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Christopher Bergin

Tax Analysts' President and Publisher

 

All Posts by Christopher Bergin

July 24, 2014 - 12:32 PM EDT
Inversion Diversion
Well, Washington found something to entertain itself with this summer: Corporate inversions, in which a U.S. multinational basically flees the U.S. – although its headquarters and executives rarely leave – to become subject to a foreign jurisdiction to avoid paying what is one of the highest corp... [Read More]
July 17, 2014 - 9:54 AM EDT
Corporate Tax: Is It All About Patriotism and Morality?
Well, it was only a matter of time before the tax and morality debate that has been brewing in Europe invaded the shores of the United States. And there is an unlikely commander helping to establish a beachhead in the attack on U.S. multinationals – then again, maybe not so unlikely. In a blisteri... [Read More]
July 3, 2014 - 9:25 AM EDT
What’s Behind the Brain Drain at the IRS?
Last week it was announced that Michael Danilack, deputy IRS commissioner (international), IRS Large Business and International Division (LB&I), was leaving. This week brought two other resignations from the same division: Samuel Maruca, director of transfer pricing, and Diana Wollman, director of... [Read More]
June 26, 2014 - 10:20 AM EDT
The IRS Has Been Set Up
We've all been witness to the injuries the IRS has inflicted on itself this year. But, as a comment on my previous post points out (hat tip to Michael Karlin), the reality that “both political parties have cynically abused our tax laws to get charitable status for blatantly political organization... [Read More]
June 19, 2014 - 8:39 AM EDT
The Coverup Is Usually Worse Than the Crime
Lois Lerner, the former IRS official who is at the center of the controversy over the agency's abusive treatment of conservative organizations seeking tax-exempt status, returned to center stage this week when it was revealed that two years' worth of e-mails sent to and from her were “lost.” So... [Read More]
June 12, 2014 - 1:08 PM EDT
Taxpayer Bill of Rights or Mission Statement?
The IRS recently issued a taxpayer bill of rights. The press release announcing it states: “Similar to the U.S. Constitution's Bill of Rights, the Taxpayer Bill of Rights contains 10 provisions.” Wait a minute. Stop right there, or, as one of my senior relatives used to say, “Hold the phone.”... [Read More]
May 22, 2014 - 9:40 AM EDT
The Punishment of Credit Suisse Is Not Enough
Earlier this week, the U.S. government announced that Swiss bank Credit Suisse pleaded guilty to criminal charges arising from allegations it helped U.S. clients evade U.S. taxes and that it has agreed to pay $2.6 billion as part of a plea agreement. That sounds like a lot of money, doesn't it? A... [Read More]
May 15, 2014 - 11:00 AM EDT
A Warning About the IRS That We Should Heed
The IRS needs help rediscovering its mission, warned former IRS Commissioner Larry Gibbs after receiving the Distinguished Service Award last weekend at the American Bar Association Section of Taxation meeting. Mr. Gibbs is a man who would know what an IRS in trouble looks like. He became commissio... [Read More]
May 5, 2014 - 12:30 PM EDT
Welcome to the Dark Side – Of Tax
“Use the force, Luke.” We may all need the force soon. Suppose the House Ways and Means Committee asked the IRS for your tax returns and released them to the public without your consent. Everyone in the Empire would know a whole lot more about you than you would want them to know. Impossible, you... [Read More]
April 24, 2014 - 11:36 AM EDT
The IRS and the Tax System: Integrity and Fairness for Whom?
There are many people who no doubt would like to harm the IRS. Some of that comes with the territory –- after all, most taxpayers dislike the tax collector. But right now, the one hurting the IRS the most is the IRS itself. In the latest bonehead maneuver from the IRS, the Treasury Inspector Gener... [Read More]
April 15, 2014 - 9:08 AM EDT
Tax Day – It Just Isn’t Fair
One of my favorite things about tax day is that I get to watch many of my liberal friends turn into fiscal conservatives for a day. That phenomenon seems to be particularly widespread this year. If you are a good liberal, living in the expensive DC Metro area, making a good salaried living, working... [Read More]
April 10, 2014 - 1:08 PM EDT
The Gift That Is Lois Lerner
I was going to write about Caterpillar this week – the tractor maker, not the bug – and the fact that some senators are outraged over the company's ability to minimize taxes by using the rules Congress gave it. But then I got a comment to my last post (thank you, edmund dantes) that I think make... [Read More]
March 27, 2014 - 6:43 AM EDT
Good Grief! Tax Analysts v. Internal Revenue Service
It's spring in Washington, and the other day it snowed three inches; Washington is supposed to be a Southern city, so I'm now questioning global warming. While this spring may be memorable for snow, last spring was memorable in tax circles because the IRS had admitted that it had treated very bad... [Read More]
March 13, 2014 - 1:26 PM EDT
It’s Not Just About Lois Lerner
I have written a lot here about the IRS and the issues surrounding the way it treated certain groups applying for tax-exempt status as social welfare organizations. It's certainly a hot issue – it even made its way into The Economist this week. And wherever you stand on Lois Lerner, I think we ca... [Read More]
March 7, 2014 - 8:45 AM EST
More Arrogance and Secrecy From the IRS
A couple of days ago, the House Oversight and Government Reform Committee tried to hold a hearing on the IRS exemption scandal. I say try because it turned into a circus. Most of the press focused on the unprofessional and immature behavior of the committee's top two members: Chair Darrell E. Issa... [Read More]
February 27, 2014 - 10:49 AM EST
Tax Reform Only a Mother Could Love
House Ways and Means Committee Chair Dave Camp, R-Mich., released his discussion draft of a tax reform bill this week. It starts out with the title, the Tax Reform Act of 2014. Simple enough. The rest of the draft is not so simple. But there is nothing simple about creating new winners and losers i... [Read More]
February 20, 2014 - 1:17 PM EST
Progressivity Does Not Equal Equality
There has been a lot of discussion about “income inequality” lately – clearly because the Obama administration thinks it's a political winner. You can't have a discussion of this topic without quickly getting to tax policy and our tax system. I am a strong supporter of progressive tax systems.... [Read More]
February 14, 2014 - 10:34 AM EST
To Fix the IRS, You Have to Fund It
In my recent observations about the IRS, I have carefully avoided using the C-word – corruption. But something is clearly wrong at this agency. The regulatory side, the Office of Chief Counsel, seems to function in a more or less arbitrary and capricious manner -- in other words, without adult su... [Read More]
February 6, 2014 - 2:18 PM EST
New IRS Commissioner Wants to Move Forward - We Should Let Him
Over the weekend, President Obama said in a nationally televised interview before the Super Bowl that the IRS's mistreatment of the exemption applications of mostly conservative social welfare organizations was the result of “some boneheaded decisions.” The President went on to say that there wa... [Read More]
January 31, 2014 - 9:01 AM EST
The State of Our Union: My, My, My
You might think I'm crazy, but I used to look forward to the State of the Union address, including the ridiculous theater of it all. I've actually attended a few of them. They were great. The best was watching Bill Clinton from the House gallery, where you could see everything. Clinton oozed char... [Read More]
January 23, 2014 - 9:31 AM EST
Fortress Secrecy – No News Here
The latest chapter in Tax Analysts' ongoing efforts to investigate what did and didn't happen in the IRS's self-admitted abuse of power in reviewing the tax-exempt applications of mostly conservative groups was written last week. If you didn't know, that's not surprising, because while it got s... [Read More]
January 16, 2014 - 9:24 AM EST
Starve the Beast and Punish the Taxpayer
Part of the job of the national taxpayer advocate is to be our "voice at the IRS" and to report to Congress annually, identifying problems and recommending solutions. Each year the report lists “the most serious problems encountered by taxpayers.” In the report just recently sent to Congress, fir... [Read More]
January 9, 2014 - 1:29 PM EST
The Tax Code in 2014 – It Still Stinks
Many taxpayers will have to get used to new taxes in 2014 as they complete their income tax returns for 2013. Here are my three favorites (and I am being totally sarcastic): PEP, Pease and the NII tax. Why do I loathe them? Because they're stealth taxes; they are sneaky and cynical and a perfect i... [Read More]
December 19, 2013 - 9:01 AM EST
Transparency Is in Our DNA
Tax Analysts is involved in litigation in the commonwealth of Kentucky to get its Department of Revenue to begin releasing redacted copies of final letter rulings. The agency is resisting that, which is why we are in court. Arguments in that case were heard by a Kentucky circuit court judge this we... [Read More]
December 12, 2013 - 2:47 PM EST
Walk the Talk: The IRS Needs a Chief Who Supports Transparency
According to a Tax Analysts report, the Senate Finance Committee will vote tomorrow, December 13, on the nomination of John Koskinen to be the next IRS commissioner. At his nomination hearings, Koskinen stated that the IRS should be transparent and accountable. Although Koskinen is not a tax profes... [Read More]
December 5, 2013 - 8:37 AM EST
Tax Analysts v. IRS: What Are They Hiding?
Back in August, I wrote about the lawsuit Tax Analysts had filed against the IRS seeking documents under the Freedom of Information Act. The documents being sought were training materials used to instruct and guide IRS personnel in the IRS exempt organization determinations office in Cincinnati. Th... [Read More]
November 21, 2013 - 2:14 PM EST
The End of the Era of Multinationals
A lot of us tax policy types seem to really enjoy discussing the more metaphysical aspects of what we call tax reform. What is it? When is it coming? Has it already arrived? Has the tax reform effort fizzled? Was it ever here? Or – my personal favorite – have we only just started to start a tax r... [Read More]
November 14, 2013 - 11:12 AM EST
The IRS: A Greek Tragedy
National Taxpayer Advocate Nina Olson has said she often feels a little like Cassandra from Greek mythology. According to legend, Cassandra was the daughter of King Priam and Queen Hecuba of Troy. Apollo gave her the gift of prophesy, but when she spurned him, he put a curse on her so that her pred... [Read More]
November 7, 2013 - 9:06 AM EST
ACA + IRS = Perfect Storm
On August 15 I wrote about the lawsuit Tax Analysts had just filed under the Freedom of Information Act against the IRS, seeking all documents used since 2009 to train IRS personnel in the exempt organizations determinations office in Cincinnati. We were trying to get to the bottom of what the agen... [Read More]
October 31, 2013 - 8:57 AM EDT
What’s a UDITPA?
Tax lawyers, I think, sometimes get a bad rap. We're weird. We have no sense of humor. How can someone who works with taxes know how to have fun? But we do know how – at least most of us do. This week I had the pleasure of attending the Paul J. Hartman State and Local Tax Forum in Nashville, Tenn... [Read More]
October 24, 2013 - 10:21 AM EDT
Loving You Is Easy (Is It?)
Interesting headline. What am I referring to? No, not the 70s hit by Maya Rudolph's mother, Minnie Riperton, but Loving v. IRS in which the U.S. District Court for the District of Columbia held that the IRS didn't have the authority to regulate the conduct of unregulated commercial tax return prep... [Read More]
October 17, 2013 - 9:09 AM EDT
Our Legislators: No Laughing Matter
Now that the government shutdown is finally over (for now), I have a couple of things stuck in my craw. One is the Tea Party, which is licking its wounds (many of them self-inflicted) and trying hard to win a PR war. But picking on the Tea Party just isn't contrarian enough for me right now. They... [Read More]
October 10, 2013 - 9:02 AM EDT
The IRS Is Shut Down – And We Will All Pay
Few people on the planet know, much less care, that the IRS issued no letter rulings last week. For good or ill, I'm one of them. Most Americans have not been affected by the IRS shutdown. But more and more are going to start feeling the pain, especially the longer this political, childish behavio... [Read More]
October 3, 2013 - 8:05 AM EDT
'Your Voice at the IRS' Silenced
Heads up: Here is something that so far has received scant coverage in the ongoing debacle that is the partial government shutdown -- our rights as taxpayers have taken a serious hit. The entire Taxpayer Advocate Service (TAS) has been closed and all of its employees sent home. That includes Nina O... [Read More]
September 26, 2013 - 12:44 PM EDT
We Need a Tax Professional to Run the IRS
Lois Lerner, who headed the IRS division responsible for tax-exempt organizations, and who calculatedly announced at the May ABA Tax Section meeting that the IRS had used inappropriate means to examine exemption applications of conservative groups, and who was at the center of the latest IRS scanda... [Read More]
September 19, 2013 - 8:55 AM EDT
Mind the Gap, and Fund the IRS
The Treasury Inspector General for Tax Administration's office earlier this week issued a lengthy report on the tax gap. The tax gap is defined as the difference between true tax liability in any year and the amount of taxes that are paid voluntarily and on time. Of course, “voluntarily” is a bi... [Read More]
September 12, 2013 - 9:05 AM EDT
Tax Avoidance Just Isn’t What It Used To Be
I was taught that there is a difference between tax evasion and tax avoidance. Tax evasion is breaking the law, and is illegal. Tax avoidance is minimizing your taxes through legitimate means. Tax avoidance is legal. But some people are starting to argue: that no, it's not. When it comes to tax av... [Read More]
September 5, 2013 - 9:58 AM EDT
The Story of Tax Analysts
Tax Analysts has been in the press a lot lately – that tends to happen when you take the Internal Revenue Service to court. And that has reminded me that not everyone knows exactly who we are. Fortunately, I now have a simple way to tell our story that I can share with you right here. The story of... [Read More]
August 29, 2013 - 9:02 AM EDT
What We Need Is a Godless Tax Code!
