Friday, December 30, 2011

Friday's Tax Quote - December 30, 2011

“The income tax created more criminals than any other single act of government.”

- Barry M. Goldwater

Friday, December 23, 2011

Friday's Tax Quote - December 23, 2011

“The sales tax seems to be more politically acceptable than the income tax.”

- Raymond C. Scheppach

Friday, December 16, 2011

Friday's Tax Quote - December 16, 2011

“Any tax is a discouragement and therefore a regulation so far as it goes.”

- Oliver Wendell Holmes Jr.

Friday, December 9, 2011

Friday's Tax Quote - December 9, 2011

“I want to find out who this FICA guy is and how come he’s taking so much of my money.”

- Nick Kypreos

Friday, December 2, 2011

Friday's Tax Quote - December 2, 2011

“Politicians never accuse you of ‘greed’ for wanting other people’s money – only for wanting to keep your own money.”

- Joseph Sobran

Friday, November 18, 2011

Friday's Tax Quote - November 18, 2011

“We contend that for a nation to try and tax itself into prosperity is like a man standing in a bucket and trying to lift himself up by its handle.”

- Winston Churchill

Friday, November 11, 2011

Friday's Tax Quote - November 11, 2011

“If you want more of something, subsidize it; if you want less, tax it.”

- Old Economic Adage

Friday, November 4, 2011

Friday's Tax Quote - November 4, 2011

“Abracadabra, thus we learn
The more you create, the less you earn.
The less you earn, the more you’re given,
The less you lead, the more you’re driven,
The more destroyed, the more they feed,
The more you pay, the more they need,
The more you earn, the less you keep,
And now I lay me down to sleep.
I pray the Lord my soul to take,
If the tax-collector hasn’t got it before I wake.”

- Ogden Nash

Friday, October 28, 2011

Friday's Tax Quote - October 28, 2011

“Every society makes choices as to the tax systems that not only raise the necessary revenues to support government expenditures, but within that choice are inherent reflections of societal values.  Not only does a society choose a tax system but the tax system becomes one of the basic institutions that in itself shapes and molds the society.”

- Karen M. Yeager

Friday, October 21, 2011

Friday's Tax Quote - October 21, 2011

“Count the day won when, turning on its axis,
This earth imposes no additional taxes.”

- Franklin P. Adams

Friday, October 14, 2011

Friday's Tax Quote - October 14, 2011

“We understandably hesitate to talk about law in explicitly moral terms.  But tax has unavoidable moral and political dimensions.”

- Edward J. McCaffery

Friday, October 7, 2011

Friday's Tax Quote - October 7, 2011

“I hate taxes
Taxes gonna break my back I swear
Don’t you know I paid a lot more than my share
You know I’m thinkin’ about movin’ somewhere else
But I can’t because I love America too much
Especially California
Yeah I guess I’m gonna have to pay these taxes
If I’m gonna live here.”

- Robert Cray (“1040 Blues”)

Friday, September 30, 2011

Friday's Tax Quote - September 30, 2011

“The tax man’s taken all my dough
And left me in this stately home
Lazing on a sunny afternoon
And I can’t even sail my yacht
He’s taken everything I’ve got
All I got’s this sunny afternoon.”

- Ray Davies (“Sunny Afternoon”)

Friday, September 23, 2011

Friday's Tax Quote - September 23, 2011

“What Mae West said about sex is true about taxes.  All tax cuts are good tax cuts; even bad tax cuts are good tax cuts.”

- Grover Norquist

Friday, September 16, 2011

Friday, September 9, 2011

Friday's Tax Quote - September 9, 2011

“If you get up early, work late, and pay your taxes, you will get ahead – if you strike oil.”

- J. Paul Getty

Friday, September 2, 2011

Friday's Tax Quote - September 2, 2011

“The wages of sin are death, but by the time taxes are taken out, it’s just sort of a tired feeling.”

- Paula Poundstone

Friday, August 26, 2011

Friday's Tax Quote - August 26, 2011

“I thought at first that the power of taxation [given in the new Federal constitution] might have been limited.  A little reflection soon convinced me it ought not to be.”

- Thomas Jefferson

Friday, August 19, 2011

Friday's Tax Quote - August 19, 2011

“The expenses of government, having for their object the interest of all, should be borne by everyone, and the more a man enjoys the advantages of society, the more he ought to hold himself honored in contributing to those expenses.”

- Anne Robert Jacques Turgot

Friday, August 12, 2011

Friday's Tax Quote - August 12, 2011

“I think our tax system is not worthy of an advanced society.”

- Paul H. O’Neill

Friday, August 5, 2011

Friday's Tax Quote - August 5, 2011

“I like to pay taxes.  With them I buy civilization.”

- Oliver Wendell Holmes Jr.

