Tax Guru – Ker$tetter Letter

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Our old corporation is no longer active.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

New York City Targets Alec Baldwin for Possible Tax Evasion – This is the exact same thing Rush Limbaugh has had to deal with since he moved to Florida, where he has to prove to the New York tax auditors exactly how many days he was in that state each year in order to allocate the proper proportion of his annual income for New York State and New York City to confiscate their shares. As is standard for tax matters, the New York tax authorities start from the assumption that the wealthy celebrities were inside their boundaries every single day of the year and force them to prove otherwise. 

Confusion over tax code changes leads taxpayers to seek help with returns – Why we will never run out of work and why the freebie come-ons from the assembly line prep chains are no real threat to real tax advisors.

A good short video from GlennBeck.com on some of the most common lies the libs constantly tell about the tax system in this country.

I just updated my copy of the 2011 CFS Tax Corresponder program and noticed that they added two letters for clients regarding opting out of the new mandatory e-filing requirement.

From Tax Info

The first is a notification letter to send to clients, explaining the new rule and advising them to sign the second letter, which states that they are refusing to e-file and choosing to file paper returns.

Good look by Cato at the status of the government mandated Ponzi Scheme.

The Case for Social Security Personal Accounts

Any private market financial advisors who pushed their clients into this kind of retirement plan would be in the slammer along with Bernie Madoff.  Why aren’t the elected rulers in DC who continue to foist this insane and immoral scheme on all of us punished in a similar manner, or at least kicked out of office? 

From Blog Comix

From the most recent issue of National Review:

From Blog Comix