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			    <title>IRS TAX TIPS</title> 
				<link>http://www.irstaxquestions.com/taxtips/</link> 
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			<title>Diablo Gold Secrets</title>
			<link>http://www.irstaxquestions.com/taxtips/news/diablo-gold-secrets</link>
			<description><![CDATA[The Original And #1 Diablo 3 Gold Guide]]></description>
			<pubDate>Thu, 17 May 2012 22:01:19 MST</pubDate>
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			<title>Avengers cavalcade!</title>
			<link>http://www.irstaxquestions.com/taxtips/news/avengers-cavalcade</link>
			<description><![CDATA[The new Cavalcade of Risk is up at Insurance Claims and Issues!

This roundup of insurance and risk-management blog posts covers vital stuff — for example, Insureblog’s analysis of the insurance industry’s exposure if the scenes in The Avengers actually happened.
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			<pubDate>Thu, 17 May 2012 22:01:19 MST</pubDate>
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			<title>Tax Roundup, 5/17/2012: Athletic welfare queen edition</title>
			<link>http://www.irstaxquestions.com/taxtips/news/tax-roundup-5172012-athletic-welfare-queen-edition</link>
			<description><![CDATA[From Minnesota to the Gulf, Corporate welfare for wealthy athletes and wealthier team owners flows like a big muddy river.  The Tax Policy Blog passes on the bad news for the taxpayers who are picking up the tab:
A new sports facility has an extremely small (perhaps even negative) effect on overall economic activity and employment. No recent facility appears to have earned anything approaching a reasonable return on investment. No recent facility has been self-financing in terms of its impact on net tax revenues. Regardless of whether the unit of analysis is a local neighborhood, a city, or an entire metropolitan area, the economic benefits of sports facilities are de minimus.
But, but… the Vikings!

Do corporate welfare queens wear bloody socks? Rhode Island has invested $75 million in a video game company started by Curt Schilling. It’s starting to get ugly. (Hat tip: alert reader Brendan).
David Brunori ponders taxes on “violent” video games:
Do violent video games make people more likely to commit crimes? Supporters pointed to a real-life cop killer who was known to play Grand Theft Auto — in 2003. The real Nazis (not the zombies) committed the most horrific acts known to mankind without once watching a violent video game. Perhaps World War II wouldn’t have occurred if we had taxed Mein Kampf?
Unless the characters somehow emerge from the screen and start shooting up the house, it’s hard to see how something that happens only on a computer screen is “violent.”
TaxProf: Tax Savings From Facebook Co-Founder’s Renunciation of U.S. Citizenship: $67 Million
Jack Townsend: Renunciation of U.S. Citizenship to Save U.S. Tax
What’s your all-in cost of government? The AICPA has posted an online calculator to estimate your total liability for federal, state and local taxes. It’s easy to use, and the results are sobering. 
You negotiated a debt workout? The IRS may be glad to hear that. My newest post at IowaBiz.com, the Des Moines Business Record’s group blog for entrepreneurs.
Kay Bell: Tax record keeping tips and the statute of limitations on IRS audits
Adding insult to fatal injury: Deputies: Jailed murder suspect tries tax fraud with victim’s ID (TBO.com, Tampa)
Anthony Nitti: Bobby From Birmingham Does Little to Further the Cause of the Persecuted CPA
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			<pubDate>Thu, 17 May 2012 22:01:19 MST</pubDate>
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			<title>If the senator wants a say on executive comp, he should get himself on a board</title>
			<link>http://www.irstaxquestions.com/taxtips/news/if-the-senator-wants-a-say-on-executive-comp-he-should-get-himself-on-a-board</link>
			<description><![CDATA[With all the headlines about fabulous mulit-million dollar compansation packages for big-time executives, you’d never notice that the tax law caps deductions for public company executive pay at $1 million (Sec. 162(m).  So how has that worked out?
Not well, obviously.  Now a new study out of the Georgetown University Law Center gets to the obvious with some academic rigor: 
Sixteen years after its enactment, can we say that the $1 million deduction limitation works and that the Code is the best vehicle for Congress’s efforts to control executive pay? Drawing from a wide range of sources, this paper examines the § 162(m) limitation and explore whether the law achieves its intended result. To add context, it surveys other tax laws that restrict compensation deductions, like the § 286G tax deduction limits for “Golden Parachute” payments, the $500,000 deduction limit on compensation paid to executives at companies that received the largest Troubled Asset Relief Program (TARP) bailouts, and the Patient Protection and Affordable Care Act’s (PPACA’s) $500,000 deduction limit on compensation payments… Upon closer examination, it becomes clear that § 162(m) is less effective than letting shareholders have a binding say over how much companies pay their executives.