Friday, July 29, 2011

Friday's Tax Quote - July 29, 2011

“And it came to pass in those days, that there went out a decree from Caesar Augustus that all the world should be taxed.”

- New Testament

Friday, July 22, 2011

Friday's Tax Quote - July 22, 2011

“[T]o tax and to please, no more than to love and to be wise, is not given to men.”

- Edmund Burke

Friday, July 15, 2011

Friday's Tax Quote - July 15, 2011

“Trade being a sensitive plant, a direct tax upon it to some extent at least deters trade even if its effect is not precisely calculable”

- Felix Frankfurter

Friday, July 8, 2011

Friday's Tax Quote - July 8, 2011

“The law of taxation is more concerned with the substance of economic opportunity than with classifying legal concepts, and tagging them with names and labels.”

- Benjamin N. Cardozo

Friday, July 1, 2011

Friday's Tax Quote - July 1, 2011

“There are some taxes that are good for our economy, because they discourage harmful activities.”

- David M. Roodman

Friday, June 24, 2011

Friday's Tax Quote - June 24, 2011

“Taxes, after all, are dues that we pay for the privileges of membership in an organized society.”

- Franklin D. Roosevelt

Friday, June 17, 2011

Friday's Tax Quote - June 17, 2011

“When Jesus tells his audience to ‘render to Caesar’ his point is not that they should pay their taxes like dutiful Roman citizens; his point is that they should be rendering their selves to God.  When it comes to what people owe God, Jesus is saying, we are all in the very highest tax bracket…”

- David T. Ball

Friday, June 3, 2011

Friday's Tax Quote - June 3, 2011

“There’s nothing like self-interest to motivate behavior.  When people ask me what are ways to pick out tax-efficient [mutual] funds, the first thing I say is, ‘Find out whether the manager has his or her own taxable dollars in the fund.’”

- Susan Belder

Friday, May 27, 2011

Friday's Tax Quote - May 27, 2011

“All taxes are a drag on economic growth.  It’s only a question of degree.”

- Alan Greenspan

Friday, May 20, 2011

Friday, May 13, 2011

Friday's Tax Quote - May 13, 2011

“…what are the inevitable consequences of being too fond of glory: Taxes upon every article which enters the mouth, or covers the back, or is placed under foot…taxes on everything on earth and the waters under the earth.”

- Sidney Smith

Friday, May 6, 2011

Friday's Tax Quote - May 6, 2011

“Men in America were so conditioned that they felt differently about taxes and about prices.  The former was an involuntary taking; the latter a voluntary giving….No one observed the obvious fact that in terms of total income of an individual it made no difference whether the money went for prices or taxes.”

- Thurman W. Arnold

Friday, April 29, 2011

Friday's Tax Quote - April 29, 2011

“Censure is the tax a man pays to the public for being eminent.”

- Jonathan Swift

Friday, April 15, 2011

Friday's Tax Quote - April 15, 2011

“The taxing authority is an uninvited party to all contracts.”

- Myron S. Scholes, Mark A. Wolfson, Merle M. Erickson, Edward L. Maydew, and Terry J. Shevlin

Friday, April 8, 2011

Friday's Tax Quote - April 8, 2011

“[The federal income tax system is] a disgrace to the human race.”

- Jimmy Carter

Friday, April 1, 2011

Friday's Tax Quote - April 1, 2011

“The math of the late 1980’s was simple.  Any company that exchanged its equity for debt was immediately worth more, courtesy of the U.S. tax code.  And every company was thought to be ripe for such a maneuver.”

- Roger Lowenstein

Friday, March 25, 2011

Friday's Tax Quote - March 25, 2011

“Whoever hopes a faultless tax to see, hopes what ne’er was, is not, and ne’er shall be.”

- Alexander Pope

Friday, March 18, 2011

Friday's Tax Quote - March 18, 2011

“Down to the Banana Republics
Down to the tropical sun
Go the expatriated Americans
Hopin’ to find some fun
Some of them go for the sailing
Brought by the lure of the sea
Tryin’ to find what is ailing
Living in the land of the free
Some of them are running to lovers
Leaving no forward address
Some of them are running tons of ganja
Some are running from the IRS.”

- Jimmy Buffet (“Banana Republics”)

Friday, March 11, 2011

Friday's Tax Quote - March 11, 2011

“A fool and his money are soon parted.  It takes creative tax laws for the rest.”

- Bob Thaves (“Frank & Ernest”)

Friday, March 4, 2011

Friday's Tax Quote - March 4, 2011

“The best things in life are free, but sooner or later the government will find a way to tax them.”

- Anonymous

Sunday, February 27, 2011

Kinder and Gentler IRS? Nope, Just Practical.

