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Most Recent Posts

Clergy Housing Tax Break Withstands Challenge – Atheist Group Lacks Standing

Clergy Housing Tax Break Withstands Challenge – Atheist Group Lacks Standing

The legal problem with challenging the exclusion has always been standing.It is hard to argue in court against a tax break that somebody else is getting.  The judges tell you that it is no skin off your nose and that you should write your Congressman. Of course, the judges put it much more eloquently, but that’s the gist of it.

In order to obtain standing Freedom From Religion Foundation started paying a couple of its officers a housing allowance.  Since they would rather have you call them late for breakfast than “minister of the gospel”, they did not exclude the allowance from their income when they filed their returns.  Judge Barbara Crabb thought it would be silly to require the FFRF officers to file refund claims that they IRS would deny in order to have standing to sue.  The Seventh Circuit did not agree:

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Tax Court Goes To Webster For Definition Of Construction – And Watch That NAICS Code

The reference to the Webster’s II New Riverside University Dictionary made me wonder if that is somehow the official Tax Court dictionary. I found that it has been cited by the Tax Court 20 times which is twice as often as the Oxford English Dictionary.  The higher courts seem to favor OED.  Still you can get a copy from Amazon for one cent.  Well, it’s four bucks when you throw in the shipping.  Still, I decided to order myself a copy.

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Kansas Property Tax Consultant War – A Sign Of Things To Come?

Kansas Property Tax Consultant War – A Sign Of Things To Come?

This situation may create what I am going to call the Tea Party Paradox.  There is a desire for less government and lower taxes in general, but also a sense that what government there is should be more local and state than federal.  So now we have the situation where the people who want to slash the federal government are positioned to slash the levels of government, that they view as more benign, although perhaps still in need of pruning.

Then there is what I will call the Lois Lerner Effect.  Anti-tax zealots are using misbehavior in one of the more obscure, less significant parts of the IRS to condemn the entire system and advocate an entirely new system.  What happened in Kansas with the Court of Tax Appeals indicates that zealous legislators can restructure a system relatively quickly once they get a head of steam up.

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Technology Officer Denied Capital Gain Treatment On Sale To Google

Technology Officer Denied Capital Gain Treatment On Sale To Google

Clearly Mr. Brinkley would have helped himself with the penalties if he had given all documents to his advisers.  Should he have made more of a fuss about the W-2? There you get into business judgement.  You wouldn’t want tax issues to screw up the deal.  If I could have changed one thing, I would have separated the transfer of rights from the employment letter.  I hope Mr. Brinkley appeals this decision.  It may be right on the capital gain issue, although there is still an argument there.  And I think it is wrong on the penalty.

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Judicial Watch Loses Orthodontist Suit Against Delay Of Obamacare Employer Mandate

Judicial Watch Loses Orthodontist Suit Against Delay Of Obamacare Employer Mandate

A dissenting judge had pointed out that Doctor Kawa was out the interest he could have earned on the five grand over two years.  I guess that might have amounted to something back when money still earned interest.  That had not been mentioned in the claim.  And really, you shouldn’t be in court over something that could be settled with maybe a steak dinner.

And even if he had been harmed, the Court did not see how the order he was requesting to prevent the administration from kicking the can down the road would make him any better off.

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AICPA Wasted Member Dues On IRS Lawsuit

Then my villainous cynical mind kicks in.  Suppose large local and regional firms started pledging that any non-CPAs who touched your return would be people who had at least passed the IRS exam and challenged you to ask the larger firms if they could match that.  A very large portion of the tax work done by the largest firms is actually done in India.  Clients who take the time to read the voluminous engagement letters are aware of this, but still it might prove something of an embarrassment.  If the firms went ahead and had their Indian employees take the exam, I’m thinking the Tea Party would have a blast with the long list of Indian names on the IRS preparer rolls.

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What If Lois Lerner Was Right About The Tea Party?

One GD thing after another and now we are on Day 542 of the IRS Scandal, by TaxProf count, with no end in sight. Here is the question that is troubling me right now thanks to the e-mails I have been getting from Jenny Beth Martin.  If there is a pretty compelling case that Tea Party Patriots Inc was intended from day 1 to be a political organization, rather than a social welfare organization, would that make any difference in how we view Lois Lerner?

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Government Coming Down Harder On Kent Hovind

Government Coming Down Harder On Kent Hovind

I should preface this by saying that Kent Hovind’s troubles are pretty much of his own making.  YEC supporters have encouraged Kent to stop fighting the IRS so he can focus his energy on “creation science”.  Eric Hovind is following in his dad’s footsteps in arguing against evolution, but is not a chip off the old block when it comes to tax compliance.  The website of his group Creation Today gives links to its Form 990 and even mentions its CPA firm.

With that said I really question the judgement of the government in going after Kent for making one more stupid filing.  Frankly, if I was on the jury, they might have a hard time getting a conviction.  There is stupid and stubborn and there is criminal.  Plenty of tax related crime to fight elsewhere.  If Hovind is convicted, he will seem like a martyr.  If he is acquitted, it will look like a victory for tax defiers.

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There Is An Accountant Art Expert – Who Knew?

Although estate taxes play a major role in art planning, there are numerous other tax issues.  If you want to diversify your collection or get the yen to move from say Impressionism to Abstract, you might have significant taxable gains.  Although I’ve always believed that 1031 might have application in the art world, Gary confirmed that it is a viable technique.  He recommends that you involve an institutional exchange facilitator which might also be doing real estate and equipment since they will have the facility with the proper tax execution.  I couldn’t pry a name out of him.

Then there are state tax issues. The New York Times recently ran an article about a sales and use tax dodge that some collectors were using.  Works that they bought were shipped on loan to a museum in a state that would not charge sales or use tax.  After a few months, the work could be moved to the collectors home and he beats the use tax because the original use was the museum loan.  Gary’s firm put out an alert, that nifty as this idea might be it does not work if you bring the artwork into New York, New Jersey, or Connecticut.

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