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April 2013

We made it through prime tax-filing season with the Internal Revenue Service's proposal to regulate tax professionals in legal limbo. This time next year, the issue could be settled, either judicially or, if some in Congress have their way, through new law. Senators are exploring tax reform options that would give the IRS clear statutory authority to regulate tax preparers. On the House side, the Taxpayer Protection and Preparer Fraud Prevention Act of 2013 would do the same. Tax pro regulation recap: The IRS began rolling out its taxpayer registration and oversight program in 2010. To date, according to American... Read more →

Boxer Mike Tyson TKOs Fox host with talk pro-tax talk

Former heavyweight champ Mike Tyson can still deliver a punch. This time, though, it was a conservative talk show host who was stunned by the boxer. Tyson, who's currently performing the one-man show "Undisputed Truth" about his often outrageous life, told Fox & Friends host Brian Kilmeade that he wants to pay taxes on the money he makes from the tour. "I look forward to paying off my taxes and paying off my country, because that's my duty," Tyson said. "I know they say that's legal extortion, but listen, I'm living in this country and if I got to pay... Read more →

Nerd Prom, otherwise known as the White House Correspondents Dinner, showcases D.C.'s lighter side

I'm sure you had your own fun stuff to do Saturday night, so you might have missed the Barry and Coco Show. You probably know the duo better as Barack "Barry" Obamaand Conan "Coco" O'Brien. The president of the United States and the late night TBS comedy show host headlined Washington, D.C.'s annual Nerd Prom, or as it's officially known, the White House Correspondents Dinner. C-SPAN, the cable television outlet that provides coverage of federal government proceedings and other public affairs programs on its three channels, has been covering the dinner since before it was cool. You can check out... Read more →

One of the biggest frustrations this tax filing season was the processing delay of around 600,000 returns because of improperly completed education tax credit claims on Form 8863. Although the Internal Revenue Service didn't provide any details on where the returns in question came from, many of the problematic forms were prepared by H&R Block. The Kansas City-based tax preparer didn't get specific either, but it acknowledged the error in its blog. Bill Cobb, the company's CEO and president, soon thereafter issued an online apology to customers. Now the tax preparation giant is saying it's sorry with cash. OK, with... Read more →

The ringleader of a South Florida identity theft ring that filed $11.7 million worth of fraudulent federal income tax refunds was sentenced last week to more than 26 years in prison and $1.9 million in restitution. At the sentencing of Alci Bonannee, 36, of Fort Lauderdale, federal prosecutors said the scheme was one of the biggest and most successful they've seen. It was so convincing, noted the trial judge, that the Internal Revenue Service approved some $4.5 million of the requested refunds. It also is a prime example of what federal proscutors called a tax fraud "epidemic" that is more... Read more →

I quit smoking cold turkey more than 30 years ago as a gift to the hubby. But every now and then during tax filing season, I think about lighting up again. I suspect I am not alone in that response to stress. Dependence on, or addiction to if you prefer, cigarettes is one reason why taxing the product is so popular. Sure, sure, lawmakers say it's for our own good. That by making us pay more for a pack of cancer sticks, we'll smoke less or give them up altogether. And that does work, especially for younger smokers who have... Read more →

Online shoppers are grumbling about the very real possibility that they'll soon be paying state (and local) sales tax on their purchases. The Senate will take a final vote on its Internet sales tax bill, still referred to by some as the Amazon tax even though the online retail giant now supports the levy, on May 6. It is expected to pass and head to the House for consideration, where the outcome isn't as sure, but most expect it to be approved there, too. Guess what. You probably should have been paying those taxes anyway. States that collect sales taxes... Read more →

Being a Grammy winning, critically acclaimed, platinum record selling singer-songwriter can sure come in handy if you're in tax trouble. Just ask Lauryn Hill. The former front-woman for the Fugees and successful solo artist (and record producer and actress) has been under Internal Revenue Service scrutiny for failing to file federal tax returns for tax years 2005, 2006 and 2007. During those years, said the IRS, she earned $1.8 million. Last June, Hill pled guilty to the three federal tax charges. Each carries a maximum penalty of one year in prison and a $100,000 fine. At a sentencing hearing on... Read more →

Everyone makes mistakes now and then. (Don't tell the hubby that I admitted that!) When it comes to mistakes on tax returns, the Internal Revenue Service gives us a second chance, up to a point. As this week's Weekly Tax Tip notes, sending in a corrected tax return via Form 1040X is not that difficult. The IRS wants to know what you originally reported, what your corrected numbers are and why you are making the changes. You can add or subtract personal exemptions if on your original 1040 there was some confusion as to whether you properly claimed a dependent.... Read more →

Not to get too wonky, but this could affect you, me and our taxes. Sen. Max Baucus, Montana's senior U.S. senator, is not expected to seek re-election in 2014. Although Baucus hasn't officially announced his upcoming retirement, apparently it's the worst kept secret in Washington, D.C. Every media outlet in the nation's capital is reporting that the Democratic chair of the Senate Finance Committee has decided to step down when his current term ends. UPDATE: It's official. Baucus posted an announcement (and video) of his retirement on his Senate Web page. One reason that Baucus' decision is not so surprising... Read more →

