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July 2008

Sales tax holidays on tap

UPDATE, July 24, 2008 -- Massachusetts has finally joined the 2008 tax holiday parade. More on the Bay State's upcoming August event here. The stimulus checks apparently aren't enticing us to spend, according to the latest data from the National Retail Federation. But maybe an end of summer mainstay -- back-to-school sales tax holidays -- will get those of us in participating states doing our economic shopping duties. Earlier this year, a couple of states held tax-free holidays to encourage their residents to buy hurricane season supplies. Vermont shoppers are in the midst of their midsummer shopping tax break. The... Read more →

Home-to-church conversion cuts tax bill

By converting his $3 million home to a church, an Illinois man has saved himself around $80,000 in property taxes. But officials of the Village of Lake Bluff say not so fast. While they try to sort out whether the new Armenian Church of Lake Bluff is indeed legitimate, they have notified home/church owner George Michael that he owes the municipality $115,000 in fines for zoning violations in connection with the property conversion. According to the Chicago Tribune, Michael told state officials that he started the new church more than a year ago after he got an online pastor's degree.... Read more →

Offshore tax evasion getting added attention

Congressional interest in the use of foreign accounts to avoid U.S. taxes has moved beyond the traditional tax-writing committees. The Senate's Homeland Security and Government Affairs Committee also is getting in on the act. Its Permanent Subcommittee on Investigations is focusing on alleged tax evasion by the wealthy via offshore accounts set up by UBS and LGT, a banking company controlled by the royal family of Liechtenstein. You can read my previous bloggings on this global tax evasion investigation here, here and here. The Subcommittee has issued a 115-page report and, as I type, is holding a hearing on the... Read more →

Will you outlive your nest egg?

A new study says that you probably will. And that data was collected before the stock market went on its recent roller coaster ride. Almost three out of five new middle-class retirees will outlive their financial assets if they keep up their pre-retirement lifestyle, according to an Ernst & Young study conducted on behalf of Americans for Secure Retirement. The study also found that middle-income Americans entering retirement now will have to reduce their standard of living by an average of 24 percent to minimize the likelihood of outliving their financial assets. And the news doesn't get better. If you... Read more →

Rebates: one down, one to come?

The bulk of the rebate checks have been delivered. Can't you just feel the economic stimulation. (I hope that last sentence doesn't cause any content filter problems.) And just as we taxpayers, if not necessarily the economy, recover from the sometimes confusing, often frustrating rebate process, some lawmakers are planning round two. CQ Politics reports that Majority Leader Steny Hoyer (D-Md.; pictured at left) is expecting the House to consider a second economic stimulus package by the time Congress adjourns in late September. Hoyer's Republican colleagues and Dubya say it's too soon to think about another attempt to jump start... Read more →

McCains benefit from Bud sale

Joe Sixpack Budweiser drinkers might be crying in their beers over the sale of the iconic American brewer to InBev of Belgium, but I suspect that John and Cindy McCain have no complaints. Image details: Anheuser-Busch Approaches Mexican Beer Company Day After Bid From InBe served by The presumptive Republican presidential nominee and his Anheuser-Busch heiress wife probably hoisted a few foamy rounds after the announcement to celebrate their windfall. Mrs. McCain's company owns, according to news reports, between $2.5 million and $5 million in Anheuser stock. The ImBev purchase should give her $800,000 to $1.6 million on the... Read more →

Vermont Energy Star tax holiday

This week, Vermont residents can escape paying sales tax on qualified Energy Star appliances costing $2,000 or less. The energy-efficient equipment must be for personal use. In addition to an exemption from Vermont's 6 percent sales tax, local option sales taxes will not be collected either. The tax holiday runs through Friday, July 18. Details on the holiday and eligible purchases can be found at this Vermont tax department Web page. More tax holidays to come: I ran across the Vermont Energy Star tax-free event while working on a story on upcoming back-to-school tax holidays. More than a dozen states... Read more →

Happy Bastille Day!
And a few foreign tax tips

On July 14, 1789, the French stormed the Bastille, the prison that was the symbol of the absolute power of Louis 16th's rule. Thus began the French Revolution. We here in the fledging United States contributed to the French revolt. The cost of getting involved in our war of independence (some say in the hope that U.S. victory would weaken Britain in Europe, too; no such luck for the French) put France in a major financial bind. In that state, the aristocracy was ripe for the tumbling. Here in Texas, we've had our own relationship with France. That country's flag... Read more →

A look at FDIC coverage

The IndyMac Bank failure got me thinking about something most of us take for granted: Federal Deposit Insurance Corporation, usually referred to as FDIC, protection of our bank accounts. The FDIC is an independent U.S. governmental agency created to protect bank customers against loss of deposits held in an FDIC insured bank or savings association that fails. According to the FDIC Web site, insured deposits usually are available to customers of a failed bank within a few days. Since the inception of the FDIC in 1933, no depositor has ever lost a penny of insured deposits. The key phase is... Read more →

Accountants' exciting lives -- on film

Ah, summer! It's heaven for film fans. Every weekend, a blockbuster, generally with a comic book hero, premieres on movie screens nationwide. But, according to an article in today's New York Times, many film goers likely will overlook an exciting and entertaining genre, the accountancy movie. We're all very aware of the role accountants play in getting movies made in the first place. But the bean counting and associated tax connections extend beyond the studio ledgers. In recent months, the tax troubles of actors (Paul Hogan, Wesley Snipes, Nicolas Cage, Will Smith) have been well publicized. Then there was the... Read more →

