Tax Guru – Ker$tetter Letter

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Archive for the ‘SalesTax’ Category

Posted by taxguru on April 1, 2015

Click on image for full-size version.

bHo-AprilFool

Drudge had links to some interesting tax related stories this morning:

No Joke: April 1st Brings Double Digit Sales Tax To Several East Bay Towns – It used to be a common belief that states with no income taxes made up the revenue by having much higher sales and property tax rates.  That is no longer the case. California has super high income tax rates, as well as high sales tax rates.  It was actually a big surprise to me when we moved down here to Florida, because I was expecting much higher sales and property taxes than we had in Arkansas.  It turned out that both are actually much lower down here.

IRS union calls for $1.9 billion more in funding – The PR campaign for more IRS money is in full swing.

IRS ignoring 60 percent of taxpayers’ calls as deadline looms – Self admitted by the less than truthful (he lied to Congress about Lois Lerner’s emails) IRS Commissioner as he pushes for more money for IRS employees.

IRS chief to GOP: You can’t abolish us – The number one goal of government employees is self perpetuation; so it’s natural to expect IRS employees to fight like crazy against any proposed changes in the system that could possibly reduce the scope of their power. The cruel irony is that they use our own tax dollars to fight any attempts to reduce their ability to confiscate more of our money.

Tax Freedom Day® 2015 is April 24th – The Tax Foundation’s annual calculation of when in the year we move from being slaves of the government to free persons who can keep the fruits of our labors.


TaxCoach Software: Finally! Plain-English Tax Planning That Builds Your Business!


Posted in IRS, SalesTax | Comments Off on

Posted by taxguru on July 28, 2010

Sen. John Kerry skips town on sails tax –  Today’s example of DemonRat hypocrisy.

His career of marrying rich widows has obviously resulted in a very cozy lifestyle for the Lurch lookalike.  Let’s not hold our breath waiting for Vice President Joe Bite-Me Biden to call John sKerry unpatriotic for taking steps to avoid paying his fair share of taxes. That would only happen if the yacht were owned by a Republican.

Some more coverage of this topic:

http://www.myfoxboston.com/video/videoplayer.swf?dppversion=2397

Sen. Kerry to pay $500K tax on yacht

The more sKerry changes, the more he stays the same

Activists: John Kerry boat flap boon to tax ballot question

John Kerry may need to pay $500k tax on yacht

Explaining John Kerry’s Yacht-Tax Dodge

John Kerry says he always intended to pay tax – Of course he did. Doesn’t this remind you of his famous campaign slogan that he voted for a bill before he voted against it?

John Kerry adds wind to story’s sails

sKerry: Benedict Arnold’s yacht?

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Profiting from sales taxes…

Posted by taxguru on November 3, 2009

As someone who buys almost everything over the internet, where some out of state vendors charge sales tax and others don’t, I have long suspected that many of those vendors don’t actually send the tax money to Arkansas and other “foreign” states.  Given a choice, I’d obviously prefer not to pay the sales taxes at all.  But if I am forced to pay them, I would like some assurance that the money is properly forwarded to the State and not kept as another profit item, such as inflated Shipping and Handling charges, which I have railed against in the past.

According to this article,some states are now cracking down on online vendors who aren’t passing along the full amount of sales taxes paid by their customers.

 Fla. sues online travel companies over hotel taxes

I’m not a pro-tax type of person, but the money these companies are allegedly pocketing isn’t being stolen from the state governments.  It is being stolen from their customers.

 

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Sales Tax Holidays

Posted by taxguru on July 17, 2008

CCH has a list of some upcoming special sales tax holidays in various states.

