Tax Docket

According to an article from the Washington Post today, taxpayers spend 7.6 billion hours and nearly $140 Billion in order to comply with the Internal Revenue Code. This is reported a few days after the release of the President’s Economic Recovery Board’s report regarding the complexity of tax code. Evidence of the increased complexity of the code cited in the report is the enlargement of the Form 1040 (form used by individual taxpayers to file taxes) Instructions from 14 to pages to 44 pages and 15,000 changes to the code since 1986.

When you step up to order your cheeseteak at Pat’s King of Steaks, you order it “wit or wit out” onion. Well, for bloggers in Philly, they can only maintain their blog wit a tax. According to multiple articles, Philadelphia imposes a $300 “business privilege license” tax on local bloggers in addition to city wage taxes and taxes on net profits earned from blogging.

NBC Philadelphia: Pay Up or Shut Up: Bloggers Charged $300 For Their Thoughts
Washington Examiner: Philly requiring bloggers to pay $300 for a business license
Mashable:Philadelphia Tax Code Sparks Big Controversy with Small Bloggers

Trying to figure out what estate tax rates will apply next year is almost as frustrating for estate planners as it is for ESPN in trying to figure out whether Brett Favre will retire or not. Georgia estate planner John J. Scroggin took the uncertainty to another level. According to the Wall Street Journal’s Financial Adviser’s Blog, he asked a group of estate planners to place bets on how Congress would handle the estate tax. The Jackpot: $200. Scroggin thinks there are three possibilities for the estate tax. “The options are a 45% tax on estates over $2 million; a 60% tax on estates over $1 million; or 60% tax on estates over $2 million.”

WSJ Financial Adviser Blog: On Estate Tax, All Bets Are…On

From Forbes, Tax Hikes Loom For Businesses (slideshow)

Taxes take the top spot on the legislative agenda when Congress returns from its summer recess in September. Lawmakers have said they’ll take up legislation to provide a boost to small businesses and to extend some expiring (or expired) tax breaks. They’re also under pressure to reduce the budget deficit. It’s got to be paid for somehow.

European golf tour officials are in talks with the British government about changing certain tax laws that may deter top golfers from competing in this year’s Ryder Cup. The recent rules issued by the HMRC (HM Revenue and Customs) allow the agency to tax endorsement and sponsorship earnings as well as player winnings. The agency’s rules have deterred Jamaican sprinter Usain Bolt from competition’s in Britain.

Andre Agassi lost a landmark case against the agency four years ago regarding these rules and regulations. In light of the court’s ruling in this case, for example, if an athlete competes 40 percent of the time in Britain, that athlete’s global endorsement earnings can be taxed 40 percent.

AP: Tour Officials Hampered by UK Tax Rules

Here is a link to a calculator created by the Tax Foundation which will compute your 2011 income taxes under three different scenarios: (1) If Congress allows all Bust tax cuts to expire; (2) Congress Acts to extend Bush tax cuts through 2011; and (3) Congress enacts tax laws as suggested in President Obama’s budget.

From NPR’s Cities, Websites and Hotels at Odds Over Taxes:

Atlanta won a court case last week that will bring in more money for the city. And the same legal argument heard there — about whether the city now is simply able to collect taxes that it said it was already owed, or whether it’s imposing a new tax altogether — has taken place in courtrooms all across the country.

A seemingly technical question about taxing hotel rooms has triggered dozens of lawsuits nationwide, as well as a big-money lobbying fight in Congress.

On one side are online travel companies such as Expedia and Travelocity, which claim that cities — because of their miserable budget situation — are attempting a money grab by demanding tax payments to which they’re not entitled.

From Forbes, Did Tax Ploy Help Saints Win Super Bowl?

In a just-filed U.S. Tax Court lawsuit, the partnership owning the Saints acknowledges that it didn’t treat an $8.5 million annual payment from the state of Louisiana as income and therefore didn’t pay taxes on the sum. Rather, the team said the money was an addition to “working capital” and a nontaxable transaction.

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According to the lawsuit, the $8.5 million was one of a series of “inducement payments” starting in 2001 for 10 years to keep the National Football League team in New Orleans. The lawsuit says, the money was to be used, among other things, to “acquire additional and higher-priced player contacts” to make the team “more competitive in the NFL.”

On Wednesday, the Senate approved legislation which allows home buyers (first-time home buyers and home buyers purchasing home for primary residence) that signed contracts by April 30 to close by September 30 in order to still be eligible for the tax credit. The tax credit is $8,000 for first time home buyers and $6,500 for home buyers purchasing a home as their new primary residence. Congress has sent the bill to President Obama.

Reuters, Senate Agrees to Extend Home Tax Credit

New York Times, Home Buyers’ Tax Credit Extended

ABC News,Congress Approves Home Tax Credit Extension

Method Man plead guilty to tax evasion charges Monday. The Hip Hip artist  was arrested on August 9 for failure to pay state and personal income taxes. According to reports, he wrote a $40,000 restitution check on the spot after owning approximately $106,000 in taxes.

The Associated Press, Method Man Pleads Guilty to NYC- Tax Evasion Charge

ABC News, Method Man Pleads Guilty to Tax Evasion

Fox News, Method Man Pleads Guilty to Tax Evasion Charge

New York Daily News, Wu-Tang rapper Method Man Pleads Guilty to Attempted Tax Evasion, Pays $106K in Restitution