Long ago, a famous tax professor said, "Basic tax, as everyone knows, is the only genuinely funny subject in law school." I've always agreed with that observation. To wit. The other day, the Washington Post reported that Annie Laurie Gaylor, an atheist and the leader of a group called the Freedom... [Read More]
August 22, 2013 - 9:38 AM EDT
It's a Cover-Up!
On Tuesday night, I was channel surfing, looking for something entertaining on TV. I stopped on the Greta Van Susteren show because she was talking about the "IRS scandal" with Karl Rove -- something I'm interested in -- and then I heard her say "A nonprofit news organization called Tax Analysts ar... [Read More]
August 15, 2013 - 8:06 PM EDT
Tax Analysts v. Internal Revenue Service
About a week ago I wrote a post, which noted that although Tax Analysts has been involved in various litigation with the IRS for more than 40 years, we were not founded to sue the IRS. Well, we just sued the IRS. Hypocritical? Not at all. As I stated in that post, Tax Analysts has always worked h... [Read More]
August 15, 2013 - 9:29 AM EDT
15 Years of IRS Reform
In 1998, the Internal Revenue Service Restructuring and Reform Act became law. It was a game changer for the nation's tax collector. There are those who view that law as a positive change. I am not in that camp, at least not totally. There certainly were well-motivated people involved in the IRS r... [Read More]
August 8, 2013 - 10:33 AM EDT
Transparency: Worth Fighting For
"We sue the IRS!" For those of us at Tax Analysts that's a tempting answer to give at, say, a cocktail party after being asked, “Where do you work?” followed by “And what does a Tax Analysts do?” Great way to answer the question, right? One problem, the answer is wrong. Tax Analysts was not fo... [Read More]
August 1, 2013 - 9:06 AM EDT
Obama's Corporate Proposal -- Once Again, Tax Politics not Tax Policy
Last week, I posted about a lunch I had been to at which the nation's two top taxwriters – Senate Finance Committee Chair Max Baucus and House Ways and Means Committee Chair Dave Camp – spoke about their efforts to get tax reform legislation. Two points from that post were that I found them dedi... [Read More]
July 26, 2013 - 2:40 PM EDT
Our Secretive Senate
Senate Finance Committee Chair Max Baucus, a Democrat from Montana, wants to reform our tax system, and he wants it badly. His Senate career will end next year, and he seems desperate to write his legacy as a reformer. His dedication is admirable, but desperation can lead to mistakes. Back in June,... [Read More]
July 25, 2013 - 9:14 AM EDT
Baucus and Camp: Tax Reformers or Dedicated Dreamers?
Last week, I attended a lunch sponsored by The Economic Club of Washington D.C. that featured a conversation with the two top taxwriters in Congress. Max Baucus is the Chairman of the Senate Finance Committee and a Democrat; Dave Camp is the Chairman of the House Ways and Means Committee and a Repu... [Read More]
July 18, 2013 - 8:46 AM EDT
IRS: Victim, Football, Both?
Maybe it's just me, but I find it interesting (not necessarily ironic), that lawmakers give the IRS the job of determining whether certain organizations applying for tax exemption are too political, and now lawmakers from both parties are politicizing the IRS for it. Unfortunately, as I have been... [Read More]
July 11, 2013 - 9:15 AM EDT
Jaws
Tell me if you've heard this one. A House Republican went boating over the long holiday weekend and tragically fell off his yacht into a group of hungry, man-eating sharks. Don't worry. He came out without a scratch: professional courtesy (insert rimshot). Yesterday, the House Oversight and Gover... [Read More]
July 4, 2013 - 10:41 AM EDT
Gratitude on the Fourth of July
My regular day for posting is Thursday, and this Thursday is the Fourth of July. In 2009 I wrote someting that, at least to me, is as relevant to the holiday now as it was then. I'm reposting it here with a few tweaks. Happy Fourth of July, everyone. The Fourth of July is my favorite holiday -- has... [Read More]
June 27, 2013 - 9:21 AM EDT
Get to the Bottom of It
Is it me, or does it seem that almost every day brings yet another "scandal" about the IRS? This morning, as reported by Tax Notes Today, “The IRS is taking steps to end its relationship with information technology contractor Strong Castle Inc. after accusations that the company's owner maintaine... [Read More]
June 20, 2013 - 8:07 AM EDT
Another Bad Day for the IRS
The IRS has a “bunker mentality.” If you deal with it on somewhat of a regular basis, that can be infuriating. But it is also somewhat understandable. The IRS is an organization with a target on its back. And rarely has that target been larger than it is now. Just take yesterday. There was a larg... [Read More]
June 6, 2013 - 9:39 AM EDT
The IRS: It's Bad Enough
When is it not silly season in Washington. D.C.? Congress is apparently having a ball with the latest misery of the IRS. Some Republicans are saying that the scandal goes straight to the White House. Where's the proof? Some Democrats are insinuating that taxpayers who use dangerous words like “pa... [Read More]
May 30, 2013 - 8:47 AM EDT
Ireland Is Not a Tax Haven, Dammit
It's an interesting time to be in Dublin. The Irish are nervous; you can feel it in their media. And they are especially nervous after the U.S. Senate's permanent investigations subcommittee hearing last week at which apparently the terms “Ireland” and “tax haven” were used in proximity about... [Read More]
May 23, 2013 - 9:57 AM EDT
The IRS Is Broken, But That's the Symptom
Tired of the endless coverage of the IRS's handling of tax exemption applications of certain conservative groups? Fatigued by President Obama's outrage over something that, at least in part, has demonstrated that he needs to take a course in how to be an effective chief executive (although, to gi... [Read More]
May 16, 2013 - 9:10 AM EDT
Scandal, Scandal, Scandal
To paraphrase John Wayne in McClintock: Now, let's all calm down. In Washington, they throw the word scandal around with such abandon it's hard to know at any given time what it means. (According to dictionary.com it is a disgraceful or discreditable action) . Well, look on the bright side; in the... [Read More]
May 9, 2013 - 8:22 AM EDT
No Use for Useless Stances
Do you know what a use tax is? Most people don't. Ever paid a use tax? Most people haven't, in part because they don't know what it is. Typically, states impose use taxes when they can't force a seller to collect sales taxes and then, typically, never collect the use tax. This week the Senate p... [Read More]
May 2, 2013 - 9:21 AM EDT
Taxes Don’t Matter Until, Well, They Matter
I was born in New York. There are a lot of myths about New York that are not completely accurate. For example, we don't all speak like gangsters. New Yorkers don't all live in a big city because that's all New York is. New York is actually a beautiful state with wonderful mountains, majestic riv... [Read More]
April 25, 2013 - 9:04 AM EDT
Dilemma – The Earned Income Tax Credit
Earlier this week, Max Baucus, the Chair of the Senate Finance Committee, announced that he will not run for reelection in 2014. Baucus is currently working on tax reform with House Ways and Means Committee Chair Dave Camp. Immediately, some began to assert that Baucus' announcement meant the end... [Read More]
April 18, 2013 - 8:52 AM EDT
It Just Isn't Fair
The Government Accountability Office recently released a report on how much government revenue is left on the table because of "special tax provisions that are exceptions to the normal structure of the corporate income tax system." These "special provisions" include exemptions, exclusions, deductio... [Read More]
April 11, 2013 - 6:44 AM EDT
Why Transparency Is Like Porn
Earlier this week the Wall Street Journal ran an editorial by Senate Finance Committee Chair Max Baucus and House Ways and Means Chair Dave Camp titled, “Tax Reform Is Very Much Alive and Doable.” Of course, the-sometimes-Washington-cynic in me immediately reacted: No it's not. But in fairness t... [Read More]
April 4, 2013 - 9:10 AM EDT
'Commissioner-Less'
The Internal Revenue Service is currently without a Commissioner. Douglas Shulman, the 47th IRS Commissioner stepped down last November. And from what I'm starting to hear, the IRS may not have a new Commissioner for as long as close to two years. That is not a good thing. The IRS is not leaderles... [Read More]
March 28, 2013 - 8:13 AM EDT
‘Legal Enemies of the State’!
