Don't Mess With Taxes

My, what a busy tax morning. Tax and trash collectors, scofflaws racing against the tax man and Members of Congress just dying to change the estate taxes.

So here's all today's tax news that's fit to print online:

1. The Government Accountability Office has denied the protests filed against the IRS in connection with contracts it awarded in March to to three private debt collectors, according to Tax Analysts' Taxwire service. This now means the agency can immediately resume its controversial program to outsource overdue IRS bill collection.

That might be as far as the effort will get though, as the House included in its IRS appropriations bill a provision prohibiting, beginning Oct. 1, the agency from hiring any more private bill collectors.

2. Yet another estate tax measure was introduced this week in the U.S. House, but prospects of what now has been scaled down to partial repeal still are iffy in this Congressional session.

Representatives previously had voted for full repeal. This new proposal follows a Senate compromise (that didn't come to a vote) calling for no tax on estates of $5 million ($10 million for married couples) or less. Estates between $5 million and $25 million would be taxed at the capital gains rate (currently 15 percent); those worth more than $25 million would be taxed at 30 percent.

The changes would take effect on Jan. 1, 2010, the day that the earlier estate tax law would have totally removed the tax for just that one year.

The bill also has a provision for a new 60 percent temporary deduction for qualified timber capital gains in an effort to persuade a handful of Senate Democrats who have long wanted the tree-cutting tax break to agree to the estate tax changes.

And that produces other problems. The timber provision adds another $5 billion to the estate tax modification costs. Joint Committee on Taxation number crunchers estimate the the total 10-year cost of the House estate-slash-timber (sorry, couldn't resist) bill will be $280 billion. That just might be too big of a budget pill for deficit watching members to swallow.

3. Gene Haas, owner of Oxnard, Calif.-based Haas Automation and NASCAR's Haas CNC Racing (Jeff Green's #66 Nextel Cup car and Johnny Sauter's #00 in the Busch series), is  speeding toward tax trouble. The Associated Press reports that Haas has been arrested for investigation of conspiracy, filing false tax returns and witness intimidation.

The U.S. Attorney's Office alleges that Haas orchestrated a plan to list $50 million in bogus expenses that could be written off as business costs and save the company $20 million in taxes. He's in jail in LA without bail.

4. I've added a poll (upper left of the page) to find out whether Don't Mess With Taxes readers are going to take all their vacation time, an issue touched on in Hot fun in the summertime. Remember: If you're one of those who can't quite leave it all behind while on holiday, you can still check in anytime, anywhere, via any Internet connection to the ol' tax blog! Not that I'm recommending that. I'm just saying.

5. And finally, Austin advertising copywriters who created and now manage the state's anti-littering campaign, are working to push the Texas Department of Transportation catch phrase to the top of Advertising Week's third annual favorite slogan contest.

Why do I care? Well, I'm a Texan and the slogan is "Don't Mess with Texas."

Many, many people trash talk or want to literally trash the tax code, but as I explained in introducing Don't Mess With Taxes, I subscribe to the other interpretations of the "don't mess with" warning.

The anti-littering slogan wasn't an immediate hit with state officials. The phrase's creator told the Austin American-Statesman that when he pitched it in 1985, one person asked that it be changed to "Please, don't mess with Texas."

I hope someone down at Congress Avenue and 11th Street pulled that faux Texan's residency card!

You can help the effort, even if you aren't a Texan but don't want to mess with us, by voting for "Don't Mess with Texas" at this Web page. Please.