Don't Mess With Taxes

Bernard Madoff is heading to jail for the rest of his life. And the victims of the largest-ever Ponzi scheme got some measure of vengeance from the 150-year prison sentence handed down for the faux financier yesterday. But what about their money? There's all sorts of wrangling going on over who owes whom what and how to get it. Before all's said and done, this process likely will join the ranks of the longest legal battles. One of the targets is the Securities and Exchange Commission (SEC). As Joe Nocera notes in his his New York Times blog Executive Suite,... Read more →

The Supreme Court has ruled that white firefighters in New Haven, Conn., were unfairly denied promotions because of their race. The case has received special attention because Supreme Court nominee Sonia Sotomayor was part of an appellate panel that issued the ruling that was today overturned. Legal experts say the 5-to-4 High Court ruling could alter employment practices across the country and make it harder to prove discrimination. Sotomayor on taxes: Capitol Hill is obviously paying close attention to all of Sotomayor's prior rulings, not just the high-profile ones. Those in the tax world, however, don't have a lot to... Read more →

"You mean old U.S. and U.K. bullies, quit picking on us!" That's essentially what one Swiss banker is saying about efforts by the United States, the United Kingdom and other countries to close down, or at least more tightly control, Swiss and other European countries' uber-private financial operations. Yves Mirabaud, a managing partner at the Swiss private bank that bears his name, told the Financial Times that such efforts are "more than simply fighting against tax havens. Switzerland is a small country. It is not powerful." It depends, Mr. Mirabaud, on just how you define power. The Swiss banker also... Read more →

The House on Friday approved H.R. 2454, the American Clean Energy and Security Act. It's the first ever piece of U.S. legislation designed to curb heat-trapping gases linked to climate change. As you already know, regardless of which side of the global warming argument you're on, getting a final bill is not going to be easy. House Democrats were unsure early Friday whether, despite the party's majority, they had the votes for passage. They did, barely. H.R. 2454 was approved 219 to 212, with 44 Democrats voting against it. Now the battle moves across Capitol Hill, where the Senate must... Read more →

If you believe the old saying that things come in threes, we should be done, at least for a while, with the passing of pop culture icons. Within two days, the world's #1 second banana Ed McMahon, TV sex symbol Farrah Fawcett and King of Pop Michael Jackson passed away. Yesterday, eBay's offerings exploded. Hey, everyone grieves in his or her own way. Michael mania: As soon as Jackson's death was confirmed, the online auction company was flooded with items related to to the singer-dancer-songwriter. My last search showed 21,914 items for sale. Merchandise includes records, DVDs, magnets, photos, pins,... Read more →

I must admit that I've never seen the television show starring Jon and Kate and their brood. I'm not a fan of reality, or quasi-reality as is usually the case, shows. And being childless, I don't have anything in common, thank goodness, with a family coping with eight kids. I've also been happily married (and I think the hubby has been, too) for many more years than Jon and Kate. But there's no way anyone can escape the news of the Gosselin's crumbling marriage. So it seems as good a time as any to offer some tax tips, eight to... Read more →

My neighbors here in the Lone Star State's capital love their bicycles. That's no surprise in the city that is home to seven-time Tour de France champ Lance Armstrong. How committed are Austinites to this transportation alternative? Temperatures here have been near or over 100 degrees for weeks, yet bicycle riders, many wishfully attired in yellow biking jerseys, still have been hitting the roads and hills -- yes, inclines in sweltering weather! -- in droves. So there was generally joy when it was announced that the guy who stole Lance's $10,000 ride while he was competing in a California race... Read more →

I just had to blog about this, seeing as how here in Central Texas we're into our third straight week of near-or-hotter-than-100-degree temperatures. And summer just officially started on Sunday! So any mention of ice, which we are going through by the bucket loads in our tea, is welcome. Not so, however, for residents of Alaska. In colder climes (I vaguely remember those), warming weather can create ice jams or, as they also are called, ice dams. These also begin with warming weather, when ice in rivers starts melting and breaking into pieces that float downstream, as shown in the... Read more →

Watch out businesses, out-of-state state tax collectors just got a boost from the country's high court. The U.S. Supreme Court today decided against hearing an appeal from out-of-state companies that Massachusetts officials say owe it taxes. As I mentioned about a month ago in Money-hungry states, cities tax trolling, Bay State tax collectors set their sites on credit-card giant Capital One Financial. Massachusetts officials said that since the Virginia-base company made beaucoups money from cardholders who live in their state, Cap One should fork over more than $2 million in taxes to the Massachusetts treasury. The Department of Revenue was... Read more →

Happy Father's Day! For all you who still have your dad around, be sure to give him a call today. If you dad is anything like mine was, it will be a short call, but I promise you, he will appreciate it. Some of you live close enough to your families to make a visit today, or any other time, possible. And still others are actually sharing a home with Dad … or Mom. You might be thinking of the boomerang kid trend, where young adults move back home, usually right after college, to save some money before completely leaving... Read more →