How does that old Wall Street saying go? Bulls make money; Bears make money; Pigs get slaughtered. Bulls in this context are easily defined, and so are Bears. Money can be measured. But it seems to me that piggy behavior is in the eyes of the beholder. InTax Notes this week I wrote about abusive tr... [Read More]
March 21, 2013 - 8:49 AM EDT
Ode to the VAT Bastard
Do you remember the VAT Bastard? I know I do. He was a champion of the value added consumption tax (VAT). He still pops up in comments now and again but not too often. He was like an awesomely nerdy superhero. I miss him. Especially now, because I'm in the process of putting together my own tax re... [Read More]
March 14, 2013 - 9:01 AM EDT
Polish Up Your Guccis
Tax reform is all the buzz in Washington these days. The head of the taxwriting House Ways and Means Committee talks about it and is developing a plan. The head of the Senate Finance Committee talks about it. The President talks about it. And if you need further evidence, the front-page of last Sun... [Read More]
March 7, 2013 - 8:51 AM EST
The Legend of Rusty Pipes
I read recently that Ernst & Young agreed to pay the government $123 million and admit wrongful conduct by partners and employees who helped some 200 clients use tax shelters to defer, reduce or eliminate more than $2 billion in tax liabilities. E&Y is the latest, but not the only, firm involved in... [Read More]
February 28, 2013 - 10:18 AM EST
The True Meaning of Sequestration
Tomorrow the world will end. And it's not a Mayan thing this time. It's like Y2K all over again (remember that joke?). What is it? It's the sequester. What is the sequester anyway? Well, it's about spending cuts. That's what I hear on the radio. They say those spending cuts will starve childre... [Read More]
February 21, 2013 - 7:17 AM EST
Leaving the IRS: A True Tax Pro
Of all government agencies, the IRS is the most misunderstood. It perhaps makes sense, especially this time of year, for many of us taxpayers to loathe the nation's tax collector. After all, such is the lot of the tax collector since Biblical times. It makes less sense to me how misunderstood it i... [Read More]
February 14, 2013 - 9:01 AM EST
Madness Time
Those of you who are not sports fans, please don't take offense at the headline – it's not a sports reference (the college basketball championships that will take place next month are sometimes referred to as “March Madness”). This is a tax blog. It's tax filing season. And for most of you, t... [Read More]
February 7, 2013 - 9:20 AM EST
More Than an Obstacle to Tax Reform
A lot of people in Washington are nervous about the next fiscal cliff – so-called sequestration. Sequestration is slang for fiscal Russian Roulette. The point of this dangerous game is to force our politicians to face up to the country's fiscal problems. Our politicians designed this game because... [Read More]
January 31, 2013 - 9:11 AM EST
Guns and Tax Returns
So, why do I think guns are like tax returns? I will get to that in a minute. Earlier this month, a district court judge for the District of Columbia basically shut down the IRS's registered tax return preparer program. The purpose of the program was to better regulate hundreds of thousands of peop... [Read More]
January 24, 2013 - 8:26 AM EST
Wipe-Out – What Surfing and Our Tax System Have in Common
As previewed here Tax Analysts and Pepperdine School of Law held a symposium on federal income taxes in California last week – because sometimes you need to have a discussion of taxes as far away from Washington as you can get. (And I promise to stop it with the West Coast surfer metaphors, but I... [Read More]
January 17, 2013 - 8:51 AM EST
Everybody's Gone Surfing
Tomorrow, January 18, Tax Analysts is cosponsoring a one-day tax symposium in Malibu, California with Pepperdine University School of Law that will feature several speakers – and bloggers – from this site. (Rumors abound that my colleague David Brunori is trying to figure out how to pack his surf... [Read More]
January 10, 2013 - 10:59 AM EST
Permanent Insanity
Things have been positively dizzy in Washington since the New Year – dizzy from all the spinning coming from Democrats and Republicans on how they saved us from the fiscal cliff. My personal favorite: we now have a permanent tax code. Even the great, gray lady that is The New York Times declared... [Read More]
January 1, 2013 - 8:35 AM EST
Job Opening: Failure All But Guaranteed
There is currently an opening at the IRS. But it’s not the type of job you will see posted in the newspaper. The job is for IRS Commissioner, and it will be filled by the President of the United States. It is not all that unusual for the IRS to be run for a period of time by an acting commissioner... [Read More]
December 21, 2012 - 3:28 PM EST
Tin Ear Tinhorns
Merry Christmas from Washington, D.C. Here’s your bag of coal. It’s chilly here in Washington. We don’t care how it is where you are. We don’t care about your 401k plan. We don’t care about whether you have to pay the alternative minimum tax for this year. We don’t care if you don’t get your... [Read More]
December 20, 2012 - 8:44 AM EST
Fiscal Surrender
As part of the discussion about the budget time bomb that Congress tied around itself, and the rest of us, is a debate on what to call it. Is it a fiscal cliff or more like a fiscal slope (and a slippery one at that)? Maybe it’s gone to another stage: a fiscal surrender. There’s an interesting ar... [Read More]
December 13, 2012 - 8:37 AM EST
More Cliffs
Everyone is talking about the "fiscal cliff." Then there is the more obscure and equally dangerous IRS cliff that just about no one is talking about – but I did. There are, however, lots of other cliffs. Where are they? They're in the states. The states are living in interesting times. The proverb... [Read More]
December 7, 2012 - 1:33 PM EST
'Small Ball' -- Obsessing about the Rich
One of the many jobs I’ve had was as a caddy when I was a kid. For those not familiar with the term, a caddy hauls one or two bags of sticks and balls around an 18-hole golf course for "rich people." I found it to be quite a lucrative position, relative to my stage of life then. "Rich" is also a r... [Read More]
December 6, 2012 - 9:46 AM EST
Fool’s Gold and Loopholes
The definition of tax reform has taken a beating the last several months as both sides use it to keep the debate about our fiscal disaster as small as possible. But true tax reform is not a small issue, and the fiscal cliff is not just about taxes; it's about $16 trillion of debt we can't repay an... [Read More]
November 29, 2012 - 9:17 AM EST
The Other Cliff; Hint: It’s in Your Tax Return
The IRS is an interesting organization to observe. For one thing, it mostly tries to fly under the radar. I think this is caused by several factors. Among them, the IRS is a professional operation that goes about its business and is very good at doing what it is assigned to do with little or no pub... [Read More]
November 9, 2012 - 2:13 PM EST
Beware the 'Frankentax'!
I have some unsolicited advice for our Washington politicians, all of them currently in the "lame duck world." (Unsolicited, yes, but it has the benefit of being free.) If the fiscal cliff, which, by the way, you created, is confusing you, think of just three little words: alternative minimum tax.... [Read More]
October 11, 2012 - 2:50 PM EDT
Taxes and the Poor
Tomorrow, Friday, October 12, Tax Analysts will hold a roundtable discussion in Washington, D.C. on “Taxes and the Poor – What the Poor Pay, What They Should Pay, and Why.” This was a huge issue even before Mitt Romney’s 47 percent comment, which provided great PR for our conference. And, of co... [Read More]
October 4, 2012 - 2:37 PM EDT
Shovel Ready
There is no doubt that tax policy is an important issue facing our nation. The debate last night only reinforced that. Tax policy – or the lack thereof – dominated the first almost thirty minutes of the event. Our tax system is a mess. And we need serious solutions. Last night these two guys just... [Read More]
September 18, 2012 - 4:57 PM EDT
Romney Steps in Taxes, Again
I was asked in a radio interview this morning what I thought the chances were for reforming our federal tax system any time soon. The context was a Mother Jones article that included video of Republican presidential candidate Mitt Romney telling a bunch of rich donors that 47% of all voters will vo... [Read More]
September 12, 2012 - 7:46 PM EDT
Fiscal Myth
Just when I think that our politicians can’t act any more irresponsibly, they up the ante. And this one is a doozie. Republican House Speaker John Boehner said Tuesday that he is “not confident at all” that a deal can be reached to deal with the so-called fiscal cliff – a congressionally concoc... [Read More]
September 10, 2012 - 6:13 AM EDT
Where’s the Tax Plan, Man – Uh, Men?
Watching Mitt Romney on yesterday's “Meet the Depressed” depressed me. In a taped interview, host David Gregory repeatedly asked Romney for details of his tax plan. He ended up practically begging for just one detail – any morsel, please. He got zip, zilch, nothing. I don’t care that much about... [Read More]
August 24, 2012 - 9:39 AM EDT
Taxing With the Stars
Well, we are in the “dog days of summer,” hanging out at the beach if we are lucky or watching reruns on TV if we are mostly brain-dead. Yes, those lazy days. Not to worry – tax is always entertaining. So, what do Flavor Flav, Rihanna, Lauryn Hill, Nicolas Cage, Richard Hatch, and Wesley Snipes... [Read More]
August 3, 2012 - 8:16 PM EDT
What Kind of a Meanie Taxes Olympic Medals?
Did you see the young lady (actually she’s 16 and her name is Gabby Douglas) who won Olympic gold in the all-around of gymnastics for herself and for her country? Did you know she has to pay taxes on that medal and the honorarium that goes with it? What kind of a system would tax such an adorable... [Read More]
August 1, 2012 - 8:33 PM EDT
Why Am I Paying for a Prancing Horse?
Have you been watching the Olympics? I like the swimming and basketball best so far. But I must admit that I've been watching with fascination the U.S. ladies gymnastics team, which won gold. I realize they are now America's sweethearts, but did you catch the looks they shoot competitors and teamma... [Read More]
July 26, 2012 - 12:19 PM EDT
Lazy Days of Summer - the News from Washington
I was struck this morning reading Tax Notes Today – that fantastic publication that covers all things tax better than anyone (if I do say so myself). Here we are getting ready to enter into August, and what are our politicians up to? They’re not getting any actual work done. No, they’re playing... [Read More]
July 12, 2012 - 10:12 AM EDT
Taxing the Rich, and Missing the Point
The hot tax news this week is that President Obama proposed extending the so-called Bush tax cuts but only for the middle class, not for the people the President thinks are rich. (If he gets what he wants can we start calling them the Obama tax cuts?) Apparently, the President thinks that families... [Read More]
June 28, 2012 - 5:34 PM EDT
Well, It’s a Tax
Well, at least we’ve settled that: the Supreme Court upheld the constitutionality of the Affordable Care Act’s individual mandate that is enforced through Congress’ power to tax. The mandate is a tax. There was some disagreement on that. Now, whether you support health care reform or not, the Co... [Read More]
June 27, 2012 - 1:51 PM EDT
Tax Bull
We already know that a hallmark of the Presidential contest will involve several truck loads of bull("ony") about taxes and tax policy. My current favorite (and this is subject to change from either side) goes like this: “Half the country doesn’t pay taxes!” Bull. Close to half of us pay no INCO... [Read More]
June 11, 2012 - 6:41 AM EDT
What Did Clinton Say That Was So Wrong?
I’m confused why Bill Clinton had to apologize last week for his comments on taxing the rich. What did he say that was so wrong? In what I heard him say he wasn’t questioning if we should increase income taxes on the rich but when we should increase income taxes on the rich. Given the economy and... [Read More]
June 1, 2012 - 9:32 AM EDT
Who Wants To Be a Millionaire?
It's part of "taxmageddon," or the perfect storm, or driving off the cliff, or whatever the metaphor of the week is: it's the expiration of the so-called Bush tax cuts scheduled for the end of the year. Oh, the uncertainty. Oh, the inhumanity. What's a nation to do? Where is the leader we need to s... [Read More]
May 10, 2012 - 9:06 AM EDT
Flabbergasted by Obama on Tax Reform
Yesterday in Tax Notes Today I read a report about a Senate hearing to consider the Obama Administration’s nominee for the top tax policy position at the U.S. Treasury Department. His name is Mark Mazur, currently Treasury deputy assistant secretary for tax analysis. Mazur told the committee that... [Read More]
May 8, 2012 - 10:29 AM EDT
There's Fair, And Then There's Fair
Now, I'm a huge supporter of progressive income tax systems, and the thought of some "wealth redistribution" doesn’t scare me a bit. What is starting to scare me, however, is President Obama's campaign rhetoric about an "even playing field" and people paying their "fair share." I’m starting to wo... [Read More]
April 30, 2012 - 1:27 PM EDT
Apple Sidesteps Taxes – What’s Wrong With That?
A front-page article in Sunday’s New York Times (“How Apple Sidesteps Billions in Taxes”) is getting quite the buzz. A couple of things about the article. While the Times piece recognizes that there is nothing illegal about the techniques that Apple uses to minimize its taxes, it insinuates, I t... [Read More]
April 17, 2012 - 12:16 PM EDT
Happy Tax Day! Do You Know Your Rights?
As we “celebrate” Tax Day on April 17 this year, here is an astonishing point. Most of us think we have no rights before the IRS. According to a nationwide survey of taxpayers conducted by the Taxpayer Advocate Service, a branch of the IRS, only 9% of respondents said they believed they had any r... [Read More]
April 13, 2012 - 12:12 PM EDT
It’s Not the 'Buffett Rule'; It’s the 'Oz Gambit'
The concept of fairness, within or outside a tax system, is a tricky thing – and often a very subjective one as well. What's fair to one person may seem totally unfair to someone else. And whatever "fair share" means, it can't be defined in a sound bite. Tax rates are also tricky things. In our in... [Read More]
March 29, 2012 - 10:11 AM EDT
A Time Bomb of a Tax Code
There’s a lot of serious news out there – tragedy, health care, a nuclear Iran. It seems the news of the day roars at us. But if you turn down the sound, you can hear it: tick, tick, tick. What is it, you say? It’s the federal tax system, and it’s set to explode. And if it does, there will be d... [Read More]
March 26, 2012 - 11:36 AM EDT
IRS, Inc.
Well, we are deep into the tax season. Have you tried to call the IRS for a little help? If so, you probably have a little less hair now – from pulling it! The IRS is unlike any other government agency, both in what it does and how it is funded. And both of those depend on a fickle Congress. For s... [Read More]
March 21, 2012 - 10:23 AM EDT
Choking Off “Your Voice at the IRS”
Have you ever heard of the national Taxpayer Advocate Service? You should know about it, especially if you are having trouble with the IRS, your friendly federal tax collector. According to the IRS web site, “The Taxpayer Advocate Service is an independent organization within the IRS whose employe... [Read More]
March 7, 2012 - 2:42 PM EST
You Can't Get There from Here
The Economic View in Sunday’s New York Times by Harvard economics professor N. Gregory Mankiw (Capital Gains, Ordinary Income and Shades of Gray) defending special tax rates for carried interest brought to mind the old joke about a tourist asking a Maine farmer for directions to Augusta. The farm... [Read More]
February 26, 2012 - 1:08 PM EST
Another Story of the Grasshopper and the Ant
In the category of You-Can’t-Make-This-Stuff-Up, the German government has “offered” to send 160 "financial experts" to Greece to help collect taxes. According to the German news website “The Local,” the German tax collectors “are ready to jump in to help the ailing country.” Hmm, that unfor... [Read More]
February 16, 2012 - 5:34 PM EST
How I Learned to Stop Worrying and Love the Payroll Tax Cut
I pretty much have always blamed our politicians for the dysfunctional, unreliable and incomprehensible tax system that we have. But maybe we just get the politicians we deserve. Our politicians in Washington have agreed to extend the so-called payroll tax cut. So, now they are running around getti... [Read More]
February 6, 2012 - 1:52 PM EST
Reagan Is Not the Answer
I know everybody – at least most Republicans running for President – wants to be Ronald Reagan. But guess what? It isn’t the 80s. A piece in yesterday's New York Times, entitled “Sunday Dialogue: Time for Tax Reform?” posed the following question: should capital gains and dividends be treated... [Read More]
February 3, 2012 - 11:15 AM EST
Does God Hate Carried Interest?
