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May 2007

What I like about Austin

The hubby headed to Atlanta today on business, and as I drove back home after dropping him at the airport, one of the best things about our new hometown came across loud and clear. On my favorite radio station, KGSR, I heard in succession: Lucinda Williams' heartfelt inquiry Are You Alright? Joe Ely's bluesy celebration of Dallas The Neville Brothers' funky Fiyo on the Bayou Lyle Lovett trying, but realizing You Can't Resist It Joss Stone wanting someone to Tell Me 'Bout It Booker T and the MGs musically munching Green Onions All those songs. Old. New. All those genres.... Read more →

Marijuana deduction goes up in smoke

Medical marijuana is not deductible on a federal 1040. But other services provided by a San Francisco-based group that helps folks suffering fatal or debilitating illnesses can be written off. That was the split decision handed down Tuesday in a U.S. Tax Court ruling regarding expenses claimed by Californians Helping to Alleviate Medical Problems, Inc. The group, which in subsequent references we'll refer to by the acronym CHAMP because that sounds much better than the Tax Court's "Petitioner" (or P), was organized in December 1996 under California law as a public benefit corporation to help individuals suffering from AIDS and... Read more →

Oversight OK of tax debt collectors

The IRS Oversight Board, a panel created in 1998 by the IRS Reform and Restructuring Act, has given its OK to private tax debt collectors. The nine-member independent Board met earlier this month to examine the controversial program's progress. Since last September, the IRS has been using debt collection firms to bring in certain unpaid taxes. So far, the IRS has turned 33,824 cases over to the private collection agents (PCAs), accounting for unpaid taxes of $218 million. As of last month, according to the Oversight Board, the collection agents had brought in $19.47 million in gross revenue. $15.57 million... Read more →

Getting your rocking chairs on the same porch

Do you and your partner talk about retirement? The hubby and I do. A lot. Much of it is along the lines of "I can't wait to quit working!" But seriously, we do look forward to the day when we feel comfortable enough to do what we want to do, rather than what we need to do to pay bills. And while the date certain is still up for debate, we pretty much agree on what we'll do when it arrives. At the slow pace we're taking to unpack, we'll finally get around to furnishing our house. And we'll be... Read more →

Tax gift for older moms

Lone Star State voters gave older mothers -- and fathers and even childless folks -- a present this Mother's Day by approving Proposition 1. The constitutional amendment was the only statewide issue on the ballot in yesterday's election. Its passage now means that Texas homeowners who are over 65 or disabled will get a rate reduction in their school property tax rates for 2006 and 2007 tax years. Those folks didn't get property tax relief last year when everyone else did because the state's constitution already called for a special freeze on their rates. Under that provision, these property owners... Read more →

Tax Cheat Rap Sheet:
Week ending May 12, 2007

For the second week, although a day late this time (the inaugural roundup was May 4), I did a search of tax crimes. Here's the current batch of convicted tax miscreants. We start with a former IRS director, Jesse Ayala Cota, who pleaded guilty in a Kansas City, Kan., court to promoting a tax-fraud scheme through his accounting firm. Cost to the U.S. Treasury: $1.3 million. Cota, according to court documents, pocketed $300,000. Between 1997 and 2002, he prepared bogus tax returns based on “false and misleading representations” to clients. Cota admitted to using his former position with the IRS... Read more →

Accounting for musical tastes

During tax-filing season, we had Tax Rap. Now it's time for CPA Rock. Next weekend, direct from the city that gave us grunge, accountants will put their musical talents on display to help raise money for scholarships at two Washington state colleges. The actual May 19 Battle of the Bands concert will be on the Highline Community College campus in Des Moines, Wash., a Seattle suburb. Highline will be one accounting scholarship beneficiary; the other recipient school will be Central Washington University. Seattle-area bands scheduled to compete are Disregarded Entity, Accounting Crows, Industry Audit Guys, Facial Depreciation and Terminal Liability.... Read more →

Tax Carnival #18: Tax Break Time ... Maybe

May. The month that brings us May Day, maypoles, Mother's Day, May flowers, Memorial Day and now Tax Carnival #18: Time for a Break from Taxes ... Maybe. Or maybe not. Tax aficionados know that to get the most tax savings, you need to pay constant attention, year round. So here are some tax topics to consider this first month after we finished up last year's taxes. First, let's wrap up our 2006 returns, starting with Mama Money's item on Our Tax Bill is What?! Posted at Financial Dispatches, she explains "why we purposefully under withheld." We also have Anthony,... Read more →

How do you say 'I'm back' in French?

"Je suis de retour," according to Altavista's online translation tool Babel Fish. Well, that's what legendary French rocker Johnny Hallyday will say to his homeland fans on May 17. That's when newly-elected French president Nicolas Sarkozy will be sworn in. When that happens, Hallyday believes it will be financially safe for him to return home. Hallyday moved to Switzerland last year because he was tired of paying what he considered exorbitant French taxes. Now he's convinced that Sarkozy will follow through on his campaign promise to cut taxes. Hallyday's wife Laetitia told the media, "Nicolas Sarkozy's policies will certainly lead... Read more →

Dealing with disaster ... again

I am home! I arrived yesterday evening, with the weather gods giving my airline flights just enough time to go from Kansas City to Dallas and on to Austin without excessive turbulence. When I left KC, the Missouri River was already over its banks in some areas. During the Dallas layover, all of us at the gate area were glued to the local news reports of storm cells with potential tornadoes moving eastward toward DFW. The spring storm season is nothing new. But this year is a decidedly difficult one. And weather-related disasters started early this year; remember Florida in... Read more →

