Posts Tagged ‘state taxes’
Wednesday, February 10th, 2010 by Moore McLaughlin
The IRS has issued a detailed, 80-page document discussing and rebutting many of the more common frivolous arguments made by individuals and groups that oppose compliance with federal tax laws. An accompanying news release reminds taxpayers that the penalty for frivolous tax returns is $5,000, and applies when a person submits a tax return or other specified submission, and any portion of the submission is based on a position that IRS identifies as frivolous. The tax attorneys at McLaughlin & Quinn, LLC frequently see taxpayers try to raise these arguments. Partners Moore McLaughlin, Esq., CPA and Thomas P. Quinn, Esq. generally convince them to be realistic and deal with the IRS in a forthright manner.
The IRS’s “The Truth About Frivolous Tax Arguments” responds to some of the more common frivolous “legal” arguments about the federal tax system. Each contention is briefly explained, followed by a discussion of the legal authority that rejects the contention.
The document covers these broad categories of frivolous arguments:
- Various contentions that: the federal income tax system is voluntary; terms in the Code such as taxable income, gross income and “the taxpayer” are improperly defined; and payment of taxes is unconstitutional. Other arguments in the category have fictional legal bases, for example, that IRS is not an agency of the U.S., or that taxpayers are entitled to the refund of social security taxes paid over their lifetime.
- Frivolous arguments in collection due process cases, including various contentions that assessments are invalid, or that the statutory notice of deficiency, notice of federal tax lien or statutory notice and demand is invalid.
- Contentions that the Tax Court is not authorized to decide legal issues, or that IRS personnel do not have the authority to seize property in satisfaction of unpaid taxes, or that IRS employees lack credentials.
A final section of the IRS’s frivolous tax arguments document explains in detail the penalties that courts may impose on those who pursue tax cases on frivolous grounds, and cites scores of cases rejecting various frivolous arguments and imposing penalties.
For a copy of this complete report, contact Moore McLaughlin, Esq., CPA by e-mail at mmclaughlin@mclaughlinquinn.com.
If you or someone you know owes taxes and needs help dealing with the IRS or state taxing authority, please contact Thomas P. Quinn, Esq. by e-mail at tquinn@mclaughlinquinn.com or Moore McLaughlin, Esq., CPA by e-mail at mmclaughlin@mclaughlinquinn.com or either of them by phone at 401-421-5115.
Tags: frivolous tax arguments, internal revenue code, Internal Revenue Service, IRS, IRS and state tax collections, levy, lien, mclaughlin & quinn, Moore McLaughlin, Providence, Rhode Island, state taxes, tax, Tax planning, Thomas P. Quinn
Posted in Current Events, IRS and state tax collections, Tax Current Events and News, Tax planning
Sunday, January 24th, 2010 by Moore McLaughlin
The Commissioner of the IRS, Douglas Shulman, recently admitted that the tax code is too complex for even the commissioner of the IRS. Click here for full story. I have long been a proponent of the flat tax as a way to ensure a higher degree of compliance. The tax attorneys at McLaughlin & Quinn, LLC represent taxpayers before the IRS and state taxing authorities on a daily basis. Many times, any errors that are found come from an honest misunderstanding of the tax code. Often, the IRS proposes changes based on uncertain areas of the law, where no one is really sure what the right answer is.
Until Congress decides to stop its social engineering experiments, and picking winners (homeowners, ethanol) and losers (renters), Tom, Frank and I will have plenty of work. In my opinion, the tax code should be used solely for raising revenue, not for dictating to people how to live their lives.
In the meantime, taxpayers, such as the IRS Commissioner, will have to rely on paid professionals.
Tags: Commissioner of IRS, Douglas Shulman, Flat tax, Frank Fiore, Internal Revenue Service, IRS, mclaughlin & quinn, Moore McLaughlin, Providence, Rhode Island, social engineering, state taxes, tax, Tax planning, Thomas P. Quinn
Posted in Current Events, IRS and state tax collections, Tax Current Events and News, Tax planning
Wednesday, September 30th, 2009 by Moore McLaughlin
According to a recent article in the Wall Street Journal, state revenue agents have been looking at MySpace and Facebook postings to catch tax scofflaws. Click here for the full article.
For example, in Minnesota the tax authorities found a tax evader after he announced on his MySpace page that he was returning to his home 
town to work and mentioned his new employer. Genius!
Agents in Nebraska caught a DJ after announcing one of his gigs. Brilliant!
