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June 2011

Ron and Rand Paul, father-son deficit cutting duo, go their separate ways

It's true. Republican Rep. Ron Paul of Texas, who's injected his Libertarian leanings into the GOP presidential nomination battle, and his freshman Senator son Rand Paul of Kentucky are no longer sharing a home in the Washington, D.C., area. Everybody, it seems, has daddy issues, although the younger Paul says traffic was the prime reason he moved into his own place on Capitol Hill. Having lived almost 20 years in the nation's capital and the Maryland suburbs, I can agree with the Pauls about the area's infuriating road congestion if not most of their political positions. Related posts: Want to... Read more →


Tax cutting on Capitol Hill gets personal

The president threw down the gauntlet when it comes to taxes and the federal debt limit. Now Capitol Hill plans to make the tax cut fight personal. Senate Democrats today plan to force a vote on tax loopholes, many of which are championed by their Republican counterparts. They're starting with a tax break that Minority Leader Mitch McConnell got included in 2008 legislation: $126 million in tax breaks for the horse-racing industry. Or as it's been dubbed, the Bluegrass Boondoggle. Three years ago, the senior Senator from Kentucky was looking after his constituents, many of whom depend on the success... Read more →


The hubby and I are child-free, but our neighborhood is full of kids. It's also full of moms and dads who both work outside the home. So what do our working parent neighbors do when school is out for the summer and their youngsters have hours and hours free? No, they don't drop the kids off at our house. We are definitely not that good of neighbors. They send them to summer camp. And if it's a day camp, all the better. You don't have to mess with young Joni's or Jimmy's homesickness. You don't have to deal with your... Read more →


Did injuries sustained by a Michigan drag racer in a non-competition car crash seven years ago contribute to his involvement in an alleged $80 million tax fraud case? That's the question that everyone involved in the case, but particularly Evan Knoll's attorney, hopes will be answered by a court-ordered psychological evaluation. The exam will determine whether Knoll, who's charged with filing false tax refunds that bilked the federal government out of more than $80 million, can assist in his defense. Knoll is expected to be in custody at a federal facility for several months while the examination is conducted. Knoll's... Read more →


A Florida Congressman is fighting for a 61-mile commuter rail project in the center of his state that, reports the New York Times, the federal government ranks as one of the least cost-effective mass transit efforts in the nation. Finally, Alaska's bridge to nowhere has company. This long-standing effort by Rep. John L. Mica to build more train tracks in Central Florida is continuing at a time when every spending proposal ostensibly is getting a good once-over by deficit hawks. But as is usually the case on Capitol Hill, politics and special interests tend to prevail. SunRail, the northern portion... Read more →


How serendipitous that New York's decision to sanction same-sax marriages came in June, the most popular month for weddings. OK, it takes 30 days for the law to go into effect, pushing the first exchanging of vows to July 24, but every couple needs time to plan their big day. And it's still is a nice gesture. Photo by Kathryn8/iStock Not to take any glow off the new-found relationship option, but like their heterosexual counterparts, New York's same-sex couples also will now be able to officially divorce. "One of the so-called benefits to marriage is actually divorce," Ruthann Robson, professor... Read more →


New York businesses who collect sales taxes now must file those returns and make payments electronically. If they don't, the state's Department of Taxation and Finance will assess a $50 penalty for each failure to e-file. Most Empire State businesses who fall under the mandatory e-filing law which took effect May 30 won't have a problem meeting the electronic requirements. Unless they are Amish. Since they shun electricity, the Amish don't own computers or phones with which they could e-pay their taxes. And that adherence to age-old traditions mean that the rest of the world's technological advances are which making... Read more →


The NASCAR drivers are turning left and right today on the road course in Sonoma, Calif. The sport's most popular driver, Dale Earnhardt, Jr., is driving a car with National Guard decals. But some of Junior's fans, as well as those who support other race teams, are worried about a report that Congress will again attempt to end military sponsorship of motorsports. Specifically, U.S. Rep. Betty McCollum (D-Minn.) is expected to introduce an amendment to next year's Pentagon appropriations bill that would reduce money going to advertising for motorsports, fishing, wrestling and ultimate-fighting events. When McCollum introduced similar legislation in... Read more →


It usually pays to be judicious when it comes to taxes. But when taxpayers didn't exercise enough prudence, their tax actions entered the judicial realm in a couple of cases discussed last week at my other tax blog. Let's start with the U.S. Tax Court case in which the judge informed a couple that their tax professional's error is no excuse for their request to waive the penalty that was assessed in connection with the mistake. The couple had made $3.4 million on an investment transaction. Their accounting/law firm neglected to add that money to their income. The IRS noticed... Read more →


Scott Adams, the man who's made a fortune by making fun of the stupidity that abounds in much of corporate life, wants to use that concept in our real world. Specifically, he's suggesting a stupidity tax. "I'm just curious as to whether tax policy could make a huge difference in the effectiveness of society by directly taxing stupidity," Adams wrote on his blog. "Suppose science is applied to the task of identifying the most important knowledge that an adult should possess. Could you find a few thousand bits of knowledge that successful people generally understand and unsuccessful people do not?"... Read more →