A couple of carnivals

Carnival tents are going up this week, and we start with the latest Carnival of Personal Finance. In its 99th edition, Money, Matter, and More Musings gives us Awesome Money Quotes. The collection of cash chatter contains bloggings on kids, parents and money mistakes; the realities of loan pre-approvals; and my own look at a curious report on the tax practices of lower-income investors. Lots of good advice in this carnival. The icing on the carnival cake is all the great financial quotes sprinkled throughout. Check it out. Tax Carnival reminder: Tomorrow, Wednesday, May 9, is the new deadline for... Read more →

W's tax cuts pay off for himself and Dick

A new paper from Citizens for Tax Justice shows that the 2006 tax bill of W and wife Laura was $31,037 lower than last year's bill. That's 14 percent smaller than the couple's prior year taxes. No, the First Family didn't hire a new accountant. Instead, the Bushes can thank the president's own tax cut program. 24.4 percent of W's 2006 income went to taxes, according to CTJ. Without his tax cuts, he and his wife would have paid 28.4 percent of their earnings to the IRS. Here are the figures, per CTJ, for the First Family: And here's how... Read more →

Hello from Kansas City

It's stormy here. Just like it's been for three days. Just like it's supposed to be for the rest of the week. The Weather Channel's map of Monday conditions still has that big red blob indicating potentially severe weather over the middle of the country. But even with the threatening weather, about two dozen of us on the shuttle into town from the airport got a nice little tour. As the bus went from hotel to hotel, dropping a few of us off at each lodging, the older gentleman driving us also served as our ad hoc guide. He pointed... Read more →

A brief tax pause

Actually, it's a Tax Carnival pause. Carnival #18 was scheduled to go up Monday, May 7. But in a few hours I'm heading out on a quasi-business trip, so I've decided to reschedule. It's not a major publication shift. I'll take the items that have come in so far and post them on Friday, May 11. I'll also keep taking submissions for the 18th Carnival of Taxes through Wednesday. Goin' to Kansas City: At least the reason for the Carnival delay is tax related. I'm heading up to Kansas City for a few days for a Taxpayer Advocacy Panel meeting.... Read more →

Cinco ways to save

Hola amigos y amigas! Add "me llamo Kay" and "mas cerveza, por favor," and you've just about exhausted all I still recall from a year of high school Spanish class. Not that cerveza order, of course, but you know how teenagers always manage to learn what they need, or want, to know. Despite my bilingual limitations, I had to give it a try in recognition of Cinco de Mayo. On May 5, 1862, Mexican forces halted, at least temporarily, the French incursion into our neighbor nation south of the border. The day also marks a more recent and more personal... Read more →

Biggest tax cheats? Lower income investors

And Tax Cheat Week on the ol' blog continues. The latest installment comes from a Congressional committee that says when it comes to reporting capital gains income, the biggest tax evaders are folks in the lowest income tax brackets. Say what? That's not just my reaction. That was the response of Rep. Rahm Emanuel (D-Ill.), who had asked the Joint Committee on Taxation to compile stats that would help in his effort to crack down on tax cheating. Investment earnings are a major tax-evasion area of concern, since the IRS essentially takes the word of taxpayers in reporting how much... Read more →

Tax Cheat Rap Sheet:
Week ending May 4, 2007

The Senate's recent look at ways offshore tax havens escape IRS enforcement got me thinking about those scofflaws who do get caught. So I did a little Googling and discovered some recent tax prosecutions. I might just make this a regular Friday afternoon effort. I suspect I'll find at least a few reports of tax miscreants every week. The cases might not be as sexy or salacious as those reported on The Smoking Gun, but the ramifications for us law-abiding taxpayers are substantial. If you and I are shelling out our fair share, then everyone else needs to do so,... Read more →

Patience pays off for some tax cheats

You've heard that old saying, "Virtue is its own reward." Well, a more accurate proverb for some tax evaders is "Patience is the best tax reward." It seems that if you're engaged in a financial activity that the IRS finds suspicious, like say an offshore account, you and your tax haven money have a pretty good chance of escaping any rebuke (or worse) from the tax agency. The reason is quite simple: Tax examiners just don't have time to complete these types of investigations. As long as you can wait out Uncle Sam, you're likely to get away without any... Read more →

Why I'm slow, and cranky, today

The image above illustrates how the hubby and I spent 8 p.m. Wednesday through 2:30 a.m. today. When I snipped this WeatherBug lightning strike map shot about 12:30 a.m., in the preceding hour 11,653 bolts touched down. As the heaviest part of the storm line moved over us, it felt like 11,000 were just outside our house. Now I stay up late many, many nights. But not usually listening to lightning assault my neighborhood. Waiting for severe weather to pass takes a little more out of you than the usual 2 a.m. surfing to see what other folks thought of... Read more →

Bogus home bank busted

A Washington state man set up a "bank" in his suburban home for folks who specifically wanted to evade taxes. That's the charge against Robert Arant, whom IRS investigators say took in at least $28 million from people throughout the United States who wanted accounts they could conceal from the tax agency. Or, as Arant reportedly advertised, his financial services were for those "who would rather not deal directly with the banking system." According to news reports (such as this Associated Press story on the WTOP radio Web site), Arant pooled his customers' money it in six accounts at Bank... Read more →