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June 2013

It's Flag Day. Are you flying the Stars and Stripes? Americans are natural flag wavers, both figuratively and literally. So the idea of Flag Day was welcomed back in 1885 when Wisconsin teacher Bernard J. Cigrand asked his students to write essays on the U.S. flag and its significance. The assignment fell on the anniversary of the Continental Congress's vote in 1777 to adopt the Stars and Stripes. It became an official national holiday in 1949 when President Harry Truman signed legislation designating each June 14 as Flag Day. After the terrorist attacks of 9-11, U.S. flags became regular fixtures... Read more →

Yet another high-profile marriage apparently is about to end in divorce. Media mogul Rupert Murdoch has filed for divorce from Wendi Deng, his third wife of 14 years. The 82-year-old head of News Corporation and his 44-year-old wife are the parents of two young daughters. Expect the breakup to be messy. Murdoch is worth a reported $11.2 billion that comes from News Corp, corporate parent of, to name a few, Fox News, various entertainment TV outlets, a film studio and a publishing empire that counts the Wall Street Journal among its holdings. When Murdoch and his second wife divorced in... Read more →

If you're planning on efiling a tax document, you might want to get to it today. The Internal Revenue Service is facing another furlough day tomorrow, Friday, June 14. All IRS employees will stay at home that day without pay in order for the agency to meet sequestration budget cuts. Yep, for the second time this year, the IRS is closing all its doors nationwide. That includes not only IRS offices, but also the agency's nearly 400 taxpayer assistance centers across the country as well as Taxpayer Advocate Service facilities. No tax returns will be processed and no compliance-related activities... Read more →

UPDATED June 13, 2017: The table showing where to snail mail your estimated tax payment voucher has been updated. Some links also have been changed. Has your summer gotten off to a good start? Great! But if you must make estimated tax payments, you need to take a break from your fun in the sun and send in your second Form 1040-ES for tax year 2013. It's usually due on June 15. But since that's a Saturday this year, you get a couple more days to make the payment. Your second estimated tax payment for 2013 is due Monday, June... Read more →

If you're planning on dropping Daniel Werfel a note about the Internal Revenue Services' recent troubles, be sure to address him correctly. Werfel is no longer IRS Acting Commissioner. No, he hasn't been fired or suspended. He's got a new title. Werfel is now IRS Principal Deputy Commissioner and Deputy Commissioner for Services and Enforcement. But regardless of what you call him, IRS employees will still call him boss. Despite the title change, Werfel will continue to run the agency. Ch-ch-changes: Werfel's new, longer official job designation was bestowed by Treasury Secretary Jacob Lew, who sent Senate and House tax-writing... Read more →

Just in time for beach season, the Internal Revenue Service issued final regulations for tanning booth operators. You remember the tanning tax. The 10 percent levy was created as part of the health care reform law and has been in effect since July 1, 2010. Tanning bed customer photo (click image for direct link) by Evil Erin via Flickr CC But the IRS now has made the process for collecting the indoor tanning services excise tax official. For the most part, the final rules follow the guidelines issued almost three years ago. Below are some key sections of the final... Read more →

Sometime this month, the U.S. Supreme Court will decide two gay marriage cases, California's Proposition 8 legalizing same-sex marriages in that state and the federal Defense of Marriage Act, or DOMA, which defines marriage for federal purposes as being the exchange of vows between one man and one woman. One of the 138 same-sex newlywed couples who were greeted by a cheering crowd after their weddings at City Hall in Seattle on Dec. 9, 2012, the first day that same-sex couples could marry in the state of Washington. Photo by Michael Holden via photopin cc The justices' opinions will affect... Read more →

The slow but steady economic recovery is starting to pay off for some state treasuries. State collections of personal income taxes in the first quarter of 2013 are up by an overall 17.6 percent compared to the same period a year earlier. That pace, according to a recent Rockefeller Institute of Government at SUNY-Albany report, is the strongest growth since the start in 2007 of the Great Recession. But before all you state tax officials start doing a collective happy dance, there are two big reasons for the early 2013 bump in taxes paid. ATRA and California: First, say Rockefeller... Read more →

Donald Duck's debut and pro-taxes effort during WWII

Happy 79th Birthday, Donald Duck! On June 9, 1934, Walt Disney released The Wise Little Hen, in which we were introduced to a duck named Donald. Before long, the easily exasperated duck with the distinctive delivery style was a cartoon star on his own. And within a decade, Donald Duck was making animated films not just for Walt, but also for Sam. Uncle Sam, that is. A ducky tax proponent: During the height of World War II, Disney worked with the War Activities Committee of the Motion Picture Industry to produce an animated short encouraging folks to pay their income... Read more →

I love old buildings. It's about history as much as architecture. But too often, people and cities don't appreciate either. The Detroit Masonic Temple can thank its lucky stars that someone much more flush than I shares my sentiments, at least where this towering limestone structure is concerned. Jack White, pictured at right, has a personal history with the historic building and that was part of the reason that the singer-songwriter-producer stepped in to save it. The Masonic Temple was on the verge of being auctioned off due to delinquent taxes from 2010 to 2012. White, best known for the... Read more →

