It’s a nice, Spring day, and you’re relaxing in your office at the Oregon Department of Revenue. All that’s on your desk is a stack of tax returns. So why not browse some pornography on the Internet?
Well, you’re now an ex-employee. And there was a Trojan on the Porn site. And those files you were working on? Someone, somewhere may have that data.
We previously reported the sad case of William Campbell. The ex-Mayor of Atlanta was sentenced today to 2 1/2 years in prison for tax evasion.
Campbell plans on appealing the sentence.
News Story: MSNBC
The Tax Court today looked at three cases where Native Americans claimed that they did not owe income tax because they’re Native Americans. Section 1 of the Tax Code states that all income is taxable. As the Court noted,
“Native Americans are subject to the same Federal income tax laws as are other U.S. citizens unless there is an exemption explicitly created by treaty or statute. Squire v. Capoeman, 351 U.S. 1, 6 (1956); Estate of Poletti v. Commissioner, 99 T.C. 554, 557-558 (1992), affd. 34 F.3d 742 (9th Cir. 1994); see Allen v. Commissioner, T.C. Memo. 2006-11; see also Rev. Rul. 2006-20, 2006-15 I.R.B. 746.” [Gunton v. Commissioner, T.C. Memo 2006-122]
In all three cases the petitioners could not cite treaties or laws that exempted them from income tax. So they all struck out, and owe the tax.
Cases: Gunton v. Commissioner, T.C. Memo 2006-122
Metallic v. Commissioner, T.C. Memo 2006-123
George v. Commissioner, T.C. Memo 2006-121
My writing partner lives in Youngstown, Ohio. The last time I checked a map it was over 2000 miles from the Bronze Golden State. However, the Board of Equalization must look at different maps.
According to this column in the North Lake Tahoe Bonanza, the BOE ruled that if the managing member of an LLC is a California resident, the LLC must pay California taxes solely for this reason. I can’t find the ruling online, so I do not know any of the other details.
But on its face this ruling seems ridiculous. Consider a hypothetical Ohio LLC, Youngstown Tubing, LLC. The business is located in Youngstown. The LLC has no sales effort in California. Its managing member resides in California, but he travels to Youngstown for all of the LLC’s business. Yet (supposedly) because of the BOE’s ruling, this Ohio LLC would owe California franchise tax and the (previously ruled unconstitutional) LLC fee tax. I can’t see how this ruling can survive a challenge in federal court; then again, I was shocked that the Supreme Court declined to hear the Huckaby case (where a Tennessee telecommuter was forced to pay New York income tax).
I have requested additional information from the BOE; perhaps I’ll be surprised when I read the ruling and find that this ruling makes sense. I’ll keep you informed.
According to the Fresno IRS Service Center, around 40,000 to 50,000 extensions filed using Form 4868 were wrongly denied at the Fresno IRS campus. Most of the forms were transmitted in bulk via paid preparers. The IRS is now notifying impacted taxpayers and preparers that the extension(s) is allowed and that they should ignore the previous communication.
If your extension was denied, and it was filed in Fresno, do nothing until July. Then if you feel it was wrongly denied, and you have not heard from the IRS, you should request a reconsideration using the process noted in the denial letter.
The error apparently stems from “human error” is misstamping the incoming Form 4868s.
Hat Tip: CSEA
Proposition 82, the mandatory preschool/tax increase/help Las Vegas, Phoenix, and Denver initiative, fell to defeat yesterday. With almost every precinct reporting, 39.1% favored the proposition, but 60.9% opposed it. Californians even defeated a library bond initiative, 53.1% to 46.9%. That’s unusual because most bond measures are easily passed in the Golden State.
But we’re not through dealing with tax increases. In the Democratic primary, Phil “I want to increase your taxes” Angelides defeated Steve Westly and will oppose Governor Schwarzenegger in the November general election.
I have a number of clients who receive income from outside of the United States. I’ve advised my clients that the US Tax Code is quite clear—income from all sources, legal or illegal, from within the United States or from outside the United States, is generally taxable. Anyone in a high profile occupation, such as an athlete or a contestant on a game show (eg Richard Hatch) should be aware of this.
Well, at least one surfer perhaps thought that the surfing lifestyle exempted him from paying taxes on winnings earned in Fiji, South Africa, Brazil and other foreign locales. Until the IRS found out. Sonny Garcia, perhaps the best ever Hawaiian surfer (he retired last year), now faces up to three years in jail and a fine of up to $100,000 after pleading guilty today to tax evasion. Garcia, born Vincent Sennan Garcia III, has won numerous surfing titles as this article notes.
The moral? Even if the surf’s up, dude, you gotta pay your taxes.
No, I’m not talking about the Impossible Missions Force. I’m speaking about…well, to be honest, a lot of nothing. But several charlatans have been promoting an “IMF Decoding Service.” Indeed, if you do a search on Google or some other search engine you’ll find several of these listed.
The Deptartment of Justice and the IRS are not amused. Last week one of the promoters of this scheme found himself in court in Cincinnati, and now has a permanent injunction against promoting the IMF Decoding Service and the FOIA Generator. You don’t need the Freedom of Information Act in order to obtain records from the IRS; you can request a transcript of your tax returns or even photocopies of your old returns just by filling out the appropriate forms.
A sucker is born every day. Hopefully you realize that you must pay your taxes. If you don’t, there are several federal institutions just waiting for you. And for the promoters of these frauds.
Proposition 82, the pre-school for all, tax the wealthy, help Las Vegas, Phoenix, and Denver initiative, now trails, according to a Field Poll just released. For those, like me, who are against the initiative, vigilance is still required. Democrats are shown to be in favor of the initiative while Republicans are against it. However, there are no contested raced on the Republican primary ballot on Tuesday while there is a contentious Democratic races for Governor.
As always, you should exercise your right to vote this Tuesday no matter where you stand on this initiative. If you don’t know where your polling place is, you can find your polling place here.
For those who don’t remember, we had a long list of participants to choose from for the 2005 Tax Offender of the Year. Our lucky winner, Sharon Lee Caulder, formerly of New Orleans, recently of Oakland, and soon to be housed by the Bureau of Prisons, was sentenced on Thursday to 30 months in prison. Ms. Caulder earned $1.7 million (primarily from sales of her book, Mark of Voodoo, while simultaneously filing for bankruptcy. Oops.
