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October 2008

The scariest word in the world, on Halloween or any other day of the year is taxes. And it' is being used as a scare tactic, with some success, in the final days of the presidential election. A CBS News/New York Times poll released today finds that John McCain’s focus on taxes, including his talk about Joe the Plumber and his perception of Barack Obama proposals, seems to be having some effect. In light of all the yammering on both sides about taxes, the newspaper asked two groups to independently analyze the McCain and Obama plans. The findings? McCain would... Read more →

Yes, it's an old joke about blood-sucking IRS agents. So maybe that's why it seems so fitting that a tax lawyer has just published "The New Annotated Dracula." Leslie S. Klinger is a Los Angeles tax attorney with clients in the entertainment industry. You can insert your own Hollywood blood-letting wise cracks here. After his office closes, however, Klinger turns his attention to genre literature. The Wall Street Journal reports that Klinger's closer look at Bram Stoker's famous vampire novel is the tax lawyer's second such annotation. He previously edited the three volume, 2,700-page "The New Annotated Sherlock Holmes." The... Read more →

It's still in the just talking about stage, but Capitol Hill is starting to toss around ideas about what might be in a second stimulus package. At yesterday's Ways and Means hearing (previewed here) suggestions included infrastructure projects and more unemployment insurance money. Yep, you guessed it, those were on the wish lists of the state and city officials who testified. Links to the testimony presented at the hearing can be found at this Ways and Means Web page. Support for more rebate checks: But of more interest to most taxpayers are the suggestions from those who didn't make a... Read more →

A couple of days ago I blogged about the millions of dollars lost to tax fraud committed by people already behind bars. Well, we apparently need to incarcerate a few more folks. Between 2006 and 2007, the IRS issued approximately $1.6 billion in fraudulent refunds to taxpayers. Even worse, it could have been prevented. Those unwarranted refunds were the result of a failed fraud detection system and insufficient resources to work all the fraudulent returns. That's the bad news from the Treasury Inspector General for Tax Administration (TIGTA) in connection with its recent review of the Internal Revenue Service's Questionable... Read more →

Times are tough and likely to get tougher for many folks. But there is a ray of hope for some job seekers: the IRS. "Benjamin Franklin said that nothing in this world is certain except death and taxes. When death is not an option and the world is maximizing the uncertainty, taxes look like an intriguing career alternative," writes New York Times reporter James Barron. In his article "In Bleak Times, the I.R.S. Looks Good," Barron reports on a job fair this week at the federal office building in Manhattan: "An hour before the fair was scheduled to begin, the... Read more →

W&M hearing on the economy

As an apparent precursor to a second round of rebate checks, the House Ways and Means Committee today is holding a hearing on "Economic Recovery, Job Creation and Investment In America." In announcing the hearing, Committee Chairman Charles Rangel (D-NY) noted the severity of the recent economic downturn and its effects not only on individuals, but also on state and local governments. Witnesses invited to testify before the panel include: David Paterson, Governor, State of New York Mark Sanford, Governor, State of South Carolina Douglas Palmer, Mayor, City of Trenton, N.J. Timothy Firestine, Chief Operating Officer, Montgomery County Executive, Rockville,... Read more →

When it comes to tax fraud, federal prisons apparently are branch offices. The IRS estimates that around $375 million is lost each year to refund fraud. And part of that total comes from behind bars. Between 7.5 percent to 15 percent of all refund tax fraud is being committed by prison inmates. And, says the IRS, the problem is growing, with prisoners devising elaborate schemes to receive refunds by fraudulently reporting earnings or claiming false eligibility for tax credits. The IRS is hopeful that trend will soon slow. Thanks to a newly enacted law, the Secretary of the Treasury can... Read more →

Historical and tax value of Palin's clothes

OK. The GOP vice presidential candidate won't let this die a natural death, so here goes another look at Sarah Palin's pricey campaign wardrobe. Over the weekend, the Alaska governor told a campaign rally crowd in Tampa, Fla., "You know, I tried to just ignore it because it’s so ridiculous." Then she chose not to ignore it, blaming the Republican National Committee. That group actually shelled out the $150,000 for Palin's new suits and accessories from Saks Fifth Avenue and Neiman Marcus (blogged here). "Those clothes, they are not my property," Palin said. "Just like the lighting and the staging... Read more →

"The only thing that hurts more than paying an income tax is not having to pay an income tax." -- Lord Thomas Robert Dewar Yes, that Dewar. The Scottish whiskey distiller. The man whose namesake beverage is probably imbibed in large quantities around April 15. But his observation is sobering. And worth considering as the presidential campaign heads into the home stretch. During these last nine days, the perennial political specter of taxes will be invoked as something more terrifying than any Halloween demon. Don't get me wrong. I don't like paying taxes, especially when my planning has been a... Read more →

The New York governor's chief of staff has resigned, in large part because of tax troubles. Charles O'Byrne came under scrutiny after it was revealed that he didn't file tax returns for several years because of his clinical depression (blogged about here). O'Byrne's departure from Gov. David Paterson's office was mentioned Friday in the New York Time's City Room blog and later confirmed by in the paper. After failing to file state and federal tax returns between 2001 and 2005, O'Byrne eventually set up installment payment plans to meet his overdue tax obligations. He paid the last of his $300,000... Read more →

