Reminder: Worst Tax Season Ever Starts Today

Posted on by Adrienne Gonzalez

For months, we've been hearing how bad tax season will be this year. Not just for you poor tax people, but for — gasp — taxpayers, even.

See our post in November of last year:

The Internal Revenue Service is gearing up to be hated even more than usual due to a “miserable” tax filing season, [IRS Commisioner John Koskinen] warned. That’s because of a lack of funding from Congress combined with increased responsibilities.

The 2015 tax filing season “will be one of the most complicated filing seasons we’ve ever had,” IRS Commissioner John Koskinen warned at the American Institute of Certified Public Accountants (AICPA) National Tax Conference in Washington, DC Thursday. “All we can do is try to maximize our services as well as we can; as well as we can is still going to be miserable. You really do get what you pay for.”

See also, this from the New York Times earlier this month:

Services to taxpayers are likely to drop to their worst levels since 2001, when the Internal Revenue Service first started measuring its performance, the agency’s taxpayer advocate said in her annual report released on Wednesday.

Five years of budget-cutting have “brought about a devastating erosion of taxpayer service, harming taxpayers individually and collectively,” wrote Nina E. Olson, who leads the Taxpayer Advocate Service, an independent office within the I.R.S.

Ms. Olson warned that in this fiscal year — as filing requirements mandated by the Affordable Care Act go into effect — the agency might end up answering as few as 43 percent of the more than 100 million phone calls it expects to receive from taxpayers.

Well, today the worst tax season ever kicks off. We'll be here for you throughout, and if you need to vent or cry or freak out, just reach out and give us a holla. Seriously, I'm up at weird hours and you can even call me and just cry your ass off. I can't guarantee I'll pick up but hey, offer is out there. For those of you in the Mid-Atlantic/Old South, you can even come to my apartment and pet some kittens if you're feeling the pain. Kittens make everything better.

Hang in there, guys (and gals). It'll be over soon.

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Grover Norquist Gives Congressman Frank Wolf the Heebie Jeebies

“My conscience has compelled me to come to the floor today to voice concerns I have with the influence Grover Norquist, the president of Americans for Tax Reform, has on the political process in Washington,” Wolf read from a statement on the floor of the House of Representatives today. Wolf listed a series of associations that he said undermines Norquist’s credibility as a policy advocate. Among them, he cited a relationship Norquist had with former lobbyist and convicted felon Jack Abramoff. “Mister Abramoff essentially laundered money through ATR and Mister Norquist knew it,” Wolf said. [Bloomberg]

Sometimes Billionaires Get Bad Tax Advice, Just Like Us!

It’s probably safe to say that billionaire hedge fund manager Leon Cooperman doesn’t get poor service very often. As the founder of Omega Advisors and #655 by Forbes‘ last count, the man has arguably earned the right to demand only the best, especially when it comes to something as important as tax services.

Howthat Cooperman is just the latest billionaire to have tax issues (McCombs, Anschutz have had troubles recently) that might cause a less prudent mega-rich person to flip their lid (e.g. Ted Turner, Steve Jobs).

Cooperman recently received a letter from the IRS informing him that despite the generous gift of $43 million to his own foundation, the contribution could not be allowed because the donation was a non-marketable security made to a private foundation, which is not allowed by the IRS. Had he made the donation to say, NORML (he looks like he could get behind it, couldn’t he?), or some other public charity everything would have been hunky-dory.


Unfortunately for Mr Cooperman, this isn’t the case and the IRS sent him a bill for $14 million in back taxes and $5 million in penalties. Understandably, this aggression will not stand and the “plain-speaking” Coop has taken the case to court to insist that he relied on his accountants to get this shit right. It’s complicated, after all. It’s not about the money, it’s the principle. Coop would gladly schlep in suitcases of consecutively numbered hundos to settle this here and now but the penalties are uncalled for and he’s bound and determined to prove that. But who actually is to blame?

The lawsuit says Cooperman’s two personal returns claiming the deductions were prepared by his longtime accountant, Mark I. Gittelman, a CPA with Gittelman & Co., Clifton, N.J. The formal appraisals to support the claimed deductions were done by RSM Business Services and Duff & Phelps, Cooperman’s suit adds.

[…]

McGladrey does tax work for other Cooperman entities, including his hedge fund, Omega Advisors. Cooperman told Forbes that McGladrey knew he was planning to donate a nonmarketable security to his private foundation and take a deduction when the firm rendered its appraisal for a fee that Cooperman said was about $20,000.

Again, the money isn’t important but for crissakes, McGladrey, you just don’t half-ass your work for Leon Cooperman. Forbes was all over this issue back in ’04. Where were you in 2004? Stumping for John Kerry?

Of course we all know where this is eventually going – litigation! When rich people get wronged, someone inevitably pays and it sounds like LC is happy to sit tight and let the tax court do its thing. Once that’s resolved, he’ll turn his sights towards the responsible parties:

Cooperman clearly is thinking about malpractice litigation. He acknowledged McGladrey is likely to assert it didn’t prepare or sign the tax returns with the disallowed deductions, although the firm’s formal appraisal was attached.

Best of luck to everyone involved!

Billionaire Leon Cooperman: I Got Bad Tax Advice [Forbes]

The Miami Heat Bail Out Tim Hardaway

They aren’t exactly the U.S. Treasury and don’t foresee any populist outrage but Miami Heat Limited Partnership did Tim a fave and bought his 7,500 square foot manse for $1.985 million, according to Tax Watchdog Robert Snell:

The Miami Heat, one of the NBA’s hottest teams, bailed out former star Tim Hardaway, whose namesake son plays for the University of Michigan basketball team, by buying his Miami mansion and clearing up a $120,000 federal tax debt.

Hardaway, 44, ran into tax trouble in June despite being paid more than $46.6 million during his NBA career. The IRS filed a tax lien against his property and the bill listed his 7,542-square-foot mansion in suburban Miami.

For whatever reason, Tim is still crashing there but the Heat are trying to flip the pad for $2.5 mil, so if you’re in the market for 5bed/5.5bath with a full basketball court, make them an offer.