Uncle Sam wants you … to repay the home tax credit. Payback is due for those who took advantage in ’08, not in ’09 or ’10

It’s tricky to keep this straight, so this chart from TheTaxBook is extremely handy.

From Tax Info

Downloadable PDF version.

Amazon.com Widgets

Obama’s FY2012 Budget: Taxes, Taxes, and More Taxes –  And who is surprised by this?

are coming up with ever more ludicrous schemes to steal money from people, such as this recent case from New York allowing that state to tax all world-wide income of anyone who happens to own property in New York. 

Out-of-State Owners Could Face Tax Bill

We can obviously expect similar moves from the other financially incompetent states, such as California. 

One of the big reasons that these kinds of schemes to assess immoral taxes on non-residents is the fact that those people are not voters in that state and don’t have the same kind of recourse of screaming to their elected officials as the residents have.

Rush Limbaugh is super glad that he sold his apartment in NYC.

The 1099 Repudiation. A revealing debate over one of Washington’s dumbest ideas. – I haven’t written much about this insane unworkable provision of the ObamaCare law because I never expected it to become reality. Nor have I advised any of our clients to do anything differently in regard to 1099 reporting than they already have been doing.

As is always the case with our bone-headed rulers, when they attempt to fix a problem, they create much larger ones.  The billions of new 1099s would have created the worst identity theft nightmare we have ever seen.  If everyone had to give everyone else their Social Security or other ID numbers, there goes everyone’s privacy out the window. 

It’s just another ridiculous idea to supposedly close the unknowable “Tax Gap.”  As I have explained countless times, nobody really knows how large the tax gap is and all such numbers used by our rulers to justify more power for IRS are just pulled out of their rear ends.  Likewise, any predictions of how much new revenue this insane 1099 rule would create come from that exact same place.

The IRS Targets Income Tricks – Nothing really new here. IRS has always tried to classify as much income as possible as W-2 wages in order to be able to charge payroll taxes.

It has always been my contention that IRS does not have the right to unilaterally change the compensation package that has been negotiated between a company and its workers.  Rather than take conventional salaries, some people prefer to be paid in other forms, such as leases and royalties, or in the form of fringe benefits.  A combination of these is the most common arrangement. 

A perfect example of this is Steve Jobs, who takes an annual salary from Apple of one dollar, but makes up for that with other fringe benefits, as well as appreciation in the value of his company stock.  If such an arrangement is good enough for the Chairman of a multi-billion dollar corporation, it should be just as acceptable in much smaller corporations.

From a client:

Good Morning, Kerry!

Our old corporation is no longer active. This was the corporation we had for a retail store. This weekend, we received a letter from the state of Missouri. I’ve attached a copy of the letter. I’m assuming we’re ‘not required to file’, but thought I should check with you first.

Thanks,

My Reply:

We received that exact same kind of notice from the MO DOR over the weekend for one of our corporations. Some genius at the DOR must have had the bright idea to go fishing for taxpayers by spamming all of the corporations in the Arkansas counties bordering Missouri, hoping some will voluntarily file Missouri tax returns.

A few years ago, they sent similar kinds of notices to insurance agents and Realtors in our counties. I’m pretty sure your father, as well as several other of our clients, got one of those. We just wrote back to the MO DOR and explained that they didn’t do any business in Missouri and all of their income was being properly reported to Arkansas. We never heard another word from the MO DOR after sending those in.

For this new fishing expedition, I just wrote on the notice that we do not conduct business in Missouri and all of our business is in Arkansas. You can see a copy of what I wrote here.

In your case, you can also mention that your corp has been dissolved, but make sure that you include the fact that you never did business in Missouri so they don’t try to get you for prior years.

Don’t be surprised if you receive a similar notice for your other corp. I’m expecting one for ours.

I hope this helps.

Kerry