Shop Smart on Tax-free Weekend

For those of you who may now know, next weekend (August 21-23) is the back to school tax holiday for the state of Texas. While the tax holiday itself will be your biggest savings, there are several steps you can take to save even more cash next weekend. El Lider USA has written up some great tips for Texas citizens wondering how to stretch their savings next weekend, check out a few of them below.

1. Do your research. In addition to clothes, footwear and some backpacks, Texas families also receive a sales tax break on most school supplies up to $100 for use by a student in elementary or secondary school. The 81st Texas Legislature recently passed HB 1801 (2009) expanding the list of items qualifying from exemption from Texas state and local sales during the August holiday. Know what items are included before you shop by visiting http://www.window.state.tx.us/taxinfo/taxpubs/tx98_490/tx98_490.html.

2. Stick to your budget. Just because it’s tax-free doesn’t mean you should go on a spending spree. Consider the savings are less then 10 percent. Develop a budget and stick to it. Don’t let the stress and crowds lead to overspending.

3. Don’t stress. If the stress is too much for you to handle, don’t worry. Retailers will likely have sales promotions throughout the first month of school. Check store Web sites and weekend circulars to find the best deals.

4. Stack your savings. Keep your eyes open for specials on top of tax-free items. Combine coupons, store specials and tax savings to receive a significant discount.

5. Don’t open department store credit cards. Retailers will be pushing you to open a store credit card this sales holiday by promoting extra savings. Be aware that these cards usually come with high interest rates that can easily create debt. The one-time 10 or 20 percent savings you’ll receive by opening one of these cards is not worth the debt and credit rating damage it could cause for years to come.

6. Don’t cram it all in. You don’t need to pick everything up during tax-free weekend. Back-to-school sales will usually extend into the first month of school so you have plenty of time to find those deals.

US Appeals Court Sides With IRS In 'Son Of Boss' Tax Case

From the Wall Street Journal.com:

A U.S. appeals court upheld the IRS in denying more than $50 million in tax losses claimed by two Texas lawyers in an oft-litigated tax shelter strategy known as "son of Boss."

In a Friday ruling, the Fifth Circuit Court of Appeals found that investment partnerships set up by Cary Patterson and Harold Nix lacked economic substance and should be disregarded for tax purposes.

Patterson and Nix earned about $30 million each between 1998 and 2000 representing the state of Texas in litigation against tobacco firms, according to the Fifth Circuit opinion.

"Son of Boss" refers to a category of complex tax maneuvers designed to generate huge losses with little risk to the investor, in order to shelter large capital gains.

Hundreds of taxpayers involved in "son of Boss"-type transactions have settled with the IRS since the tax collector issued a global settlement offer in May 2004.

In a statement Monday, John A. DiCicco, acting assistant attorney general, hailed the appellate court ruling and said the court had "recognized that determinations of this sort must be made on the objective evidence irrespective of the claimed motives of the individual investors."

The court rejected an argument from the government, however, that Patterson and Nix owed penalties in the case.

IRS Seeks to Recover $227 Million in Unpaid Taxes From Stanford

A financer from Texas is in big trouble with the IRS, and they are doing all they can to recover the money he owes. Check out the story below, thanks to Bloomberg.

Investors in R. Allen Stanford’s Antiguan bank may have to get in line behind the Internal Revenue Service as they seek to recover money from the alleged swindler.

The IRS asked a judge to let it continue to seek at least $226.6 million in back taxes from Stanford, the Texas financier accused of running an $8 billion Ponzi scheme.

The motion was filed on March 13 in the U.S. District Court in Dallas, where a court-appointed receiver is sorting out claims for more than $1 billion in assets frozen in customer accounts and in gold coins and bullion seized last month.

“The IRS shall file a fairly significant claim against R. Allen Stanford,” agency lawyer Manuel Lena Jr. wrote in the so- called motion to intervene in the case brought against Stanford by the Securities and Exchange Commission.

Stanford’s federal tax bill has swelled to twice the amount previously reported as penalties and interest piled up, and it may grow further because Stanford hasn’t filed his 2007 tax return, Lena said in the court filing.

Ralph Janvey, the court-appointed receiver, will file his response in court today, answering more than 45 groups of investors that have requested permission to join the SEC’s case against Stanford and his companies.

Janvey has already released $4.1 billion in frozen Stanford investor accounts. Only accounts linked to certain executives and employees, the bullion division, and accounts containing investments at Antiguan-based Stanford International Bank remain under the court-ordered freeze.