California caught wind of a rigger of sails through an on-line thread to collect a 4-figure sum. Outstanding!
Personally, I love these stories. Can’t get enough of them. Of course, I also watch all of the “Caught in the Act” and “World’s Dumbest Criminals” episodes I can.
Back in the real world, Tom Quinn and I help people with their IRS, Rhode Island and Massachusetts tax problems on a daily basis. If you owe the IRS, Rhode Island or Massachusetts taxes, contact us at 401-421-5115 or by e-mail at mmclaughlin@mclaughlinquinn.com or tquinn@mclaughlinquinn.com for more information on how we can help you.
Tags: collection, Facebook, IRS, IRS and state tax collections, levy, lien, mclaughlin & quinn, Moore McLaughlin, MySpace, Providence, Rhode Island, sales tax, state taxes, Thomas P. Quinn, Wall Street Journal
Posted in Current Events, Financial workout, IRS and state tax collections, Tax Current Events and News
Friday, August 28th, 2009 by Moore McLaughlin
The national news outlets have picked up on the story about Rhode Island Governor Donald Carcieri’s plan to shut down the state government for 12 days by furloughing certain “non-essential” state workers in an effort to cut state expenses. Click here and here and here. Thankfully Rhode Island is required to balance its budget every year (unlike the Federal government) otherwise who knows what would happen. However, even with this balanced-budget requirement, our tiny little state still seems unable to properly manage its finances.
According to the Wall Street Journal, the Democrats in the Rhode Island legislature increased spending this year by 12% while requiring the Governor to cut spending by around $68 million. The Governor is utilizing these furloughs as part of his plan to cut spending. Naturally, the state employees unions have vowed to fight this furlough, and they may win. Click here for the full Wall Street Journal article.
Whether or not the unions prevail, tax experts are concerned about the impact on taxes in the Ocean State. The Governor and the Legislature already raised the tax rate on long-term capital gains from 1.67% to 9.9%. Given their reluctance to actually cut spending or to take any sort of business-friendly measures which would increase the base upon which the state income tax is calculated, the Legislature may see no other option than to increase the tax rate (directly or indirectly) on income. They could, of course, increase other tax rates, such as the sales and use tax, or broaden the sales and use tax base (e.g. to include services). The Legislature and the Governor already imposed a new tax on Amazon.com and other on-line retailers. We are still waiting to see how much additional tax revenue the state will receive after several on-line retailers withdrew from Rhode Island.
The tax attorneys at McLaughlin & Quinn, LLC are keeping an eye open and an ear to the ground monitoring any rumors or discussions of changes to the Rhode Island tax laws. As soon as we hear anything, we will post an entry to the M&Q Blog or send out an e-mail alert. If you are interested in receiving our e-mail newsletters and alerts, please contact Michaela Costa by e-mail at mcosta@mclaughlinquinn.com and ask to be added to our list.
In the meantime, business owners, investors and everyone else in Rhode Island will just keep operating under the current rules, while wondering who’s running Rhode Island.
Tags: balanced budget, furlough, mclaughlin & quinn, Moore McLaughlin, Providence, Rhode Island, sales tax, state taxes, Tax planning, Wall Street Journal
Posted in IRS and state tax collections, Tax Current Events and News, Tax planning
Thursday, July 9th, 2009 by Moore McLaughlin
In Rhode Island’s state budget bill for fiscal year 2010, signed by Governor Donald L. Carcieri on June 30, 2009, the lower capital gains rate is eliminated for personal income tax 
purposes. For tax years beginning on or after January 1, 2010 capital gains will be treated as ordinary income. As a result, some capital gains in Rhode Island that could have been taxed at rates as low as 1.67% will now be taxed at rates up to 9.9%.
Click here for Providence Journal article.
At the new higher rates, 1031 exchanges and other tax-deferral techniques will see a rebound in popularity. For more information on 1031 exchanges, visit the All States 1031 Exchange Facilitator, LLC website by clicking here.
Tags: 1031 exchange real estate investment, Capital gains tax, mclaughlin & quinn, Moore McLaughlin, Providence, Rhode Island, state taxes, tax, Tax planning
Posted in 1031 Exchanges, IRS and state tax collections, Tax Current Events and News, Tax planning
Tuesday, June 30th, 2009 by Moore McLaughlin
The Rhode Island Legislature has done it again. They have managed to find a way to not only drive more Rhode Island small businesses out of business or out of state, but at the same time they have managed to reduce tax revenues in the state. To top it all off, their actions are likely unconstitutional. This does not seem like the way to get Rhode Island back on its economic feet.
