health services funded by Proposition 63, i.e., there is not connection ‘between the group being assessed and the use of the funds collected.’ The argument fails, because there is no need to contrive a link between the taxpayer and the services being funded.
So apparently just because you’re a lunatic millionaire and can afford private mental health services doesn’t mean you get out of funding state-run mental health services. According to the court, millionaires need to help out the crazies that can’t afford to go to fancy-schmancy hospitals regardless of the lack of relevance.
Oh, and btw, the Plaintiffs are the real victims here, “The Taxpayers perceive themselves as victims of a populist movement to ‘soak the rich.'” How would you feel if you were a victim of a populist movement? People with torches and pitchforks outside your house. Nightmare. Think about the what the millionaires are going through, people.
California Court Upholds 1% Tax on Millionaires [TaxProf Blog]
- Joe Kristan
- November 11, 2011
The IRS Commissioner and his subaltern for preparer regulation this week spilled some of the beans about the “competency tests” that they are imposing on the unwashed (non-CPA, non-lawyer, non-enrolled agent) preparers. Some key bits, as reported by Tax Analysts (sorry, subscriber-only link):
- Prometric – the company known for making sure CPA exam candidates don’t hide cheat sheets in their ostomy bags – will also administer the IRS competency test. So don’t even think about hiding cheat sheets in your orthotic leg or enhanced breasts. But then again, you don’t have to, because…
- …They will allow you to use Publication 17, Your Federal Income Tax, when you take the competency test, and
- They’ll only test on 1040 issues.
This confirms the obvious: the competency test will be a joke. It has to be, or too few preparers would survive to prepare the nation’s returns. It won’t be completely open-book, but it sounds like you will be able to pass if you have adequate skills at reading and using an index.
This all makes it look like the cynics are right – it’s all about extending IRS power over preparers.
Don’t believe me? Listen to Shulman’s own words:
Today, I want to talk for a little bit about some of our priority programs, such as the Return Preparer Program, the evolution of our relationship with our largest corporate taxpayers, including Schedule UTP, and our work on what we’re calling a real time tax system.
The common thread that runs through them is points of leverage and working smarter.
Points of leverage sounds like what a wrestler uses to pin an opponent. The IRS can use these “points of leverage” to make preparers more subjects of the government and less advocates for their clients. And in their own sweet time, they will.
- Caleb Newquist
- March 30, 2010
If you’re a member of the AICPA the biggest benefit you enjoy is not the prestige, not the certificate that you have mounted on your wall but the Journal of Accountancy that shows up in your mail every month. It’s really solid that your firm shells out good money on an annual basis so you can add new Excel tips to your spreadsheet wizard repertoire.
JofA manages to talk to a number of high profile as well, which you would expect from a behemoth professional journal. Case in point, when we received the latest month’s issue we couldn’t help but get a little giddy seeing Doug “Help me, help you” Shulman. We flipped to the Q&A immediately after seeing his handsome mug on the cover only to find the Commish’s picture at right. It makes us think that he’s channeling Monty Burns, which some of you probably find appropriate.
The Q&A is pretty much what you would expect, touching on the new preparer regulations, “We ran a very open, transparent, public dialogue about this,” to threatening offshore tax scofflaws, “The U.S. government is getting very serious about rooting out offshore tax evasion,” and warning whistleblowers not to expect that money any time soon, “[T]his could take multiple years to get the awards out. But I’m a big fan of the program.”
A couple of more interesting statements, include how excited Dougie is that all the assignments that other government agencies don’t want, get dumped on the service, “it’s…a big compliment that we’re seen as a ‘go-to’ agency in government.”
That being said, this particular interview was certainly conducted prior to the passage of the healthcare reform bill and no mention of the IRS’ role in enforcement (or lack thereof) was brought up. Maybe if the JofA had seen the Bill O’Reilly/Anthony Weiner throwndown it would have been a stop the presses moment.
The only other thing worth noting is that pizza parlors around the country might want to tighten up the ship in the coming months, “We will build features into our technology system so if we see, say, a pizza parlor that says they had $90,000 of sales last year and it shows that they had $85,000 of credit card sales and we know that pizzerias have a lot of cash sales, that will be a red flag. We’ll use it to better target our audits, to see where there’s potential noncompliance, and then we’ll use it to better focus our resources.”
Maybe the Commish is just giving an example of what a red flag is but using this particular example rather than say, a celebrity, seem peculiar. Just leave Di Fara alone, okay?
Tax From the Top: Q&A With IRS Commissioner Doug Shulman [Journal of Accountancy]