Misbehaving athletes (or fun hating NFL, NBA, MLB administrators) should take note, getting fined can apparently do wonders for your itemized deductions. That's according to a report from Darren Rovell at CNBC, anyway. He cites sports accountant Robert Raiola of Van Duyne, Behrens & Co. who says that fines are "classified as ordinary business expenses," so once the amount of those expenses exceed 2% of the taxpayers adjusted gross income, the expenses are deductible. Of course, what isn't mentioned is that it's likely that a professional athlete's itemized deductions would probably be limited since it's safe to assume that their itemized deductions are greater than $166,800. So in other words, it might work out well for Chad Ochocinco to get fined on a weekly basis for wearing sombreros, bribing officials, and/or any other tomfoolery that the NFL finds fineable but without all the information it's difficult to determine if this is actually a worth tax-planning strategy. Athletes – please consult your tax advisor that is probably already robbing you blind.
- Adrienne Gonzalez
- June 15, 2011
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.
- Caleb Newquist
- October 12, 2011
At a minimum, the Cain plan is a distributional monstrosity. The poor would pay more while the rich would have their taxes cut, with no guarantee that economic growth will increase and good reason to believe that the budget deficit will increase. Even allowing for the poorly thought through promises routinely made on the campaign trail, Mr. Cain’s tax plan stands out as exceptionally ill conceived. [NYT via TaxProf]
- Caleb Newquist
- April 18, 2013
A Sunset Hills accounting business closed abruptly last week just days before the tax deadline. […]