 

Posted in SalesTax | Comments Off on Sales Tax Holidays

Sales Tax Scammers

Posted by taxguru on October 26, 2007

Q:

Subject: Tax /Ethical Question

Dear Mr. Kerstetter,

As an aspiring accountant, ive encountered an ethical dillema at my job. I currently work for a retail establishment(non accounting related job)where we sell high end luxury fashion goods. A few weeks ago, i noticed a transaction that wasnt “right”. A sales associate sold some merchandise to her client that was over $100,000 in store. Come to find out, the sales associate and assitant manager did not charge the client tax(the tax was approximatly $9500). To “dodge” the tax issue, the assistant manager shipped out an empty box filled with catalogues and possibly magazines to give the impression that the merchandise was being sent out to the client at an out of state address via FedEx. The thing is, items that exceed over a certain amount(im guessing over $10,000) typically need to be sent out insured by an armoured security delivery service. My question for you is what kind of laws has the sales associate and assistant manager violated? Im under the impression this is tax fraud and quite possibly, mail fraud. I feel that this transaction should be reported for I feel its very dishonest yet i know the outcome will most likely be termination of those employees. I dont want people to lose their jobs but at the same time these kind of things should not go unspoken. Thanks


A:

This sounds very similar to the infamous art dealer cases in New York a few years back, where several very famous art dealers received prison sentences for helping their customers evade state sales taxes by pretending to ship paintings out of state.

So, what your superiors are doing is obviously very illegal and will come to light eventually.  Anyone the government determines was part of this conspiracy to evade the taxes will most likely be prosecuted.  The prosecutors will have to exercise their own discretion as to how vigorously they want to prosecute anyone they learn knew about the scheme and failed to report it.

Since you are aware of this ongoing crime by some people at your employer, you do have a dilemma as to how to proceed.  I can think of a few options for you.  You didn’t say who your employer is or where you are located; so I’m not sure how many of these will be applicable for your particular situation.

At a minimum, you should report this illegal activity to the top CEO of your company, as well as to the person in charge of the company’s Internal Audit department.  When I was employed in the Internal Auditing profession, there were a number of instances where I was alerted to criminal activity by employees and I was allowed to follow those through with my own investigations that led to employee terminations and criminal prosecutions.

I’m assuming that the top corp big-wigs are unaware of this illegal activity and will welcome the chance to clean house of the lawbreakers before it ends up being discovered and costing the company a lot of money and bad press. 

Of course, if the company’s top brass are in on the tax evasion scheme, this won’t do much good.  In that case, the next option will be much more appealing to you.

Most tax agencies pay rewards to whistle blowers for info leading to the recovery of evaded taxes.  Turning in the lawbreakers to your state sales tax agency could result in a nice financial reward for you. 

In addition, if you are serious about a career in accounting, a job with the sales tax agency investigating this kind of thing at other companies could very well be possible if you make an impressive presentation of your findings when you turn in the tax scammers at your company. 

Of course, other options are to just remain quiet about this and stay at your current job or leave and find employment at a more law abiding company.

Good luck.  I hope this helps give you some ideas as to a course of action.  Please keep me posted as to how this plays out.

Kerry Kerstetter

 

Follow-Up:

Dear Mr. Kerstetter,

Thank you so much for your reply. I am actually going to quit my job at the end of the year for I just was offered an internship at a public firm for the busy tax season! However, im still trying to evaluate my decision on if I should report this or not. There is so much unethical things that happen on a store level in addition to this that I could report, yet nobody else has the courage to stand up to my superiors. I will definently keep you posted if I do decide to take action against them. Have a great day!

 

 

 

 

Posted in SalesTax | Comments Off on Sales Tax Scammers

Sales Tax Holidays

Posted by taxguru on July 26, 2007

The most recent email newsletter from TaxCoach Software had a link to this handy listing of the various sales tax free days in many states around the country. 

Be sure to click on the link to your state’s specific website; because there are several exceptions.  For example, I noticed that there’s nothing listed for here in Arkansas; but I could go up into Missouri  next week and avoid sales tax on up to $3,500 of computer hardware.  However, it seems that most cities and counties aren’t participating in this “holiday;” so only the state portion of the sales tax will be waived. 

  

 

 

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