The study points out the obvious: the exception for “performance based compensation,” like stock options, has channelled the executive pay away from cash and into options and the like.  Options allow the executive to bet with company money.  If things go well, they and shareholders win, but if they don’t, only shareholders lose.  Some companies might have been better off writing executives big checks rather than encouraging them to roll the dice to run up stock value.  In any case, Congress has no business or skill in telling companies how and how much to pay their employees. 
Via the TaxProf.
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			<pubDate>Thu, 17 May 2012 22:01:19 MST</pubDate>
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			<title>Louisiana Legislature Approves Basketball Tax Breaks</title>
			<link>http://www.irstaxquestions.com/taxtips/news/louisiana-legislature-approves-basketball-tax-breaks</link>
			<description><![CDATA[The Louisiana legislature has approved a bill that would continue to provide tax breaks to the NBA&#039;s New Orleans Hornets. The tax credits, $37 million over ten years, are part of the state&#039;s Quality Jobs economic development program. The bill now goes to Governor Jindal for approval. According to the Times-Picayune, the bill is part of a larger deal:
The bill is part of the package of concessions the state made in negotiations to keep the National Basketball Association franchise playing at the Arena through at least 2024, and possibly 2029.[...]
The new contract between the NBA and the state also requires the state to come up with $50 million to $60 million in capital construction money to renovate the Arena during the next two years to make room for more expensive seating and box suites that Hornets management can sell.
The new deal also reduces a state attendance subsidy to the team. Under the previous agreement, the state had to pay the team up to $8 million per year if fan attendance was low. The potential annual subsidy has been reduced to $2.8 million in the new deal.
Stadium and sports team subsidies are fairly common, but many economists criticize the underlying economics. The claims of economic benefits tend to be exaggerated and usually leave out the fact that much of the economic activity associated with a sports team is likely to be shifted from other entertainment sectors. And, as is all too common with many analyses of economic development incentives, opportunity costs are ignored. Economists Andrew Zimbalist and Roger Noll summarized their findings in 1997 after studying sports subsidies around the nation:
In every case, the conclusions are the same. A new sports facility has an extremely small (perhaps even negative) effect on overall economic activity and employment. No recent facility appears to have earned anything approaching a reasonable return on investment. No recent facility has been self-financing in terms of its impact on net tax revenues. Regardless of whether the unit of analysis is a local neighborhood, a city, or an entire metropolitan area, the economic benefits of sports facilities are de minimus.
Clearly the Governor would not be justified in approving this deal based on the economic literature. Some subsidy proponents have responded to these criticisms by citing difficult-to-quantify intangible benefits, such as local pride and national prestige. However, if this is the best argument that proponents have, states and cities should be wary of continuing to dump money into sports subsidies.
For more on public funding for stadiums and convention centers, see:Sen. Obama Wrong About Economics of Sports StadiumsTax-Funded Raleigh Convention Center Subsidizing Conventions to Get Business As the Stadium Deal Turns Taxpayers Should Cry Foul Over Stadium Subsidies D.C. Mayor to Divert Dedicated Funds from Stadium
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			<pubDate>Thu, 17 May 2012 22:01:19 MST</pubDate>
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			<title>What the IRS Fresh Start Program does for You</title>
			<link>http://www.irstaxquestions.com/taxtips/news/what-the-irs-fresh-start-program-does-for-you</link>
			<description><![CDATA[The economic recession has made it difficult for many taxpayers to afford paying their taxes. So the IRS has done something to help. On February 24, 2011, the agency created a new program known as the Fresh Start program. To many taxpayers, this program is a godsend as it gives those who owe back taxes the opportunity to consolidate their tax debts and pay them off in a convenient and orderly manner.
