Corporations are living the island life -- or at least their shadowy shell companies are -- and saving a bundle on taxes as a result.
This post comes from Maryalene LaPonsie at partner site Money Talks News.
While you may be dutifully sending off 25 percent or more of your income to the federal government each year, corporations are sharing a whole lot less with Uncle Sam.
According to a 2013 report from the U.S. Government Accountability Office, profitable corporations paid a mere 13 percent in federal income taxes in 2010. For comparison, the statutory tax rate -- that's the one set forth in law -- is 35 percent.
So how do corporations get away with paying only 13 percent of their income in taxes when they should be paying 35 percent?
With a tax hit like that, it had better be some pretty delicious potato salad.
This post comes from Brianna Ehley at partner site The Fiscal Times.
It’s only been a few days since a top contender for the world’s most obnoxious Kickstarter rocketed to Internet fame, making a bland BBQ side dish one of the most discussed topics online, right alongside the World Cup, ISIS and the latest revelations about the NSA’s surveillance program.
You can thank Ohio native Zack "Danger" Brown for creating the now infamous potato salad Kickstarter, which has now raised more than $70,000 from about 5,000 donors (who presumably have nothing else to do with their money).
You read that right: 70 Grand in about three days ... and Brown has several weeks to go until his fundraising campaign ends.
That’s a lot of dough for potato salad — but as the good people at the Tax Foundation point out, "Danger" Brown’s fundraising comes with some financial peril. The growing potato salad account is going to sprout up quite a hefty tax bill.
Record numbers of Americans living abroad are renouncing their US citizenship over IRS reporting reqirements.
This post comes from Liam Pleven and Laura Saunders at partner site The Wall Street Journal.
Patricia Moon was born in Dayton, Ohio, to a family descended from Quakers who settled in the New World before the American Revolution.
As a young woman, Ms. Moon fell for a Canadian man and moved to Toronto. The 59-year-old homemaker, who still visits the U.S. to see relatives, said she feels American in her bones, even after three decades abroad.
Yet despite her deep roots, Ms. Moon walked into a U.S. consulate two years ago, raised her right hand and recited an oath renouncing her U.S. citizenship. Afterward, she said, "I bawled my eyes out."
Ms. Moon is among record numbers of Americans cutting ties. U.S. offices abroad reported that 1,001 U.S. citizens and green-card holders had renounced their allegiance in the first three months of the year, according to Andrew Mitchel, a lawyer in Centerbrook, Conn., who analyzes Treasury Department data. That figure puts 2014 on track to top last year's total of 2,999 renunciations, he said, which was the most since the government began disclosing the data.
Six weeks later, most Americans have forgotten about the 2014 tax season -- except those who didn't file by the April 15 deadline.
Tax attorneys and finance geeks aside, no one really likes doing their taxes. If you realize you made an error or forgot to include something in your tax return, you're probably not going to be too eager to deal with it. What happens if you just ... don't?
All sorts of no-good, terrible, very bad things can happen to you if you ignore problems with your taxes. Before getting into that, let's start with what you should do if you realize you messed up your tax return.
Survey of wealthy Americans finds that politics determine the solution for inequality. But they were united on other key wealth issues facing the country.
Robert Frank, CNBC
In the heated debate over inequality, the wealthy are usually portrayed as the cause rather than the solution.
But CNBC's first-ever Millionaire Survey reveals that 51 percent of American millionaires believe inequality is a "major problem" for the U.S., and nearly two-thirds support higher taxes on the wealthy and a higher minimum wage as ways to narrow the wealth gap.
Some think Uncle Sam has too much leeway collecting taxes as it is, but the truth is the IRS needs more money to do its job properly.
This post comes from Janet Novack at partner site Forbes.com.
No, this isn’t an article about how the Internal Revenue Service is a corrupt, political tool, because it’s not -- despite its ham-handed handling of Tea Party and other organizations’ applications for 501(c)(4) tax exemptions and the bonuses it indiscriminately paid to IRS employees behind on their own taxes.
The IRS is, however, an insular, often tone deaf and sometimes bumbling bureaucracy which is being starved of the resources it needs to do its job. Since 2010, its Congressional appropriations have fallen 7 percent -- and that’s in nominal dollars, before any adjustment for inflation. During the same period, its appropriations funded workforce has shrunk by 10 percent, with enforcement staff down 15 percent, according to numbers Congress' Government Accountability Office released last week. Meanwhile, the tax agency’s workload has increased with the explosion of identity theft tax refund fraud; a 4 percent growth in returns filed; and new laws to administer, including the Affordable Care Act (a.k.a. Obamacare).
"The IRS is in crisis and it's not the crisis that everybody thinks it is," IRS Taxpayer Advocate Nina E. Olson said in an interview.
A tax loophole allows corporations to deduct millions when they give CEOs huge stock options and other types of 'performance pay.'
This post comes from Krystal Steinmetz at partner site Money Talks News.
If you shake your head when hearing about multimillion-dollar pay packages for executives, you're probably not going to be happy to hear that you as a taxpayer have helped subsidize that huge CEO pay.
It's true. A new report by the left-leaning Institute for Policy Studies found that a tax loophole has allowed corporations "to deduct unlimited amounts from their income taxes for the cost of executive compensation -- as long as the pay is in the form of stock options and other so-called 'performance pay,'" the institute said.
In other words, the more a company pays its top executive in performance pay, the less the company has to pay in taxes.
This loophole has provided a massive subsidy for exorbitant executive compensation.
The report focuses specifically on the restaurant industry, and for good reason. The industry has proven to be a double burden for taxpayers. While restaurant workers are often paid so little that they are forced to rely on taxpayer-funded programs for the low-income, taxpayers are also unknowingly helping to subsidize millions in executive compensation.
In a tax case, a US judge ruled that the agency's published guidelines don't hold up in court.
This post comes from Janet Novack at partner site Forbes.com.
Before filing your 2013 tax return, did you consult an Internal Revenue Service publication for clarification of some confusing point?
That's living dangerously.
Or so a U.S. Tax Court Judge declared this week. "Taxpayers rely on IRS guidance at their own peril," Judge Joseph W. Nega wrote in an order entered on April 15th -- an order denying a motion that he reconsider his earlier decision to penalize tax lawyer Alvan L. Bobrow for making an IRA rollover move that IRS Publication 590, Individual Retirement Arrangements (IRAs), says is allowed.
Technically, Nega denied the motion as moot, since Bobrow and his wife Elisa had reached a settlement with the government. But the judge wrote in his order that IRS guidance isn't "binding precedent" or even sufficient "substantial authority" to get a taxpayer excused from penalties if he follows that guidance and the IRS’s interpretation of the tax law turns out to be wrong.
Huh? Sound unfair? Some of the nation’s most prominent tax lawyers sure think so.
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