Tax Guru – Ker$tetter Letter

IRS Says Americans’ Income Shrank for 2 Consecutive Years – Using amounts reported on tax returns actually understates the drop in income caused by the stock market collapse a few years ago.  I’ve seen tax returns where the taxpayers lost well over a million dollars; but were only allowed to deduct $3,000 per year.

 

 

 

Cigarette Taxes Are Dangerous For Your Health  

  

John Kerry’s Tax Plan: Too Much Tinkering – While it’s not worth wasting any time seriously worrying about John Kerry’s tax plans becoming reality any time soon since he will lose in November in a landslide, there are some other good alternative tax reform ideas at the end of this article. 

  



The Tax Code’s Impact on the Reliability of Revenue Projections 

Socialism is evil  – Good “tell it like it is” from Walter Williams.  It’s always bugged me how pervasive the belief is in this country among the elites (and the DemonRats) that capitalism is the world’s evil and socialism is the salvation from all problems. 

Wave of Regulations Will Follow Tsunami of Federal Spending     

Trusts May Gain Tax Benefits By Shifting States  – A tax saving strategy that has always been near & dear to me, arranging things so that income is sourced from a tax free state.  While this article deals with trusts, similar steps can often be taken with corporations.  

Human Piggy Bank Held – An even more disgusting money laundering technique.

A closer look at 2004 sales-tax-free holidays – Most are timed for back to school purchases, but some have already started.

Arkansas Tax Amnesty Program – I just received a press release from the DFA reminding us that the amnesty program for people to come clean on pre-2003 taxes will be expiring on September 30, 2004.  This is actually better than most other tax amnesty programs I have seen because, besides waiving all penalties, they are also forgiving interest charges.  Since DFA charges ten percent (10%) interest on back taxes (much higher than the IRS’s 4%), that could save quite a bit of money. 

Having participated in the California amnesty program back in the mid-1980s, a word of warning is appropriate.  Anyone considering catching up with previously unfiled State income tax returns should also be ready to do the same with IRS, which does not have an active amnesty program.  Information sharing  between State and Federal tax agencies is a two way exchange.  DFA will be notifying IRS of back returns they receive and IRS will be expecting the same years to be cleaned up with them.  Back in the 1980s, I knew of many people who refused to take part in the Calif. amnesty  because they didn’t want to tip off IRS.

IRS Officials Criticize Arbitration Ruling – I can’t help feeling a bit sorry for top IRS management after their employees’ union stopped them from trying to improve their accounting skill level. 

  

 

When tax cuts lose to spending 

Incentives Matter: A Lesson – The lower tax rates on corporate dividends haven’t completely eliminated the double taxation of corporate income; but they have motivated Microsoft to pay out over $60 billion from previously taxed income.   It does keep the balance of intellectual power tilted towards our side.

Hispanic business owners strongly support permanent repeal of the estate tax, and the issue could determine how they vote in November – As should anyone who supports capitalism and opposes communistic wealth redistribution.

 

Low-Income Seniors Won’t Lose Subsidy 

As Cash Fades, America Becomes A Plastic Nation – Interesting look at the way our financial activities have been evolving away from the use of actual currency.  This must be good news for IRS because tracking taxable  cash transactions has always been the largest component of their “tax gap.” 

  

  

 

US Treasury Begins Sponsorship on New Twenty Dollar Bills – Obviously, this wouldn’t be a good time to do this.

 

 Blood-red money leads to a suspect – An extreme example of money laundering at an actual laundromat.