Under the Fresh Start program the limit of the tax lien is raised to $10,000 meaning the IRS will only impose a lien on your property once your tax debt exceeds $10,000. More significantly, the Fresh Start program allows for the withdrawal of the lien once your back taxes have been fully paid. This is a vast improvement from the previous system where your lien was merely released upon full payment of taxes. If your lien is withdrawn, it is expunged, meaning it will not show on your credit record at all, thereby making it easier for you to apply for credit and loans after paying off your taxes. However, if you are merely released from your lien, your credit record will show that you had a lien filed against you by the IRS and you were released upon satisfying the lien.
If you wish your lien to be withdrawn even earlier, the Fresh Start program enables this also. All you need to do is enter into a Direct Debit agreement with the IRS that allows the agency to deduct fixed amounts from your bank account to repay your taxes every month. Once you have made several installment payments, the IRS can lift the lien even before your back taxes have been fully settled.
If you are currently paying for taxes in installments you can convert to the direct debit program and have your lien lifted immediately by requesting the IRS to do so.
The Fresh Start program also benefits small business owners. Now such business owners can pay their back taxes in installments if their tax liability does not exceed $25,000. Previously the threshold was only $10,000 meaning if your tax debt exceeds this amount, you cannot pay by installments. But now with the Fresh Start program, you can owe up to $25,000 and still pay by installments over 2 years.
If you wish to file for an offer in compromise, you may now do so if you owe not more than $50,000 in back taxes (the previous limit was only $25,000). The offer in compromise allows you to have part of your tax liability forgiven under certain conditions. Also, the offer in compromise is now open to those who earn up to $100,000 per annum.
But there are caveats attached to the Fresh Start program. For instance, the lien withdrawals are only for individuals and not businesses or other entities, and the program is only meant for use with income taxes. The program is not open to those with delinquent gift, estate or employment taxes.
What the IRS Fresh Start Program does for You is a post from: IRS Tax Problem Solver Blog - IRS Help
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			<pubDate>Wed, 16 May 2012 22:00:51 MST</pubDate>
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			<title>Tax Roundup, 5/16/2012: Mobile workforce act, rich hix tax trix, London whales.</title>
			<link>http://www.irstaxquestions.com/taxtips/news/tax-roundup-5162012-mobile-workforce-act-rich-hix-tax-trix-london-whales</link>
			<description><![CDATA[House Passes Mobile Workforce State Income Tax Simplification Act (H.R. 1864). (AICPA) State tax administrators dislike it, which I count as an endorsement.  It probably won’t go anywhere in the Senate.
More lucrative than the suicide thing:  Feds raid tax fraud suspect’s home with possible 9/11 connection (WTSP.com) 
No bias here! “Firms urge delay in IRS offshore tax dodger rules” (Reuters).  It would be more accurate to say “Firms urge delay in IRS attempt to wreck U.S. firms overseas finance operations.” 
Hak Ghun, will travel: 
A man who skipped town four years ago following allegations he spent millions of Navajo Nation corporate funds for personal use was indicted Tuesday on charges of federal tax evasion.
Hak Ghun, 61, the former chief executive officer of Biochemical Decontamination Systems Manufacturing Inc., a steel and fiberglass fabrication company based in Shiprock, is accused of spending more than $1 million of the company’s funds to pay his personal expenses, U.S. Attorney Kenneth Gonzales said in a prepared release.
Linda Beale brings us “Ten tax tricks (non-rich need not apply)” Much less here than meets the eye. For example:
9. IRS Monte Carlo (converting traditional IRAs to Roth IRAs, especially in sets so that you can take advantage of the 21-month “change your mind” period selectively as it benefits you)
This is a budgeting gimmick from Congress specifically designed to increase taxable income by having people pay tax now in hopes that it will help them avoid paying taxes later. It actually works best for the young and relatively poor, who are probably in lower brackets now than they will be at retirement. In any case, when people use this “trick,” they are making a bet on their future incomes and future tax law. They are also specifically doing what Congress hoped they would do.
American exceptionalism: Phil Hodgen searches in vain for another country that taxes its citizens abroad like we do.
William Perez: Tax Tips for Parents of New Graduates
Because they can?  Why is the IRS so slow to pay tax whistleblower rewards? (Kay Bell)
Anthony Nitti, Tax Court Decides First of its Kind Section 104 Issue.  Divorced spouse assigned ex’s disability payment doesn’t get to exclude it as compensation for personal injury.