What I’m referring to is the recent passage of a law that requires Amazon.com to collect Rhode Island sales tax on sales made through Rhode Island-based associates. Click here for the entire article from the Providence Business News. Not surprisingly, Amazon.com immediately severed all relationships with Rhode Island-based associates.
Since book buyers can go directly to Amazon.com to buy their books, with no Rhode Island intermediary, Amazon does not have an obligation to collect the Rhode Island sales tax. So, now the state will still not receive any sales tax, and no income taxes, property taxes, employment taxes, etc., from the Rhode Island-based associate that may now go out of business, or move to another state. Absolutely brilliant! (more…)
Tags: Amazon.com, Blue Nile, BNA Tax & Accounting, business tax, California, corporate tax, Hawaii, mclaughlin & quinn, Moore McLaughlin, Overstock.com, Providence, Providence Business News, Rhode Island, sales tax, state taxes
Posted in IRS and state tax collections, Tax Current Events and News, Tax planning
Monday, May 18th, 2009 by Moore McLaughlin
One of my favorite economists of all time is Arthur Laffer. The reason I have always enjoyed his writings lies in large part to my belief that tax policy is one of the most creative or destructive forces in the universe. Perhaps this is why I chose tax law as my profession. Mr. Laffer developed the famous Laffer Curve, which proves that at some point, higher marginal taxes will result in lower tax revenues. The basis for this premises is that high earners can take steps to legally avoid paying the taxes. Plus, at some point, there is no incentive to earn more.
Click here for Mr. Laffer’s latest Wall Street Journal editorial.
Tags: Arthur Laffer, income tax, Laffer curve, marginal tax rate, Massachusetts, mclaughlin & quinn, Providence, Rhode Island, state taxes, tax policy, Wall Street Journal
Posted in Tax Current Events and News, Tax planning
Monday, May 18th, 2009 by Moore McLaughlin
The 2009 CFO Magazine State Tax Survey, conducted with KPMG, has just been released, and the results, while in some cases 
very predictable, are still enlightening. According to the article in the May 2009 issue of CFO Magazine, “more than 40 states are facing budget shortfalls, and as many as ten expect fiscal 2010 revenues to lag expenses by more than 20%.” Click here for the full article.
Tags: business tax, CFO, corporate tax, KPMG, Massachusetts, mclaughlin & quinn, Moore McLaughlin, Providence, Rhode Island, sales tax, state taxes, tax, Tax planning
Posted in Tax Current Events and News, Tax planning
Monday, April 27th, 2009 by Moore McLaughlin
As a tax attorney and CPA, I have studied the federal Internal Revenue Code extensively over the course of the last 20 years. Some people may tell me to get a life and that I could not have possibly chosen a more boring or inane field of study. 
For my entire life, I have always loved puzzles. My mom tells my two young sons how good I was at solving puzzles as a kid. I think of the Internal Revenue Code as a puzzle, a big complex and multi-faceted puzzle. My understanding of this puzzle started to develop in great detail during my studies at New York University while obtaining my Masters of Law in Taxation. In particular, famed tax expert Prof. Martin Ginsberg taught my class on tax policy. For the first time, I started to see how the Internal Revenue Code is used not merely for the purpose of raising revenue for the federal government, but for social engineering.
If the sole purpose of the Internal Revenue Code was to raise money for the government to spend, then a flat tax, with no or few deductions, would seem to be appropriate. Perhaps that was the idea when the U.S. constitution was amended to allow the income tax. Now, however, things have changed. And, I don’t see them going back.
Here are some examples of social engineering through the tax laws. Some lawmaker determined that Americans should own their own homes and that the tax law should punish those that don’t. To impose this idea, homeowners can take tax deductions for interest and real estate taxes on their homes while renters, who pay these same costs indirectly, cannot. Another example is the credit for day care expenses for children. Where is the credit for stay-at-home moms? There are only about a million more examples.
These days the tax laws are so complicated that even the Treasury Secretary and other high-level administration officials cannot even understand and comply with the rules. How can the average person or business owner be expected to? Removing the social engineering provisions and other Congress-blessed goodies would be a good first step in the right direction.
Tags: 1031 exchange real estate investment, asset protection, internal revenue code, IRS, IRS and state tax collections, Massachusetts, mclaughlin & quinn, Moore McLaughlin, Providence, Rhode Island, state taxes, tax, Tax planning, Thomas P. Quinn
Posted in Estate Planning, Tax planning