If you’re going to leak a photo of a beautiful 2013 Ferrari, wouldn’t you take care to produce a high-quality digital photo? This one is seriously lacking. The car doesn’t quite fit the photo. It’s all grainy and dull. And there’s the guy posing with the vehicle that must not care about getting in trouble for the leak. Although I suppose he can definitively say he wasn’t the one who snapped the shot! Maybe the picture was taken with a little spy camera built into the button of the photographer’s coat — maybe that’s why it’s such a bad picture.
J.K. Rowling Moves Beyond Potter
I have a hard time watching Jim Carrey in a serious role — it just always seems like a subtle joke. Maybe I’ve never been able to see him as anyone other than Ace Ventura. His mannerisms and acting style are so unique and, for lack of a better word, goofy, that I’m sure it is difficult for him to land roles in serious movies.
But some actors have succeeded in breaking out of their comfort zones. So why not authors? J.K. Rowling, author of the earth-shattering Harry Potter series, announced today that she would be breaking on through to the world of adult books via publisher Little Brown. No, not that kind of book! Just books that won’t be found in the “youth” section of the bookstore. Although its hard to believe, her last Potter book was released back in 2007.
Rowling is saying that her new novel will be “very different” from the Harry Potter series. I’m not sure what an author does to accomplish this transition. In my non-author-like mind I’m picturing bigger words, more complex sentences, difficult plots and characters, darker themes. Actually, if it’s going to be very different, maybe she’s writing about puppies and butterflies this time.
Early Retirement Distributions
Many people do not realize that early distributions from retirement accounts qualify as income for tax purposes. The realization may come in a very disturbing way — such as a 1099 and/or a letter from the IRS stating there has been underreported income. If nothing is done to correct this, and if no exceptions exist, it will likely result in a tax debt. A retirement withdrawal is normally considered “early” if done prior to age 59 1/2. The tax impact of an early withdrawal is the topic of the IRS’ latest installment in its Tax Tips series (IRS Tax Tip 2012-34), and is outlined here:
- early distributions are subject to an additional 10% tax and must be reported to the IRS
- rollovers are generally not subject to this tax; not until the new plan actually makes a distribution
- nondeductible contributions to an IRA are not taxed in an early distribution
- early distributions attributable to prior contributions to a Roth IRA are not taxed
There are several exceptions to the 10% early withdrawal tax, which are discussed fully in Publications 590 and 575.
61-year-old NH Man May go to Prison for Apprehending Burglar
Nobody goes out of their way to help people anymore because they’re afraid of getting sued for their good deed, or in the case of Dennis Flemming, getting thrown into prison.
Dennis Flemming, 61, held a thief who had broken into his New Hampshire home at gunpoint until the police arrived on the scene. When the police arrived they arrested both the thief and Mr. Flemming who now faces a sentence roughly equal to that of the burglar. The state wants to put Flemming away for about 7 years on a “reckless conduct” charge.
The alleged “reckless conduct” consisted of firing a bullet into the ground to show the thief that he was not going to let him get away. Says Flemming:
“I didn’t think I could handle this guy physically, so I fired into the ground. I didn’t know it was illegal [to fire into the ground], but I had to make that guy realize I was serious.
It’s upsetting that homeowners can’t defend themselves and protect their neighbors in this manner. It will be interesting to follow this case through to the end and see if justice is served. See full story here.
Who Can Improve the IRS’ Image?
Clearly there are few firms, organizations, or government agencies that pose a greater PR challenge than the IRS. That’s why the Service is soliciting pitches from 12 full service communications and marketing companies to replace the current $17.5 million contract it awarded to PR firm Porter Novelli four years ago. The IRS needs to convince Americans who are only interested in tax relief that filing and paying your taxes is not that bad.
The IRS is in dire need of some PR assistance.
~ Captain Obvious
The Novelli contract is over, and many would ask, “What did they do?” I suppose they did spruce up the IRS website with some new smiling faces. And they tried to change the face of the IRS to make it seem younger and more in-touch with technology . . . emphasis on “tried.”
The new contract is worth $15 million and with that kind of incentive, many PR specialists are going to be up for the challenge. And I’m sure each will have their individual spin on what should be done. For instance, David Bauman would try to turn things around for the IRS by first changing their name. That’s how he gradually repaired Ron Artest’s image — by changing his name to Metta World Peace. See WSJ article for the full story.
What would you chose as the IRS’ new moniker?
Important Baseball Start Dates
Today I asked Christian (my personal MLB knowledge source) when baseball starts and he said, “It depends . . .” then he proceeded to give me this long-winded, convoluted answer. I told him, “C’mon, it’s Friday. Loosen up. I’m not asking you for your legal opinion here. Take your attorney hat off for just a second and answer my question!”
Then he had me take a look at MLB’s Important Dates link and I saw why he answered me like he did. It really IS complicated!