The effect of the homebuyer tax credits, explained.  The Failure of Tax Policy Credits: Specific Evidence (Jim Maule)
That’s one way to make everyone rich: “Maryland to Increase Taxes on ‘Rich’ Residents Earning More than $100K Per Year?“ (Peter Pappas)
TaxGrrrl: Viral ‘Tax Loophole’ Video is Misleading: Taxpayer Fraud is a Much Bigger Problem
Robert D. Flach’s Wednesday Buzz is up!
Is there anything they don’t want to tax? Taxing the London Whale (TaxVox)
Longest books ever written:  Is This the Most Embarrassing Thing To Ever Happen to an Accountant at Work? (Going Concern)
You can look it up.  “Enrolled Agents Finally in the Dictionary! ” (Jason Dinesen)
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			<pubDate>Wed, 16 May 2012 22:00:51 MST</pubDate>
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			<title>Many Renouncing Citizenship because of IRS Action on Foreign Assets</title>
			<link>http://www.irstaxquestions.com/taxtips/news/many-renouncing-citizenship-because-of-irs-action-on-foreign-assets</link>
			<description><![CDATA[Due to the IRS action of taxing foreign assets owned by US citizens, a number of Americans have decided to relinquish their citizenship to avoid paying taxes. Among the more prominent ones is Eduardo Saverin, co-founder of Facebook. Last year, 1,780 Americans gave up their citizenship while the year before only 1,485 did so. In 2009, number was 731 and the year before that, only 226.
Since 2009, the IRS has intensified its efforts of tracking down American-owned taxable assets lodged overseas. This action has resulted in thousands of taxpayers being caught and prosecuted for tax evasion because they have not declared their offshore assets. The number of US citizens renouncing their citizenship started to spike in 2009 after the infamous case of UBS Bank of Switzerland that was fined $780 million in compensation for its role in helping its US customers hide their taxable assets in their bank accounts.
More significantly, the bank was forced to divulge the names of thousands of American clients with bank accounts suspected of tax evasion to the American government. This entire episode came about after an ex-private banker of UBS, Bradley Birkenfeld blew the cover off what UBS was doing and subsequently helped the IRS identify thousands of suspected tax dodgers. This inevitably spooked those having foreign assets.
The number of those relinquishing citizenship is expected to increase next year when more legislation is put in force. Among them is one that makes it mandatory for foreign banks to inform the US government of Americans opening bank accounts with them. Some foreign banks are already prohibiting Americans from opening accounts.
One of those in the list of people announced by the IRS who had renounced their citizenship is Eduardo Saverin, the 30-year old billionaire co-founder of Facebook, that is about to make its shares public. Facebook expects to raise as much as $11.8 billion through its coming IPO, the biggest for an Internet company. Saverin’s share in the company is about 4% which would stand to earn Saverin about $3.84 billion after the IPO. All this money will not be subject to tax now that Saverin has given up his citizenship.
But Saverin will still be subject to an exit tax on the capital gains from his stock holdings, even if he does not sell the shares. Saverin plans to become a resident of Singapore, where he intends to live indefinitely. Singapore does not have a capital gains tax but it does tax certain “foreign-sourced income”.
 
Many Renouncing Citizenship because of IRS Action on Foreign Assets is a post from: IRS Tax Problem Solver Blog - IRS Help
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			<pubDate>Tue, 15 May 2012 22:01:11 MST</pubDate>
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			<title>IRS Statute of Limitations on Foreign Sources of Income</title>
			<link>http://www.irstaxquestions.com/taxtips/news/irs-statute-of-limitations-on-foreign-sources-of-income</link>
			<description><![CDATA[Many people were rejoicing when the Supreme Court decided in favor of Home Concrete &amp; Supply LLC in their dispute with the IRS over the statute of limitations on tax audits. In that landmark case, the highest court in the land judged that the IRS had up to 3 years to audit taxes, not 6 years as contended by the agency. But before you go throwing a celebration party, you should remember a few things.
Firstly, the statute of limitations is still 6 years under certain circumstances. If you under-declare your taxable income by 25% or more, the IRS has 6 years, not 3, to audit you. Furthermore, the civil statute of limitations on Report of Foreign Bank and Financial Accounts (FBAR) errors or misreports is 6 years plus all criminal cases carry a 6 year statute of limitations also.
In 2010, the tax code was amended so an omission of more than $5,000 in gross income from “specified foreign financial assets” extends the IRS time to 6 years. The law is clear that the 6 year statute applies even if you had filed and disclosed your foreign income sources under the Foreign Account Tax Compliance Act (FATCA). So to each case, the statute of limitations may still be 6 years instead of 3 depending on circumstances.