Happy Earth Day! This event was created 43 years ago in large part as a response to the 1969 oil spill in Santa Barbara, Calif. The idea was to designate a day on which the American public could focus on air and water pollution and how to mitigate or prevent their damage to our environment. It has grown into a global movement. Heck, even the Internal Revenue Service and tax collectors at other governmental levels are involved, thanks to the many laws that offer tax breaks for environmental actions. Here are some environmentally-related tax savings to think about today and... Read more →

It's no secret that the United States desperately wants money from taxpayers who have tried to shield their taxable income by putting it into foreign accounts. First, the Internal Revenue Service used information provided by a UBS whistleblower to obtain information about U.S. money hidden in secret Swiss bank accounts. Then the American tax agency continued its offshore voluntary disclosure program, what you and I call a tax amnesty, which has brought in more than $5 billion in previously uncollected taxes. Tougher foreign income reporting requirements also were enacted. And now Switzerland and the United States reportedly are close to... Read more →

Tax Day, the Tax Foundation's annual calculation of when U.S. taxpayers have earned enough money to pay their annual federal, state and local taxes, arrived last week. To be precise, Tax Freedom Day 2013 was April 18. You did throw a party, right? If not, you might still get a shot. Last Thursday was the national taxes-paid day. But some states are still waiting for their Tax Freedom Days. Click image for a larger view. State tax burdens vary considerably, notes the Tax Foundation, due to differing state tax policies and because of the steep progressivity of the federal tax... Read more →

If you plan to work on taxes this summer, be it business filings or estimated taxes or finishing up your 2012 tax return for which you got an extension, mark these days on your calendar: May 24 June 14 July 5 July 22 Aug. 30 The Internal Revenue Service will be shut down those days, and possibly two more days in August or September. That's the word that went out in an email Friday from IRS Acting Commissioner Steve Miller to his employees. These are the five-for-sure days that IRS personnel will be furloughed as the agency deals with its... Read more →

It's been an awful week in America. On Monday, April 15, two bombs that went off near the finish line of the Boston Marathon killed three people and injured more than 170. Late Wednesday, April 17, a fertilizer plant explosion leveled a portion of the small town of West, Texas, which is in the central part of the state. Fourteen people, including firefighters and emergency medical workers who were first to arrive at what started as a fire, were killed, around 60 are still missing and about 200 were injured. Since then, and especially with today's developments in the hunt... Read more →

Superman turned 75 on Wednesday, April 18. The iconic American hero first appeared on that date in 1938's Action Comics #1. The June cover date was to let newsstand owners know when to take down the publication. Over the years, Clark Kent and his other-worldly alter ego has evolved on our television and movie screens. In June, we'll get the latest film version, Warner Bros' Man of Steel. This week, however, one of the most well-known portrayers of Superman was hit by a bit of tax Kryptonite. Dean Cain, who was ABC television's Superman from 1993 to 1997 in Lois... Read more →

Had enough of your own taxes this year? Then check out President Obama's and Vice President Biden's 2012 returns. Click return image to see full Obama 2012 tax filing (opens in PDF). Obama 2012 taxes: The president's and first lady's joint return reporting adjusted gross income (AGI) of $608,611. The Obamas paid $112,214 in total tax. That comes to an effective tax rate of 18.4 percent. In reaching their final tax bill, the Obamas whittled down their AGI via $258,385 in itemized deductions. Those Schedule A claims included $63,305 in other taxes paid, $45,046 in home mortgage interest (their Chicago... Read more →

Most folks get a tax refund from the U.S. Treasury each year. And most of the time, those checks show up in our snail mail boxes or are directly deposited into our bank (or saving or IRA) accounts without any problem. But now and then, something goes wrong. It could be a seemingly good error. Your tax refund is larger than you expected. That actually happened to me one year. Or it could be the opposite. Your refund check is smaller, a lot smaller, than the amount that was indicated on your tax return. Making do with more tax money:... Read more →

Tax Day is one of the most stressful times of the year. But it also might just give our brains a boost. Researchers at the University of California, Berkeley say that acute short-lived stress primes the brain for improved performance. The findings of the seven-member team working at the university's Helen Wills Neuroscience Institute were published April 16 in the open access online journal eLife. "You always think about stress as a really bad thing, but it's not," according to Daniela Kaufer, associate professor of integrative biology at UC Berkeley. "Some amounts of stress are good to push you just... Read more →

Late this afternoon the Internal Revenue Service announced that Boston-area taxpayers will get three more months to both file and pay any federal tax due. Here's the full statement: IRS Announces Three-Month Filing, Payment Extension Following Boston Marathon Explosions IR-2013-43, April 16, 2013 WASHINGTON — The Internal Revenue Service today announced a three-month tax filing and payment extension to Boston area taxpayers and others affected by Monday’s explosions. This relief applies to all individual taxpayers who live in Suffolk County, Mass., including the city of Boston. It also includes victims, their families, first responders, others impacted by this tragedy who... Read more →