The Internal Revenue Service's problems are far from over. The Treasury Inspector General for Tax Administration (TIGTA) is poring over some recently recovered emails to/from Lois Lerner that could (or could not) shed light on the agency's bungled 501(c)(4) nonprofit application review process. Regardless of TIGTA's findings, you can bet Republicans, who will control both the House and Senate in the incoming 114th Congress, will use their combined majorities to keep the pressure on the IRS. And with the tax extenders bill stalled, it's looking more likely that the 2015 tax filing season will be delayed. That's terrible news for... Read more →
November 2014
It's day three -- or more for some -- of the Thanksgiving holiday. Are you tired of your relatives yet? No judging here. The hubby and I tend to do our families and ourselves a favor and celebrate holidays on our own or show up for the big day only. Everyone can maintain for 24 hours or less at least a semblance (or façade) of patience and goodwill. If, however, you're still in the midst of a mass of relatives, it may be time for a movie break. A quick cinematic note. Most Thanksgiving movies tend to deal with crazy... Read more →
Do you factor taxes into your shopping budget? You should. If you live in a high sales tax state, it could make a big difference. The tax costs of shopping are of particular concern as the holiday shopping season has arrived. Many stores opened on Thanksgiving Thursday. A few waited until the traditional Black Friday. Then there's Small Business Saturday and, after a break for your bank account and some turkey dinner leftovers, comes Cyber Monday. So who should be putting aside a few extra bucks to cover shopping sales taxes? Tax software and information services company Wolters Kluwer CCH... Read more →
President Abraham Lincoln is famous for so many wonderful, impressive, inspiring actions and words. He gave us stirring arguments in the Lincoln-Douglas debates in his unsuccessful quest to unseat U.S. Senator Stephen Douglas. But the campaign battle laid the foundation for his eventual political triumphs. After becoming the 16th president, he confronted the Civil War, one of our nation's darkest times. From that tragic era came Lincoln's long remembered Gettysburg Address and the Emancipation Proclamation. To finance that grim internecine battle, Lincoln signed into the law the country's first income tax. The Aug. 5, 1861 law imposed a 3 percent... Read more →
Just when it looked like things were going so well with the tax extenders negotiations, the Washington we all know (and some love) reared its political head. The more than 50 tax breaks that expired at the end of 2013 are likely to stay dead. Or at least that was the situation as of last night. What happened? The White House decided the proposal being hammered out by Senate Majority Leader Harry Reid (D-Nev.) and House Ways and Means Chairman Dave Camp (R-Mich.) was a turkey. The deal, according to the White House, was far too favorable to business interests... Read more →
Major League Baseball fans on opposite sides of the United States are going to have very different Thanksgivings this year. In Boston, Red Sox Nation is very thankful for their team's signing this week of two of the sport's biggest free agents, third baseman Pablo "Kung Fu Panda" Sandoval and Hanley Ramirez, who plays (for now) shortstop. Click image for MLB.com story and video on Boston's blockbuster player acquisitions. San Francisco and Los Angeles baseball fans, meanwhile, will be crying in their turkey dinners. Exact contract details for the pair haven't been released. However, Sandoval reportedly signed a five-year contract... Read more →
Apparently a lot of folks are not happy about proposals to extend the 55 or so tax breaks that expired at the end of 2013. Actually, that's good news. It at least means that people are talking taxes. The big issue is whether to do away with some of the extenders, the name given the technically temporary tax breaks that must renewed periodically by the House and Senate. Wait! Don't freak out. The tax provisions wouldn't be eliminated. They just wouldn't be extenders. Instead, they would become permanent parts of the tax code. Permanent tax trade-offs: That's what a lot... Read more →
Things have been pretty quiet of late in the Congressional crusade against the Internal Revenue Service, so you can't be blamed for thinking that the tax agency was off the hook for its ham-handed handling all around of 501(c)(4) applications. After all, a federal court judge on Oct. 23 threw out a pair of lawsuits filed by Tea Party groups, Linchpins of Liberty and True the Vote, against the IRS that had claimed the IRS targeted them for special scrutiny. Last week, however, another thorn -- or more accurately 30,000 thorns -- in the IRS side flared up. That's when... Read more →
It was global tax crime time last week at my other tax blog. In Russia, one of the contractors who helped get Sochi ready for the last Winter Olympics is facing tax evasion charges. Oleg Shishov, CEO of the building firm Mostovik, is accused of falsifying tax documents from 2009 to 2012 in order to avoid paying more than 515 million rubles, or $10.9 million U.S., in taxes. Shishov could face up to six years in a Russian prison if convicted. Closer to home, 18 South Florida college students were among 21 indivudals charged with participating in a $1.9 million... Read more →
The Internal Revenue Service recently released its figures on how inflation will affect many federal tax provisions in 2015. But the cost of living also affects states. And these jurisdictions' tax departments deal with annual price increases in different ways. Thanks to the Tax Foundation map below, you can see the various state tax approaches to inflation. Click image for a larger view. The Washington, D.C.-based tax think tank notes that: 23 states fully index brackets to inflation; this number includes the nine states (each marked by an asterisk and listed in the "Notes" box in the map) with single-rate... Read more →