If you filed your 2006 taxes before the deadline of April 15 in 2007, for example, the IRS has 6 years to audit you because the 3 year statute of limitations had not expired on March 18, 2010 when FATCA was passed. This means the IRS has up to April 15, 2013 to audit you. But for your 2005 taxes that were filed before April 15, 2006 the IRS has 3 years (not 6) to audit you because it was longer than 3 years before March 18, 2010.
However, if you consent to extend the statute of limitations before the 3 years is up (i.e. before April 15, 2009) then the IRS gets 6 years since the extension was not expired yet when FATCA was passed on March 18, 2010.
Another circumstance is if you had submitted your taxes late. For example, if you submitted your 2005 taxes in 2007 instead of 2006 and let’s say the 3 year statute of limitation was still open on March 18, 2010 when FATCA was passed, then the IRS has 6 years to audit your taxes. But if you made a late submission and your submission date was longer than 3 years before March 18, 2010 then the 6 year time limit does not apply and the IRS only has 3 years to audit you unless some other exception to the 3 year statute applies.
Finally, let’s say you submitted your 2005 taxes on time but you under-declared your income by more than 25% and more than $5,000 of that came from a foreign source. This means the statute of limitation in this case is 6 years and the IRS has until April 15, 2012.
 
IRS Statute of Limitations on Foreign Sources of Income is a post from: IRS Tax Problem Solver Blog - IRS Help
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			<pubDate>Tue, 15 May 2012 22:01:11 MST</pubDate>
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			<title>Iowa General Assembly adjourns without further damage (update – they got some damage in)</title>
			<link>http://www.irstaxquestions.com/taxtips/news/iowa-general-assembly-adjourns-without-further-damage-update-they-got-some-damage-in</link>
			<description><![CDATA[It could have been much worse.
The 150 elected supergeniuses at the Iowa legislature weren’t shy about deciding what forms of energy production deserve your tax money, and they also invested tax dollars in a private baseball park in Dyersville.  Still, they at least avoided making taxpayers pay for other peoples “innovative” investments or ESOP consultants.
The legislature failed to pass the Governor’s highest priority, a reform of Iowa’s commercial property taxes, though they did vote to curb some of the worst abuses of TIF districts.
Bills that passed include:

TIF Reform. HF 2460, the TIF reform, keeps taxpayers from diverting TIF receipts and requires audits of projects.  It’s a small step against local crony capitalism.
Field of Dreams.  The legislature passed and the Governor signed a bill (SF 2329) to let an athletic complex built on the location of the Kevin Costner movie to keep sales taxes it collects.  The movie says “if you build it, they will come.”  The legislation says “If you lobby hard enough, they’ll vote for almost anything.”  Any bill passed for the benefit of a specific taxpayer is by definition bad policy.
Tax Credits for green energy.SF 2342 provides “tax credits for the construction and installation of solar energy systems and geothermal heat pumps, modifying sales and use tax provisions related to property purchased for resale, and creating a sales tax exemption for certain items purchased for use in providing vehicle wash and wax services.”  Because the Iowa legislature knows better than you how you should heat your house.

Bills that died, mercifully:

The misbegotten “anchor manufacturing” or “supply chain incentive” bill. (HF 2471)
The extension of the Iowa Capital Gain break to certain sales to ESOPs (HF 2284) (UPDATE, 5/15: they snuck part of this in)
A special break for executive stock bonuses (HF 2311)
A 100% state tax credit for investments in the Iowa “Innovation Fund.” (HSB 648)
An “Amazon Tax” (SF 2309) that would have enabled struggling Main Street retailers like Wal-Mart to compete on a more level playing field with internet behemoths selling stuff out of their basements.

It’s unfortunate that the legislature couldn’t agree on a way to improve Iowa’s awful commercial property tax, but maybe we’ll be better off in the long run making it an issue in the upcoming election.  It would be even better if they would take up the issue of tax reform generally.  I suppose an election over the merits of the Quick and Dirty Iowa Tax Reform Plan would be too much to hope for.
The Quad City Times has more coverage of the end of the session.
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			<pubDate>Tue, 15 May 2012 22:01:11 MST</pubDate>
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