Six conservative groups told their Internal Revenue Service tax-exempt troubles to members of Congress earlier this week. Now 25 of them, including the four Tea Party groups whose representatives testified before the Ways and Means Committee, are suing Uncle Sam. In addition to citing the IRS itself, the suit names former IRS Deputy Commissioner Steven Miller, suspended Exempt Organization's (EO) head Lois Lerner, former EO Technical Unit Acting Manager Holly Paz and "unknown named officials" at the tax agency. Attorney General Eric Holder and Treasury Secretary Jacob Lew also are listed as defendants. The law suit, filed by the American... Read more →

Tax collectors worldwide are an unpopular group, but a group of Italian businessmen found a unique way to express dissatisfaction with their nation's collection agents. They dropped their trousers. The five men, partially dressed in shirts, socks and shoes and their underwear, gathered this week outside the parliament building in Rome carrying signs that read "You are killing thousands of jobs." They and other members of the business lobby Coba Imprese want to abolish Equitalia, the agency that collects back taxes and fines. As Italy has attempted to get tough with tax evaders in recent years, Equitalia has become widely... Read more →

The tax cut revolution got its start 35 years ago today when California voters approved Proposition 13. The brainchild of anti-tax activist Howard Jarvis, shown there at left celebrating Prop 13's June 6, 1978, ballot box victory, and Paul Gann, the landmark California constitutional amendment limited property taxes to 1 percent of the real estate's assessed value and limited the growth rate of future assessments to 2 percent. Tax revolt legislation soon spread eastward, with nearly half of the states enacting similar measures. Proposition 13 also was the catalyst for President Ronald Reagan's tax cuts in 1981. With that tax... Read more →

In addition to costing $4.1 million, the 2010 Internal Revenue Service conference in Anaheim, Calif., could cost two tax agency employees their jobs. IRS Acting Commissioner Daniel Werfel this afternoon announced that he has placed the employees on administrative leave and has started the process to remove them. The action comes after the IRS received additional information from the Treasury Inspector General for Tax Administration (TIGTA) about a party at a private suite at an Anaheim hotel three years ago. Eating and ethics: According to the IRS, "food was allegedly inappropriately provided free of charge in violation of government ethics... Read more →

The Internal Revenue Service's recent rash of troubles has me asking, with apologies to Ladies Home Journal, can this agency be saved? The actual continuation of the IRS isn't really in doubt, despite some calls to dismantle it by demagoguing politicians. There will always be a need for Uncle Sam to bring in money and there has to be an agency to do that job. So the real question is can the IRS' reputation, or as the private sector would call it, the agency's brand, be saved? That's a big job. The... Read more →

It's official. An Internal Revenue Service division spent $4.1 million on one conference. Oh my goodness, IRS. Really? You know better than that. But then, apparently you didn't know better than that three years ago. The Treasury Inspector General for Tax Administration (TIGTA) latest whack at the IRS confirms that the August 2010 Small Business and Self-Employed (SB/SE) Division's managers conference in Anaheim, Calif., topped the $4 million mark. This event will go down in IRS infamy not only for its excessive expenses, but also because it was the one for which the Star Trek and line dancing videos were... Read more →

Conservative groups tell Ways and Means of IRS targeting; Senate Finance ranking GOP member wants to hear, too

Six members of conservative groups that had their tax-exempt status applications held for closer scrutiny by the Internal Revenue Service are on Capitol Hill this morning, telling their stories to the Ways and Means Committee. In opening the hearing, Ways and Means Chairman Dave Camp (R-Mich.) said "this investigation is about how and why the IRS was empowered and allowed to use a broken tax code to abuse individuals based on their beliefs, and seemingly only based on their beliefs." The witnesses were invited by the committee to speak. They are John Eastman, chairman of the National Organization for Marriage;... Read more →

Daniel Werfel, who took over as Acting Commissioner of the Internal Revenue Service less than two weeks ago, this afternoon made his first trip in that position to the lions' den known as Capitol Hill. Given the tenor of previous House and Senate hearings on the many missteps the agency has recently made, many of us were feeling a bit sorry for Werfel as he headed to the House Appropriations Subcommittee on Financial Services and General Government hearing room. Congress has latched onto the IRS not only because the tax agency has, as everyone on both sides of the aisle... Read more →

We got a preview late Friday afternoon of next week's Congressional hearings into actions by the Internal Revenue Service. That's when IRS Acting Commissioner Danny Werfel issued a statement about a Treasury Inspector General for Tax Administration (TIGTA) report to be released Tuesday, June 4, and which reportedly examines federal spending at more than 200 IRS conferences over a three-year period. Werfel's public acknowledgement of the upcoming report and his characterization of "inappropriate" expenses associated with it is a preemptive apology in an effort to limit the damage. Good luck with that, Danny. A similar, though more clumsily issued apology... Read more →

The richest 20 percent of Americans enjoy more than half of the benefits from 10 major tax breaks. That's the analysis of the nonpartisan Congressional Budget Office in its report, "The Distribution of Major Tax Expenditures in the Individual Income Tax System," released last week. The tax breaks -- or expenditures as they are known in legislative circles -- include tax deductions, tax credits, preferential tax rates for certain types of income and income that is excluded from taxes. The CBO grouped the expenditures into four categories: Exclusions from taxable income, which includes employer-sponsored health insurance, net pension contributions and... Read more →