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March 2009

February 2009

What is "is"? We all remember how that one little word caused so many problems for a former president. But today my initial question also highlights how personal perspectives shape our definitions of everything. Take, for example, the definition of wealthy. In reviewing Barack Obama's first national budget as president, we all are asking, what is wealthy? In the new prez's eyes, it is anyone making more than $250,000. For most of us in the fly-over, that sounds reasonable. However, residents in other parts of the country with higher costs of living, especially those families that include income from both... Read more →

Fellow tax blogger and tax pro Bruce, known on the Web as taxguy, has done me the honor of reviewing my book, The Truth About Paying Fewer Taxes. For the fact that he took the time to read the book, I am grateful. For his very nice review of it, I am enormously thankful. I recommend you give Bruce's review a look, not just from a self-promotional standpoint, but also because there's something in it for you. In connection with the review, Bruce is giving away a signed copy of my book. Thanks, Bruce, and to those who enter his... Read more →

A New York man lost his bid for a $1.5 million divorce settlement. He said his ex-wife should pay him that amount in consideration of the kidney he donated to her. The court ruled, however, that the kidney was a gift. And you thought your spouse came up with some off-the-wall presents! Plus, said the judge, human organs may not be considered marital property. At least the life-saving medical move was made years ago. The romantic in me would have been so bummed if they had broken up right after the surgery, making it look like the kidney was the... Read more →

Another effort to ax private tax collectors

Everybody's got their noses deep in Obama's first budget proposal, which I previewed yesterday, and I plan to look at the specifics released today, too. First though, I have to clear some stuff off my never-ending Do Now list. One of the things on that list is a reminder to examine current Congressional funding measures. Yeah, I know, you wish you lived my exciting life. But, hey, money makes the world, including all our federal agencies and programs, go round. And included in the Omnibus Appropriations Act of 2009 (H.R. 1105) that was passed yesterday by the House is a... Read more →

SF treasurer issues wrong tax bills

The San Francisco Treasurer mistakenly sent out a batch of erroneous collection notices last week to city businesses. According to the San Francisco Chronicle's City Insider blog, the Treasurer's phone system was jammed, prompting folks who wanted to challenge the fee to come down to City Hall in person. One person who received a letter told the paper that the business assessed a $310 tax bill had closed three years ago. Even worse, the tax claim was from 1992. The owner of the former business argued the bill, but noted that other taxpayers might just trust the city and pay... Read more →

Obama budget preview

In case you missed the President's first address to the House, Senate and us television viewers last night, the Los Angeles Times' political blog Top of the Ticket has the full text of the speech. So just what did Obama have to say about taxes? Not much, and that was essentially a plug for the Making Work Pay credit: "If your family earns less than $250,000 a year, you will not see your taxes increased a single dime. I repeat: not one single dime. In fact, the recovery plan provides a tax cut -- that's right, a tax cut --... Read more →

Don't tell me you didn't see this coming. A group of wealthy Americans with accounts at UBS have filed a lawsuit against the beleaguered Swiss bank in an effort to keep their identities secret. While the suit names UBS, the real target is U.S. investigators who want the account holders' names in connection with their probe of offshore (IRS speak for foreign) tax evasion. The Department of Justice thought it was getting those names last week when it reached a nonprosecution deal with UBS. But when the Swiss bankers didn't immediately start naming names, the feds filed their own lawsuit... Read more →

State withholding and the stimulus

It's always something with taxes, isn't it? While the IRS gets kudos for so quickly revamping the federal withholding tables to align with the recently enacted American Recovery and Reinvestment Act of 2009, there are still some issues a bit up in the air. One is in connection with state income tax withholding. This is something, as noted in my earlier post on the short-term hold put on Kansas refunds, that workers in taxpayers in 41 states and D.C. have to worry about. In an interview with Tax Analysts, a spokesperson for the payroll service Paychex noted that additional IRS... Read more →

Calm down commuters and other folks who spend a lot of time on the road. Uncle Sam is not going to start taxing you based on how many miles you log. Fears, dare I say panic, about the possibility of such a driving for tax dollars program ran rampant after Transportation Secretary Ray LaHood told the Associated Press, "We should look at the vehicular miles program where people are actually clocked on the number of miles that they traveled." LaHood, a former Republican Congressman from Illinois who's part of Obama's attempt to include more political diversity in his cabinet, made... Read more →

The biggest cheers for movie-making tax breaks obviously come from film makers. But some states still give the special benefits good reviews, too. And while the idea of state tax breaks for specific industries is not new, the decision to lure movies to states by offering tax incentives is getting renewed attention. Part of the interest is the annual Oscars ceremony. I admit that last year I was pleased that a couple films, including the Best Picture Academy Award winner "No Country for Old Men," filmed at least a few scenes in Texas. But more that bragging rights and tourism... Read more →

