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August 2008

Obama tweaks his tax plan

Barack Obama has tweaked his tax plan in connection with expanded Social Security payroll tax collection and higher capital gains tax. Jason Furman and Austan Goolsbee, Obama's economic policy director and senior economic adviser, respectively, elaborated on the revised proposal last week on the Wall Street Journal op-ed page. Obama still supports changes to both areas, but just not as much as he originally did. Now he's calling for a 20 percent tax on capital gains and certain dividend income, which currently is 15 percent, for individuals making more than $200,000 and families making more than $250,000. Previous comments during... Read more →

State tax initiatives: on, off and maybe

Ballot initiatives are a popular way to let state politicians off the hook get the public involved in the legislative process. Yes, I know that proponents of the process argue that the direct-to-voters approach keeps state governments in check. But in many cases, it's also an easy way out for lawmakers, who then can point fingers at the voting public when bad ideas become law. And sometimes initiatives win based on how well the group pushing the measure is run. OK, so that's no different than any other U.S. election, but if the folks in our statehouses aren't taking responsibility... Read more →

What did UBS execs know and when?

The latest news in the global offshore account investigation doesn't look too good for UBS. At least three years ago, some of the Swiss bank's senior executives knew about possible violations of U.S. securities laws in connection with American clients of its private bank, according to a story in today's New York Times. Top UBS execs (and some of their lawyers) reportedly received letters alerting them to potential problems by June 2005, almost three years before the Justice Department formally announced its investigation of the bank. UBS, the world's largest private bank, is accused of helping some American clients put... Read more →

Sales tax holidays, take two

Attention Massachusetts, Connecticut and Texas shoppers! Your state sales tax holiday is this weekend. Texas kicks off this final round of back-to-school sales tax-free events on Friday, Aug. 15. State and some local levies will be waived through Sunday, Aug. 17. Massachusetts is giving its shoppers the weekend days to save or spend or both, depending on who's talking about the event. Connecticut is holding a week-long event, starting Sunday, Aug. 17, and running through Saturday, Aug. 23. The table below provides details on these last three late summer sales tax holidays. Texas, Massachusetts & Connecticut 2008 Tax Holidays Click... Read more →

NFL opposes IRS' expanded salary reporting rule

So what are NFL suits afraid of? Being laughed at for making too little money. I'm not laughing. Are you? Heck, I'm not even smiling. I'm sitting here with my jaw hanging open at the latest example of National Football League audacity. First, the NFL cried to Congress about how the mean old cable companies aren't giving them everything the league wants when it comes to putting the NFL Channel on regular vs. premium tiers. Just work it out, children, and let us fans with cable see the damn games! Now the league is back on Capitol Hill whining asking... Read more →

Tax Carnival #39:
Dog Days of Summer 2008

Here we are, smack dab in the middle of the dog days of summer. It's hot (so far here in Austin, we've had 46 days of 100 degree or higher temps) and although I'm dog tired, I'm dogged by a ton of things still nipping at my heels. That's why this 39th edition of the Carnival of Taxes is a week late. I hope this slight delay hasn't landed me in the dog house. But I've finally gathered this month's many offerings. They're presented below in no particular order, aside from the first one. C'mon! It had to go there... Read more →

How taxing is your state?

A new study by the Tax Foundation indicates that overall, Americans' state tax burden has dropped ever so slightly. In a new special report, Tax Foundation senior economist Gerald Prante found that the nation as a whole paid 9.7 percent of its income in state and local taxes, down from 9.9 percent in 2007. The main reason for the incremental drop is that our income grew faster than tax collections between 2007 and 2008. Of course, the national percentage is made of the 50 separate collection amounts. So who among us, according to Tax Foundation data, is paying the least... Read more →

Judge to Snipes: Pay up!

Yeah, I'm tired of Wesley Snipes, too, but at least this time the news about his tax fraud conviction is good for the rest of the taxpayer public. Snipes has been ordered by a federal district judge to pay $217,363.75 to cover the government's prosecution costs. Here's the itemized bill: $2,456.40 for daily trial transcripts $193,716.98 for scanning, printing and numbering documents $21,052.19 for witnesses $138.18 for certification and copying of trial exhibits The court-ordered amount is $40,323.99 less than the bill Assistant U.S. Attorney M. Scotland Morris had submitted. The big difference is in connection with witness-related fees. Now... Read more →

Updated deduction data

In my post yesterday, one of the links went to another post about increased audits. That item included a table of average deduction amounts. Well, as tax fate would have it, last night as I as going through e-mail, one of my newsletters contained a version based on more recent figures. So below, courtesy of Kiplinger, are the average amounts for some of the more popular itemized deduction categories based on 2006 preliminary filing data. Average Deductions, 2006 Tax Returns AGI InterestExpense State & Local Taxes Charity Medical Expenses Total Itemized Deductions Under $15,000 $8,761 $720 $1,373 $7,179 $14,569 $15,000... Read more →

08.08.08: Looking for good tax luck

It's no accident that this round of the Summer Olympics kicked off in Beijing at 8:08 p.m. local time today, 08-08-08. For the Chinese, eight is a lucky number. To commemorate this fortunate day on the other side of our planet, The New York Times takes a look at that Chinese numerical perspective, as well as seven other notable octads. They include: Roman Emperor Elagabalus' fixation on eights Ponticus' eight evil thoughts Eight causes of anger Click on over to the feature Crazy Eights for more on these four groupings of eight, as well on the remaining four segments of... Read more →

