Tuesday, October 30, 2007

IRS Offers Help for Wildfire Victims

Last week the IRS added a new page to their site offering links and help for victims of the California wildfires. You can check the page out here.

According to the IRS’ release, if you own property damaged by fire in the presidential disaster area, you can either claim uninsured or unreimbursed disaster losses by filing an amended 2006 tax return or you may wait and claim any losses on your 2007 return. Both individuals and businesses are eligible for these options. For more information, check out the IRS website.

IRS Updates Living Expense Standards

After months of using three-year-old data to calculate taxpayers living expense standards, the IRS has finally issued new standards. These standards, also known as collection financial standards, are used when reviewing a taxpayer's account to determine their ability to pay federal tax liabilities. Essentially the IRS uses this data to determine the type and amount of tax debt relief each taxpayer qualifies for during settlement negotiations. The new standards went into effect October 1.

According to an IRS news release the standards have been designed to incorporate the following items:

  • A new category for out of pocket health care expenses
  • The elimination of income ranges for national standards for food, clothing and other items
  • A nationwide set of tables for national standard expenses, eliminating separate tables for Alask and Hawaii
  • An expanded number of household categories for housing and utilities
  • An allowance for cell phone costs in housing and utilities
  • Equal allowances for first and second vehicles under transportation expenses
  • Fewer Metropolitan Statistical Areas for vehicle operating costs
  • A separate nationwide public transportation allowance

A little over a month ago I drafted an open letter to the Secretary of the Treasury urging for changes to the IRS standards as they had not been updated since last year. I am glad to see the IRS has finally decided to update these standards as using three-year-old data to calculate a person’s expense standards was making things unnecessarily difficult on taxpayers hoping to find IRS tax relief.

Friday, October 26, 2007

Mutual Fund Taxes To Break Records

According to CNN Money, major mutual fund companies have begun estimating this year’s taxable distributions and the taxes are set to break records yet again. Last year their tax bills totaled $23.8 billion, which was the largest since 2000, but this year’s total is expected to be over $24 billion. One reason for the ever-growing tax bill is the past years "wild market," with plunging stocks and a soft housing market.

US House Votes to Extend Internet Tax Ban

On October 23, the United States House of Representatives voted with a massive 405 – 2 majority to extend the current ban on Internet taxes for the next four years. This is a small victory, as many from the tech industry lobbied to extend the ban indefinitely. First enacted by Congress in 1998, the Tax Freedom Act Amendments Act was set to expire on November 1, 2007.

Although the legislation passed through the House with flying colors, it stalled in the Senate. In order to extend the ban the act would need to pass the Senate and be signed by the President.
"Every day, broadband technology changes the way Americans live, from how they do business to how they learn and communicate to how they access medical treatment," claims Walter McCormick Jr., president and CEO of the United States Telecom Association. "An Internet access tax penalizes that way of life. In essence, we're talking about a tax on economic opportunity, on knowledge, and on finding one's voice in the democratic process."

For more information check out this article on PC World, or this editorial in the Washington Post.

Thursday, October 25, 2007

Porsche to Take Over VW?

Although Porsche has been buying VW stock like crazy for the past year, there has been a piece of legislation called the VW Law which has stopped Porsche from taking full control over the company. However, the European Courts recently stuck down the law and now there is nothing preventing Porsche from increasing their stock ownership. Porsche currently has a 31% stake in VW, but with this new announcement they are expected to increase that to at least 51%. The industry expects Porsche to be patient with the rest of the process, possibly taking up to a year, but there is no doubt that they will soon control VW. Thanks to AutoBlog.

Poker Winnings Must Now Be Reported As Income

According to an IRS news release, casinos and other poker tournament sponsors will be required to report information on winnings to the IRS, starting March 4, 2008. The IRS hopes this rule clarifies the tax reporting rules that apply to poker tournaments and gain additional revenue from these popular gaming events. When the new rule takes effect, winnings exceeding $5,000.00 will require reporting to the IRS. The casinos will report the pay-out on an IRS Form W-2G. However, the IRS is reminding tournament winners that they must report all their winnings on federal income tax returns, regardless of the amount won. This rule has been in effect for years, and all tournament winners should currently be reporting all winnings. The IRS is hoping that with the new rules placed on tournament sponsors will help increase the number of winners who do report their winnings.

Friday, October 19, 2007

Even Celebrities Owe Back Taxes

On October 11th, 2007 the California Franchise Tax Board published their annual list of the top 250 taxpayers with back taxes owed to California. Included in this list of delinquent taxpayers is three celebrities, one of which claims to have no regular income whatsoever.

The publishing of this information is part of the California government’s attempt to use publicity to get the money they are owed. As with all persons owing back taxes, everyone on this list have been contacted numerous times by the Franchise Tax Board in effort to collect the debts. Specifically, before publishing the list they notify each taxpayer via certified letter reminding them of the liability. But I guess when you owe the IRS millions of dollars it’s probably going to take more then just a letter to get the money.

Out of the list of 250 delinquent taxpayers there are three celebrities that stand out. Firstly there’s singer Dionne Warwick who owes California over $2.6 million, and she’s been dodging the tax collectors for over ten years. Maybe she’s hoping the statute of limitations will run out, but if I were her I wouldn’t hold my breath.