President Obama is getting grief about comments he made at the National Prayer Breakfast earlier this week that his call for tax increases on the rich “coincides with Jesus’s teaching.” Well, at the risk of getting pummeled myself, I understand where he’s coming from. I have stated many times t... [Read More]
January 31, 2012 - 11:28 AM EST
The Canary in the Coal Mine
Some might think it strange to compare the U.S. tax code to a canary. Vulture, maybe, but canary? Still, last week we had a couple of teaching moments that really should not be ignored. First came Mitt Romney’s 2010 tax return and a preview of his 2011 tax picture. A growing number of Americans th... [Read More]
January 24, 2012 - 5:09 PM EST
Romney’s Returns: Wrong Point
OK, at the risk of dating myself, here’s my Gomer Pyle imitation. Mitt Romney has released his 2010 tax return and sur-prise, sur-prise, sur-prise! He’s a rich guy. Guess how he got rich? Sur-prise, sur-prise, sur-prise! Through investments. And because he makes most of his money through investme... [Read More]
January 19, 2012 - 10:26 AM EST
Small Business – Another Third Rail
Small business; it’s as American as mom and apple pie, and just as sacred. It’s the American dream for many to start a business in a basement or garage and become a millionaire – a real one and not the White House version that discounts the definition of “millionaire” by about 800,000 big ones... [Read More]
January 9, 2012 - 10:00 AM EST
Half a League, Half a League Onward, IRS
OK, it may be a stretch of a metaphor to compare the IRS to the Light Brigade, but I’m starting to worry the IRS is doomed. Late last week, the IRS issued a new estimate of the tax gap based on the 2006 tax year. The tax gap is the amount of tax liability owed by taxpayers that is not paid on time... [Read More]
January 3, 2012 - 12:01 PM EST
Bowl Season
Like many, I took some time to enjoy – in my case, try to ignore – the holidays. But the nuttiness didn’t stop in the tax community. Here are my top five stupid tax things from the last couple of weeks. 1. While we were partying, our fearless leaders enacted a two-month extension of the so-calle... [Read More]
December 15, 2011 - 12:23 PM EST
The Payroll Tax Deal Will Get Done
When two snowflakes meet over the skies of Washington, there is absolute chaos. People jam the roads in an attempt to buy up all the bread and milk they can get – which is interesting because many Washingtonians drive hulking SUVs that they don’t know how to drive, but that make them feel invinci... [Read More]
December 8, 2011 - 2:33 PM EST
What's Fair? A Dangerous Game
The other day in a speech President Obama said that some “billionaires” pay an effective income tax rate of 1%. Sounds terrible, doesn’t it? Those bad billionaires. I’m on record as saying that considering the tax laws, it is not implausible that the President is correct. A simple statement, bu... [Read More]
December 1, 2011 - 10:36 AM EST
GE and the 57,000 Page Tax Return
Is it a new horror film? Not exactly. In a November 28 letter to IRS Commissioner Douglas Shulman, Congressman Frank Wolf, a Republican from Virginia, wants to know how many hours IRS employees spent reviewing General Electric’s massive 2010 tax return and what it cost the taxpayers. Wolf says tha... [Read More]
November 30, 2011 - 11:16 AM EST
Tax Reform? Just Don’t See It
So let me see if I have this right. If you allow the so-called Bush tax cuts to expire, which they were designed to do, it’s a huge tax increase (the GOP). If you allow the temporary cut in payroll taxes to be temporary, it’s a huge tax increase (President Obama). And this stuff works, depending... [Read More]
November 3, 2011 - 11:13 AM EDT
I Thought the ‘Dodgers’ Were a Baseball Team?
There's a report that's getting a lot of attention this morning that concludes that many large U.S. corporations paid little or no corporate income taxes between 2008 and 2010 even though they raked in millions of dollars. The report, prepared by the interest group Citizens for Tax Justice and the... [Read More]
October 14, 2011 - 11:23 AM EDT
That Shining Guillotine on the Hill
Obviously lobbyists in Washington live in a bubble. I say that because if I were a lobbyist in Washington working for, say, Google or Pfizer I would be reminding my client about the French Revolution, rather than running around the Capitol frantically trying to get lawmakers to declare a repatriati... [Read More]
October 5, 2011 - 2:54 PM EDT
Another Disgraceful Chapter in Tax History
A recent report by the conservative Heritage Foundation together with a recent report by the liberal Institute for Policy Studies might be too late to save us from being played for fools again, otherwise known as the "repatriation holiday." This holiday (it's not a holiday for you or me) is at the... [Read More]
September 19, 2011 - 12:10 PM EDT
Obama Gets the Millionaires' Tax Right
I’ve never thought President Obama cared that much about reforming the nation’s tax system. After listening to his speech this morning, I still think that. As President, he’s certainly entitled to his priorities, number one of which was health care. And I get that the President wants to increase... [Read More]
September 12, 2011 - 4:53 PM EDT
President Obama's Tax Plan: 'No Games, No Politics, No Delays' -- No Chance
In introducing his jobs bill today, President Obama said there should be "no games, no politics, no delays." Really. Let's look at a couple of the tax oldies but goodies that President Obama apparently will trot out to help pay for his jobs bill: a cap on itemized deductions for “millionaires” an... [Read More]
August 14, 2011 - 8:47 PM EDT
Storm the Corporate Bastille!
Steve Pearlstein, who I have a tremendous amount of respect for, wrote a scathing column over the weekend for the Washington Post. If I understood his point, we are in our current economic mess in large part because of corporations and their lobbying. He writes: You helped create the monsters that... [Read More]
August 12, 2011 - 11:41 AM EDT
I Was Looking for Hope (Again?); And Then They Talked Taxes
Let me first state that in watching the debate last night in Iowa with eight current GOP presidential candidates I wasn’t depressed. And that made me the only person in my family room who could say that. I guess I remain mainly an optimist when it comes to this country. Although I think in the las... [Read More]
August 8, 2011 - 7:20 PM EDT
Latest from the Bergin Rating Agency
I spent part of the weekend listening to talking heads about the debt situation. Once again, tax policy is a large part of the problem. And we are at a stunningly stupid point in the country’s history when it comes to tax policy. Democrats want to raise taxes on the rich. Why? Because the rich are... [Read More]
July 27, 2011 - 4:38 PM EDT
The Income Tax is Doomed
While our politicians play Russian roulette with our lives – because both sides care more about gaining the White House in 2012 than fixing the debt – there’s still talk in Washington of reforming the income tax system. Bloomberg reported this morning that House Ways and Means Committee Chair Da... [Read More]
July 15, 2011 - 2:12 PM EDT
For Obama, It's All About Taxes
Just before noon, I listened to President Obama's latest press conference on the debt crisis that is barreling its way toward us. In fact, I've been paying as much attention as I can to the debt-limit debate. I have been deliberate in reaching conclusions. And I have now reached one. The President... [Read More]
July 8, 2011 - 3:23 PM EDT
The Multinationals are Coming! The Multinationals are Coming!
Make no mistake about it, the jobs numbers reported this morning were not bad, they were terrible; they were horrific. I waited to watch President Obama address the numbers. For me, when he finally did, he said nothing new and stuck to his usual talking points, proving, I suppose, that the administ... [Read More]
July 4, 2011 - 12:15 PM EDT
Gratitude
I first posted this in 2009. It remains relevant today. Happy Fourth of July! The Fourth of July is my favorite holiday -- has been for a long, long time. That's quite a statement, especially considering that when I was a kid, my birthday was a national holiday. I mean, we got off from school and e... [Read More]
June 29, 2011 - 10:25 AM EDT
The Unfair Tax Treatment of Same-Sex Couples
Recently, eight U.S. Senators wrote a letter to the IRS urging the agency to address problems encountered by same-sex couples when they try to prepare and file their federal income tax returns. Several states have established domestic partnerships or civil unions for same-sex couples, while other... [Read More]
June 15, 2011 - 7:41 PM EDT
It's Time to Lose Grover
Why does Grover Norquist, president of Americans for Tax Reform, get to direct tax policy in this country? Norquist has convinced 41 of 47 sitting Republican U.S. Senators to sign a no-tax-increase-pledge. That’s a pledge to never increase taxes. Ever. And that’s just plain crazy. More than that,... [Read More]
June 9, 2011 - 11:20 AM EDT
A Leaking Bucket of a Tax System
Let’s take two pieces of news from this morning’s Tax Notes Today and put them together – just for fun. The Treasury Inspector General for Tax Administration has reported that the tax system lost millions of dollars because the IRS could not effectively enforce a special deduction our brilliant... [Read More]
May 31, 2011 - 11:43 AM EDT
Who's to Blame for the Deficit? The Poor!
That pesky deficit is becoming a real bother. If the government could only get some more money, we could fix it. Last week Congress held a hearing on one way to get more money. Go after a tax credit program designed to help the working poor. Now that’s the ticket! As reported by Tax Notes Today, I... [Read More]
May 24, 2011 - 11:09 AM EDT
Blocking Block
The Justice Department is suing H&R Block, the well-known tax preparation company, to stop it from buying another tax preparation software company, TaxAct. The Justice Department believes that the reason Block wants to buy TaxAct is to eliminate a competitor. No! I can’t believe it. You think that... [Read More]
May 16, 2011 - 1:15 PM EDT
What’s Wrong with the Tax Code? Those That Wrote It!
In Washington around Mothers' Day there was a meeting of tax lawyers. Think of it, probably more than 500 tax lawyers in one place. Oh, the jokes you can get out of that picture. (And the jokes would be on me, too, because in the interest of full disclosure: I was there.) At one of the panel sessio... [Read More]
May 12, 2011 - 5:16 PM EDT
Another One for the ‘Gee, That Was Stupid File’
Play along with me here. Say you are the head of one of the five big multinational oil companies. You’re about to be hauled into a Senate Finance Committee hearing and treated like you’re the head of one of “the five families.” Several Democratic Senators want to rake you and your four friends... [Read More]
May 11, 2011 - 12:02 PM EDT
The VAT Is No Silver Bullet
I know the VAT Bastard. Yes, the VAT Bastard is a real person; in fact, the VAT Bastard is a friend of mine. And before you ask, the identity of the VAT Bastard is safe with me. The VAT Bastard has told me that if I can be convinced that a VAT for the United States is a good idea, then anybody can.... [Read More]
April 29, 2011 - 10:25 AM EDT
Pigs Get Slaughtered, And They Deserve It!
Now before the animal rights folks get up in arms, I’m talking about oil companies, not swine (then again, maybe I’m talking about the same thing). One lesson of history is that sooner or later the greedy get theirs. This is a lesson harshly learned. The trick, I guess, is to get as much as you c... [Read More]
April 22, 2011 - 11:08 AM EDT
Gaining the Support of Paul
George Bernard Shaw famously said, “A government which robs Peter to pay Paul can depend on the support of Paul.” I suppose the reverse is true as well. Republicans say that the President’s recent town meetings tour is about gaining the support of Paul. In other words, tax the rich; Paul needs h... [Read More]
April 18, 2011 - 3:57 PM EDT
Did You Get Your Official 'Taxpayer Receipt'?
Just in time for tax day, you can log on the official White House web site and get your very own Federal Taxpayer Receipt. It will calculate where the money you pay in Social Security tax, Medicare tax, and income tax goes. For example, more than 50% of the income tax my family paid this year went... [Read More]
April 13, 2011 - 7:45 PM EDT
Catastrophe Now or Apocalypse Later?
