Don't Mess With Taxes

OK, I had no idea who Wade Cook is. Apparently, I am in the minority and, in this instance, darn glad of it. Earlier this month, Cook was sentenced to 88 months (that's around 7 and 1/3 years if you don't have calculator handy) for federal tax evasion, obstruction of justice and filing a false return. He also was ordered to pay $3.75 million in back taxes on the approximately $9.5 million he earned on sales of books like Wall Street Money Machine (you can pick up a used copy of Vol. 1 at Amazon for a penny), and the... Read more →

Since it's Sunday, it seems fitting to bring you a few thoughts on taxes from Pope Benedict XVI. According to the Times of London, the Pope is preparing to condemn tax evasion as "socially unjust." The paper reports that the pontiff's second encyclical will denounce the use of tax havens and offshore bank accounts by wealthy individuals. Such tax-avoidance techniques, from the Pope's perspective, reduce tax revenues that benefit society as a whole. TaxProf Paul Caron says you can find additional info on the upcoming papal tax paper at Catholic World News and Catholic Online. Caron also points us to... Read more →

My colleagues on the Taxpayer Advocacy Panel have released our 2006 annual report. We got it out a bit later than we wanted, but if you thumb through it, you'll see why. As required by the federal law that created TAP, each year we provide a written report describing the Panel's objectives and a self-assessment of our previous report goals. The 2006 version summarizes 58 new recommendations that TAP generated for IRS consideration last year. The report also updates the status of the 250 recommendations TAP has submitted to the IRS since the panel was established in 2002. Many of... Read more →

Have the stock market's recent "corrections" got you wondering and worrying about what to do? You're not alone. It seems like every day, someone has another piece of investing advice. During one of the Dow's dips last month, Kiplinger's Stock Watch columnist Andrew Tanzer advised, "Focus on quality, and don't get spooked by the market's wild gyrations." Generally sound advice for most of us nursing a nest egg we won't touch for a while. Meanwhile, over at MarketWatch, Paul Ferrell suggests five "lazy portfolio" strategies that he says will help investors deal with what he sees as a coming market... Read more →

We had to wait a bit longer here in Texas for our sales tax holiday, but it finally arrives tomorrow, Friday, Aug. 17, and runs through Sunday, Aug. 19. The event used to be earlier in the month, like most of the 15 other tax holidays across the country, but it was moved this year to the third weekend in August. The shift puts retailers' back-to-school sales pitches closer to the start of the academic year. During these three days, Lone Star State shoppers won't pay any state or local sales taxes on most clothing and footwear costing less than... Read more →

It's around 6 a.m. on the East Coast. That means some folks are topping off their travel coffee mugs in preparation for their early-morning commute to the office. Later today, they'll close down their cubicles and head out on the return trip home. And around 400,000 of those employees, most of whom work in cities, get a tax break to help cover commuting costs, while at the same time, the federal government is handing out millions of dollars to help discourage urban driving. A story in today's New York Times examines the federal schizophrenia when it comes to commuting. According... Read more →

Once upon tax time, today was a crazy one for filers. Aug. 15 used to be the first deadline that seekers of filing extensions had to face. But in 2006, the IRS decided to eliminate the four-month deadline and automatically give all filing procrastinators six more months -- until Oct. 15 -- to get their tax acts together. There are just two caveats. First, the request had to be made by the April deadline by filing Form 4868. Secondly, the big requirement didn't change. The extension only applies to your tax forms. If your preliminary tax calculations indicated that you... Read more →

The IRS has made it official. The details on claiming the tax break for the cost of caring for a child or other dependent so you can work have been formalized. CCH, the tax information publishing company (among other things), reports that the agency has adopted the final regulations, most of which reflect proposed regulations that were published on May 24, 2006, and have been in use by filers since then. Here are the highlights: Summer school vs. day camp: The final regulations clarify that the costs of summer school and tutoring programs are not allowable expenses in claiming the... Read more →

Take Alabama football fanaticism, mix in some generous federal tax breaks created to spur post-Katrina rebuilding and you have a recipe for big bucks for some real estate investors. According to the Associated Press, several condominium projects are being built near the University of Alabama football stadium. Featuring granite counter tops, king-size bathtubs, crimson couches and Bear Bryant wall art, the Tuscaloosa units are priced at up to $1 million each. But in addition to wealthy Crimson Tide alumni, buyers include investors who plan to rent out the condos. And that entitles them to some of the tax benefits created... Read more →

In the wake of the Minnesota bridge disaster, officials across the country scrambled to inspect their bridges and roadways. And most lawmakers, at both the state and federal levels, are scrambling to come up with some money to pay for the many projects found to be, if not downright dangerous, at least in need of some long-overdue touch-up. Check out the American Society of Civil Engineers National Report Card, keeping in mind that this indicates the status two years ago. Grades now, after almost two more years of wear and tear, would likely be much lower. Dubya, however, has objected... Read more →

