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November 2013

One of the craziest things about the U.S. tax code is that it deems all income, even that obtained via illegal means, taxable. Many states also subscribe to this taxation tenet, particularly when it comes to drugs. They require sellers of marijuana and/or illicit narcotics to purchase drug stamps. Added enforcement tool: Yes, some drug sellers do buy the stamps. The state gladly accepts their money. And if they don't purchase the official documentation for their illegal operation but get busted later for drug trafficking, law enforcement has another charge to add to the alleged narcotics-related crimes. Look at the... Read more →

Did you finish off that bottle of Pinot Grigio with yesterday's turkey feast? Are you about to open another one to go with leftovers? Or maybe your prefer beer. Or you really, really need something a little stronger to deal with your crazy uncle's incessant political rants. Whatever potent potable you do select, a part of the price will go to tax collectors. If you opt for the hard stuff, a substantial portion of what you pay covers various taxes, according to the Distilled Spirits Council of the United States (DSCUS). The national trade association for producers and marketers of... Read more →

I don't believe in going overboard with food on Thanksgiving Day. It's just the hubby, my mom and me sitting down at our table later today for a small roasted turkey breast, gravy, cornbread stuffing (made by me using my grandmother's recipe), fresh Brussels' sprouts, biscuits, cranberry sauce, ancho chili relish and for dessert pumpkin (baked by the hubby) and pecan (baked by Blue Bonnet Cafe) pies. By Friday night, all the food should be gone. OK, maybe we'll still have some pie left. Or maybe not. I do, however, believe in overindulging on Thanksgiving-related blog posts! Actually, I was... Read more →

We can thank Abraham Lincoln for some of the most momentous events and acts in our country's history. Our 16th president had the unenviable task of being Commander in Chief during the Civil War. During that terrible period, he came under Confederate fire at the Battle of Fort Stevens, becoming the second and last sitting president to be in involved in a war. He also made sure that the divided America knew that a higher cause was at stake in the brutal war. Lincoln issued the Emancipation Proclamation on Jan. 1, 1863, declaring that slaves within the Confederacy were forever... Read more →

Fewer of us will be going over the river or through the woods to grandma's house this Thanksgiving travel season, according to AAA. That's bad news not only for sad grandparents who won't see their families, but also for state treasuries. The drop in travel, especially of the vehicular variety, is going to cost states tax money. Overall, AAA projects that 43.4 million Americans will travel 50 miles or more from home during the Thanksgiving holiday weekend, which the travel group defines as starting today (Wednesday, Nov. 27) and wrapping up on Sunday, Dec. 1. That's a slight decrease from... Read more →

If you're hitting the road to a new destination this Thanksgiving holiday, you've probably been looking at a road map. Take a tax break from those red and blue highways and check out the even more colorful Tax Foundation's map of possible tax bracket creep across the United States. Bracket creep is as icky as it sounds. It flares up, notes the Washington, D.C.-based group, when tax brackets aren't indexed for inflation. Without that adjustment, as a taxpayer's earnings increase, that added money will be taxed at higher rates. You could contract this terrible tax affliction if you live in... Read more →

One of the most-hallowed tax breaks for ministers has been struck down by a federal judge. Judge Barbara Crabb of the United States District Court for the Western District of Wisconsin ruled on Nov. 21 that the parsonage allowance is unconstitutional. She also issued an injunction discontinuing the tax code section. Don't panic, ministers et al. Your tax bills aren't going up just yet. Crabb stayed her ruling until the conclusion of any appeals, which is standard legal operating procedure. Housing allowance tax history: The housing allowance is an amount designated by a church -- any church, despite the Protestant-sounding... Read more →

Sen. Max Baucus, chairman of the Senate Finance Committee, has been swamping us with his thoughts on how to overhaul our tax system. He started with his thoughts on how to improve the corporate tax system, specifically as it relates to taxes on the international earnings of multinational companies. Next came Baucus' proposals to overhaul more administrative style tax functions, such as simplifying the filing system and fighting tax fraud. Although some of the tax reform material that Baucus has been distributing is in legislative language, it is not proposed legislation ... yet. The Montana Democrat notes that the documents... Read more →

Getting ready to travel for family get-togethers this holiday season? If you're flying, you'll likely be paying some airline fees. But one thing you can be very thankful for this coming Thursday is that your trip didn't involve a private jet flight out of Nigeria. The Nigeria Airspace Management Agency is now collecting $3,000 from foreign-registered charter aircraft and $2,500 from locally registered charter planes for each round trip. Some media outlets are reporting the tax will cost some private jets as much as $4,000 per flight. Nigeria is one of the leading private jet markets, according to Ventures, rivaling... Read more →

Tax preparers who are fighting the Internal Revenue Service in court over the agency's attempt to regulate them might have the upper hand in the legal system. The tax pros, however, do not have a friend in Sen. Max Baucus (pictured at right). He supports the IRS' oversight effort. Preparer regs part of tax reform: The Democrat from Montana heads the Senate Finance Committee. Baucus also has partnered with his House counterpart, Ways and Means Chairman Rep. Dave Camp (R-Mich.), to push for tax reform. Camp has yet to release his suggested Internal Revenue Code changes. Baucus, however, has been... Read more →