Hi. How are you? Good to see you. Some weather we’ve been having lately, huh? How about that near government shutdown? Sure had me worried. But I guess we’re OK now? Well, gotta go. Hope to see you again soon. Oh, by the way, your house is on fire! What's my point? We'd better stop kidding oursel... [Read More]
March 31, 2011 - 8:01 PM EDT
Citizens of the World: How's Your Effective Tax Rate?
It may not be a wise idea for U.S. multinational corporations to foster the image that they really owe no allegiance to any one country, including their own. They're global, right? And as citizens of the world, they exist to make money. And money knows no home. Well, if money knows no home, why are... [Read More]
March 19, 2011 - 10:35 PM EDT
A Conference on Corporate Tax Reform
In Washington, D.C., corporate tax reform is in the air; you can smell it – and that may turn out to be the right imagery. I must admit that I’m a bit confused by the issue. Policy folks all seem to agree that we should cut the corporate tax rates. After all, the rest of the industrialized world... [Read More]
February 18, 2011 - 12:17 PM EST
We Need to Support the IRS!
I know, the title to this post sounds weird. Support the IRS? Aren't we supposed to hate the tax collector? My long-standing answer to that question has always been, "No." It's tough to be the tax collector; Hey, only Jesus would have dinner with a tax collector. Now, the organization I work for ha... [Read More]
February 12, 2011 - 2:59 PM EST
Milking the Tax System
Attention all citizens; here’s an important announcement from your government: “The Internal Revenue Service has concluded that breast pumps and supplies that assist lactation are medical expenses under section 213(d) of the Internal Revenue Code because, like obstetric care, they are for the pur... [Read More]
February 9, 2011 - 1:17 PM EST
The U.S. Tax Law; It's a Circus
Our tax system is riddled with exceptions, credits, deductions, special treatment, you name it. That is why it is a complicated mess, and that is one reason why it doesn’t collect enough revenue to fund the government – the other is that our politicians spend our money like sailors on steroids. E... [Read More]
February 2, 2011 - 8:39 AM EST
So Who Is Our President; Clinton or Reagan?
I've been getting a great kick out of the speculation in the general media about the transformation of President Barack Obama. Some say he’s done a classic “Clintonian” spin to the middle. On Sunday, The New York Times – hysterically I thought – ran an opinion piece proclaiming that President... [Read More]
January 28, 2011 - 8:04 AM EST
Tax Cuts Are Never Irresponsible
Republicans like to accuse President Obama and the Democrats of leading us into fiscal oblivion with their irresponsible, job-killing (their words, not mine) spending. But with this country drowning in debt and desperate for revenue, if you’re a Republican, it’s always a good time for a tax cut!... [Read More]
January 26, 2011 - 12:25 PM EST
The State of Our Union
When it comes to tax reform, President Obama won’t even attempt to play Ronald Reagan on TV. That much is clear from his State of the Union address last night, which had nothing about real tax reform. For those who thought that corporate tax reform was on the horizon, forget about it. The Presiden... [Read More]
January 24, 2011 - 8:44 AM EST
'GE, We Bring Good Things...'
People keep telling me our President is a left-wing ideologue. Maybe, but first things first, he’s a politician – from Chicago, no less. As further proof of that, last week President Obama appointed Jeffery Immelt, Chairman and CEO of General Electric, to head the new “President’s Council on Jo... [Read More]
January 18, 2011 - 8:57 AM EST
How the GOP Will Really Get 'ObamaCare'
This week Republicans in the House will bring to the floor a bill called “Repealing the Job-Killing Health Care Law Act.” Stupid name for a stupid idea. This particular bill is going nowhere. Nonetheless, voting for it will make the House GOP members feel good. But that’s not how the GOP will gu... [Read More]
January 14, 2011 - 9:06 AM EST
Another Really Stupid Idea
The IRS recently proposed rules that require tax return preparers to file all clients’ returns electronically. Now there are great advantages to filing electronically (I do it myself), but you can’t make a taxpayer file electronically if they don’t want to. So in its infinite wisdom, the IRS say... [Read More]
January 11, 2011 - 7:49 PM EST
What a Surprise! Most of Us Are Honest Taxpayers
So what’s all this crap about people not paying their taxes? Oh, there's a tax gap all right. And celebrity types who want to tell us all how to live but won't pay their fair share have been with us always. But according to a survey by the IRS Oversight Board, an overwhelming percentage of U.S. ta... [Read More]
January 6, 2011 - 9:53 AM EST
The Myth of Revenue Neutrality
Somehow the concept of revenue neutrality has become a fundamental principle of tax reform. Look at the Tax Reform Act of 1986. There you go again (as Ronald Reagan used to say); you can’t have tax reform without it. The principle of revenue neutrality says that you can change your tax system all... [Read More]
January 5, 2011 - 8:09 AM EST
Attack of the Killer Bs, and Other Snappy Acronyms
Last week Bloomberg ran a story on how U.S. multinational companies use sophisticated techniques to avoid paying billions in U.S taxes – billions that the rest of us get to make up. The designers of these tax “maneuvers” are brilliant people. They take pride in their legal gaming of the tax syst... [Read More]
December 29, 2010 - 6:29 AM EST
It's Been 40 Years in the Making; It's a Good Read, and It's Free
As part of recognizing its 40th Anniversary, Tax Analysts has prepared an eBook, "Forty Years of Change, One Constant: Tax Analysts." The premise of the book is fairly simple. We asked a group of people to answer the following question. What is one of the most significant changes to tax administrat... [Read More]
December 14, 2010 - 12:19 PM EST
Holiday Madness
Did you ever notice that people get a little dopey this time of year? Like those folks who put antlers on the roofs of their minivans and stick a round, red, Rudolf nose in the grill. What’s up with that? Or what about this tax-cut deal? The President wants to spend more money that he doesn’t hav... [Read More]
December 2, 2010 - 8:07 PM EST
Tax Law - It's All About the Beer
The problem with our nation is that most of us have decided the best way to deal with the impending fiscal crisis is to give up nothing, stick our head in the sand and hope the inevitable will go away. The problem with our tax code is that it is corrupt. By that I mean it's shot full of special tax... [Read More]
November 23, 2010 - 8:57 AM EST
A Simple-Minded Question for Thanksgiving
I think of myself as simple-minded. That doesn’t mean I think I’m a dope; it just means that I like to think of things in simple terms. Politicians like to present things in complicated and confusing terms. Let’s see if I’ve got this annoying debate about the so-called Bush tax cuts right. Repu... [Read More]
November 15, 2010 - 1:44 PM EST
The AMT Promise - What a Stitch
[Inspired by recent promises from leading Congressional taxwriters that they really, really will prevent the alternative minimum tax (AMT) from burying the middle class, even though there’s almost no time left to do so.] The AMT was designed to be a devious trap, For really rich people who have to... [Read More]
November 11, 2010 - 9:33 AM EST
Deficit Panel Chairs, Meet Namby-Pamby Land
The co-chairs of the President’s commission charged with coming up with ideas for confronting our massive growing national debt issued a draft proposal yesterday. Regarding the tax ideas contained in the proposal, at first blush, I like them. But a lot of folks won’t. The co-chairs, former Senato... [Read More]
November 9, 2010 - 10:43 AM EST
Cutting Tax Breaks Will Save Us! Not.
News outlets have reported that the President’s debt panel is looking to propose cutting tax expenditures to help return us to fiscal sanity. Tax expenditures are those little goodies in the tax code that provide special exclusions or deductions or credits or special preferential tax rates to cert... [Read More]
November 5, 2010 - 11:11 AM EDT
Gridlock's First Victim: Tax Policy
It seems to me that something happens to people when they become members of the U.S. Congress: their arrogance quotient goes up, and their intelligence quotient goes down. In the case of many of the newly elected Republicans, the AQ is already starting to climb. That is why I have no problem predic... [Read More]
October 29, 2010 - 4:59 PM EDT
Darth Vader at the IRS?
At Tax Analysts, where I work, the employees have a lot of fun with Halloween. There’s a party with refreshments, a costume contest, and a pumpkin carving contest. We have greatly creative people; so, the submissions for the contests are quite something. My favorite carved pumpkin this year did no... [Read More]
October 26, 2010 - 2:26 PM EDT
Trick or Treat and the Mortgage Interest Deduction
Just in time for Halloween, the Obama Administration is leaking that there are some scary things going on in its deficit commission. The commission is due to come out in a few weeks with its recommendations for confronting the impending bankruptcy of the United States. Lately, it’s been reported t... [Read More]
October 8, 2010 - 2:07 PM EDT
Some Tax-Free Advice to Congress
An important and practical article in yesterday’s Wall Street Journal by Laura Saunders asks a fairly simple question: how are Treasury officials to come up with withholding rates for next year when thanks to Congressional inaction, they have no idea what the tax rates will be? These withholding t... [Read More]
October 3, 2010 - 3:18 PM EDT
It's Time to Get Rid of the Extremes
Not to be crass, but allow me to make an observation. Currently, in our American society, there are two extremes in the tax debate. And quite frankly, they are both annoying the hell out of me. One: The more you lower taxes, the better the economy will be. Well that’s just silly; lower them to zer... [Read More]
October 1, 2010 - 10:25 AM EDT
Plain Speaking for the IRS
I’ve written about this before, but I can’t help myself; this kind of stuff cracks me up. This week the Senate passed a bill called the Plain Language Act of 2010. As originated this bill was aimed at the IRS, but it has been expanded to all federal agencies that prepare documents for "obtaining... [Read More]
September 29, 2010 - 10:39 AM EDT
The Bush Tax Cuts Debate is a Dangerous Distraction
I’ve been writing about our tax system for a long time. And it has never been such a dysfunctional mess of uncertainty as it is now. And uncertainty is a seriously bad disease for a self-assessment tax system. Just a couple of years ago, I would have never thought it possible that a President and... [Read More]
September 26, 2010 - 3:27 PM EDT
The 'Bush Tax Cuts' Are Really Tax Hikes
I’m watching the Sunday talk shows and listening to the endless droning about who deserves to keep their so-called Bush tax cuts. I’m thinking: Am I the only one who gets this? Nobody is getting a tax cut; we’re all getting a sneak attack tax increase. In its latest profile in cowardice the Unit... [Read More]
September 17, 2010 - 2:36 PM EDT
Soaking the Rich the Right Way
You can’t turn to any media lately without hearing the great debate about whether we should extend the so-called Bush tax cuts to "the rich" or just extend them for "the middle class." But when they talk about "the rich," they never talk about the hedge fund managers who pay capital gains tax rate... [Read More]
September 12, 2010 - 7:33 PM EDT
You Think These Guys Can Fix the Economy?
To extend the Bush tax cuts for “the rich” or not extend them; that is the question of the day. Some Democrats now say yes, because they’re afraid of losing their cushy jobs in the U.S. Congress. Future Republican Speaker of the House John Boehner said this weekend that he will settle for whatev... [Read More]
September 8, 2010 - 2:25 PM EDT
Guess What? We're Not Europe
I recently read an interesting commentary by an economist that criticized the Obama Administration’s "misguided approach" to trying to fix our ailing economy by spending more money. He specifically noted Paul Krugman's call to arms for more stimulus in the New York Times and Federal Reserve Chairm... [Read More]
August 31, 2010 - 1:49 PM EDT
Message from PERAB: Are You Out of Your Mind?
