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How Uncle Sam helps save for retirement - Daily Herald

Google IRS Federal Income Tax - Tue, 2014-06-17 23:20

How Uncle Sam helps save for retirement
Daily Herald
The Saver's Credit—a little-known tax credit made available by the IRS to low- to moderate-income workers—could make saving for retirement more affordable than you think. It may reduce your federal income taxes when you save for retirement through a ...

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FairTax and IRS Scandal - Gilmer Mirror

Google IRS Federal Income Tax - Tue, 2014-06-17 17:09

FairTax and IRS Scandal
Gilmer Mirror
Pass the FairTaxHR25 which defunds and disbands the IRS. As long as the IRS exists, politicians will ... We as a nation must ensure that our children and grandchildren have the freedom of speech and private ownership now denied under the income tax ...

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Universal to unveil second Harry Potter attraction

Yahoo Tax - Tue, 2014-06-17 15:57
By Barbara Liston ORLANDO Fla. (Reuters) - Universal Orlando kicks off previews on Wednesday of its much anticipated Diagon Alley, a second Harry Potter-themed attraction that is expected provide a boost for the park's revenues and for tourism in central Florida. Universal has yet to fix a date for the opening of Diagon Alley this summer, but theme park experts predict a major bump in tourism based on the response to the original, a recreation of Hogsmeade Village, which required staggered entry times long after the June 2010 grand opening to control crowds. “There are heightened expectations for this expansion,” said Richmond-based theme park consultant John Gerner of Leisure Business Advisors. In the month after the original Harry Potter attraction opened, bed tax revenue from hotel guests in Orange County jumped 21 percent over the previous year.
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House GOP measure blocks IRS on political groups

Yahoo Tax - Tue, 2014-06-17 09:16
WASHINGTON (AP) — A GOP-controlled House committee unveiled legislation Tuesday to block the Internal Revenue Service from issuing new rules intended to rein in the use of tax-exempt groups for political campaigning.
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Paul Reddam's KPMG Tax Shelter Stunk In More Ways Than One - Forbes

Google IRS Federal Income Tax - Tue, 2014-06-17 05:40

Paul Reddam's KPMG Tax Shelter Stunk In More Ways Than One
Forbes
Although the Tax Court disallowed the loss based on economic substance, the IRS had maintained that the deal stunk four different ways besides the lack of “economic substance”. The phony loss had been created by a related ... (2) if Cormorant did own ...

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Napa doctor sentenced to prison for tax fraud - Napa Valley Register

Google IRS Federal Income Tax - Mon, 2014-06-16 21:27

Napa doctor sentenced to prison for tax fraud
Napa Valley Register
15 at a federal facility. The physician was sentenced under a plea agreement reached in early February, when he agreed to plead guilty to four counts of filing false income tax returns between 2005 and 2008. The charges were filed in connection with ...

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Moving Just to Avoid Taking 401(k) Tax Hit - Fox Business

Google IRS Federal Income Tax - Mon, 2014-06-16 18:05

Moving Just to Avoid Taking 401(k) Tax Hit
Fox Business
Taking early distributions from your 401(k) plan triggers a federal penalty tax of 10%. Fortunately, most states don't ... The best way to check if you qualify for one of the exceptions is to review IRS Tax Topic 558 titled "Additional Tax on Early ...

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IRS Clarifies the Structuring of Insurance-Dedicated Funds - WealthManagement.com

Google IRS Federal Income Tax - Mon, 2014-06-16 15:15

IRS Clarifies the Structuring of Insurance-Dedicated Funds
WealthManagement.com
The IRS ruled favorably, concluding that none of these facts “will cause the variable contract holders to be treated as the owners of the FUNDS shares for federal income tax purposes.” In other words, these facts won't cause the gains within the IDF to ...

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City of Miami sues JPMorgan, claims mortgage discrimination

Yahoo Tax - Mon, 2014-06-16 11:25

By Dena Aubin NEW YORK (Reuters) - The city of Miami has sued JPMorgan Chase & Co, accusing the bank of predatory mortgage lending in minority neighborhoods that allegedly caused a wave of foreclosures during the last decade's housing crisis. After issuing high-cost loans to minorities in the years before the housing crisis, JPMorgan later refused to refinance the loans on the same terms as it extended to whites, leading to defaults and foreclosures, the complaint said. The lawsuit came just weeks after the city of Los Angeles filed similar claims against JPMorgan, seeking to recoup damages for lost tax revenue and increased city services needed in blighted neighborhoods. "The Miami City Attorney's claims are baseless and stand contrary to our long record of providing affordable housing to low- to moderate-income families across the region," JPMorgan spokesman Jason Lobo said.