The good news about the Making Work Pay credit, a key provision of the just-enacted stimulus bill, is that it will be showing up in paychecks sooner that most of us expected. As I noted earlier, the IRS knew delivery of the credit money was going to be via paychecks well before it passed. That gave the agency a head start in getting the distribution method ready so that the money would be in taxpayer hands quickly. Well, the IRS' efficiency in this case has impressed me. In an announcement posted at the agency's Web site today (yes, on a... Read more →

Long-time readers know that I'm a total fangirl of TaxProf Blog. This comprehensive compendium of taxing-good blogginess was one of the first resources I found when I started Don't Mess With Taxes back in late 2005. I got an even bigger thrill when, in January 2006, TaxProf's author Paul Caron mentioned my then-new blog in his look at the growth of tax blogging. So you can imagine how jazzed I was when I discovered that this past week Don't Mess With Taxes made TaxProf's list of Top 10 Tax Blogs. He compiled the collection for As notes in... Read more →

Astrology and assets?

In tough economic times, people look for any edge, including celestial help. I'm not talking about faith that things will work out or asking for financial guidance from the usual source. Rather, some folks are relying on astrology to help them handle their money. CNN correspondent Brooke Baldwin has the details in the video report below. I try not to be too judgmental, but I sure hope that none of these folks has a whole lot riding on when Jupiter aligns with Mars. This is right up there with tax horoscopes when it comes to credibility. In my book, if... Read more →

The Department of Justice effort to get information on Americans suspected of using Swiss bank accounts to avoid U.S. taxes already has had a domestic effect. The Senate Committee on Homeland Security and Governmental Affairs Permanent Subcommittee on Investigations was planning to once again examine the tax haven issue next Tuesday, Feb. 24. That hearing has now been moved to March 4. When it convenes next month, the panel members want to continue their "examination of financial institutions which are located in offshore tax havens and which use practices that facilitate tax evasion and other misconduct by U.S. clients." You... Read more →

On Wednesday, U.S. tax investigators were convinced they had hit the tax evasion jackpot. Today, however, the feds headed to court in an attempt to force Switzerland's biggest bank to pony up the full payout. The Department of Justice (DoJ) thought a deferred prosecution agreement it reached with UBS AG would result in the IRS finding out just who had been stashing cash in secret Swiss bank accounts in order to avoid paying U.S. taxes. As part of the deal and, according to the DoJ, "in an unprecedented move," UBS agreed to immediately provide the U.S. government with "the identities... Read more →

California refunds back on track, too

UPDATE, March 6: Despite enactment of a budget, state tax refunds are still on hold. The California legislature this morning finally resolved that state's budget crisis and agreed to a plan that Gov. Arnold Schwarzenegger is expected to sign shorty. The new 18-month budget includes $15 billion in permanent spending cuts, $12.8 billion in temporary tax increases and $11.4 billion in borrowing. Of particular short-term interest is that the plan should free up money so that the state's tax office can start sending out the refunds that were on hold. "By passing this difficult budget we keep infrastructure projects moving,... Read more →

Good news, Kansas taxpayers. Your governor and legislature reached a budget agreement that takes your refunds off hold. On Tuesday, Democratic Gov. Kathleen Sibelius and GOP lawmakers agreed to a compromise budget. Sibelius promptly signed the measure into law. So now Kansans, your tax refund checks really should be in the mail. Californians still on hold: There's no such luck yet for Golden State taxpayers. Gov. Arnold Schwarzenegger still needs one vote from a fellow Republican legislator to pass a plan to plug California's $42 billion budget deficit. Late Wednesday, it looked like an agreement might be imminent, but to... Read more →

When it was reported during last year's presidential campaign that Sarah Palin received tens of thousands of dollars in per diem from Alaska even though she was working from her Wasilla, Alaska, home, tax watchers were up in arms. Their outrage at what they saw as the Alaska governor's flouting of federal tax law apparently was justified. Today's Anchorage Daily News reports that the state's administration commissioner Annette Kreitzer has informed Palin that she must pay income taxes on the per diem amounts she received. "At the Governor's request, we reviewed the situation to determine whether we were in full... Read more →

It's official. The American Recovery and Reinvestment Act of 2009 is now law.Embedded video from CNN Video There's been lots of coverage, in blogs and traditional media, of the various provisions. I'm working on a story on the Making Work Pay credit. I'll pass along the finished product link when it's published. However, I already touched on the highlights in "Stimulus yes, rebate check no" and "OK, some rebate checks." Below is a quick rundown of some other key individual taxpayer provisions in the new law. AMT again: There is another one-year alternative minimum tax patch that will keep millions... Read more →

Most U.S. Senators don't want to talk about taxes, at least not about their own. Politicians are quick to pounce on tax topics when they're on the campaign trail or debating stimulus bills, However, found that such verbosity doesn't extend to personal filings. That's understandable. Taxes are a very private affair ... unless you're running for president or appointed to a Cabinet position. But it also is useful to know that our leaders understand the practical implications of the tax laws they ultimately approve; that they actually know what they are asking each of their taxpaying constituents to do... Read more →