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IR-2010-32, March 16, 2010 The Internal Revenue Service today issued its 2010 “dirty dozen” list of tax scams, including schemes involving return preparer fraud, hiding income offshore and phishing. “Taxpayers should be wary of anyone peddling scams that seem too good to be true,” IRS Commissioner Doug Shulman said. “The IRS fights fraud by [...] Tax Girl: “tucked in the middle [of the Housing Assistance Tax Act of 2008] is a new requirement that banks and credit card merchants to report payments to the IRS. . . . . What this means is that taxpayers who have a credit card merchant account, Paypal account or similar account and [...] The law firm of Baker, Donelson, Bearman, Caldwell & Berkowitz, PC. has an informative article that all employers should read. It is called “20 Ways Your Independent Contractor Might Be An Employee.” The IRS is conducting audits to find employers that have improperly characterized employees of independent contractors to avoid paying payroll taxes. [...] In their never-ending thirst to raise tax money to pay for their unlimited spending habits, some states have adopted what is called the “Amazon” tax and others are considering it. This is a tax on online companies that have no connection with a state, but are required to collect and pay sales taxes [...] The following story is proof that we cannot escape paying taxes by dying. AolNews: “It could easily have been the plot for a ‘Sanford and Son’ episode: a bizarre money-making scheme cooked up by a well-meaning but possibly misguided man that seems destined to go comically awry. But in this real-life case, it’s [...] A person who loses real property in a foreclosure may have to report income to the IRS equal to the amount of the debt that is not paid. This concept is called “discharge of indebtedness income.” The following are two important articles that explain the tax consequences following a foreclosure: Federal Income Tax Consequences [...] Shrinkage is Good describes thirteen weird taxes from around the world. They are: witchcraft, weird baby names, cow flatulence, playing cards, forced smoking, tax-exempt sex toys, urine, hats, beards, prostitution, porn, illegal drugs and bribery. The Des Moines Register reports that two women who bragged online that they were cheating on their taxes were indicted on five counts of income tax evasion. Kiplinger has a story about the fourteen strangest income tax deductions claimed by tax payers. The Ballard Spahr law firm reports that the Internal Revenue Service will begin random audits of employers to determine if they have underpaid employment taxes by paying independent contractors who should have been classified as employees. Treasury regulations require disregarded entities to withhold, report, and pay employment taxes. See “Final Regulations [...] Russ Fox of Taxable Tax summarizes the large number of new taxes contained in the President Obama’s latest health care proposal. Amazon does not collect or pay California sales tax to purchasers who are residents of California. State law makers estimate that near-bankrupt California could collect $150 million or more if it could force Amazon to collect the tax or give information to California that would allow the state to go after residents who [...] The February 15, 2010, New York Times has a special section with a number of stories on federal taxes. The stories are entitled: With Rules in Flux, It’s a Tough Time for Tax Strategies The Tax Foundation studied President Obama’s proposed budget and found that the $118 billion will be redistributed from the top earners. The Foundation’s chart shows that a taxpayer in the top one percent will pay an additional $101,314 for a total of $509,257 redistributed and taxpayers in the bottom ten percent will receive [...] An IRS publication states: “Stolen property. If you steal property, you must report its fair market value in your income in the year you steal it unless in the same year, you return it to its rightful owner.” Tax Foundation: “It’s funny but true; thieves must pay income tax on stolen property they keep [...] Washington Post: “The D.C. Department of the Environment published new regulations . . . clarifying which retail stores have to charge the 5-cent tax on plastic bags and how the city will enforce the law. . . . But the law has resulted in widespread confusion about which stores have to charge for [...] The IRS released IR-2010-80, The Truth about Frivolous Tax Arguments, which debunks the most common frivolous arguments made by taxpayers who believe there is no federal income tax law, the earth is flat and Elvis is alive. The IRS says: The Internal Revenue Service today released the 2010 version of its discussion [...] Wall St. Journal: “The Senate health-care bill would raise effective marginal tax rates on lower and middle-income singles and families up to 41%. The stunning victory of Scott Brown in Massachusetts may prove to be a game-changer for the President’s health-care “reform” agenda. This is good news for the ability of lower-income families [...] Don’t Mess with Taxes: “I know I’ve blogged about the first-time homebuyer credit a gazillion times. My most recent post on the tax break was The home buyer credit’s three E’s. But I cover it yet again, this time for Bankrate.com, in Homebuyer tax credit extended, expanded. Quick aside: That article is Daily [...] Reuters: “The Obama administration’s plan to cut more than $1 trillion from the deficit over the next decade relies heavily on so-called backdoor tax increases that will result in a bigger tax bill for middle-class families. In the 2010 budget tabled by President Barack Obama on Monday, the White House wants to let [...] Don’t Mess with Taxes: “As you can see from this lovely graphic from the folks at CCH, interpreting the tax code gets tougher every year. Back when our current income tax code was put into place, CCH’s Standard Federal Tax Reporter needed 400 pages to examine the legislative, administrative and judicial aspects of [...] OregonLive.com: In a January 17, 2010, column, Nike co-founder and chairman Phil Knight warned Oregonians about the future of the state if proposed tax increases were to be approved by the voters. “Measures 66 and 67 should be labeled Oregon’s Assisted Suicide Law II. They will allow us to watch a state slowly [...] Liberty Works: “ObamaNomics is built on the assumption that politicians are better stewards of economic resources than the millions of individuals and business enterprises who created those resources. The Democrats’ plan is to dramatically increase taxation to fund programs through which government can exert greater control over our lives. But these data [...] Forbes: “Football safety sues after audit nixes his big charitable and business deductions. The Internal Revenue Service says Arizona Cardinals safety Antrel Rolle understated his taxable income by more than 50% during his first two years in pro football, sending him a $2.2 million bill for back taxes, interest and penalties. The [...] Wall St. Journal: “if the Democratic economic policies continue nevertheless, this year will be nothing like the bitter economic January we will be living in a year from now. Government spending has already hugely increased, and so has the size and scope of government, but next year there will also be substantial tax [...] New York Times: “IN the digital age, filing income tax returns should be a snap. The important data from employers and financial institutions have already been sent to the government’s computers. Yet taxpayers are still required to perform the anachronistic chore of preparing a return from scratch. And, in many cases, they pay [...] Companies with employees should never fail to pay payroll taxes not just because its required by the law, but also because people who control a company’s finances can be personally liable to the IRS for the unpaid trust fund portion of payroll taxes. Employers such as corporations (for profit and nonprofit), limited liability [...] Bloomberg: “Professional golfer Jim Thorpe, who has won more than $15 million in his career, was sentenced to one year in prison for failing to pay U.S. income taxes for three years. Thorpe’s request to avoid prison time was rejected today by U.S. Magistrate Judge Karla Spaulding in Orlando, Florida. The former college [...] Don’t Mess with Taxes: “If you expect to get a refund, then your initial answer to my query about your readiness to file your taxes will be an immediate and emphatic ‘Duh!’ But my question is really about the filing process itself. Even if you use tax software and e-file, whether via your [...] Forbes.com: “Judge allows IRS freeze of $22 million attributed to tax cheating skin merchant Joe Francis. ‘Girls Gone Wild’ creator Joseph R. Francis, whose personal legal troubles are as eye-catching as the topless women he films, has lost a court bid to block the Internal Revenue Service from freezing $22 million in two [...] |
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