Address On Federal Return Creates State Income Tax Problem
You are always a resident of the state where you are domiciled even if you spend no time at all there in a given year. I constructed a hypothetical fellow called Harry Hedgefund. He is a dealmeister with offices in Manhattan and Boston. He has apartments in Greenwich Village and the South End, where his mistresses live. And he has a monstrous house in Alpine, NJ where his family lives. That means he is domiciled in New Jersey, but there are many days where he is in New York in the morning and Massachusetts in the evening making him a statutory resident of both states.
Tax Rate Of 137% On Net Disability Settlement
We don’t know how Mr. Nordloh actually made out on his 2011 refund claim, so we can’t determine how much he was net out of pocket. It is worth noting that the CPA computation was $5,169. That was on a net from the settlement of $3,771. That works out to a federal income tax rate of 137%. Congress should really do something about this, but I am not holding my breath. I’ve seen worse.
The other thing that is absurd about this case is the way the IRS vigorously went after the accuracy penalty. The Enrolled Agent, the IRS and the CPA came up with three different answers and then the IRS came up with a fourth answer. And the IRS wants to charge an accuracy penalty. Go figure.
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Over and over again courts have said that there is nothing sinister in so arranging one’s affairs as to keep taxes as low as possible. Everybody does so, rich or poor; and all do right, for nobody owes any public duty to pay more than the law demands: taxes are enforced exactions, not voluntary contributions. To demand more in the name of morals is mere cant.