In an unanimous decision, the Supreme Court upheld the requirement that medical residents pay Social Security taxes. As we noted in our prior posts on this topic, full-time students that work in addition to attending school are generally exempt from paying such taxes. However, in the Court’s opinion written by Chief Justice Roberts, the interpretation by the Internal Revenue Service of the law requiring residents to pay such tax was a reasonable one. The Court did not agree with Mayo Clinic’s argument that like full-time students, medical residents attend lectures and perform lab work in the course of learning and thus should not be responsible for paying the Social Security tax. The stakes in this case range from upwards of $700 Million payable by approximately 100,000 medical residents across the country.
Taxsoftware.com announced today that an application that permits a taxpayer to file six of the most often used federal tax returns is now available for purchase for $9.99 for use on Apple’s iPad. According to the press release, the app is the first of its kind.
Further, the app includes unlimited tax preparation and printing. There is an e-filing charge of $4 for an iPad 1040 and a $15 fee for any iPad business return (1041, 1065, 1120, 1120S and 1099-MISC.)
Visit the app’s site here for more information. Finally, by no means does this post mean that I am narrowing the scope of Tax Docket to Apple Products that assist individuals in handling their tax matters (see my previous post Mac App Store Opens Today — With a Useful Estate Planning App?).
Also, if you do get frustrated with the filing of your return or the amount of your refund (or lack thereof) we do not suggest you do what the video below demonstrates.
Today Apple has opened its new Mac App Store which mirrors Apple’s App Stores for its popular iPad, iPhone, and iPod products. I don’t own a Mac computer but I am familiar with the App Store as I use it for my iPod touch. With all the buzz surrounding this new Apple service I decided to explore some of the Apps currently available in the new Mac App Store. One of the first Apps I came across was Compartments. The App is introduced simply as “fast, easy-to-use home inventory application.” After reading more I discovered that a Compartments user can input information about things they own in their home, organize that information by room, input warranty information, and generate insurance reports which estimates the current value of a user’s things just to name a few of its functions.
Reading all of the information about Compartments brought to mind many stories I have heard about families having to sort through their parents or grandparents stuff in their house trying to figure out what it is, what its worth, and who should keep it. With a lack of documentation or instruction from the owner of these items, the probate of an estate may be stalled and even worse, arguments often ensue among family members. With Compartments, most of these issues may be able to be avoided. Further, many states, such as Florida, permit a testator to draft a memorandum that inventories personal items such as household furnishings and designate who shall receive them at death instead of including that information in his or her actual will. Although Compartments may not be used to replace such document, it may be used to help making this document an easier task.
In September, we reported that a proposed Romanian witch and fortune teller tax law was rejected by lawmakers in Romania. Well, as of January 1, Romanian witches and fortune tellers will be taxed as part of an initiative to collect more revenue and crack down on tax evasion in a country that is in recession according to the Associated Press. It is speculated that the tax will be difficult to collect because payments to witches and fortune tellers are made in cash and in small amounts. According to the Associated Press, witches and fortune tellers plan to threaten the government with spells and spirits as part of the new law.
The Internal Revenue Service announced that taxpayers will have an extra three days to file and pay their taxes this 2011 Tax Season. The Service explained that the extension is due because Emancipation Day, a holiday observed in the District of Columbia, falls this year on Friday, April 15. By law, District of Columbia holidays impact tax deadlines in the same way that federal holidays do. Further, taxpayers requesting an extension will have until Oct. 17 to file their 2010 tax returns.
If you went to law school or are currently attending you have likely heard a professor, potential employer, or law school graduate say something to the tune of “Law school doesn’t really prepare you for the practice of law.” I always chuckled to myself when I heard someone say this. How can three years of school (and for many others an additional year to pursue an LL.M.) not prepare you to work as an attorney? A few months ago I thought to myself, “Would any doctor or former medical student tell a current medical student that medical school doesn’t prepare you to work as a doctor?” Of course not. When we go to visit a doctor, we (or at least I) expect that they experts in what they do. Could you imagine if your dentist told you that he or she thought you may need a root canal but had only read about them in a class and had never actually performed one? Of course not. So why is it acceptable for most law students to graduate from law school without ever seeing a case file, without standing before a judge and arguing a case, and without sitting down with a client to discuss their particular matter? Sure, I am thankful for my experience on Moot Court, but not all law students are members of Moot Court. What do law students who are not members of Moot Court and Law Review take away from law school?