Next on the list of celebrities is 90’s comedian Sinbad, who hasn’t had a hit anything for years but still managed to rake up a tax debt of over $2.1 million dollars. His liability has been outstanding since December of 1993. When I see numbers like this it makes me wonder… How in the world did Sinbad manage to get so far in debt to the California government? He had a few hits back in the early 1990’s but in order to get that far in debt he probably never paid taxes in full. It constantly amazes me when I see these celebrities who think they don’t have to pay their taxes. Too bad he didn’t have a better tax lawyer, or at least a decent advisor to tell him to pay his taxes. I’m betting he doesn’t have the extra cash just lying around to pay in full. But can you imagine his lawyer calling into the IRS to negotiate an offer in compromise and telling the IRS agent it’s for Sinbad? What I’d give to listen into those negotiations.

The last celebrity on the list owes the least out of all the celebrities, but for some one who claims in court to have no income what so ever he sure has a pretty high income tax liability. The star in question? The notorious O.J. Simpson, who owes California over $1.4 million in personal income taxes that have been outstanding since 1999. I wonder if he even intends to pay that debt down? I doubt it. He’ll probably just ignore it and let it add on to the millions of dollars he owes countless other people.

The lesion to be learned from all of this? As the old saying goes the only things in life that are certain are death and taxes. Every one has to pay income taxes, even has-been celebrities who haven’t worked in decades.

Tuesday, October 16, 2007

New GM Concept Camaro

GM car czar Bob Lutz announced a new Camaro concept car on one of his recent posts on the Fastlane Blog. He describes the new car as being remarkable claims the new Camaro is intended to be "the finest car in its class, ever." Check out a picture of the concept car below, thanks to the GM Fastland Blog.

New IRS Tax Talk Today

Later today the IRS will feature a new webcast on their Tax Talk Today website. The Webcast is scheduled for Tuesday, October 16, at 2 p.m. ET. Discussion topics on the Webcast will include an overview of OPR, Circular 230 and monetary penalties. The live hour-long Webcast will focus on the IRS’s Office of Professional Responsibility (OPR), which is responsible for setting, communicating and enforcing standards of competence, integrity and conduct among tax professionals who practice before the IRS. Tax Talk Today is a Webcast put out by the IRS with the goal of educating tax and payroll professionals on the most current and complex tax issues. You can access the Webcast for free by registering online at www.TaxTalkToday.tv.

Friday, October 12, 2007

Full List of 2007 Baseball Champions

Nutty About Sports.com has a very informative article on their site with a list of all the current baseball champions of 2007. The list includes not only Major League Baseball Champions, but Minor League Baseball Champions, Independent League Champions, College Baseball Champions and Little League Baseball Champions as well. You can see the full list by clicking here.

Republican Debate Comments From Tax Foundation

The other night was a Republican primary debate with the topic on taxes and the economy. Tax Foundation.org has put together a good review of the debate with their comments and observations on various things candidates said in the debate. Topics include revising the current tax code, government subsidies, the federal budget, corporate taxes, and others. Check out the full review at Tax Foundation.org: Observations from the Republican Debate.

Wednesday, October 10, 2007

Disney Planning New Resort in Hawaii

According to Radio New Zealand, the Walt Disney Company has announced plans to build a new resort on the Hawaiian Island of Oahu scheduled to open sometime in 2011. Disney has purchased over 21 acres of oceanfront property, where they plan to build a resort set to include 800 hotel rooms and villas. This new Hawaiian resort will help expand Disney’s Vacation Club, their new time share business.

Woman Sues Kmart for Taxing Toilet Paper

A Pennsylvania woman sued Kmart for allegedly collecting a 7 percent state sales tax on toilet paper. In her lawsuit, she is seeking $100 in damages plus court costs, claiming the $3.99 toilet paper she purchased was incorrectly taxed in the amount of 28 cents. Her lawsuit takes advantage of Pennsylvania's Unfair Trade Practices and Consumer Protection Law, which allows her to seek damages 357 times her actual injury or around $100. Although most paper goods are taxable in Pennsylvania, toilet tissue is listed as a nontaxable item.

Monday, October 08, 2007

IRS Announces Increase In Corporate E-filed Returns

According to the Internal Revenue Service, more than 800,000 of the nation’s small businesses and large corporations have electronically filed their tax returns so far this year. This number represents a 60 percent increase from last year. "This is a record-breaking year for electronically filed returns by corporations and businesses," said Acting IRS Commissioner Linda Stiff. "We will continue to work with the business community, tax practitioners and the software industry to improve this important program." However not just small businesses are e-filing, thousands of large corporations are voluntarily e-filing as well. More than 42,000 large corporations have already e-filed this tax year.

Nissan Unveils Pivo 2 Concept Car

Nissan unveiled the new Pivo 2 concept car at the Tokio Motor Show a few days ago. The car features a 360-degree rotating cabin, 90-degree turning wheels, and braking and steering drive by wire capabilities. Below is a picture of this funky new concept car, thanks to Engadget.com.

Friday, October 05, 2007

Bush Says No to Children's Health Insurance

A few days ago President Bush vetoed a bill that would have expanded a children’s heath insurance program by over $35 million over the next five years. Speaking in Pennsylvania, Bush claimed he vetoed the bill because he felt it was a step towards federalizing medicine and inappropriately expanding the program to help more children. Senate and House Democrats alike were quick to condemn the veto, which had received bipartisan support. House Majority Leader Nanci Pelosi has already announced plans to gain enough votes to overturn the veto. For more coverage on this issue, check out CNN.com.

Check Out Watch Me Franchise!

Ever wondered what it would be like to open your own franchise business? Well check out the new Watch Me Franchise blog put together with the help of two new Roni Deutch Tax Center franchisees, Heather and Gentry Spell. The blog has been following the Spells from day one before they even signed a franchise agreement, and will continue to follow them through the end of tax season. Along with videos and pictures of the Spells, the blog also features informative articles and blog entries useful to any one considering investing in a franchise. Check out WatchMeFranchise.com today!

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