There's been talk of late by federal officials and politicians of the "green shoots" of an economic recovery, but at the state level, most economic lawns are still crunchy brown from a serious revenue drought. State personal income tax collections dropped 26 percent nationwide through the first four months of 2009 compared with a year ago, putting many states' already troubled budgets into deeper holes. The percentage drop comes to $28.8 billion less than the same period a year earlier, according to an examination of state income tax collections by the Nelson A. Rockefeller Institute of Government, the public policy... Read more →

Health care continues to be all about the money. Accounting giant PricewaterhouseCoopers projects that U.S. employers will face a 9 percent increase in health care costs in 2010. That's slightly lower than in 2008 (9.2 percent), but overall, medical-cost increases continue to outpace inflation and pay hikes. The health care reform debate on Capitol Hill also has run into the expected fiscal roadblocks. Congressional Budget Office estimates are that a bill drafted by the Senate health committee would cost $1 trillion to cover just 16 million more uninsured folks. So the Senate has countered with a proposal that would require... Read more →

When should illegal tax shelter penalties be waived? In the view of some Members of Congress, when the fines are being levied on a small business. In 2004, a law took effect to automatically assess penalties on large corporations that exploited illegal tax shelters. The fines could reach as much as $300,000 a year. The automatic fine implementation, however, is forcing some small businesses who use the same techniques to pay penalties that are substantially larger than the tax savings they got from the questionable shelters. A bipartisan groups of Congressmen say that's not right. The law was created, according... Read more →

Well, this certainly is a topic that's got people talking, especially those who fill out tax returns for a living. Joe Kristan reiterates on his Tax Update Blog why he's still opposed to IRS regulation of tax preparers. Joe's response was prompted by pro-regulation blogger Peter Pappas' post about the indictment of a Florida preparer, which led to the question, Still Don't Want to Regulate Preparers? Check out the comments, which so far relay the thoughts of Bruce, who blogs at taxguy, and Robert, aka The Wandering Tax Pro. Despite jumping the gun a bit, as noted in my post... Read more →

It looks like Washington, D.C., road crews need to build a U-turn lane in front of the IRS headquarters on Constitution Avenue. For the second time this month, the agency has done a 180 on an issue. First there was the cell phone taxation issue, which the IRS backed off of after much public outcry. Now it seems that the agency got a little bit ahead of itself when it comes to possibly tougher regulations of paid tax preparers. Apparently, the IRS issued a request for proposal, or RPF, in government acronymese, soliciting quotes for the development of a self-regulating... Read more →

Last week, the IRS asked for public input on a proposal to, as it put it, "simplify the procedures under which employers substantiate an employee's business use of employer-provided cellular telephones or other similar telecommunications equipment." Actually, what the IRS was trying to do was increase enforcement of the existing tax law, which is complicated, misunderstood and essentially ignored by both employers and employees. One IRS proposal was to count 25 percent of employee cell phone use as personal. That percentage then would be taxable income to the employee. My tax blogging colleagues taxgirl and Tax Update Blog did a... Read more →

Tough times are hitting the credit card industry, too, Rather than spending a lot of time trying to collect all the unpaid balances on their books, card issuers are opting to make deals with their customers. Or, as the New York Times notes, "As they confront unprecedented numbers of troubled customers, credit card companies are increasingly doing something they have historically scorned: settling delinquent accounts for substantially less than the amount owed." One such beneficiary of this new attitude is Edward McClelland: "McClelland's credit card company was calling yet again, wondering when it could expect the next installment on his... Read more →

Gas prices went up again today. It's the 48th straight day they've increased, matching a record for this decade. If that trend continues, some folks might be seriously thinking about buying a new, more fuel-efficient car. What makes the option, even in a recession, more appealing is that there are some tax breaks associated with certain vehicle purchases. And the IRS just improved one of those tax benefits that had been out of reach for some buyers. The American Recovery and Reinvestment Act of 2009, aka the latest stimulus package signed into law on Feb. 17, includes a deduction for... Read more →

If you file estimated taxes, your second 1040-ES voucher is due today, or at least must be postmarked June 15 if you send it via U.S. Postal Service snail mail. If you don't have a voucher package from the IRS, you can download it. And my estimated filing reminder from last week has some tips for 1040-ES filers, as well as a table showing the mailing addresses for the vouchers by state. Read more →

Happy Flag Day America! The idea of an annual day specifically celebrating the U.S. flag is believed to have first originated in 1885, according to USFlag.org. But it was not until Aug. 3, 1949, that President Harry Truman signed an Act of Congress designating June 14 of each year as National Flag Day. So if you have a Star Spangled Banner, be sure to fly it proudly today. And to get you in the mood, check out this rendition of You're A Grand Old Flag. Sales tax breaks for flags: In some states, you can save a bit of money... Read more →