February 19, 2012 – Pitchers and Catchers report
February 29, 2012 – First exhibition game: Florida State University vs. Philadelphia Phillies, Florida
March 2, 2012 – First Spring Training game: Seattle Mariners vs. Oakland Athletics, Phoenix
March 28, 2012 – First Regular Season game: Seattle Mariners vs. Oakland Athletics, Tokyo
April 4, 2012 – Opening Night: St. Louis Cardinals at Miami Marlins
April 5, 2012 – Opening Day
Bartering – It’s Still Income to the IRS
Assume Farmer John, an acquaintance, comes to my office with a small tax problem and I spend 10 minutes researching and looking for the answer. I then provide him with a bit of advice, and he asks me what he owes me. I ask him to give me a dozen eggs from his family farm and we’ll call it even. Do I have to report this transaction as income on my taxes?
This is an exchange of one product or service for another, with no cash changing hands. It’s a barter. A barter may be an exchange of goods for goods, services for services, or as in my example, services for goods. According to the IRS, the fair market value of the goods and services exchanged in a barter transaction must be reported as income by both parties. So the $2.00 dozen of eggs must be reported as income on my taxes. And the value of my services must be reported as income by Farmer John.
Besides the income tax responsibilities, there may be other tax implications associated with bartering such as:
- self-employment tax
- employment tax
- excise tax
- capital gains or capital losses
- non-deductible personal loss
Bartering transactions take place in a variety of settings, including home-based online bartering businesses, bartering exchanges, or on an informal one-on-one basis. For more information about the IRS rules on bartering, see IRS Tax Tip 2012-33 and the Bartering Tax Center on the IRS website.
The IRS Dirty Dozen List is Suspiciously Familiar
Wouldn’t David Letterman’s credibility be questioned if he reused the same Top Ten List each night but changed the order of the list? That’s what the IRS is doing with its “Dirty Dozen” list. It’s basically the same thing year after year — a stern warning from the Commish about not looking for tax relief amid tax scams, followed by the same 12 scams rearranged in a different order. Presumably the list is arranged in a logical order with the most common scams at the top. But is the order of the list based on empirical data, or is it just anecdotal? Who knows?
This year the obligatory stern warning went something like this:
Taxpayers should be careful and avoid falling into a trap with the Dirty Dozen. Scam artists will tempt people in-person, on-line and by e-mail with misleading promises about lost refunds and free money. Don’t be fooled by these scams.
~ IRS Commissioner Doug Shulman
And the top three scam were . . .
- Identity Theft
- Phishing
- Return Preparer Fraud
Illegal offshore bank accounts was a close 4th on this year’s list, which is not a surprise given how aggressively the IRS has worked shut them down. I don’t mean to make light of tax scams; they are real, and we should definitely stay vigilant. I am just amused by IRS gimmicks, and this looks like another one.
Another Round of Fake IRS Emails
Don’t be fooled by scam emails purporting to be from the IRS. The IRS does not communicate with taxpayers by email, so you can be sure that anything appearing to be from the IRS is a scam. IRS scam emails often contain links which, if opened, can damage your computer or compromise your private information.
The latest scam email originated in Saudi Arabia, contains the subject line “Tax refund important information,” and the following content:
After the last annual calculations of your financial activity we have concluded that you are eligible to get a tax refund of $464.
You may submit the tax refund application and give us 3-9 days in order to process it.A refund can be hindered for many different reasons.
E.g., submitting invalid records or not meeting a deadline.To get information about your tax refund please open this link.
Sincerely,
Tax Refund Department
Internal Revenue Service
Thanks to the Taxgirl, Kelly Philips Erb, for spreading the word about these nefarious emails.
Tax Relief Available for the 2012 Tax Season!
Montgomery & Wetenkamp are ready to help you this tax season! See 2012 Tax Season press release.
The tax attorneys at Montgomery & Wetenkamp, personally handle all aspects of their tax relief cases. Unlike other tax relief firms, the tax attorneys at Montgomery & Wetenkamp do not employee a sales force, legal assistants, or other intermediaries which may increase client fees and diminish the client experience. From the first time a client calls Montgomery & Wetenkamp, they will be speaking directly to one of the tax attorneys who will personally resolve their IRS tax debt.
“The IRS is a very powerful and unforgiving collection machine. This tax season, it is now easy and affordable to be prepared and have an organized and systematic plan for tax relief rather than getting stuck in the bowels of the IRS collection machine. The IRS has several tax relief options available for taxpayers who cannot pay their taxes. Such options vary from allowing additional time to pay a tax debt to reducing the total amount of the tax bill to an affordable amount
~ Christian Montgomery, Tax Attorney
Most tax relief options are driven by a taxpayer’s unique facts and circumstances, and how well and organized those facts and circumstances are advocated to the IRS. The tax attorneys at Montgomery & Wetenkamp are experienced in tax relief matters and will design and implement a systematic resolution to their client’s IRS tax problems.
Contact Montgomery & Wetenkamp now for your free consultation.