For a while it was said that what emerged from the IRS Restructuring and Reform Act of 1998 was “a kinder and gentler” IRS.  Over the past several years we have learned that the alleged tide of kindness was pulling back out to sea.  Replacing it appears to be a more practical and resourceful IRS that is recognizing that traditional collection methods are resulting in a greater number of business failures and lower rates of repayment. 

The IRS recently announced a “New Effort to Help Struggling Taxpayers Get a Fresh Start.”  See News Release IR 2011-20 here.  This is a good thing for a lot of taxpayers that have fallen behind on their tax obligations.  Make no mistake, this is not a program that has grown out of altruism.  The IRS must have realized that by lifting the threat of the sword and replacing it with a carrot, they could collect more unpaid taxes and allow the public a better solution to addressing tax problems.

The IRS announcement explains changes they are making. These include:   
  • Significantly increasing the dollar threshold when liens are generally issued, resulting in fewer tax liens. 
  • Making it easier for taxpayers to obtain lien withdrawals after paying a tax bill.
  • Withdrawing liens in most cases where a taxpayer enters into a Direct Debit Installment Agreement.
  • Creating easier access to Installment Agreements for more struggling small businesses.
  • Expanding a streamlined Offer in Compromise program to cover more taxpayers.

The IRS explains that the increased dollar threshold for lien filing is tied to inflationary changes since its last adjustment.  They have not, however, released what those dollar thresholds will now be.  The revisions to IRS procedure should expedite the release of a filed lien once a liability is fully paid. 

The biggest change is the release of a lien where a taxpayer owing less than $25,000 enters into a direct debit Installment Agreement.  In these cases, the monthly installment payment against a tax debt is automatically withdrawn from a taxpayer’s bank account.  This means that people owing less than $25,000 might be able to avoid additional damage to their credit report resulting from a tax lien if they allow for an automatic withdrawal from their bank account.  I am confident, however, that if a payment is missed (due to insufficient funds in a bank account) the IRS will be quick to file a lien against a taxpayer.  Getting a lien removed after such a situation will likely require the full payment of the tax even where a direct debit is in place.

Small businesses owing $25,000 or less will also benefit under the new programs.  The new rules should allow these businesses to enter into automatic installment agreements provided that the debts are paid off within 24 months.  Obviously, this will require a monthly payment in excess of $1,000.  So, while not a benefit to everyone, this will help a number of business get out of tax trouble without too much bureaucracy getting in the way.

Overall, these changes will allow a number of past due taxpayers to become fully compliant without adding a credit-devastating lien to their financial troubles.  Setting cynicism aside, what the IRS is doing is a good thing.

Friday, February 25, 2011

Friday's Tax Quote - February 25, 2011

“The government deficit is the difference between the amount of money the government spends and the amount it has the nerve to collect.”

- Sam Ewing

Wednesday, February 23, 2011

Emancipation Day: Why April 15, 2011 Falls on April 18th

This year (2011), the April 15th income tax filing deadline will not fall on April 15th.  Rather, because April 16th is a legal holiday in the District of Columbia, it will periodically have nationwide income tax filing consequences.  This year, Emancipation Day pushes the individual income tax filing deadline to Monday April 18th.  See IRS Notice 2011-17 here.   

What is Emancipation Day?  Every holiday has a reason behind it, however, too often we simply take pleasure in the fact that the existence of the holiday somehow positively affects us without thinking about the reason for the holiday.  Emancipation Day celebrates the day in 1862 on which President Abraham Lincoln signed the Compensated Emancipation Act to free over 3,000 slaves in the District of Columbia. 

Back to the tax impact: Because in 2011 the holiday falls on a Saturday, it is formally observed on the preceding Friday.  The preceding Friday is April 15th.  When April 15th falls on a holiday, the next day that is not a weekend or holiday becomes the individual income tax filing due date.  In 2011, this is Monday April 18th.  As a result, all procrastinators will have that last weekend to take care of filing their returns.  

You can find out more about Emancipation Day at the following links:

But the coolest link is here with images of the original act and transcriptions thereof:

Monday, February 21, 2011

Happy President's Day!

My good friends' young son had unfortunately thought that it was "Presents Day."  I expect that he will not soon forget the lesson that this is the day on which we honor those who served our great nation as President.

Friday, February 18, 2011

Friday's Tax Quote - February 18, 2011

“What is one really trying to do in the investment world?  Not pay the least taxes, although that may be a factor to be considered in achieving the end.  Means and end should not be confused, however, and the end is to come away with the largest after-tax rate of compound.

- Warren Buffett

Friday, February 11, 2011

Friday's Tax Quote - February 11, 2011

“A citizen can hardly distinguish between a tax and a fine, except that the fine is generally much lighter.”

- G.K. Chesterton

Friday, February 4, 2011

Friday's Tax Quote - February 4, 2011

“You must pay taxes.  But there’s no law that says you gotta leave a tip.”