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Medtronic Embarks on Self-help Tax Reform

Tax Foundation - Mon, 2014-06-16 09:30

The cost of America’s extremely high corporate tax rate continues to pile up. The Wall Street Journal reports on yet another tax “inversion” deal:

Medtronic Inc. MDT -0.77% 's agreement on Sunday to buy rival medical-device maker Covidien COV +21.12% PLC for $42.9 billion is the latest in a wave of recent moves designed—at least in part—to sidestep U.S. corporate taxes.

Covidien's U.S. headquarters are in Mansfield, Mass., where many of its executives are based. But officially it is domiciled in Ireland, which is known for having a relatively low tax rate: The main corporate rate in Ireland is 12.5%. In the U.S., home to Medtronic, the 35% tax rate is among the world's highest.

Actually it’s worse than that. The U.S. federal corporate tax rate is 35 percent, then there are state corporate taxes on top of that. Medtronic is based in Minneapolis, where the state’s corporate tax rate is 9.8 percent, making the combined U.S. corporate tax rate 41.4 percent. This is more than 3 times the tax rate in Ireland.

Plus, Medtronic apparently does some business abroad already, which means it is subject to America’s worldwide tax regime that applies the high U.S. corporate tax rate to all profits earned abroad as well. Ireland also has a worldwide tax system, but at a tax rate of 12.5 percent it essentially doesn’t matter. This is a general feature of the worldwide tax system: there is a foreign tax credit for corporate taxes paid abroad, meaning there are only additional “repatriation taxes” when the domestic corporate tax rate exceeds the foreign corporate tax rate. The only country where this applies, essentially, is the U.S. Most countries in the developed world have switched to a territorial tax system that exempts foreign profits from domestic taxation, and the remainder either have relatively low corporate tax rates (e.g. Ireland) or they have very few multinational corporations (e.g. Mexico).

And the high U.S. corporate tax rate appears to have driven this deal, according to the Journal:

Medtronic had $14 billion in cash as of April, much of it held outside the U.S. The deal would enable it to deploy that cash and help Medtronic fulfill its promise to distribute half of its free cash flow to shareholders. Indeed, a person familiar with the matter said that was one of the main reasons the company wants to do the deal.

The Journal goes on to describe how Covidien was once a division of Tyco International, which moved its corporate headquarters from New Hampshire to Bermuda in 1997. Since then, Tyco moved to Switzerland in 2009, and then finally to Ireland this May, after Switzerland introduced new rules on executive pay.

At least a dozen companies have left the U.S. in recent years using the inversion technique, which involves a U.S. company merging with a smaller company abroad and taking the foreign headquarters. After Pfizer attempted to leave earlier this year, Congress attempted to stop the wave by threatening retroactive penalties. That doesn’t seem to have worked.

Besides, corporations have many alternative and perfectly legal means of escaping high corporate tax rates, such as moving to the pass-through sector where they are taxed at individual income tax rates without further taxes on shareholders. The pass-through sector is now so big that it contains more than 90 percent of U.S. businesses, and more than half of all U.S. profits.

The high U.S. corporate tax rate is causing serious economic distortions, chasing away businesses, investment and jobs. The only way to deal with it effectively is to bring the corporate tax rate down to competitive levels, which is the path chosen by virtually every other country.

Follow William McBride on Twitter

Categories: Tax news

Pizza, pizza: $1 million a pie? - Philly.com

Google IRS Federal Income Tax - Mon, 2014-06-16 02:53

Philly.com

Pizza, pizza: $1 million a pie?
Philly.com
LARC and its property-holding company have been slapped with city, state and federal property liens. PECO is suing them for ... LARC's chairman, Anthony Lewis Jr., a member of the city's Board of Revision of Taxes, said the nonprofit got the state ...