Professional golfer Retief Goosen, fresh off a Tax Court case in which he received a split decision on how Uncle Sam taxes his U.S. earnings, wants to make sure everyone knows that he's in good standing with the IRS. The tax case was never a matter of tax avoidance, Goosen told Golf Digest/Golf World magazine. Rather, the PGA and European tours champion agreed to be the tax guinea pig so that international professional athletes and entertainers know exactly what U.S. tax officials expect. "Now that the judge has given us a guideline, a new law, how to file, we can... Read more →


Last year France began exploring ways to tax Google and other big online advertising companies. That effort is now dead. The New York Times reported last week that French President Nicolas Sarkozy's party has withdrawn legislation seeking to impose a 1 percent tax on online advertising expenditures in the country. The measure had been introduced because of concerns that foreign Internet companies pay little or no tax on their earnings in France. Although the proposal had been dubbed the Google tax, it actually would have had little effect on the company because it sells advertising aimed at French users through... Read more →


H&H Bagels, the iconic New York City bagel shop that in 2009 was charged with failure to make payroll tax payments, is closing its Upper West Side store. Earlier this week, H&H's store at Broadway and West 80th Street had been stripped of its signage, distinctive brown-striped awnings and ATMs. "It's an institution, almost like a museum," City Councilwoman Gale A. Brewer told the New York Times. "Everybody dreams of their store being a destination, but this one really is a destination. You can literally get a hot bagel at 3 o'clock in the morning, and it literally comes out... Read more →


From the always entertaining "Mr. Kettle, meet Mr. Pot" file we have former IRS Commissioner Mark Everson pointing fingers at tax attorneys and accountants in connection with the 2008 financial industry meltdown. Everson, who headed the Internal Revenue Service from May 2003 until May 2007, played the blame game in a New York Times op-ed piece in which he longed for the days when Lawyers and Accountants Once Put Integrity First. "Lawyers and accountants who were once the proud pillars of our financial system have become the happy architects of its circumvention. Nowhere is this more the case than in... Read more →


Glastonbury Festival. U2. Tax protesters. Yep, that's what is on tap at the famed music event tonight. U2 will be making a long-awaited first appearance at Glastonbury tonight. Among those waiting to greet Bono, The Edge and the rest of the boys as they take the stage will be protesters from Art Uncut. The group plans to unfurl a giant inflatable message demanding "Bono Pay Up." UPDATE, 10 p.m. CDT: The protesters sign went up, but rain, mud and aggressive security guards quickly quashed the display. It will mark the beginning of a weekend of events that the group of... Read more →


IRS hikes mileage tax deduction amounts

After first saying that a midyear change in the optional standard mileage deduction rates wasn't likely, the IRS relented. Today the agency announced that starting July 1, the rate for deductible business travel will increase to 55.5 cents a mile. That's a bump up of 4.5 cents from the 51 cent rate that's in effect for another week. Also going up by 4.5 cents between July 1 and Dec. 31 of this year will be the mileage deduction for medical or moving expenses. Qualifying driving in these areas will be 23.5 cents a mile for the last half of the... Read more →


Part of the reason that most states are struggling with balancing their budgets is that their revenue has been up and down, not just in this fiscal year, but over the past decade. Just how big of a tax money roller coaster ride has it been? The Tax Foundation has computed the each state's volatility score, with the figure expressed as a percentage of Alaska's score because it is most volatile state. And no, Sarah Palin had nothing to do with the Last Frontier's ranking. C'mon, you all were making jokes in your head anyway! Alaska's volatility is high because... Read more →


I love you honey, but not your tax return

June is the month when lots of couples are saying "I do." But when it comes to filing a joint return, many opt to say "I don't." True, opting to fill out your Form 1040 as married filing jointly is the preferred filing status for wedded couples. That's because in most cases, it produces the best tax results for husbands and wives. The IRS notes in its Publication 501 that "if you and your spouse decide to file a joint return, your tax may be lower than your combined tax for the other filing statuses. Also, your standard deduction (if... Read more →


Too often, tax refunds end up in the wrong hands because a criminal has actively gone after the money, usually employing some sort of identity theft computer hack or tax scam. But a California woman discovered a mistake that she made on her tax return sent her $110,000 IRS refund directly to a thief. Stephen Reginald McDow, 34, has been arrested on one felony count of theft of lost property. McDow crime was one of opportunity. The Laguna Beach man simply spent most of the surprise tax windfall that showed up in his bank account. In August 2010, a woman... Read more →


Tax cuts don't pay for themselves

Here's a fun way to wrap up a Monday, getting everyone fighting about, finessing figures, debating discussing tax cuts. Visit msnbc.com for breaking news, world news, and news about the economy Play nice. See you tomorrow! Hat tip: TaxProf Blog Related posts: Democrats support tax fraud and waste; Republicans hate middle-class workers Debt limit, tax reform and me on 'net TV Reagan tax cut architect says GOP has gone too far with anti-tax 'religion' Fed Chair Bernanke talks tax policy 'Uncle' Alan Greenspan's latest on taxes Want to tell your friends about this blog post? Check out the buttons --... Read more →