$266 million. That's how much money the IRS is trying to get to the appropriate taxpayers. Most of that money is from rebate checks that the IRS is having trouble delivering. Yep, this rebate deal is causing all sorts of headaches for the tax agency. First, it didn't send out thousands of checks because the associated returns had mismatched Social Security numbers. This time, though, the tax man really did put the checks in the mail, but they came back because of bad addresses. This happens every year. Usually, people file returns and move, forgetting to let Uncle Sam also... Read more →

Nah, the two major presidential candidates haven't suddenly become BFFs. The nastiness on the campaign trail continues. But there is a new feature at CQ Politics that is much more civil and informative than robocalls and carefully edited sound bites. The publication has posted Notes, Votes and Quotes, a look at what Obama and McCain have said and done on key issues. You can check out the Democrat and Republican candidates' economic stances, as well as their policies and votes on employment and labor and several other issues. Here's a sample from the economic comparison: Obama's economic plan calls for... Read more →

Palin's duds: Uniform? Loan? Donation?

We're less than two weeks away from the presidential election, so you know major fiscal issues are dominating the political discussions. Like how Sarah Palin's new wardrobe.has helped jump start our economy. As soon as The Republican National Committee (RNC) reported that it spent more than $150,000 on a Palin makeover (including professional hair and makeup services in addition to the clothing), political pundits began debating whether the outfits from Neiman Marcus and Saks would damage Palin's down-home hockey mom image. Tax geeks, however, don't care about such trivial matters. What tax liability, we immediately wondered, might the Alaskan governor... Read more →

October, already a big month for the IRS, is even busier this year. Not only is the agency processing the millions of returns filed on the final Oct. 15 extension date, it also will be processing the economic stimulus payments for those taxpayers. And, oh yeah, it will be sending out some tax rebates that it previously said could not be delivered because of name and Social Security mismatches. A taxpayer by any other name: Although the tax ID number delay isn't a new policy, it took on extra significance this year as folks anxiously awaited their stimulus rebate checks.... Read more →

Misleading Joe the Plumber ad
and other inaccurate tax claims

Joe the Plumber has become a campaign touchstone, evoking a lot of passion from both sides. After I spent a day blogging about Joe's various tax connections (here, here and here), I got mail from folks who, for the most part, said "Get real, Joe!" or "Leave Joe alone!" I know that I promised to let the 15-minute fame clock run out on Joe, but Joe himself keeps giving TV interviews. And now John McCain has decided Joe's famous/infamous man on the street exchange with Barack Obama is worth inclusion in a television ad. The problem, says, is that... Read more →

I accidentally looked at a third quarter statement for one of my retirement accounts last week. Its value had dropped just 11 percent. If you'd told me a year ago that I'd be OK with a loss in value of "just 11 percent" on any investment, I'd have called you crazy. But crazy is what the market has been. And crazy is how many folks have been acting regarding their investments. Now, however, it looks like we might be in for a break. There are some indications that global markets are stabilizing a bit as investors digest steps taken to... Read more →

'Erratic' used again in McCain connection

This time, though, it's not Barack Obama using that word to describe his opponent. Rather, moves of the online trading exchange Intrade have been called erratic of late. The reason? Intrade tracking recently defied political polls and predicted that John McCain will win the presidency next month. (Although, if I'm reading the site's data correctly, it looks like that's changed.) The McCain preference raised questions as to whether there had been market manipulation; that somehow McCain was being favored by artificial means. The New York Times says that Intrade's chief John Delaney conceded there had been erratic behavior, including spikes... Read more →

OK. I've been smacked down by the Fed chief. Testifying before the House Budget Committee this morning, Ben Bernanke said a second economic stimulus package might be warranted. So much for my plea of say it ain't so, not to mention my apparently premature so long to a second rebate. What kind of stimulus? Despite persistent efforts by Budget panel members, the Federal Reserve chairman refused to be pinned down on exactly what should go into any possible legislation that might provide another round of tax rebates. Rather, Bernanke emphasized that any rebate should be timely, targeted and temporary. Neither... Read more →

For the most part, we're in control, or are trying to be, of our finances. But sometimes, external factors can help or hurt our money management efforts. CBS' Sunday Morning program earlier today featured a piece on what motivates us humans to run with the herd. Specifically, the feature asked whether our innate animal instincts have anything to do with the recent selling frenzy on Wall Street? The answer seems to be "yes." A reliance on natural instincts is understandable. All of us, in money and other matters, have depended on our gut feelings to make a decision. And sometimes,... Read more →

The chances for a second economic stimulus payment before the end of the year have essentially evaporated. Facing opposition from House Republicans as well as the strong possibility that many lawmakers might not be in a mood to return to D.C. if they are voted out on Nov.4, House Speaker Nancy Pelosi (D-Calif.) has backed off her earlier idea of pushing through a second rebate. Pelosi and colleagues briefly considered another stimulus payment. Democratic presidential candidate Barack Obama alluded to it in announcing his revised economic plan. Thankfully, some sanity prevailed. "We could add a rebate, tax cut, or something... Read more →