Tired of the Affordable Care Act (ACA) or Obamacare or whatever you want to call the health care reform law? Too bad. We're going to be hearing about it all the way up to the Nov. 4, 2014, election day. Republicans are firing all they've got at the ACA. The latest big news is the official House Republican playbook that lists ways the party hopes to discredit Obamacare. The playbook focuses on ways to highlight Obamacare problems. Key targets are federal health care exchange's online insurance enrollment problems, as well as the loss of coverage by some individuals. The GOP... Read more →

Jimi Clark, owner of the St. Louis Mo' Money Taxes franchise, has been sentenced to 20 months in prison for falsely claiming educational tax credits on 47 returns. Clark pleaded guilty to the charge back in July. The total loss to the U.S. Treasury due to Clark fraudulently claiming the American Opportunity educational tax credit was more than $50,000. Now I realize that 50K is not a lot in the grand scheme of tax fraud. It's nowhere near the $9 million that another tax crook pleaded guilty to perpetrating last week. Neither is 20 months an exorbitant prison term. But... Read more →

Despite the dysfunction on Capitol Hill some things never change. Today hundreds of lobbyists are hitting Representatives' and Senators' offices. This group, however, isn't of the typical Gucci Gulch variety. The folks looking for favorable legislation are from nonprofits and charitable organizations. Today has been deemed "Protect Giving Day" by the philanthropic sector. More than 200 folks from that arena are in Washington, D.C., alerting members of Congress of what they say are the "cascading consequences that could be set off by harmful limitations to the charitable tax deduction." Donation deductions on chopping block? The possibility of cutting or capping... Read more →

It's that time of year again. Movie studios roll out some big productions in the hopes of generating ticket sales as well as Oscars buzz. Many movies nowadays are made in part with help from tax breaks. But a couple of states are looking more closely at how and how much taxpayer money they hand out to movie makers. Beyond New York, New York: Empire State Gov. Andrew Cuomo last week vetoed a bill that would have extended New York's supplemental film tax credit to 14 counties in the Hudson Valley and greater Albany, N.Y., area. The Democratic governor said... Read more →

Missouri is one of 34 states that prohibit same-sex couples from getting married. But lesbian and gay couples who married in a jurisdiction that does recognize their unions (15 states plus the District of Columbia) and now live in Missouri will file their 2013 state tax returns as married taxpayers. Missouri's tax sanctioning of same-same marriages is thanks to an executive order issued last week by Gov. Jay Nixon. The Internal Revenue Service and U.S. Treasury announced in late August that same-sex married couples now must file a joint Form 1040 or two returns as married filing separately regardless of... Read more →

Mexican lawmakers have finally hammered out a budget that includes a one-peso-per-liter, or about 8 cents U.S., tax on sugary beverages and an 8 percent tax on fast foods. The country's lawmakers and health activists hope that the new charges will help the country's residents lose not only weight, but also the unwanted title of the world's most obese nation. The legislative action has earned at least one piece of positive recognition. It's made 8 the winner of this week's By the Numbers honor. The tax is a crowning achievement for Mexican President Enrique Peña Nieto, who proposed it as... Read more →

The New York man behind a five-year identity theft tax refund scheme that cost the U.S. Treasury more than $12 million is headed to jail. Jose Torres, 47, of the Bronx, pleaded guilty in U.S. District Court in Newark, N.J., to conspiracy to defraud the United States, theft of government property and aggravated identity theft. Federal prosecutors say Torres was the leader of one of the nation's largest and longest running stolen identity refund fraud schemes ever identified. Torres was personally responsible, says the Department of Justice, for $9 million in fraudulent refunds issued between 2007 and 2012. Torres previously... Read more →

Not only does my wedding anniversary sometimes slip past me, so does the ol' blog's birthday. That happened just last week. Eight years ago on Thursday, Nov. 14, I wrote my first post for Don't Mess With Taxes. How tax time has flown! Thanks to everyone for reading, commenting, elaborating, suggesting and generally being such great tax geeks. I'm up for eight more years if y'all are! You also might find these posts of interest: Lighting the first candle Blog birthday #2 Happy Blog Birthday to Me! Happy 4th Blog Birthday Read more →

Italian fashion designers Domenico Dolce and Stefano Gabbana have officially filed an appeal of their tax evasion conviction. Both men were sentenced in June to one year and eight months each in prison after being found guilty of contributing to tax declaration omissions in the 2004 sale of some of their clothing lines to Gado, a Luxembourg-based holding company. The sale, argued prosecutors, allowed Dolce & Gabbana, as their brand is known, to avoid Italy's high rate by paying a lower tax in Luxembourg. D&G have consistently denied the charges. Their 90-page appeal document, filed this week at Milan's courthouse,... Read more →

The reason tax reform has stalled? Obamacare

Who is as upset as the president about the latest round of problems with Obamacare? Ways and Means Committee Chairman Dave Camp. The Republican Representative from Michigan reportedly is champing at the bit to release his long-awaited tax reform bill. Many of his GOP colleagues, however, want him to hold off. Why? They're getting great political mileage out of the latest Affordable Care Act snafu. Missed original enrollment opportunity: Republicans weren't able to make political hay when folks were frustrated by problems at the opening of the federal health care exchange on Oct. 1. That was because Republicans themselves blocked... Read more →