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Most Recent Posts

God And The IRS – And Kent Hovind!

God And The IRS – And Kent Hovind!

I didn’t think anybody would ever be able to top “Call me Ishmael” as an opening line of a book, although “When Mr. Bilbo Baggins announced that he would shortly be celebrating his eleventy-first birthday” comes close.  Professor Samuel Brunson has managed it though with his Thanksgiving line, at least in my book.  Well his […]

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First Circuit Says IRS Cannot Use Smell Test To Squash Plan To Funnel Millions Into Roth IRA

First Circuit Says IRS Cannot Use Smell Test To Squash Plan To Funnel Millions Into Roth IRA

The Benensons had their Roth IRAs each invest $1,500 in JC Holding which owned  JC Export, a newly formed DISC, in 2002.  Then they had their family-owned manufacturing business Summa Holdings pay commissions on its exports which sent $5,182,314 to JC Export from 2002 to 2008. JC Holding had to pay corporate income tax (If JC Export had been owned outright the Roth would have had to pay the tax on unrelated business income).  The after-tax balance ended up in the Roth ready to be invested tax free.  They were not interested in the deferral feature.  The whole point was to fatten up the Roth IRA with some of Summa’s after-tax income.

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Name Drop

Name Drop

Lamar Smith has given me another guest post.  Since it mentions me explicitly I will give some extended commentary at the end....

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Association For Honest Attorneys Has No Attorney Members And No Longer Has Tax-Exempt Status

Association For Honest Attorneys Has No Attorney Members And No Longer Has Tax-Exempt Status

Ironically, Ms. Farr’s approach is similar to what happens with some attorneys when they end up in Tax Court.  Rather than going through the tedious process of documenting transactions as an accountant would, they make arguments about process.  That is what happened with the great F Lee Bailey  Some good accounting and a better audit trail might have been the salvation of AHA.  Rather than an honest lawyer, perhaps AHA could have been saved by a reasonably competent accountant.

I don’t doubt Ms. Farr’s word when she says she will appeal, so I will be on the lookout for the next decision in this saga.

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NWTRCC Wants Tax Day To Be Peace Day

The organization National War Tax Resistance was formed in 1969 as a response to the surge in interest in income and telephone tax resistance, and at its peak had 192 chapters. War tax resisters also sought support from organizations like Peacemakers and War Resisters League. Many resisters gave their taxes to alternative funds that redirected the money to community organizations more deserving of financial support.

During the length of the war, many prominent individuals took up resistance. For example, in 1968, the Writers and Editors War Tax Protest took out ads in three publications, listing writers and editors who pledged to refuse to pay the income tax and/or telephone tax. Signers included Howard Zinn, Allen Ginsberg, Grace Paley, Frances Fox Piven, Adrienne Rich, Helen and Scott Nearing, Kurt Vonnegut, and Philip and Daniel Berrigan.

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Stop Calling It Tax Day

Stop Calling It Tax Day

Tax season and the focus on “the fifteenth” has other pernicious results.  Things that are really important that don’t have an externally imposed deadline attached to them are put off until “after the fifteenth”.  And “after the fifteenth”, there is a tendency to operate at a lower rate of urgency.  And the real nightmare is very complicated returns that slip past the due date through no fault of the firm.  It can end up being almost impossible to get them prioritized since being “already late”, they are of lesser importance than other returns that can be “on time”.

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