Well, it happened. I had hoped that if I -- and millions of other baseball fans -- wished hard enough, Barry Bonds would not hit #756. But once again, my telekinetic or psychic or whatever mental abilities it takes to control physical events failed me. So on Aug. 7, Bonds broke Hank Aaron's all-time home run record. Now we watch the subsequent tax game play out as the IRS and tax attorneys try to determine the tax treatment of the record-breaking ball that sailed into the right-centerfield seats last Tuesday night at San Francisco's AT&T Park. Even before Matt Murphy... Read more →

When I started college, I thought I was going to get a degree in education. My grandmother spent her entire career as a first-grade teacher and my Mam-ma was one of the coolest people I knew. My aunt Nancy also spent her professional life as a teacher and guidance counselor. So I was looking forward to following in their footsteps and carrying on my family's educator tradition. Then I realized I'd have to deal with kids all day long. Whoa up, all you parents. I'm not dissing your progeny. I'm just admitting that I quickly realized I didn't have the... Read more →

My summer has been incredibly busy. As I was slogging through the chores, personal and professional, last month, I swore I was going to pretend I was European -- or a member of the U.S. Congress -- and take August off. Unfortunately, that's not happening. But you can put away your tiny violins playing the world's smallest sad song for me. Judging from a recent Forbes story, I might be better off, at least financially, just staying home. The magazine reports that state and local governments across the country are getting more aggressive about taxing tourists. Some examples cited by... Read more →

While much of the eastern half of the country bakes in a late-summer heat wave, many folks no doubt are dreaming of cooler places. Frigid climes also have been the subject of tax fantasies, as some taxpayers have sought to use a cold locale as the basis for a tax break. Remember the fellow who worked at McMurdo Station, Ross Island, Antarctica, and who tried to report his earnings there as foreign income (blogged here)? He was hoping to exclude that amount from his U.S. tax filing. The Tax Court said no in that instance, and has again turned a... Read more →

The Frugal Law Student brings us this week's Carnival of Personal Finance. It's the 112th version, and FLS presents it as the Best Week Ever edition. If you've ever watched VH1's "Best Week" program, you'll get a kick out this format. Even if you're not familiar with it, you'll still find the carnival informative and entertaining. Some of my faves among the many, many good items: 5 money topics to discuss before getting married at Finance is Personal when paying yourself first isn't a good idea at Four Pillars and a Baby 6 ways to increase your kids' financial intelligence... Read more →

Last Thursday morning, as I was waiting for my flight from O'Hare to Austin, I bought an Egg McMuffin. Now I'm not a big fan of Mickey D's burgers, but I do like his breakfast sandwiches and especially his hash browns. They're sort of like rectangular Tater Tots. So I was thrilled when I saw those golden arches on the airport concourse, especially since I'd already been up for several hours getting packed, checked out of the hotel and shuttling to the airport, all without a morning meal. But when I toted up my travel expenses from last week's trip... Read more →

Technical corrections. Any wonk who peruses tax (and other) legislation is familiar with this term. This is how Capitol Hill cleans up after itself when a bill is poorly written or isn't clear or just plain has mistakes in it. The description of the Tax Technical Corrections Act of 2006, for example, is 13 pages of errata going back, in this case, to problems in the IRS Restructuring and Reform Act of 1998. Well, I also occasionally mess up (right now, the hubby is printing out this page for future reference). The most recent instance was in Sunday's post on... Read more →

Fed up with scammers using Web sites that look and sound official, the IRS has established a new e-filing rule. By next Thursday, Aug. 9, all authorized IRS e-file providers that obtain taxpayer information via the Internet, either directly or through third parties, must submit to the IRS the following information via an encrypted Excel spreadsheet: The provider's Electronic Filer Identification Number (EFIN); The name of a Principal or Responsible Official shown on the e-file application for the EFIN; and The Uniform Resource Locators (URLs) of all web sites that are used to e-file federal returns; that are portals or... Read more →

The father of Australian actress Michelle Williams has lost his latest court appeal and could soon be extradited to the United States to face criminal tax charges. Larry Williams is a prominent stock market trader. The 64-year-old Virgin Islands resident is wanted by the IRS on charges of willfully attempting to evade $1.5 million in taxes from 1990 to 2001. He has been free on $857,000 bail in Sydney, where he flew in May 2006 to begin what was to have been just a month-long speaking tour of Australia and New Zealand. Williams' daughter, Michelle, was nominated for an Oscar... Read more →

Looking for info on the 2008 Massachusetts tax holiday?Click here! Attention Massachusetts shoppers. Your state's sales tax holiday is once again the law of the land, or the Commonwealth, that is. On Aug. 11 and 12, you get to stiff your state Department of Revenue on items costing $2,500 or less. Just a couple of things to note. The state's sales and use tax will still be collected on all motor vehicles, motorboats, telecommunications services, meals, gas, steam, electricity, tobacco products and any single item whose price is in excess of $2,500. About that last still-taxed exception. That means that... Read more →