Rolling Stone on Taxes

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I read a lot of tax-related articles and they come from a variety of sources, but it is not every day that I find one in Rolling Stone.  I have to say that the article entitled “The Biggest Tax Scam Ever” by Tim Dickinson is very good; a very detailed scholarly piece about big corporations avoiding billions of dollars in taxes right under our noses.  I enjoyed the story, but I didn’t love that it came out of Rolling Stone.

I can tell I’m feeling the urge to do one of those “When I was a kid…” rants, but I’ll try to refrain.  I know that Rolling Stone has always published political-type “news” stories.  In fact, some would probably say its political writers are more skilled at what they do than their music staff is at picking the best music (here I refer specifically to the fact that Rolling Stone did not initially give Led Zeppelin favorable reviews — obviously a serious mistake, and one that cannot really be forgiven, even after all these years).  However, when I used to read Rolling Stone (in the 1980s) I seem to remember it being mostly a music and pop culture magazine with serious topics scattered here and there.  These days the publication looks like it is being written for an audience that is … well, MY AGE!  *facepalm*

I tend to think of it this way.  When a Burger King employee gets off work and goes out to dinner, the last thing that person wants to eat is Burger King.  And the last thing I want to read about when I pick up a music magazine after work is taxes.  Am I the only one!?

Starbucks: How Evil Are They Really?

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image via greenretaildecisions.com

If you haven’t heard about Starbucks’ tax problem, here is a very brief synopsis.  A Reuters story broke last week which outed the popular coffee chain for having paid only £8.6 million on sales of  £3 billion in Britain since 1998.  And then people were outraged when Starbucks offered to come clean by paying £20 million over the next two years, as if they are in a position to simply offer whatever they feel is a fair amount.

#1 – How dare Starbucks avoid paying taxes at this time of extreme belt-tightening all across Europe! If multinational corporations would just pay their share in taxes, then the UK and other European countries wouldn’t be in such bad shape.

#2 – How dare Starbucks think they can just throw out a figure they determine is fair when regular tax payers must pay everything they owe plus penalties & interest on top of the original tax debt!

But let’s put this in perspective.  The media fails to emphasize the fact that Starbucks isn’t doing so hot in the UK; they haven’t been making a profit.  Rents and royalties have been expensive.  Correct me if I’m wrong, but Starbucks is not being accused of doing anything illegal; they are being accused of tax avoidance (i.e., paying as little in taxes as legally required).

Year-end Tax Tips

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image via patriotupdate.com

Tax attorneys typically come in two flavors.  There are those who help you to avoid tax problems through tax planning.  These tax attorneys will advise you on the tax consequences of transactions and will help you to avoid paying more taxes than necessary.  And there are those who try to clean up the mess that has happened through poor tax planning.  These “tax relief” attorneys will help you with tax controversies and help you in situations where you owe taxes and cannot pay.  Our firm focuses on the latter, but today I want to pass along a few tax planning tips from Fox News writer, Kay Bell.  These are her year-end tax strategies, and they are specifically geared for what may lie ahead for us in 2013 (i.e., the “fiscal cliff”):

  1. Accelerate your income into 2012, if possible, to avoid having to pay higher taxes at a higher rate next year. However, be careful you are not illegally manipulating when you receive the income; the IRS looks at when you had a right to the income.
  2. Take capital gains in 2012 to avoid potentially higher rates.
  3. Sell major assets that have lost value (unless capital gains tax go up in 2013).
  4. Get medical and dental work done now that you can still easily claim itemized medical deductions.
  5. But some may want to defer itemized deductions until next year in order to offset potentially higher tax rates.
  6. Convert your traditional IRS to a Roth IRA

As always, these are very generic tax tips and you should consult a CPA, tax attorney, or other tax professional who is familiar with your individual circumstances before making these types of decisions.

 

The Sacramento Gold Dust Mystery

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image via highrisesociety.com

In these days of FATCA and offshore accounts, for some it is hard to imagine those days when the preferred place to hide money was under a mattress or in a backyard hole.  There could be many reasons for wanting to conceal one’s true wealth, but few of them tend to be very honest.  Although, I suppose some people just don’t trust themselves to spend their own money responsibly.

The technicians at Clark & Rush, a Sacramento-based heating & A/C company, found $300,000 worth of gold dust packed away in 12 old baby food jars.  They happened upon the stash in September while doing an installation on an old home in Sacramento.  The gold dust was given to the homeowners who requested that their names not be made public.  Looks like somebody has some secrets.

Some people try to illegally hide money and assets from the IRS, and there is literally no end to the creativity.  But whether it is done in an effort to pay less taxes or to escape the collection arm of the IRS in an asset seizure situation, it is the wrong approach to tax relief.  No competent tax relief attorney will ever advise you or help you to do this.  A tax attorney will assist you with tax avoidance so that you pay only as much as you are legally required to pay, but will never help you with illegal tax evasion.

Ex-UBS Client Sentenced For Tax Crimes

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In 2009 Zurich-based UBS avoided federal prosecution by paying $780 million, admitting it helped thousands of United States citizens evade federal taxes and turned over the names of 250 clients to U.S. authorities. U.S. prosecutors have since charged about 50 Americans with tax crimes

One such former client, Luis Quintero, from Florida, was recently sentenced to four months in federal prison for failing to disclose $4 million in Swiss bank accounts. Quintero, a 64-year-old wholesale perfume importer, pleaded guilty in April and agreed to pay a $2 million fine for failing to file a Report of Foreign Bank and Financial Accounts for the calendar year 2006, according to court records. Read the full article by Susannah Nesmith here.

 

U2 Scorned for Tax Dodging

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Activist group, Art Uncut, has planned a protest during U2′s performance at this weekend’s Glastonbury Festival in England.   The group has not said exactly what actions they will take to make their point.

Most people looking for tax relief don’t have the liberty of selecting which country they want to pay taxes in.  But in 1996 U2 went shopping around with the intention of moving their business affairs to a country with lower taxes, and they landed in the Netherlands.   Art Uncut’s position is that this “tax dodging,” (by U2 and others) although not illegal, is causing poor countries like the band’s native Ireland to grow even poorer.  Furthermore, it is their view that this move really undermines frontman Bono’s highly publicized campaigns aimed at reducing poverty in developing nations.

Interestingly, Forbes recently placed U2 at the very top of their list of highest paid musicians, earning $195 million over the relevant 12 month period.