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CURL: IRS scandal gets Nixonian: The 18½-minute (or 26-month) gap - Washington Times

Google IRS Federal Income Tax - Mon, 2014-06-16 01:54

CURL: IRS scandal gets Nixonian: The 18½-minute (or 26-month) gap
Washington Times
The IRS, “in violation of the constitutional rights of citizens,” targeted conservative groups by conducting income tax audits and other income tax investigations “in a discriminatory manner.” There isn't much dispute there. The IRS sought to delay tax ...
Bramwell's Lunch Beat: Medtronic Riding 'Tax Inversion' WaveAccountingweb.com

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IRS scam continues long after tax-filing season - USA TODAY

Google IRS Federal Income Tax - Sun, 2014-06-15 04:01

USA TODAY

IRS scam continues long after tax-filing season
USA TODAY
... from the U.S. Treasury Department calling about a problem with your tax return. "They say you didn't pay enough or the money wasn't received, and the only way to remedy this and make sure nothing bad happens to you is to get money to them ...

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Are Your Social Security Benefits Subject To Tax? - Greater Wilmington Business Journal

Google IRS Federal Income Tax - Sat, 2014-06-14 22:03

Are Your Social Security Benefits Subject To Tax?
Greater Wilmington Business Journal
In addition, the amount of benefits subject to federal income tax increases for retirees with even higher income – income that exceeds an “adjusted base amount.” The base amount for a single person is $25,000. For married persons filing a joint return ...

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Money Matters: Don't put off filing late tax return just because you don't ... - News & Observer

Google IRS Federal Income Tax - Sat, 2014-06-14 17:04

Money Matters: Don't put off filing late tax return just because you don't ...
News & Observer
Q. I know I can't blame my mother's illness and subsequent death in early 2012, and it's probably not accepted by the IRS as an excuse for not filing my income taxes, but I've just discovered that I didn't file my taxes for 2011. I always ... Here is ...

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Zawarski real estate agent evaded taxes in excess of $130000 for years, feds say - The Express-Times

Google IRS Federal Income Tax - Sat, 2014-06-14 14:27

Zawarski real estate agent evaded taxes in excess of $130000 for years, feds say
The Express-Times
Federal officials say Lilliam Zawarski, of Palmer Township, reported $640,489 of income on federal tax returns submitted to the IRS between 2007 and 2009. With interest and penalties for nonpayment, her taxes amounted to $164,466 for those years, ...
Feds: Northampton County real estate agent charged with tax evasionWFMZ Allentown

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Residents of 'heaven' defense fails; Anoka tax dodger pleads guilty - Minneapolis Star Tribune

Google IRS Federal Income Tax - Fri, 2014-06-13 19:42

Residents of 'heaven' defense fails; Anoka tax dodger pleads guilty
Minneapolis Star Tribune
Tami M. May, of Anoka, entered her plea this week in federal court in Minneapolis to obstruction of due administration of IRS laws. She also had been charged with 15 counts of filing false tax returns. ... In April 2005, the IRS notified husband Dennis ...

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Owner of Triple Crown-contending racehorse loses tax case versus IRS - Reuters

Google IRS Federal Income Tax - Fri, 2014-06-13 17:22

Reuters

Owner of Triple Crown-contending racehorse loses tax case versus IRS
Reuters
The IRS challenged Reddam's 1999 tax return, arguing that his OPIS transaction was invalid and that he owed $8 million in federal income taxes. The IRS said in 2001 that it would not recognize the tax benefits of OPIS transactions and in 2003 the ...

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Owner of Triple Crown-contending racehorse loses tax case versus IRS - WKZO

Google IRS Federal Income Tax - Fri, 2014-06-13 14:54

Owner of Triple Crown-contending racehorse loses tax case versus IRS
WKZO
The IRS challenged Reddam's 1999 tax return, arguing that his OPIS transaction was invalid and that he owed $8 million in federal income taxes. The IRS said in 2001 that it would not recognize the tax benefits of OPIS transactions and in 2003 the ...

and more »
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Owner of Triple Crown-contending racehorse loses tax case vs IRS - Reuters

Google IRS Federal Income Tax - Fri, 2014-06-13 14:44

Owner of Triple Crown-contending racehorse loses tax case vs IRS
Reuters
The IRS challenged Reddam's 1999 tax return, arguing that his OPIS transaction was invalid and that he owed $8 million in federal income taxes. The IRS said in 2001 that it would not recognize the tax benefits of OPIS transactions and in 2003 the ...

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