Mileage related tax legislation popping up

Back when I worked on Capitol Hill, I loved election years. No, it wasn't any fun if your employer was facing a tough re-election campaign. But from the day-to-day job standpoint, it was kind of nice, since your boss tended to leave town more than usual. Lawmakers make it a point in election years to get out of D.C. early and often to press the flesh and beg for votes make their case to constituents that they should get to stay on Capitol Hill. That means staffers are left to screw off do our jobs basically unsupervised. And you thought... Read more →

The women of personal finance

First, to those of you who clicked here expecting something else -- a calendar, pehaps? -- sorry. Secondly, I can't believe you thought that kind of stuff would show up here on the ol' blog! Don't Mess With Taxes is a serious site; OK, mostly serious. And this is one of those down to business postings, specifically on the role and reach of female personal finance bloggers. Just about this time last year several of us were exchanging our thoughts on women who blog about money. The topic started out as, "Why don't more women blog about personal finance?" When... Read more →

State tax collections: Weakest in 5 years

Most attention these days is paid to the national economy. But according to the latest numbers from the Rockefeller Institute of Government, we'd better start looking at the government level one step down. State tax collections are at their weakest in five years, according to the public policy research arm of the State University of New York in Albany. In fact, sales tax collection, a key revenue source for most states, didn't grow at all in this year's first quarter. That's the first time in six years that has happened. I guess folks really are cutting back on their spending.... Read more →

Taxpayer Advocacy Panel issues
2007 annual report

As a member of the Taxpayer Advocacy Panel, I'm pleased to report that we have officially released our 2007 annual report. In addition to summarizing TAP's activities and recommendations during 2007 to improve IRS service and customer satisfaction, the report includes a five-year retrospective on Panel activities and an update on the status of more than three hundred recommendations made since the first TAP met in 2002. Last year, my 99 other TAP members and I sent the IRS 59 new recommendations on ways we believe the agency can improve its services to all taxpayers. Area Committees, which represent seven... Read more →

Here's another non-housing related measure from the recently enacted Foreclosure Prevention Act of 2008. Credit and debit card processors now will have to provide the IRS with additional information. "Payment cards (both credit cards and debit cards) are an increasingly common form of payment to merchants for property and services rendered," according to the Treasury Department. "Some merchants fail to report accurately their gross income, including income derived from payment card transactions. Generally, compliance increases significantly for amounts that a third party reports to the IRS." Lawmakers say the measure should bring in almost $10 billion to help pay for... Read more →

Tax Carnival delayed

Muchas mea culpas to all y'all expecting the 39th Carnival of Taxes today. I'm a bit swamped, so I beg your patience, forgiveness and indulgence as I push this back a week. Tax Carnival #39 will be up next Monday, Aug. 11. I promise! If you submitted an item, rest assured I got it and I'll look them all over carefully. If you didn't get around to sending in a tax-related post and want to now, please do. I've also pushed back the submission deadline to the evening of Saturday, Aug. 9. Just click on over to our Blog Carnival... Read more →

Crazy Woman Driver sounds off
on Kyle, Junior and HMS choices

It's time for my regular detour into auto racing. This month, my Crazy Woman Driver column explains why Rick Hendrick was right to dump Kyle Busch. You can check out the digital magazine here. (This direct link is being a bit cranky today; try refreshing if you get an error page. Or you can go the to Owner Operator's Web page and click the digital magazine link there.) Once you get to the online version of the magazine, my column starts on page 36, or you can click the tease there on the upper left cover. I love writing this... Read more →

Just past midyear tax moves

Yeah, you're right. That wasn't my original headline. I had planned to post these midyear tax planning moves about a month ago. But all y'all know how it goes. Life gets crazy. Time gets away from you. And as your to-do list keeps growing, your good intentions get pushed to the bottom of it. So we're a month into the second half of 2008. So what. There's still time to make some moves that can help you cut your tax bill when you file your return next year. Here are three things you can do right now. Adjust your withholding... Read more →

Tax proposed to "equalize" oil and gas commodity trading income

Last week, Irving, Texas-based Exxon Mobil, the world's largest oil company, announced a record quarterly earnings of $11.7 billion. Earlier, Royal Dutch Shell, based in the Netherlands, reported a 33 percent increase in profit. London-based BP announced a 28 percent profit increase. And ExxonMobil's in-state neighbor, Houston-based ConocoPhillips, reported a 13 percent increase in net income during a quarter in which oil prices rose from about $100 to $140 a barrel. So it's no surprise that politicians in Washington, D.C., most of whom are chauffeured around the city (or at least they were when I was there), are huffing and... Read more →

Auditor + Hitman = Arrest

It sounded like a good idea. Pay $20,000 to get out of a $300,000 tax bill. Unfortunately, it wasn't an offer in compromise arrangement from Florida construction company owner Randy Nowak. Rather, it was the amount Nowak allegedly offered a hitman to kill the IRS agent who was auditing him. However, the guy Nowak thought was a gun for hire was an undercover FBI agent. In addition to trying to avoid the $300,000 that the audit indicated he owed, Nowak allegedly was worried that the examination process would reveal the $4 million he had stashed in offshore accounts. Now Nowak... Read more →