PERAB stands for the President’s Economic Recovery Advisory Board. Its members were asked by President Obama to look at options for simplifying the tax system, improving taxpayers' compliance with existing rules, and reforming the corporate tax system. Quite a task. Oh, and PERAB was told that it... [Read More]
August 26, 2010 - 11:12 AM EDT
Tears On My Computer Screen
Today I read a letter to the Treasury and the IRS by the heads of the Big 3 tax return preparer shops – Jackson Hewitt Tax Service Inc., H&R Block, and Liberty Tax Service – in “strong opposition” to the IRS’s decision to no longer provide the so-called debt indicator to tax return preparers a... [Read More]
August 11, 2010 - 7:51 PM EDT
Dan Rostenkowski's Legacy: Tax Reform
Tax Notes Today was one of the first this afternoon to report that Dan Rostenkowski died. Rostenkowski was Chairman of the House Ways and Means Committee during the development of the Tax Reform Act of 1986. I’ve always thought of myself as a child of that law. The first law I covered was called... [Read More]
August 11, 2010 - 9:54 AM EDT
Another Shining Example of Transparency at the IRS
The IRS has released it latest quarterly report on Advance Pricing Agreements or APAs. APAs are secret deals struck between the IRS and U.S. multinationals regarding transfer pricing. Many people think transfer pricing is legalized stealing. Our tax code allows U.S. multinational corporations to ma... [Read More]
August 5, 2010 - 6:24 PM EDT
Better Late Than Never; the IRS Does the Right Thing
The IRS announced today that starting next year, “it will no longer provide tax preparers and associated financial institutions with the ‘debt indicator,’ which is used to facilitate refund anticipation loans (RALs).” As way of background, the debt indicator tells the preparer of an electronic... [Read More]
August 4, 2010 - 7:06 PM EDT
Faking It
An op-ed piece by Treasury Secretary Timothy Geithner that recently appeared in The New York Times had an amazing headline: “Welcome to the Recovery.” Wow. It made me think of the movie When Harry Met Sally – in more ways than one. Remember the scene in a NYC deli when Sally shows Harry how she... [Read More]
July 30, 2010 - 8:14 PM EDT
Charlie Rangel Gets a Message From the Top
Cue The Godfather music. Michael is talking to Fredo in the boathouse. Fredo says all he wanted was respect! Michael decides he’s dead meat. Here’s what President Obama said today about Charlie Rangel, the 80-year old former Chairman of the House Ways and Means Committee, who is facing serious et... [Read More]
July 27, 2010 - 2:07 PM EDT
Tax Class Warfare -- It's Not About Luck
We're having some scorcher this summer. And I'm not talking about the weather. I'm talking about taxes, specifically expiring tax cuts -- popularly known as the Bush tax cuts. These tax cuts are set to expire at the end of this year. So, the Democrats and President Obama have a problem. Why is it t... [Read More]
July 22, 2010 - 11:27 AM EDT
Handicapping Horse Racing in the House of Representatives
There’s a horse race shaping up for the next Democratic Chairman of the House Ways and Means Committee. Of course, there’s a big "if" aspect to this race: there’s no guarantee the Democrats will actually hold the House in the November elections. Still, I get a kick out of watching members of eit... [Read More]
July 15, 2010 - 1:47 PM EDT
The IRS: About to Swing Out of Control
I often write about the IRS’s existence on a pendulum, which swings back and forth between law enforcement agency and customer service. Rarely is this pendulum in perfect balance. But I don’t write about the pendulum to belittle the IRS. I write about it to belittle Congress, which can’t make up... [Read More]
July 13, 2010 - 9:12 PM EDT
Happy Birthday, Tax Analysts!
This year marks the 40th anniversary of Tax Analysts, the organization I proudly work for. I have been here for almost half of that. But the Chairman of our Board, Martin Lobel, has seen it all. We’ve posted an open letter from him that briefly details our history. I recommend it as a good read. F... [Read More]
July 12, 2010 - 11:39 AM EDT
The Deficit Disease - The Cure Is Obvious
The Washington Post reported this morning that “the co-chairs of President Obama’s debt and deficit commission offered an ominous assessment of the nation’s fiscal future . . . calling current budgetary trends a cancer.” With all due respect to what I expect to be a useless commission, this is... [Read More]
July 7, 2010 - 1:09 PM EDT
The Black Helicopters Are Landing!
A July 2 Wall Street Journal editorial basically argued that President Obama is spending us into oblivion so that he can tax us into oblivion. My read is that the WSJ editorialists wouldn’t disagree that a good way to tax the heck out of us is a European-style value added tax (VAT) – they just wo... [Read More]
June 30, 2010 - 7:57 AM EDT
A Tax Lawyer's Tax Lawyer
Marty Ginsburg, a great tax lawyer and someone who was always eminently quotable, died last weekend. To many people, he was known best for being the husband of Supreme Court Justice Ruth Bader Ginsburg. But to those of us in the tax community, he was known best for his wit, his intellect, and his... [Read More]
June 27, 2010 - 3:12 PM EDT
Waiting for the Comet
I heard it again last Friday from several smart people at the Tax Analysts’ conference on doing something about our out-of-control tax expenditures budget. (To continue that discussion, click here.) We will do nothing in this country to get our greatly troubled fiscal house in order, including our... [Read More]
June 25, 2010 - 10:51 AM EDT
Tax Expenditures: Now It's Your Turn
We just finished a fascinating two-hour conference, which Tax Analysts sponsored, at the National Press Club on the subject of tax expenditures. I hope you attended or listened in online but, either way, I invite you to continue the conversation on this important subject right here. As I explained... [Read More]
June 24, 2010 - 7:35 PM EDT
Another Money-Leaking, Poorly Designed Tax Expenditure
According to a news story that first appeared in today’s Tax Notes Today, a report from the Treasury Inspector General for Tax Administration “detailing millions of dollars in fraudulent first-time home buyer credit refunds came as no surprise to analysts who saw the credit as 'poorly designed, a... [Read More]
June 22, 2010 - 11:09 AM EDT
Winner, Winner, Chicken Dinner, and Other Tax Expenditures
Among the many troubles our country currently faces, here are two of the biggest: growing deficits and an income tax system that is broken. Fortunately, there’s a good place to start addressing theses two problems: the tax expenditures budget. This somewhat obscure budget is a list mandated by a 1... [Read More]
June 16, 2010 - 9:26 AM EDT
Tan This!
Last night I listened to President Obama’s address from the Oval Office about the disastrous oil spill in the Gulf of Mexico. I certainly don’t blame the President for the oil spill. But I’m having trouble with his solution to everything: Throw money at it. Oh, but this time it’s going to be al... [Read More]
June 8, 2010 - 7:39 PM EDT
I Got Your Carried Interest Right Here
To find out what is wrong with our tax system you need look no further than the debate on carried interest going on once again in Congress. We all know it is an outrage that a hedge fund manager pays a more preferential tax rate on his income than the poorly paid person who cleans his office. And,... [Read More]
June 7, 2010 - 9:11 AM EDT
The End of Tax Administration As We Know It (Maybe)
Joke: What would you call a fight to the death among tax accountants, tax lawyers, and the IRS? A good start! Actually, no. It’s a really bad start. The IRS wants to require certain large corporations to report “uncertain tax positions” on a new schedule to be filed with their annual returns. Wh... [Read More]
May 12, 2010 - 12:26 PM EDT
It's Time We All Know What a Tax Expenditure Is
Tax expenditures are government spending through the tax code in the form of special deductions or credits or exemptions. There is an article in this week’s Tax Notes by Martin Lobel that makes an excellent argument that, “If we are serious about cutting the deficit, we need to cut tax expenditur... [Read More]
May 3, 2010 - 2:13 PM EDT
Don't Play with Your Food, Or Your Fiddle
I was going through some tax legislation that Tax Analysts reported had been recently introduced in the U.S. Congress. (Hey, I’m a tax geek; what do you expect?) With little effort, and only going back a couple of weeks, I came up with these gems. (Trust me, there’s a lot more.) A bill introduced... [Read More]
April 29, 2010 - 11:24 AM EDT
Something Good from the Bank-Bashing
I may be in the minority here, but I don’t think Goldman Sachs is the devil. And if Senators are going to haul Goldman executives up to Capitol Hill to tell them it is, then I’d like to see the executives from Fannie Mae and Freddie Mac given the same treatment. In fact, the only thing I got out... [Read More]
April 20, 2010 - 10:21 AM EDT
The Dog Ate My Homework, and Other Entertaining Excuses
Just the other day, I noted that my favorite tax quote goes like this: “Basic tax, as everyone knows, is the only genuinely funny subject in law school.” (Martin Ginsburg) To wit: Tax Analysts this morning reported a case issued by the United States Tax Court in which a taxpayer argued – apparen... [Read More]
April 16, 2010 - 5:10 PM EDT
Bag the Bag Act
Sen. Charles Schumer is ticked off. Under legislation he’s proposed, any fees imposed by an airline on carry-on luggage would be taxed. What’s got Schumer riled up is an announcement by Spirit Airlines last week that it would begin charging customers a “whopping $45 for carry-on baggage" He thi... [Read More]
April 15, 2010 - 11:14 AM EDT
Don't Tax Me!
Happy Tax Day. I was recently quoted as saying our tax system is "a freaking mess." So, let me tell you what I really think. There are two loudly competing theories about tax policy in this country. They are both wrong. They are both rigid. And they have, together, helped ruin the tax system in thi... [Read More]
April 12, 2010 - 8:12 AM EDT
Tax Day - This Time A Little Something Back for All of Us
Today Tax Analysts released a new book, As Certain as Death, Quotations About Taxes. The book, compiled by Jeffery L. Yablon, a tax partner in the Washington office of the Pillsbury Winthrop Shaw Pittman law firm, contains some 260 pages of quotes about taxes and proves the subject of tax is far fr... [Read More]
April 7, 2010 - 12:34 PM EDT
A Movie About Our Tax System -- It's a Real Good Horror Flick
Tax Trivia: So why did Ronald Reagan reform the tax code and cut income tax rates? Because he was a big right-wing nut, right? No. Because he was a crazy Republican, right? No, and before he was a Republican he was a Democrat. Because he hated big government. Well, maybe, but he was head of a real... [Read More]
March 31, 2010 - 5:09 PM EDT
Tax Freedom Day -- A Meaningless, Hilarious Ritual
Washington is full of think tanks that think about taxes. And I like to think I am a friend to them all, even though I can’t always agree with them on an individual basis. And that always makes the announcement of “Tax Freedom Day” an awkward moment. What is Tax Freedom Day? According to the rig... [Read More]
March 29, 2010 - 9:48 AM EDT
Hey Man, Don't Bogart that Tax
I’ve been telling people for years that tax policy influences our politics and our lives in amazing ways. Most of them just smirk or yawn when I tell them that. But I can prove it. Here’s the latest evidence. Tax policy is about to bring about a change that Cheech and Chong and NORML couldn’t ac... [Read More]
March 24, 2010 - 2:38 PM EDT
What's Wrong With the New Healthcare Law? The Evil IRS?
I realize the Republicans and the right wing (they are sometimes different cats) are upset about the healthcare, tax bill just signed into law. But some of the reaction is getting ridiculous. For example, Subcommittee on Oversight ranking member Charles Boustany said last week that the new healthca... [Read More]
March 18, 2010 - 6:37 PM EDT
The Tax-Health Care Bill – A Whole New Form of Government
Our politicians who favor this mess of a health care bill apparently believe in a lot of things. Democracy isn’t one of them. As this health care legislation is shaping up, it is also turning into behind-the-scenes tax reform. And this new form of tax reform has some very interesting theories. Suc... [Read More]
March 15, 2010 - 4:20 PM EDT
Happy Sunshine Week
Sunday marked the beginning of national Sunshine Week, sponsored by a group of the same name that works for open government. To honor the occasion the group highlighted a poll that found that 70 percent of those asked believe the federal government is either “very secretive” or “somewhat secreti... [Read More]
March 13, 2010 - 1:26 PM EST
Audit Lottery -- Or, the Cop Who's Not in Your Rearview Mirror
In Virginia, where I live, they have something called HOV, which stands for high-occupancy vehicle. In theory, this means that for certain highways at certain rush hours of the day the far left lane is reserved for cars with two or more people in them. In practice, it’s a joke. I drive on an HOV r... [Read More]
March 11, 2010 - 10:52 AM EST
We're Schnooks! Plain Enough for You?
I read this morning that there is a bill working its way through Congress called the Plain Language Act. It would, among other things, “require the IRS to write tax documents in plain writing.” What a concept. So what would this plain writing look like? Dear Taxpayer, We can’t explain the tax co... [Read More]
February 25, 2010 - 1:42 PM EST
The Ant, the Grasshopper and the Roaring Freight Train
I was asked the other day what I thought of the President’s deficit commission. I said I didn’t think it was going to work. Of course, we could use it as a search party to go find out whatever became of the President’s tax reform commission. All this reminds me of the fable of the ant and the gr... [Read More]
February 17, 2010 - 7:22 PM EST
Our Tax-Cutting President
President Obama celebrated the one-year anniversary of the $787 billion American Recovery and Reinvestment Act (“the stimulus”) in a press conference today. As a good politician, the President took a great deal of the credit for saving the economy while mocking his political opposition for being... [Read More]
February 9, 2010 - 2:11 PM EST
Tax Creeps
Tax Creep (n.): Someone who attempts to get another who is either completely gullible or prone to kleptomania to believe that they are under no obligation to observe the federal income tax laws. I think I invented this term. Tax creeps have been with us for a long time. And they are a major nui... [Read More]
February 8, 2010 - 12:06 PM EST
A Funny Little Budget, Tax Expenditures
Have you ever heard of the tax expenditures budget? It's a special budget that's tucked inside the overall federal budget. But what are tax expenditures? They are, according to federal law, "revenue losses attributable to provisions of the Federal tax laws which allow a special exclusion, exemption... [Read More]
February 2, 2010 - 11:43 AM EST
Have You Ever Paid a Use Tax . . . ?