Home improvements and your taxes

I'm a bit late blogging today because I spent the last few hours adding to our house plant collection. The hubby handles the outdoors. I'm in charge, for the most part, of the interior flora. We have 35½ plants (the half is a hydrangea I'm trying to resuscitate); four are the hubby's orchids, the others are my leafy (and sometime flowery) babies. Most are Pothos ivy, with a couple of cacti, some mother-in-law tongues, two African violets and several others that I don't know the formal names of, but we've had them for ages. Lately, the most prolific of our... Read more →

New iPhone, old telephone taxes:
both have issues

Did you get your new iPhone today? Are you already irritated by the accompanying hassles? You're not alone. News outlets and blogs are full of complaints about everything from the purchasing process to activation issues. Details at Associated Press, and, in my neck of the woods, the Austin American-Statesman. I slept in. I'm not much of a gadget gal. And I'm even less of a phone person. I didn't get a cell phone until 2000. I'm now on just my second phone. And I've had the same service provider for eight years. Mainly, I just want to be able... Read more →

Windfall retirement profits. Wrong!

Fellow tax blogger taxgirl recently got an interesting, and alarmed, e-mail about a proposed tax on windfall retirement earnings. Don't panic. It's not true. And while I usually wouldn't share tax info that is wrong, what with the way rumors travel, especially regarding politicians and their proposals during an election year, I wanted to preemptively get the word out to ease the minds of anyone else who might have had heard this. Taxgirl did a great job of tracking down the mixed messages that led to this rumor. Apparently, this nasty falsehood has been around for a while, appearing in... Read more →

They're baaaaccccckkkkk!

They are scammers using tax hooks to snare your personal and financial data. And actually, they never left. But they were quite busy during May and June. During those months, the IRS got reports of almost 700 incidents that were part of a new wave of scams using the IRS name in identity theft e-mails, aka phishing attempts. That brings the number of phishing attempts (those that were reported, anyway) so far this year to about 1,600. In a typical year, the most tax-related scams involve tax refunds. This year, however, is not typical, thanks to the economic stimulus payments.... Read more →

Charitable tax break has gone to the dogs

A lot of people, not just her estranged grandchildren, rolled their eyes at the late Leona Helmsley's bequests. Not only were they aghast at the Queen of Mean's gift of $10 million to her pooch Trouble (who now, poor pup, has to live on just $2 million), but they also weren't too thrilled that the bulk of the Helmsley estate went to a trust that, it turns out, will be distributed to canine-related charities. Hey, it was her money. And even though I'm not a dog person (those pesky felines are my pet of choice), I certainly appreciate how much... Read more →

Taxpayer Advocate's FY09 objectives

What do you think the Taxpayer Advocate Service (TAS) should focus on during the upcoming 2009 fiscal year? Nina E. Olson, the current Taxpayer Advocate, says her first priority is tax-related identity theft. That issue is one of several in the Advocate's Fiscal Year 2009 Objectives, an annual report required by law. It sets out the issues of concern to the Taxpayer Advocate office, as well as provides analysis and statistical information. Tax-related ID theft is job #1: When it comes to tax-related ID theft, Olson says the IRS does not have adequate procedures in place to assist victims of... Read more →

Implode-O-Meter measures mortgage lender troubles

The number of mortgage lenders that are in trouble, largely because of the risky home loans they approved, is nearing 300. That's the count according to The Mortgage Lender Implode-O-Meter. The online upstart is featured today in the New York Times, which calls the Implode-O-Meter "a sort of Gawker of the subprime world," and notes that it has caught the attention of lenders, who want to make sure their companies’ names stay off the imploded list. To be fair, the site also tracks the top "non-imploded" lenders. And it also offers readers banking bust news and commentary. The Implode-O-Meter, according... Read more →

Get packing, Wesley

Wesley Snipes has been granted court permission to leave the United States in order to work on a couple of films. As blogged about here, the action film star asked for the travel OK to head to London and then Bangkok in connection with movie roles. Snipes, just in case you've forgotten, was convicted in March of three misdemeanor counts of failing to file returns on $13.5 million in earnings. He was sentenced to three years in federal prison, but has been free on bail while appealing the conviction. Judge William Terrell Hodges signed off on the work travel request... Read more →

IRS asks accounting firms for help
in stemming foreign tax evasion

The IRS is literally calling in the big accounting guns as it seeks help finding foreign banks that fail to identify U.S. customers with investments or income in offshore accounts. A conference call is scheduled today between the IRS and Deloitte, Ernst & Young, KPMG, PwC, Grant Thornton, and BDO Seidman. According to Bloomberg, IRS deputy commissioner Barry Shott sent the accounting firms an e-mail noting that the IRS was concerned about what it was "seeing and hearing" about the practices of some foreign banks. The call's focus, according to reports in various business and accounting publications, is the Qualified... Read more →

Anti-RAL efforts continue

High tax season is over, which means that the rush for refund anticipation loans, or RALs as they are usually called, also has quieted down. But the effects of these short-term, high-interest loans linger. Opponents of the loans (their arguments are detailed in the fact sheets collected at this Center for Responsible Lending Web page) point to the fees and subsequent credit problems that often crop up in connection with RALs. That's why lawmakers, as well as the IRS, are still trying to wipe them out, or at least make them much more difficult for companies to offer. The latest... Read more →