Looking for a hint as to how the new Republican controlled Congress will work with the Democratic president for the next two years? We got an answer to today: Not very well. Republican House leaders finally filed the long-threatened lawsuit against the Obama Administration. The Senate is not involved in the action. In recent months, two law firms withdrew from the case, many suspect because of potential political repercussions. House Speaker John Boehner (R-Ohio) on Nov. 18 hired Jonathan Turley, a George Washington University professor who is an expert on constitutional law, to handle the suit. The challenge, which focuses... Read more →
Oregon voters on Nov. 4 approved use of small amounts of recreational marijuana in their state. The fight over taxing weed, however, continues. The ballot initiative that passed by a 56-to-44-percent margin specifically gave the state the exclusive right to tax marijuana. City officials are fighting that provision. State vs. local taxation: Under Measure 91, which takes effect July 1, 2015, producers will be taxed $35 an ounce for the most potent parts of a marijuana plant. Marijuana leaves will face a $10 per ounce tax, while there will be a $5 levy for plant starts sold to home growers.... Read more →
It looks like Rep. Paul Ryan is shelving national political ambitions for a while to take over the House Ways and Means committee. Ryan will assume the chairmanship of the powerful tax-writing panel on Jan. 3, 2015 when the 114th Congress convenes. He takes the gavel from W&M Chairman Rep. Dave Camp (R-Mich.), who is retiring at the end of the current congressional session. Ryan, Republican Representative for the first district of Wisconsin since 1999, announced his desire for the top tax post on Nov. 4. Click image to see interview clip via Bloomberg Politics (@bpolitics) on Twitter "It is... Read more →
Electronic devices allow smokers to inhale smokeless nicotine vapor are increasingly popular. To describe this activity, the word vape was coined. The Oxford Dictionaries today named the verb vape its 2014 Word of the Year. Tax collectors, however, don't care what it's called. More and more of them simply want to tax vaping. Only Minnesota and North Carolina have e-cigarette taxes in their tax codes, but more than two dozen state legislatures have explored similar tax bills during recent sessions. Electronic cigarettes offer a promising new area of tax, especially since real tobacco taxes and public education have resulted in... Read more →
Just when we think we've got a handle on Ebola, the disease wins a round. Dr. Martin Salia, a surgeon who contracted the deadly virus while performing his duties as chief medical officer at United Methodist Kissy Hospital in Freetown, Sierra Leone, has died in a Nebraska hospital. Salia, a Sierra Leone native who was a permanent U.S. resident, was transferred Nov. 14 to the Nebraska Medical Center's biocontainment unit where two other Ebola patients were successfully treated. Unfortunately, Salia's symptoms were far more advanced and the hospital announced his death today. However, sometimes there is good in times of... Read more →
Is an anti-soda trend finally getting a foothold? Berkeley, California, voters on Nov. 4 approved a tax on sugary beverages. That 1 cent per ounce levy will begin Jan. 1, 2015. Heading east across the San Francisco Bay, a majority of San Franciscans also supported a soda tax. However, a two-thirds vote on Election Day was needed to enact that tax. Look for health activists to continue the SF soda fight. And last week, another more localized tax that covers sodas as well as other foodstuffs won approval. The Navajo Nation Council signed off on a tax on so-called junk... Read more →
The many differences between European countries and the United States extend to taxes. The Tax Foundation recently looked at the latest tax data from the Organisation for Economic Co-operation and Development, or OECD. That 2011 material shows that consumption taxes are the largest source of tax revenue for OECD countries. That's not a surprise, notes the Tax Foundation, since all but one OECD nation levy value added taxes, or VATs, at relatively high rates. Which is the lone non-VAT country? The United States. Uncle Sam relies the most on individual income taxes. Combined federal, state and local taxes raised approximately... Read more →
Mother Nature is really flexing her muscles right now. She's put her extremes of fire and ice on simultaneous display. While residents in much of the lower 48 are coping with early and record-breaking winter weather, folks in our 50th state are watching flames consume part of their island home. Lava flowing again: The Puʻu ʻŌʻō vent of the Kilauea volcano in Hawaii began erupting in 1983. Its latest lava flow, moving anywhere from five to 30 yards an hour, began back in June. This week, in addition to consuming roadways and open land, the lava ignited a fire in... Read more →
I am a glutton for punishment. For work, I write about taxes. For fun, I'm a life-long Dallas Cowboys fan. The abuse I get in both cases runs neck-and-neck, with seasonal fluctuations for whatever group is most in the public eye at the time. But at least America's Team (bracing now for a new influx of emails) isn't having as bad a year as I expected. I predicted the 'Boys would only notch four wins. And the 'Pokes also are definitely doing better than their long-time NFC East rival based in the Washington, D.C., area. Not only is the national... Read more →
Representatives and Senators clocked in today, meeting as lame ducks for the 20th time since 1940. Not exactly lame, but some say these pool toys are just as effective as some lame-duck lawmakers. "Rubber Ducks" photo by artur84 via FreeDigitalPhotos.net. It's the first time lawmakers have seen each other since the GOP cleaned the Dems clocks in the midterm elections. But beyond that electoral awkwardness, lame duck sessions always are weird. It's the last time, at least for a while, that some members of Congress will be on Capitol Hill as lawmakers. Some are gracious in their defeats. Others are... Read more →