- Morgan Stanley (Advertisement)

Monday, January 31, 2011

A Word On Tax Collections

In November and December of 2010, I wrote a series of tax articles for the State Bar of Wisconsin's Inside Track electronic news letter.  The first concerned tax audits and can be read here.  The second article discussed appeals and can be read here. The third addressed the United States Tax Court and can be read here.

The fourth article discussed (with great generality) what happens and what options may be available once the tax liability has become a fact that must be dealt with.  A brief discussion on what options a taxpayer has for paying or negotiating a tax liability can be found here.  

Friday, January 28, 2011

Friday's Tax Quote - January 28, 2011

“Earth gets its price for what Earth gives us; The beggar is taxed for a corner to die in …”

- James Russell Lowell

Monday, January 24, 2011

A Word On The Tax Court

In November and December of 2010, I wrote a series of tax articles for the State Bar of Wisconsin's Inside Track electronic news letter.  The first concerned tax audits and can be read here.  The second article discussed appeals and can be read here.

The third article discussed challenging a tax audit beyond the Appeals Division and into the United States Tax Court and can be read here.

Friday, January 21, 2011

Friday's Tax Quote - January 21, 2011

“If a client asks in any but an extreme case whether, in your opinion, his sale will result in capital gain, your answer should probably be, ‘I don’t know, and no one else in town can tell you.’”

- James L. Wood

Monday, January 17, 2011

A Word On Tax Appeals

Nearing the end of 2010, I began writing a series of tax articles for the State Bar of Wisconsin's Inside Track electronic news letter.  The first concerned tax audits and can be read here.  The second article discusses the practical and procedural aspects of an IRS tax appeal.

The discussion on appeals considers the different routes to the IRS Appeals Division and differences in how a case is viewed by appeals officers and the appeals division.  The appeals article can be read here.

Friday, January 14, 2011

Friday's Tax Quote, January 14, 2011

“The reward of energy, enterprise and thrift –is taxes.”

-          William Feather

Tuesday, January 11, 2011

Choosing a Tax Return Preparer

January heralds the arrival of tax season as Americans begin to receive their Forms W-2, 1099, K-1, etc.  The fact that major tax reform promises to be a part of the Obama Administration's agenda reminds us that the tax laws and tax return preparation is as complicated as ever.

As a result, more and more people are turning to hired professionals to assist in the filing of their tax returns.  But buyer beware, not all accountants and return preparers are created equal.  Here are a few words of advice that the IRS has to offer:
  • Be cautious of tax preparers who claim they can obtain larger refunds than other preparers.
  • Avoid preparers who base their fee on a percentage of the refund.Use a reputable tax professional who signs the tax return and provides a copy.
  • Consider whether the individual or firm will be around to answer questions about the preparation of the tax return months, or even years, after the return has been filed.
  • Check the person’s credentials. Only attorneys, certified public accountants (CPAs) and enrolled agents can represent taxpayers before the IRS in all matters, including audits, collection and appeals. Other return preparers may only represent taxpayers for audits of returns they actually prepared.
  • Find out if the preparer is affiliated with a professional organization that provides its members with continuing education and resources and holds them to a code of ethics.
For more information on choosing a return preparer click here and watch the IRS video below.

Internal Revenue Service United States Department of the Treasury

Monday, January 10, 2011

Tax Law Forum's 3rd Birthday

It has now been slightly more than three years that I have been writing about taxes on the Tax Law Forum blog.  To grow with the times I have redesigned the web page (hope you like it), added an IRS Twitter feed and will give additional focus on current events.

I hope you stay tuned and enjoy what is to come in 2011.

Photo courtesy of Ed Sanders (”Ed g2s” på Wikimedia Commons), Creative Commons Attribution ShareAlike 2.5Attribution ShareAlike 2.0 and Attribution ShareAlike 1.0 license

Wednesday, January 5, 2011

How Social Security Could Have Promoted Job Growth

This month I am the "Alumni Guest Blogger" for the Marquette University Law School Faculty Blog.  Its a pretty good blog even without my participation and I encourage you to check it out.

In my first guest post, I write about how the new tax legislation has chosen an indirect route to job growth through the Social Security Tax cut for employees.  Giving the tax break to employers rather than employees could have done a lot more.  Don't get me wrong, anyone who pays Social Security Tax will be happy to see the impact that the one year reduction in the tax will provide in their paychecks.  However, if the new tax law is really supposed to be about job growth (as suggested by its title: Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010), it could have done more with the Social Security Tax cut.

To read about how the Social Security Tax cut really could have directly promoted job growth, read my post entitled: The Social Security Tax Cut And A More Direct Route To Job Growth.

While you are there, stick around to read more about what the school is up to (i.e. bringing on Russ Feingold as a visiting professor) and to consider interesting legal analysis.