Don't Mess With Taxes

When should you teach your children about taxes? Comedian Tim Slagle says Halloween is the perfect time. The sweets that the youngsters rake in on Oct. 31 can help you illustrate just how our tax system works. For example, there are the concepts of take-home candy, goodies that come out of the trick-or-treat bag to ensure the kiddies have candy in their old age and, of course, the part of the candy that must be paid, in most cases, to the state. I hope you and your kids have a good Halloween and that they aren't too upset by life's... Read more →

With Halloween just a day away, it's time to find out what scares you the most. When it comes to taxes, we have a terrifying tale from the Midwest. Iowa lawmakers created a tax credit to lure movie crews (and revenue) to the state. But it has played out as a much more horrifying scenario than any fake gore on the silver screen. Hawkeye State residents watched in shock and dismay as their attorney general launched a criminal investigation into the credit. The state's top lawyer is trying to recover millions of tax dollars that may have been wrongfully paid... Read more →

Now is not a good time to be rich. Let me clarify that. It's not a good time to be rich and trying to hang onto to more of your money by hiding it from tax collectors. Federal tax investigators this week served subpoenas on wealthy New York-area residents who are suspected of evading taxes by putting their U.S. taxable dollars into accounts at the Swiss bank giant UBS. According to reports, the legal demands for info went to between 250 and 280 account names turned over to U.S. officials by UBS earlier this year. Legislative help on the way:... Read more →

OK, here's the latest iteration of the first-time home buyer tax credit extension, agreed to (or so some say) Wednesday evening by the Senate leadership and the sponsors of various proposals. The $8,000 credit would continue for first-time buyers. A reduced credit of up to $6,500 would be available to repeat buyers who have owned their current homes for at least five years. Both credits would be available to home buyers who sign sales agreements by the end of April 2010. Prospective homeowners then would have until the end of June to close on the properties. Senators still hope to... Read more →

That headline is correct. The official name of these country club vehicles is golf cars, not carts. And the distinction comes in handy under a tax credit for all-electric vehicles. You might have seen the feature on the golf car tax break this morning on ABC's Good Morning America (story transcript here). But the tax credit has been around for months, precisely almost 13 months. It was part of the financial services bailout bill enacted Oct. 3, 2008. Under the Bush administration's Emergency Economic Stabilization Act (you know the law, the one that also included the arrow shaft tax break),... Read more →

That's the word, uttered a couple of times in different venues, from the top IRS guy himself. But don't panic just yet. Sure the IRS wants to get all the money it is owed. That means all us regular taxpayers need to be sure we don't screw up our annual filings. Much of the tax agency's increased audit efforts, however, will be aimed at those folks who can provide the most tax money: the wealthy. Starting offshore: Following what the IRS deemed a very successful voluntary compliance initiative that wrapped up earlier this month to get offshore account holders to... Read more →

This is a hoot! Thanks to Stacie's More Tax Tips for tipping us to this hilarious expose of brazen accountants who walk the streets, illicitly providing financial and tax services. While the accountants in the video are in Australia, I'm sure the same sad situation exists in major cities across the America. So that you don't have to resort to a street accountant to handle your taxes, check out these tips on picking a tax pro. It's never too early to think about getting that 2009 return filed properly! Read more →

That's the latest word from Capitol Hill on the continuation of the first-time home buyer credit. Actually, it's the latest word from Air Force One. No, it's not the Prez talking, but Democratic Sen. Bill Nelson of Florida, who was on the plane with Obama en route to Jacksonville. Nelson told reporters that the extension could be completed as early as this week as part of the Senate's deliberation of unemployment benefits legislation. But along with continuing the home buyer tax break through 2010 (it's scheduled to end in just over a month), the credit would be gradually reduced. According... Read more →

A bipartisan group of lawmakers say they have the plan to ease the estate tax burden. Their Estate Tax Relief Act of 2009 (H.R. 3905) would lower the estate tax rate and increase, over the next 10 years, the amount of assets that would escape estate taxation. Under the bill, introduced by Representatives Shelley Berkley (D-Nev.), Kevin Brady (R-Texas), Artur Davis (D-Ala.) and Devin Nunes (R-Calif.), the $3.5 million estate exemption amount would grow to $5 million by 2019. After that date, the exemption amount would be indexed annually for inflation. As for the current 45 percent estate tax rate,... Read more →

Those nosy Norwegians! Apparently, the Scandinavian country has, in addition to impressive winter (and not too shabby summer) Olympians, a major cruise line (thanks Viking heritage!) and untold ways to cook fish, a proud tradition of government transparency. That means its residents get to see all that it's doing. And since it collects taxes, that means that Norwegians also get to see the tax and financial info of all their countrymen and women. Yep, last week, Norwegian tax authorities issued the 2008 skattelister, or "tax list," to the media. Yikes! Talk about TMI! This release of tax data has been... Read more →