Do you even know what one is? It’s OK (at least with me) if you answered “no” to both questions. If your state has a sales tax – and most of them do. And if you buy something from an out-of-state seller – and most of us do. And the seller is not required to collect the sales tax – and a lot o... [Read More]
February 1, 2010 - 2:12 PM EST
Go to the Moon? Been There
As a child, I remember being inspired by this nation’s efforts to put a man on the moon and safely return him to earth. As I write this, I am listening to Peter Orszag, the head of the Office of Management and Budget, drone on about the federal budget released this morning. It’s the opposite of i... [Read More]
January 28, 2010 - 11:19 AM EST
The State of Our Nation: Freaking Frightening
I watched President Obama deliver the State of the Union speech last night. Did I get this right? He’s a tax cutter; he says he cut taxes for 95% of America’s working families. And, he noted that he hasn’t “raised income taxes by a single dime on a single person. Not a single dime.” He knows t... [Read More]
January 24, 2010 - 4:59 PM EST
What's that, Lassie? Timmy's About to Be Thrown Down the Well?
President Obama is never wrong. At least according to his Administration. It’s always someone else who screwed up. For a long time, it was George W. Bush’s fault because he left us with a wrecked economy. But that’s getting a little old. So, after the Democrats lost the Kennedy endowed chair in... [Read More]
January 20, 2010 - 11:25 AM EST
How About This Tea Party?
I spent four years in Boston going to school. I loved the place, and I loved the people. Why didn’t I stay? I hated the weather. You've gotta be tough to live in Massachusetts. Many of the people of Boston and Massachusetts are liberals or Democrats or both. Many are descended from Irish immigrant... [Read More]
January 14, 2010 - 9:24 PM EST
You Want To Go After the Banks? Get a Stick.
I’m not the historian on this site; that role is filled by my colleague, Joe Thorndike. But I do like history. One of my favorite Presidents – not number one, but in the top five – is Teddy Roosevelt. (Sorry, Joe, FDR doesn’t make my top five.) Among the many great things Teddy is known for is... [Read More]
January 14, 2010 - 4:45 PM EST
Fortress Secrecy* -- A Tale of Two Hours
In my last post, I promised a story to illustrate the IRS’s obsession with secrecy. It’s a true story, not fiction, because let’s face it: you couldn’t make this stuff up. In the early 1970s, Tax Analysts (the organization that sponsors Tax.com) used the still fairly new Freedom of Information... [Read More]
January 10, 2010 - 10:42 AM EST
IRS - The Secret Agency
This Saturday's Wall Street Journal tells the story of Lori Singleton-Clarke. Ms. Clarke is a nurse who earned an MBA. The Journal article is about two rather remarkable things Ms. Clarke accomplished (although I’m quite sure she has many other remarkable accomplishments). First, she convinced the... [Read More]
January 6, 2010 - 7:35 PM EST
What Do Congress and Nero Have in Common?
Three recent pieces of legislation introduced in the House of Representatives caught my attention in the last couple of days (and not in a good way). One (H.R. 4310) was introduced by Dennis Kucinich, a Democrat from Ohio. This important piece of tax legislation would deny deductions for advertisin... [Read More]
January 4, 2010 - 11:46 AM EST
And the Winner Is...A Snitch. Er, I Mean Whistle-Blower
Tax Notes, a wonderful publication published by Tax Analysts, which sponsors this site, today named its person of the year. And the winner is: Bradley Birkenfeld. Bradley Birkenfeld? Who the hell is Bradley Birkenfeld? Actually, it's a timely choice; after all he was on 60 Minutes just last night.... [Read More]
December 30, 2009 - 3:12 PM EST
Don't Die Yet, Grandpa!
Would you decide to get married based on the effect of a marriage penalty in the tax code? If so, I would suggest you take another look at your betrothed. It's always seemed to me that the tax law should be a minor – if at all – influence on life's biggest decisions. I didn't buy a home (you'll n... [Read More]
December 29, 2009 - 3:42 PM EST
Senate to the President: We’re Broke, In More Ways Than One
On Christmas Eve, a bipartisan group of more than 30 Senators sent President Obama a letter. No, not to wish him a Merry Christmas, but to tell him they’re incompetent. I’m not kidding; this letter is amazing and outrageous all at the same time. In the letter, the members of the world’s greatest... [Read More]
December 17, 2009 - 10:53 AM EST
It's Not a Death Tax, But It Is a Dead Tax
OK; I’m only human – sometimes I can be a little petty, and now seems to be one of those times. So, here goes: I TOLD YOU SO! It was a sure bet that Congress – actually, we have to blame that part of Congress called the U.S. Senate – would screw up the estate tax. And by the way, to those who i... [Read More]
December 4, 2009 - 11:26 AM EST
A Snow Ball's Chance in Hell
I’m currently reading the book Too Big to Fail, by Andrew Ross Sorkin. It’s about how Wall Street bankers wrecked the economy, and how the government bailed them out while regular people were losing their jobs. I’m a quarter way through the book and already I want to punch Gordon Gecko’s lights... [Read More]
November 29, 2009 - 11:18 PM EST
While You Were Giving Thanks, Your Mushrooms Were Being Managed
I don’t know about you, but on the Friday after Thanksgiving last week at 4:07 p.m. EST I was on a couch watching football and continuing to digest the large amount of turkey that I ate the day before. Meanwhile, Austan Goolsbee, chief economist of the President's Economic Recovery Advisory Board... [Read More]
November 27, 2009 - 12:50 PM EST
Death Watch on the Death Tax
Over the Thanksgiving holiday, I got into a discussion –- a friendly discussion –- with my brother-in-law about what he calls the death tax. He’s a forensic accountant, and he opposes what I call the estate tax because it taxes money that has already been taxed. Well, to me, that’s a better arg... [Read More]
November 17, 2009 - 5:05 PM EST
Bank Secrecy Is Over!
You buy that one, and I've got a bridge in Brooklyn to sell you. Today, the hot tax story is that almost 15,000 American crooks – I mean taxpayers – have disclosed their offshore accounts to the IRS and will now pay back billions of tax dollars. IRS Commissioner Doug Shulman was absolutely ecstat... [Read More]
November 16, 2009 - 8:54 PM EST
'Obscure,' Gracie?
OK, enough people have asked me about this that I believe I need to say something. Last Sunday’s Washington Post Magazine referred to Tax Notes as an “obscure journal.” When I saw it, I thought: Obscure, Gracie? – which is a reference to the comedy team of Burns and Allen, who may be obscure to... [Read More]
November 6, 2009 - 10:20 AM EST
Chicken Little and Swiss Banking
A subcommittee of the House Ways and Means Committee held a hearing yesterday on a bill named the Foreign Account Tax Compliance Act that would make it more difficult for U.S. taxpayers to hide money in foreign banks. Apparently, the Treasury Department and the IRS like it. I haven’t decided yet;... [Read More]
November 5, 2009 - 10:32 AM EST
'Death Tax Looms'
Reading this morning’s excellent Tax Analysts publication Tax Notes Today, this headline caught my eye: “Graves Says Death Should Not Be Taxable.” Tax headlines can be funny even if they don’t mean to be. Seems there’s this Congressman whose name is Sam Graves. He’s a Republican from Missouri... [Read More]
November 1, 2009 - 5:54 PM EST
Envelope Please, and the Worst Tax Haven of All Is...
From what I know of the Tax Justice Network, they’re a good group, working for transparency in international finance. I like that. I work for a good group, and one of the things we work for is transparency in tax administration. They are both more than worthy missions. Over the weekend, the Tax Ju... [Read More]
October 28, 2009 - 2:16 PM EDT
Join Us to Discuss the Perfect Fiscal Storm in the States
The states are in crisis, and there is a perfect fiscal storm brewing around them. Revenue is down and tax bases are shrinking; the economy can’t turn around fast enough to help get states out of the crisis before it gets worse; they certainly won’t get out of the crisis before the federal stimul... [Read More]
October 25, 2009 - 5:41 PM EDT
Sunlight Is the Best Disinfectant
Words are one of my favorite things, and some of my favorite words make up the headline of this post. The words are not mine; they come from a great man, Justice Louis Brandeis, and are often quoted. The first time I heard an IRS Chief Counsel say them, though, I almost spit up. It was like hearing... [Read More]
October 19, 2009 - 7:24 PM EDT
A Wall Street Socialist?
I keep hearing people call President Obama a socialist. A socialist?! Only in Washington is someone a socialist if his administration takes care of Wall Street fat cats and heels to the elite who can afford to hire effective lobbyists. What a town. Reading my tax news this morning was down-right de... [Read More]
October 18, 2009 - 6:31 PM EDT
Why the Economy is Like the Washington Redskins
(I know; what could this have to do with taxes? You’ll see.) I live in the Washington, D.C. area, but I’m not from here. People from the D.C. area take their professional football team very seriously. They identify with it. When they talk about their beloved Redskins they say things like: “We di... [Read More]
October 15, 2009 - 11:58 AM EDT
Deadline, Deadbeats!
Today is the last day of a special IRS program that allows taxpayers who secreted money from Uncle Sam in foreign accounts to come clean on what they fairly owe their country in taxes. If they do, they won’t get off penalty-free, but they will avoid some potentially scary consequences. Over the la... [Read More]
October 9, 2009 - 4:27 PM EDT
Quack. Is the Duck Unconstitutional?
I often tell people I’m simple minded. Not because I want people to think I think I’m an idiot, but because I like to break things down into pieces to keep them as simple as possible. So, there are only two things I really care about in the great debate on health care reform. The first is the ris... [Read More]
October 7, 2009 - 1:11 PM EDT
Pop Corn
A tax credit reduces tax liability dollar for dollar. A tax deduction reduces the amount to which a tax is applied. Of the two, the tax credit is better. But that is not why I don’t like tax credits. I don’t like tax credits because they encourage selected behaviors over others. And who gets to s... [Read More]
September 30, 2009 - 12:10 PM EDT
The American Dream? Keep It!
I think we can all agree that the current economic environment pretty much stinks. (Don’t you love it when I use technical “econ speak.”) Part of the reason we are in this “stinky” situation is the housing market, which mostly turned into a total illusion. And part of that illusion is caused b... [Read More]
September 24, 2009 - 10:00 AM EDT
Tax Our Butts Off!
In another chapter of you can’t make this stuff up. Front page of this morning’s Washington Post: America’s desire for soft toilet paper is destroying old growth forests. It seems you need quality wood to make soft toilet tissue. And we Americans are obsessed with pampering our behinds. The Euro... [Read More]
September 21, 2009 - 10:33 AM EDT
Raise the Gasoline Tax
When I was a kid, I spent a summer in Ireland. I was impressed with many things that summer: the beauty of the countryside; the friendly people who affectionately called me “Yank”; the crappy weather; the fact that, even though I was a kid, I could get served a beer in a pub and could place a bet... [Read More]
September 18, 2009 - 2:28 PM EDT
You Lie![?]
As far as I'm concerned, that Congressman who shouted at our President while the President was addressing Congress didn't get enough flak. Fifteen minutes of public discomfort is getting off easy. Not only was it disrespectful, considering the occasion and location, it was outrageous behavior. (Of... [Read More]
September 16, 2009 - 11:42 PM EDT
Hey Sailor, It's Not a Tax Deduction
Here’s something that’s been all over the net (special shoutout to Joe Kristan at Roth & Co.). A tax lawyer in New York, who has been practicing for more than 40 years (which puts him well into his 70s), attempted to deduct the costs of prostitutes, porno, and literature on sex therapy. When the... [Read More]
September 14, 2009 - 11:58 AM EDT
The State of the States, It's Not Good
We all know the California budget situation is a disaster. And it’s not just that the state has been “Schwarzeneggered.” Californians truly live in fantasy land. They believe they can have all kinds of government services and never have to pay for them. Kinda like the U.S. Congress. But it’s no... [Read More]
September 10, 2009 - 9:47 AM EDT
Drop Dead! Wait, Not Yet!
