Taxes-audit
The taxman cometh: IRS audits likely on the rise
Filed under: Tax, Taxes-audit
As if you don't already have enough money worries. This is the year to double, no, triple-check, your taxes before filing. The IRS is looking for the money it's owed with renewed vigor, and that means a lot more people can expect to be audited. Why now? It's not hard to guess.We've been hearing for months that the economy is finally on its way up, but the numbers don't actually bear that out.
As of last month, the federal deficit weighed in at a record $1.42 trillion and, depending on what Congress does, could double within the year. Estimates are that within the next ten years, the deficit will hit $9.1 trillion. Increases in the budget have been tapped for bailouts, CASH for clunkers, the first time homebuyer's credit and the controversial new health care plan. The problem? There's no money to pay for all of these programs.
First taxpayer charged in UBS scandal
Filed under: Tax, Wealth, Taxes-audit
Less than two weeks after the official amnesty program ended for taxpayers who had previously failed to disclose income from offshore accounts, the first high profile criminal case involving a taxpayer has been resolved.Steven Michael Rubinstein, of Boca Raton, an accountant and US client of UBS AG, the Swiss Bank that caused an international uproar when it was implicated in a wide-ranging scheme to assist foreign account holders in hiding income, was successfully prosecuted in the U.S. government's offshore tax-evasion probe. Rubinstein received three years of probation and a year of home-confinement, and was fined $40,000, on charges of filing a false tax return. The sentence was much lighter than expected.
The IRS charged that Rubinstein deposited more than $2 million in gold coins into his UBS accounts and used the funds to buy and sell securities. Rubinstein did not disclose the account on his tax return, as required by U.S. law, nor did he report the income generated by the accounts. You can read the official complaint here (downloads as a pdf). Rubinstein was arrested in April of this year, and has the unhappy distinction of being the first taxpayer associated with the case to be officially charged.
Ex-Big Leaguer Ron Darling faces half a million in tax liens
Filed under: Taxes-audit
Yale grad-turned New York Mets baseball star turned-TBS broadcaster Ron Darling is facing some pretty serious tax trouble: $544,197 in federal and state tax liens. The Detroit News' Tax Watchdog reports on the details:- The IRS filed a $71,076 lien against Darling on July 29 in the New York City Register's office.
- The state of New York filed a $12,664 tax warrant against Darling on May 23 in the New York County Clerk's office.
- The state of California filed an $84,860 lien against Darling on June 6, 2008, in Contra Costa County Court.
- The IRS filed a $375,597 lien against Darling on May 15, 2008, in the New York City Register's office.
The good news for Darling (and the IRS) is that he's busy working. Just a couple of days after media reports about the liens started to surface, he was back in the booth for the Dodgers' NLCS match-up with the Phillies.
Also in Darling's favor? His financial problems do not appear to be as serious as former teammate Lenny Dykstra's, who recently filed for bankruptcy.
Are late filers setting themselves up for audit?
Filed under: Tax, Taxes-audit, Taxes-income-tax-basics
Fall is by far my favorite time of year. The leaves are turning, the weather is cooling, baseball playoffs are in full swing... It seems nearly perfect -- until you remember that you haven't yet filed your taxes.While the majority of taxpayers file their tax returns on time in April, more than 10 million taxpayers (just more than 7% of the total number of filers) will file in October. Those are taxpayers who elected to file an extension by the April 15 deadline.
To file an extension, you simply complete a federal form 4868 with your name, address and tax ID information, along with an estimate of any taxes that you might owe. Assuming that it's timely filed in April, applications for extension are granted automatically by the IRS for a period of six months, no questions asked.
It's ridiculously easy. So much so that many taxpayers are hesitant to file for an extension because of the perception that an extension will trigger an audit. After all, they wonder, surely the IRS will assume that your failure to file in April is somehow indicative of bad behavior. Those taxpayers believe that filing is extension (especially if you do it year after year) is the equivalent sending the IRS a personal "audit me" invite.
The statistics, however, don't bear that out at all. Statistically, your chances of getting audited are fairly low to begin with: about 1 in 150. Certainly greater than your chances of getting hit by an asteroid (1 in 500,000) but less than dying in a car accident (1 in 100).
Method Man runs into the Tax Man
Filed under: Tax, Wealth, Taxes-audit
Hip-hop star turned actor Method Man is looking at four years in prison on charges that he failed to file a return or pay New York state income taxes between 2004 and 2007.Method Man told The New York Daily News that the reason behind the oversight is simple: "Myself, I'm a pothead. It's no secret. Everyone knows that. I go on the road and forget everything else. Sure, [the tax department] sent letters to my house saying, 'We need this money.' They started sending them in 2002. . . "
Retiree Tax Heavens (and Hells)
Filed under: Retire, Saving Money, Tax, Retirement-401(k), Retirement-403(b), Retirement advice, Taxes-audit
Maybe you're thinking about relocating in retirement, in hopes of enjoying milder weather and lower expenses. Before you make a move, it pays to assess the overall tax burden of your future home. Some states are a lot more tax friendly then others.Click through our photo gallery and see which cities are the most tax-friendly & unfriendly for retirees.
Is the taxman Facebook-stalking you?
Filed under: Tax, Technology, Taxes-audit, Taxes-income-tax-basics
Just when you thought the only people you had to worry about offending with your Facebook profile were prospective employers, parents, and creepy sex offenders, The Wall Street Journal reports (subscription required) that tax collectors are going online to hunt down deadbeats.
According to the Journal, "In Minnesota, authorities were able to levy back taxes on the wages of a long-sought tax evader after he announced on MySpace that he would be returning to his hometown to work as a real-estate broker and gave his employer's name. The state collected several thousand dollars, the full amount due."
Come out, come out, wherever you are: Good luck finding all the hidden taxes you pay
Filed under: Tax, Taxes-audit
You're a responsible consumer, use coupons, track sales, and in general try to be a savvy shopper. But do you know how much of your spending goes to taxes? I don't, and I even tried to keep track. At the beginning of this month, I held onto every receipt and went so far as to create a spreadsheet. Different taxes would be logged in the appropriate columns.
But it was a futile experiment and I abandoned the exercise in just a few days. Why? Because sales tax is such a convoluted and complex system, that I defy anyone to figure out just how much of what they spend is a tax.
Tracking Uncle Sam's spending
Filed under: Extracurriculars, Tax, Technology, Taxes-audit, Taxes-income-tax-basics, Taxes-tax credits, Taxes-tax deduction
If you're bored with keeping track of where the money goes in your household, try out a relatively new government Web site that tracks where your tax dollars are spent.USASpending.gov offers an easily digestible look into where the government is spending money, with current and historical spending broken down by grants, contracts and loans. It drills further down by breaking it down into congressional districts and by contractors.
For example, I was amazed to learn that the top government contractor so far in fiscal year 2009 -- Lockheed Martin Corp. at $20.36 billion -- has received more money from the federal government than the top assistance recipient -- $18.9 billion to the Department of Health Care Services.