I think legal education needs an update. While law school students anxiously wait outside their professor’s door to snag the prior year’s state statutes that are being given away for free, medical school students work with the latest and greatest technologies using them to perform various operations. Medical school students have Grey’s Anatomy , the new series Off The Map, and House. Law school students have reruns of Law and Order and The Good Wife (I don’t even watch this show, my fiancee does).
The internet has enabled law students to learn many of the fundamentals taught in law school quicker than ever before. Retrieving a case, statute, proposed legislation, legislative history, law review article etc, no longer requires a J.D. — only an internet connection. Instant analysis and commentary of all of the aforementioned is also available for free or little cost online.
Most undergraduate programs are four years (unless you are aspiring to be the next Van Wilder). During those four years you select a major in an area of interest and graduate with a degree in that specialty. With three years, a law school student has ample opportunity to explore areas of interest, take specialized courses in that area, and obtain a Juris Doctor with a major in that particular area. I believe this would increase the marketability of law students, make the OCI process more transparent, keep law school costs down, and allow students to takeaway skills that they will use in their particular practice area without losing sight of the general legal fundamentals. It sure would have been nice if I could have obtained a tax law designation on my J.D. degree without having to incur the additional costs of an LL.M. program.
While this does sound neat and tidy to me, I know that there is one bump in the road — the LSAT. In order to allow potential law school students the flexibility in selecting a law school program based on that school’s specialty area, the LSAT would have to become less important in the admissions process. I will leave that discussion for another day. Back to watching Law and Order reruns.
After about a month of “intense” preparation for my first set of exams at New York University’s LL.M. in Taxation program and followed by a week of recovery (although recovering has been a slow process), I am back to regularly posting on Tax Docket. I called this post “New Year. New Yew” for two reasons. First, after taking a four hour corporate tax exam, it was the first thing one of the proctors said to us as we were packing up our regs, code, computers, outlines, and other food and drink items. Second, as I am sure you are aware of, I decided to give Tax Docket a little makeover. I hope you like some of the changes and I look forward to the year ahead. Thanks for reading!
As I continue to find things to distract me while studying for my remaining LL.M. Tax finals, I came across this humorous quiz on Howstuffworks. Enjoy. I look forward to being able to post more frequently once finals are over.
Lamar Odom, the 6- foot-10 Los Angeles Lakers forward, is challenging his IRS bill, arguing that certain expenses he deducted are related to his work as a professional athlete and therefore are “ordinary and necessary expenses” paid in carrying on a trade or business which are deducible. Specifically, Odom sought to deduct expenses associated with fines handed down from the National Basketball Association (NBA). Odom also claimed expenses incurred in training and conditioning arguing that his contract with the Lakers requires him to be in sufficient physical condition. The IRS views these expenses as personal, rather than business expenses, and therefore not deductible.
The fines for which Odom is arguing should be deducible are not excluded from the regulations pertaining to the deductibility of fines and penalties. See Reg. 1.162-21. Therefore, this case likely turn on whether these expenses are truly personal in nature, or incurred in connection with Odom’s “trade” as a professional athlete.
In an unanimous decision, the Supreme Court upheld the requirement that medical residents pay Social Security taxes. As we noted in our prior posts on this topic, full-time students that work in addition to attending school are generally exempt from paying such taxes. However, in the Court’s opinion written by Chief Justice Roberts, the interpretation by the Internal Revenue Service of the law requiring residents to pay such tax was a reasonable one. The Court did not agree with Mayo Clinic’s argument that like full-time students, medical residents attend lectures and perform lab work in the course of learning and thus should not be responsible for paying the Social Security tax. The stakes in this case range from upwards of $700 Million payable by approximately 100,000 medical residents across the country.