It's a fair question: Just where do our tax dollars go? One of my Twitter pals, @LaniAR, found this interesting tax flow chart, a snippet of which appears below, that tracks what is says the average man got for his tax dollars. I must point out that there's no attribution for the numbers. It was posted by The Toilet Paper (I'm not kidding) back in April, but that doesn't necessarily mean the figures are from this year. And to be fair, TP makes no claims as to the graphic's fiscal accuracy. Still, it's a creative look at our taxes. And... Read more →

Ah, fall. The time of year when school is back in session, football season is in full swing and most employees of companies that offer health benefits are bombarded with tough decisions and even tougher paperwork to complete. Yes, it's the annual workplace benefits open enrollment season. There's a new intensity this year in choosing employer-provided medical coverage. Not only do we have the subtext of the Congressional health care reform debate, but many workplaces have made changes, some big, to their offerings. The hubby and I are part of this annual ritual. Despite the hassle, I am very thankful... Read more →

It's official. In the wake of reports of first-time home buyer credit fraud, Rep. John Lewis has introduced a bill that he hopes will put a stop to the most egregious abuses. Lewis' bill coincides with revelations during yesterday's hearing by the Ways and Means Oversight Subcommittee, which he chairs, on enforcement holes in the popular tax break. Key provisions of H.R. 3901 would: Establish a minimum age of 18 to claim the credit. This was sparked by reports that individuals as young as 4 had filed for the credit. Require proof via a copy of documentation by the taxpayer... Read more →

Who knew that Living Colour was a prophet in addition to being an '80s rock band. But here we are, 20-plus years later, still a global Cult of Personality. Sometimes those personalities we follow incessantly on TV and the Internet collide with the tax collector. I've blogged about many such cases over the years. Today, TaxProf Blog has a rundown of the latest famous tax miscreants that slipped by me while I was focusing on other tax events. Is it just a coincidence that as we approach World Series play, so many baseball players are encountering tax problems? But they're... Read more →

As I noted in yesterday's post on tax fraud committed in connection with the first-time home buyer credit, the House Ways and Means Oversight Subcommittee met this morning to hear suggestions on ways to reduce such evasion. Three witnesses went before the subcommittee. Here are some excerpts from their prepared remarks. I copied most of the comments directly from the public testimony, but did try to add some transition and clarification. And I think I spelled out most of the acronyms! J. Russell George, Inspector General Treasury Inspector General for Tax Administration (TIGTA) During the 2009 Filing Season, the IRS... Read more →

The first-time home buyer credit is a classic example of the adage that no good deed goes unpunished. The IRS says that so far it has paid out almost $10 billion in tax benefits to low- and middle-income Americans who claimed the first-time home buyer tax credit, which was increased to $8,000 in February. However, as is usually the case when it comes to taxes, folks who aren't eligible for the tax break are trying to get Uncle Sam's money -- which is, after all, our money -- anyway. Credit claims, good and bad: In mid-September, the IRS reported that... Read more →

If you had any doubt that times are bad financially for states, look no further than what used to be a sure-fire money raiser: gambling. A study by the Rockefeller Institute of Government, the public policy research arm of the State University of New York, found that gambling revenues collected by state and local governments dropped by 2.6 percent from fiscal year 2008 to 2009. This is the first time in more than 30 years that the state-sanctioned gambling cash has declined. The report, For the First Time, a Smaller Jackpot, is definitely bad news for cash-strapped states that are... Read more →

Welcome to our second Tax Twitter Tuesday. As noted in the inaugural edition on Sept. 15, I gather tax info and comments from the popular social networking program Twitter. Then on the third Tuesday of each month, the Tweets become a blog post here at Don't Mess With Taxes. If you tweet taxes, all you have to do is keep doing what you're doing. Based on how much time I waste spend networking on the site, I should run across your 140 character (or less) tax bon mots. To make sure I do, you can "at" me; that is, include... Read more →

Just a quick note to let you know that today's posts, in particular the second edition of Tax Twitter Tuesday, will be delayed a bit. As regular readers might remember, we had a bit of a disaster in our home late last month. It could have been much worse, but it's bad enough. And the hubby and I are learning that getting the old abode back to its former glory is a bit of a disaster itself. We've been living with much of our hardwood flooring and drywall gone for several weeks. There to the left is a photo of... Read more →

My post on the likelihood of the first-time home buyer credit continuing past its scheduled sunset date of Nov. 30 got a lot of reader attention and prompted one big question. How much of an extension can we expect? I'll get to that query momentarily, but first if you'll indulge me, I'd like to lay a little background and foundation. The first-time home buyer credit was improved -- and actually made a credit, not an interest-free federal loan -- in the American Recovery and Reinvestment Act that became law on Feb. 17. On Feb. 23, Rep. Lincoln Davis (D-Tenn.) introduced... Read more →