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Most Recent Posts

Need To Show Rental Effort To Deduct Expenses

Need To Show Rental Effort To Deduct Expenses

As the Tax Court noted, evidence the Meinhardts made no changes in their efforts to rent the property, despite thirty unsuccessful years, undermined their assertion that they sought to profit by renting the property. The lack of evidence of a rental property business strategy, and evidence they allowed relatives to live in the house rent-free, supported a finding that the Meinhardts held the property as an alternative residence for the personal use of their extended family.

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Grandfather Beats IRS In Tax Court Without Lawyer

Grandfather Beats IRS In Tax Court Without Lawyer

They mystery to me is why when the IRS decided to drop the penalty, they did not drop the case entirely, since, by dropping the penalty, they were indicating that they did not think Mr. Roberts was lying and, given that, it’s pretty clear that he wins.  That the deficiency notice got issued in the first place is perhaps not that surprising given the amount of fraud there is surrounding the earned income credit.  That may have turned the people working those cases into a bunch of cynical bastards.  It wouldn’t take me long. It is worth noting that it was very wise for Mr. Roberts to have entered into the written agreement with Ms. Moody rather than having the arrangement be informal. That extra piece of evidence may have been what won the case for him.

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NFL Not The Only Organization That Does Not Need Or Deserve Tax Exempt Status

NFL Not The Only Organization That Does Not Need Or Deserve Tax Exempt Status

Congress might use this flap about the NFL and even more significantly the interminable Tea Party/Dark Money/IRS Targeting scandal (You get to pick the name based on your point of view) as a goad to look more closely at the whole exempt organization area.  There are 29 different types of exempt organizations under 501(c) alone.  Many entities put a burden on overstretched IRS resources to claim exempt status for no discernible federal tax reason.  It let’s their dark money stay dark.  It allows them to get a liquor license, sponsor bingo games and avoid state sales and use tax.  Silliest of all is that 501(c) status can give an organization credibility in some circles – another illustration of Barnum’s law.

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Parsonage Supporters Encouraged By Seventh Circuit Oral Arguments

Parsonage Supporters Encouraged By Seventh Circuit Oral Arguments

When the powers that be finally realize what the country needs and appoint me tax policy czar, one of my first acts will be to cap the housing allowance at $4,000 per month not indexed for inflation so that its significance will gradually phase out.  A couple of people recognize that the unlimited housing allowance is not just bad tax policy. It is also bad for religion.

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Seventh Circuit Oral Arguments On Parsonage A Shipwreck For Freedom From Religion Foundation?

Seventh Circuit Oral Arguments On Parsonage A Shipwreck For Freedom From Religion Foundation?

Ms. Hagley went on to state that it was an “issue of first impression” as to whether any atheist could qualify under 107.  I became very sad at this point, because it is clear that they have not been reading my posts.  Many Unitarian Universalist ministers, some serving parishes founded in the seventeenth century, are atheists and the UUA is on at least one of the amicus briefs supporting the exclusion, much to my chagrin.

As they discussed the standing issue, I got the impression that Ms. Hagley and the judges think that the IRS is a lot more on the ball than it actually is.  Ms. Hagley indicated was that all the FFRF officers had to do was file an administrative claim in which they indicated that they knew they didn’t qualify for the exclusion which constituted unequal treatment.

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Did Florida County Tax Man For Being Happily Married?

Appellant never asserted that he and his wife were “estranged” or living separate lives 24/365. If he had done so, it would have placed the Property Appraiser and her staff in the position of determining whether the couple’s marriage was no longer intact—“your honor, Exhibit 33 is a photo of the Defendant and his wife holding hands.” On the flip side, an argument could be made that a couple with a very intact relationship who split their time between two residences may be able to claim two homestead exemptions so long as they are not legally married. One commenter has referred to this as the “’unwed’ loophole.” Although we need not meander down that thorny path in the instant case, the ambiguity and perhaps unforeseen consequences associated with the definition of the term “family unit” may merit legislative scrutiny in the near future. 

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Joan Rivers Made Tax History

Joan Rivers Made Tax History

The Lloyds of London policy would have paid $75,000 per month for sixty months had Ms. Rivers become disabled. The IRS wanted to disallow the premium of $115,492.  The idea is that had the policy paid, the proceeds would have been exempt income to the corporation.  You cannot deduct things that are attributable to generating tax exempt income.  The corporation argued that in the event the policy had paid, it would have used the cash flow to pay Ms. Rivers.  That income would have been taxable to her.  The Tax Court went with the IRS.

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Andrew Kay Passes – Helped Accountants Abandon Pencil Pushing

This is more reminiscing than a technical article, so please forgive me if I am a bit off on some of the details.  Our first Kaypro came with two disk drives that took 5 1/4 inch “floppy” disks. The operating system was called CPM and had something called virtual memory architecture.  The CPU (I’m not sure that is the right term, but that’s what we called it) had only 64k.  So when it was feeling overburdened it would save things temporarily on the disks.  This could be a little disturbing sometimes because things had a way of disappearing from large spreadsheets.  One thing that I have retained from my Kayrpo days is a suspicion of very large spreadsheets.

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New Hampshire Supreme Court Declines More Power In Tuition Credit Case

New Hampshire Supreme Court Declines More Power In Tuition Credit Case

Standing is probably the primary way that potentially unconstitutional tax benefits are defended. The concept is that you need to show that you specifically are being harmed.  If you think that something is just unfair, you should write to your legislature.   We will soon see whether standing will work to protect the federal tax benefit that allows the mega-pastors of the mega-churches to exclude from their taxable income housing allowances that can run into hundreds of thousands of dollars.

What is probably most interesting about the Duncan decision is that the New Hampshire Supreme Court had to first engage in a great act of self abnegation, before it could dismiss this case on standing. The New Hampshire legislature had amended the state statutes in order to create a notion of “taxpayer standing”, which is what the plaintiffs in the case were invoking.  The statute read in part:

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