Most Recent Posts
Democratic Presidential Candidate Drops Out Without Releasing Tax Plan
The Bernie Sanders campaign sent me something pretty detailed, but there is still no word on what he is thinking for rates. Hillary Clinton has floated a couple of proposals – more than two holding periods for capital assets and a tax credit to encourage profit sharing plans – that make it clear that a vote for Clinton will not be a vote for tax simplification. I haven’t noted anything yet from O’Malley and Webb dropped with nary a word on tax, although he probably convinced the other candidates that if they didn’t pick him for VP, they should strongly consider him for heading up their Secret Service detail.
Redstone Family Saga Writ Large In Favorable Tax Court Decision
Being in the movie business and all you would think the Redstones. would have been familiar with the remark attributed to Samuel Goldwyn – “A verbal contract isn’t worth the paper it’s written on.”
My own closing comment is that even though there was a favorable result here, I don’t think that it would be wise to attempt to do something like this on purpose.
IRS Commissioner Koskinen Impeachment Trial Would Be Historic
This post was originally published on Forbes Oct 28, 2015 Unless, like a sensible person, you have been shielding yourself from learning about developments in the...
Interview With Student Loan Activist Alan Collinge On Bankruptcy Protection
There is a larger, more sinister phenomenon at work here: the student loan industry cherry-picks data like these and pushes them in the media for the sole purpose of keeping bankruptcy gone from student loans, something that has allowed them to rob billions of dollars from millions of people over the years. This is a predatory cash cow for them, and they will grasp at the flimsiest of data in order to make the predatory student loan system look better, and to perpetuate the shocking financial carnage that is being inflicted upon millions and is poised to devastate far more Americans going forward, and to a far greater degree.
Maureen O’Hara’s Ill Fated Cuban Oil Tax Shelter
The top marginal rate in those days was 91%. A big attraction of oil as an investment was the percentage depletion deduction. What is great about percentage depletion is that you can keep deducting even after you have recovered your cost, which is why owning a gold mine is like owning a gold mine , while owning an oil well can be even better. Percentage depletion for oil wells was 27.5% of revenue limited to 50% of net income from the property. And this was before they started with all those silly alternative minimum tax things and passive activity loss rules were not even on the horizon.
Grand Review In Harrisburg – Great Way To Cap The Sequicentennial
I thought I was done with Civil War Sesquicentennial events after the Grand Review in May. It turns out that there is one more event, I just have to attend. Another...
God May Bless Your Pot Shop – Tax Court Not So Much
Unless you can figure out a way to combine high margins and low operating expenses Section 280E will kill a business or force it underground. Of course probably when TEFRA was passed in 1982, all illegal drug businesses were underground. Presumably the legislation comes from the “That’s how they got Al Capone” syndrome reflecting a desire to use the tax law as one more weapon in the War on Drugs. Nancy Reagan, notwithstanding, people were often saying yes, rather than just saying no. Unanticipated was the “kind of legal in some places” status of marijuana that our federal system has evolved.
The decision was pretty cut and dried. an illustration of Reilly’s First Law of Tax Planning – It is what it is. Deal with it. There are three elements to make Section 280E applicable. There is a trade or business. There is trafficking. There is a controlled substance.
No Orange Jumpsuit For Lois Lerner
I think that politically this decision might actually break in favor of conservatives who have adopted the scandal narrative as a matter of faith. An actual prosecution of Lois Lerner would make for an epic trial in which her defense would put the whole question of “dark money” flooding into the political system on trial. Right now, there does not seem to be anybody who likes her very much, but a trial could turn her into a martyr for the cause of transparency. Instead this decision by DOJ will become one more strand in the scandal narrative. Republican candidates can compete on how vigorous they will be in ordering DOJ to reopen its investigation.
IRS Should Be Asking For Cooperation Not Volunteering
Professor Manhire presents a four cell quadrant that illustrates the choices available to taxpayers – cooperate or evade – and the IRS – audit or don’t audit. He notes that the ideal situation is one in which the taxpayer cooperates and the IRS does not audit at all or at least not very often is the ideal. Lots of audits of compliant taxpayers feels like harassment. Audits of non-compliant taxpayers will have them “busted” which is unpleasant, whereas non-compliant taxpayers not being audited make the rest of us feel like chumps.
So it would be less confusing if the IRS were to say that the system is based on “cooperative compliance”. Since most people cooperate, enforcement resources can focus on those that do not. It actually sounds like a pretty good idea. We’ll see if it takes off.
Too Much Assuming Leads To Over Quarter Million Late File Penalty
I think that the result in this case is rather harsh. Given how compliant the taxpayers were once they got their act together, I think the government should have been satisfied with the late pay penalty. The problem would have been easily avoided if they had been more proactive in communicating with their professionals and if the professionals had been communicating with one another. You can’t tell from the decision why the proactivity was not happening. There may have been an understandable desire to minimize fees. If that is the case it was kind of a penny wise, pound foolish result.
I think that you could use this case as an object lesson in why you might want to consider involving a professional as at least a co-executor, if you have a significant estate. At any rate, you should try to arrange things so that your advisers and heirs/executors will work as a team.