As Benjamin Franklin famously said: “In this world nothing can be said to be certain, except death and taxes.” Well, I see his point, but don’t entirely agree. Let’s consider the estate tax – the poster child for what’s wrong with our federal tax code. It’s misunderstood. The estate tax is a... [Read More]
September 9, 2009 - 12:56 PM EDT
Tax Reform -- It's Inevitable
Have you heard of the Volcker task force? (I get a kick out of the names they come up with in Washington. Task force! Like it’s got aircraft carriers.) In March, President Obama created this group to look at what’s wrong with the tax system and report back by December. What’s wrong?!? Gee, where... [Read More]
September 8, 2009 - 7:28 PM EDT
The War is Over; the Swiss Won
This weekend, the football team from the United States Naval Academy nearly beat the Ohio State Buckeyes – and on their home field. Personally, I go a long way back with Navy football; so, I got an enormous kick out of watching the Ohio State fans sniveling on their scarlet windbreakers. I mean, i... [Read More]
September 1, 2009 - 5:01 PM EDT
It's Time, Charlie
I sadly report that we are about to lose another lion of Congress. Let me first say that I am a huge fan of Charlie Rangel, the Democratic Chair of the House Ways and Means Committee. I call him Charlie because although we've never formally met, I feel that I have known him for many years – and li... [Read More]
September 1, 2009 - 6:35 AM EDT
Lawyers, Guns and Money
Okay, kids; mark your calendars. The weekend of September 4, which is just around the corner, marks the First Annual Second Amendment Sales Tax Holiday in Louisiana. You heard me right: a state-sponsored holiday for guns, and by law, they’re going to do it every year. (I keep telling people that t... [Read More]
August 28, 2009 - 7:56 PM EDT
A Rant; Just a Rant
Every day I drive to work on Interstate Route 66. This is not the storied Route 66 of the past that took people of the 50s in big American cars with lots of chrome on adventures across the country. No, this is the hell road that takes people to and from Washington, D.C. This road is not filled with... [Read More]
August 26, 2009 - 8:56 AM EDT
Whistling in the Dark
I was going through a list of tax bills recently introduced in the U.S. Congress. (Hey, somebody’s got to do it.) And I came across the proposed “HAPPY Act of 2009.” (You can’t make this stuff up.) “HAPPY” stands for Humanity and Pets Partnered Through the Years. Just think, the hard earned m... [Read More]
August 20, 2009 - 3:46 PM EDT
Justice for All – Well, At Least for the Rich and the Swiss
It was all over the newspapers this morning; the IRS settled with the Swiss government and the Swiss bank, UBS, to get names of potential tax cheats helped by Swiss bank secrecy laws. And with some understandable excitement, the IRS immediately began crowing about it. In a statement, IRS Commission... [Read More]
August 17, 2009 - 8:15 PM EDT
Hammer Time!
Some things just can't go without comment. Former Majority Leader in the U.S. House of Representatives, Republican Tom DeLay of Texas, is going to be a contestant on the next rendition of the TV show, Dancing with the Stars. Eh, that would make him one of “the stars.” I think he should call himse... [Read More]
August 15, 2009 - 5:53 PM EDT
Tears on My Newspaper
I picked up my Washington Post this morning to see a lead news story - upper left-hand corner, front page, above the fold (some nice real estate) – that starts off as follows (it’s a few paragraphs but it is a hilarious read): Comfortable at home in his favorite chair, Sen. Benjamin L. Cardin was... [Read More]
August 12, 2009 - 7:54 PM EDT
The Real Clunker Program
Boy, these town hall meetings on health care are really getting out of hand. It’s like a contest to see how many Screaming Meemies you can get into one room. Some of these folks really need to go to charm school. Personally, I’m willing to suffer some insufferable loud mouths to keep the First Am... [Read More]
August 7, 2009 - 10:58 AM EDT
Tax is Sexy!
I’ve actually made that statement, more than once, in public, and have yet to live it down. But I’ve learned to deal with it. You see, I really like the subject of taxation. Ever since my first tax course in law school, I’ve found the subject of taxes fascinating. And I was lucky enough many yea... [Read More]
August 6, 2009 - 9:05 AM EDT
Read My Lips: The Candidate Spoke Stupidly
All leaders say things they come to regret -- it’s just part of the job. The first President Bush really regretted his “read-my-lips” promise, and President Obama probably regretted telling the nation that the Cambridge, Massachusetts police acted stupidly. (As for me, if it were an Olympic spor... [Read More]
August 3, 2009 - 6:19 PM EDT
A Clunky Government Program
I’m a fan of Fords. I have been for a long time; certainly long before Ford became the only major U.S. car maker not owned by the federal government – you know, the gang who runs the post office. So, I was thrilled to hear the news this morning that for the first time in 20 months, Ford showed a... [Read More]
July 30, 2009 - 10:17 AM EDT
Stand Up to Switzerland!
In the movie Rooster Cogburn, John Wayne, facing the bad guys, says to Katharine Hepburn, “Sister, I’ve never been in a fight I didn’t finish standin' up!” That’s the America of my youth. Today's America was brought up with Pee-wee Herman. It’s gotten so bad that I fear we’re even afraid of... [Read More]
July 20, 2009 - 4:03 PM EDT
'Gold Prediction'
Last week, Goldman Sachs reported an impressive quarterly profit. And impressive is an understatement. Out came the long knives. According to its critics, Goldman must be crooked because it made a lot of money. But isn’t that what Goldman is supposed to do? Make money? I’ll bet its clients aren’... [Read More]
July 15, 2009 - 11:09 AM EDT
Spy vs. Spy - Irony from the Tax Side
It's been all over the news: the ongoing negotiations between the U.S. Justice Department, the Swiss government, and the Swiss Bank UBS about a request by the Internal Revenue Service that the Swiss bank release the names of some 52,000 UBS account holders who may be cheating on U.S. income taxes.... [Read More]
July 13, 2009 - 11:29 AM EDT
Income Taxes--This Time It's Personal!
Watching the politicians in this town (I live and work near Washington, D.C.) would be funny if it weren’t so sad. The latest joke: The powerful chair of the House Ways and Means Committee, Charles Rangel of New York, thinks a good way to pay for health care reform is a special tax on rich people.... [Read More]
July 8, 2009 - 5:03 PM EDT
That Dirty Little Word "Tax"
There have been people working a long time and spending lots of money to ensure that to most Americans the word “tax” is worse than the “f-bomb.” While the f-bomb doesn’t bother me (other than my fascination that it can be used as a noun, a verb, an adverb, and an adjective) some find it repug... [Read More]
July 4, 2009 - 12:58 PM EDT
Gratitude
The Fourth of July is my favorite holiday -- has been for a long, long time. That's quite a statement, especially considering that when I was a kid, my birthday was a national holiday. I mean, we got off from school and everything. OK, so it was Abraham Lincoln's birthday, too. I'm writing this pos... [Read More]
June 28, 2009 - 8:58 PM EDT
If It Doesn't Exactly Quack, Is It Still a Duck?
When politicians and radio talk show hosts argue about whether a proposed legislative change is a tax, they say things like, “Well if it walks like a duck [tax], and it quacks like a duck [tax], it’s a duck. (I know, sophisticated, huh?) So, here's a question: Is the climate bill passed late last... [Read More]
June 24, 2009 - 9:00 PM EDT
A Train Wreck of a Tax Code
The federal tax code, especially in the taxation of businesses, provides ample opportunity to game the system. And a lot of it is just that. Games. Nobody gets hurt. It’s just tax dollars. And for tax lawyers, believe it or not, it’s fun. Some of the games are very clever; I mean there is nothing... [Read More]
June 24, 2009 - 11:18 AM EDT
Clink, Clank, Clunk; Oh No, Here It Comes!
What is it? The Ghost of Christmas Future? No. Even scarier! It’s the “Death Tax.” And it’s extending its boned hand toward you to pick your pocket. At least that’s what those who oppose the federal estate tax would like you to believe. And to give these folks their due, they are great markete... [Read More]
June 18, 2009 - 12:54 PM EDT
Tax Reform--Don't Cell-Phone It In!
If your employer provides you with a cell phone and you use it for personal stuff, the value of that personal stuff--including texting, "Honey, the boss asked me to work late"--must be added to your income and taxed. From both the employer's and the employee's point of view, this law is one big pai... [Read More]
June 17, 2009 - 9:52 AM EDT
Taxing Bad Commercials - Now There's Tax Policy for You
In my last post on President Obama’s ideas for international corporate tax reform, I referred to those ridiculous TV ads run by the American Pharmaceutical industry. You know the ones that start off by telling you that if you have a hangnail you must ask your doctor to prescribe the latest drug th... [Read More]
June 15, 2009 - 8:43 PM EDT
Beatin' on Those Multinationals
There was a great turnout last Friday for Tax Analysts’ conference on President Obama’s proposals to reform the U.S. international tax regime. Now, there are two parts to the President’s proposals — a component that would affect U.S. individuals and one that would affect U.S. multinational corp... [Read More]
June 10, 2009 - 11:03 PM EDT
Why President Obama's International Tax Plan Matters to You
Tax Analysts, which sponsors Tax.com, is holding a roundtable discussion this Friday on President Obama's proposed changes to the U.S. international tax regime. His plans have attracted enormous attention in the tax community and among large multinational corporations. Why? Well, if enacted, a lot... [Read More]
June 4, 2009 - 10:41 AM EDT
My GM Car and Other Gas Bags
This General Motors bailout ticks me off... I lived in California in the late '70's. Okay, I admit it, I went there to find myself. As part of that process I found my first new car. It was a metallic brown Camaro--hey, of course it was--I was finding myself and couldn't afford a 'Vette. My Camaro w... [Read More]
May 28, 2009 - 2:33 PM EDT
Two Lights in the Steeple: The VAT Is Coming, The VAT Is Coming
Yesterday's Washington Post article on the value added tax, which was commented on by my colleague Marty Sullivan, has generated quite a bit of buzz. From the pros and cons of the whole idea in The Atlantic, to the Wall Street Journal to Fox News, the VAT is suddenly on everyone's radar screen. An... [Read More]
May 7, 2009 - 9:17 PM EDT
Men in Tights
I’m hazarding a guess, but I bet President Obama’s favorite fictional character is Robin Hood. You know, the guy who took on the special interests and robbed from the rich to give to the poor, and who was so comfortable with himself that he could roam the forest in that funny hat and those green... [Read More]
April 24, 2009 - 1:24 PM EDT
Sauce for the Goose
I was reading the morning paper while drinking my instant breakfast, and I read with interest in the Washington Post that President Obama had executives from 13 of the country's largest credit card issuers over to the White House. The commander in chief was none too happy with them. Apparently, the... [Read More]
April 15, 2009 - 9:22 AM EDT
Happy Tax Day, Or, What Makes a Pirate?
It’s amazing what can cheer people up. Our incredibly trained Navy Seals take out three Somali pirates with headshots, and we all had a good day. Even the President was affected -- for a second I thought he had a little George W. Bush in his step. Shortly after that news broke, I was channel surfi... [Read More]
April 10, 2009 - 3:19 PM EDT
Look, Black Helicopters!
In my prior post, I wrote about the massive debt the Obama administration will add to this country’s already massive debt if it gets all the tax breaks and reforms it wants. I also wrote about the administration’s apparent don’t-worry-be-happy attitude to the scary budget numbers we posted. Clea... [Read More]
April 6, 2009 - 11:22 AM EDT
Holy Smokes, We're Going Broke
I moderated a Tax Analysts roundtable discussion Friday on President Obama’s tax policy. It was a great discussion, but, warning: it's two hours. Here’s the audio link. I came away with two main reactions. First, despite the fact that he has ordered a panel to study tax reform (in Washington pane... [Read More]