“Girls Gone Wild” founder Joe Francis feels he finally got a break when a federal judge okayed a deal that Francis struck with prosecutors. Under the agreement, Francis was credited with 301 days already served and sentenced to one year of probation.

The plea deal was struck after Francis learned that a key witness, Francis’ former accountant, had withheld information from his defense team at trial. Francis was originally indicted on tax evasion charges in 2007 stemming from a number of income omissions and false deductions. He pleaded guilty to two misdemeanor counts of filing false tax returns and one count of bribing Nevada jail workers.

“I think we won that one,” Francis said after the hearing.

The former bad boy was polite during the hearing, answering questions as asked. It was quite a turn-around from the belligerent persona he had maintained since the charges were first brought against him in 2007.

After the hearing, he kissed his mother.

Apparently he really does kiss his mother with that mouth.

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When Top Gear’s Jeremy Clarkson reviewed the electric sports car Tesla Roadster, he had plenty to say. Notably, he complained about the price, which was at the time of filming in the UK, £92,000 (about $150,962.40 US). Lucky for all of you prospective Tesla Roadster buyers, the price has dropped to a mere $109,000. And if you moved to Colorado, you could get your hands on it for a mere fraction of the price.

Colorado? Yeah, you read that right. Colorado is offering a 38% tax credit on the Roadster through the end of the year. That brings the total cost of the Roadster to about $65,000.

It’s not just the Tesla that can take advantage of the credit. It applies to your run of the mill Prius, too. In fact, Colorado is ahead of the pack when it comes to providing tax breaks for hybrid and zero-emission vehicles. The state has been doing it for years.

But it’s the size of the Tesla refund that is attracting attention.

Bowing to pressure from overextended taxpayers, state lawmakers passed a bill which would cap such refunds at $6,000. The bill, however, doesn’t take effect until next year. That means that there’s still plenty of time to take advantage of the refund this year.

Though state lawmakers didn’t expect to see more than 10 Tesla refunds, one Tesla dealership has reported selling six cars this week alone. That’s about $252,000 in refunds in one week. That’s not a pace that taxpayers are happy to see when faced with a $320 million deficit in the state budget.

Of course, there are some restrictions on the refund. For one, to qualify, the vehicle must be titled and registered in Colorado. And the credit is only available in the year that the car was purchased.

However, since it’s a tax credit (and not a flat out dollars back refund), there is a chance that the amount of the credit could exceed a taxpayer’s net tax liability for the year. If that happens, any excess credit may be carried forward and claimed on future year returns for up to five years.

So, it may not turn out be the kind of hit that taxpayers fear. That still doesn’t make taxpayers feel better about what’s perceived as an irresponsible tax policy. The amount of the refund alone, it has been noted, is more than many taxpayers will pay for the total cost of their car. In a tight economy, this isn’t the kind of thing that sits well with many folks.

What do you think? Fair game or bad policy?

And if you’re interested, you can watch the controversial “Top Gear” review of the Tesla Roadster here:

(In case you missed the scandal, the BBC later admitted that the scene of the car being pushed into the garage was not a result of the alleged 55 mile fail.)

Technorati Tags:
Tesla Roadster, Jeremy Clarkson, electric car, Colorado, tax credit

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“Survivor” winner Richard Hatch is finally a free man. The controversial TV personality, sometimes referred to as the “fat naked guy” on the show, has completed his sentence for tax evasion and related charges.

Hatch walked out of jail this morning, about 6 a.m.

But that doesn’t mean that he’s completely off the hook. Hatch must still serve three years of supervised release, complete a mental health program and pay the remainder of his taxes.Similar Posts:

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Rapper and Wu-Tang Clan member Method Man was arrested Monday on tax evasion charges stemming from an alleged refusal to pay personal income taxes. Method Man, whose real name is Clifford Smith, has reportedly failed to pay taxes from 2004 to 2007. His tax bill for the period was just $32,799 plus penalties and interest.

That actually begs the question: why an arrest? One of the charges is said to be a felony violation of “repeated failure to file personal income and earnings tax.” Failure to pay is a misdemeanor. And yet, Staten Island District Attorney Daniel Donovan has said the rapper will be “aggressively investigated and prosecuted” if he’s found guilty of the charges.

Is he teaching Method Man a lesson or is there something more?

If you voted something more, you and I are on the same page. A few months ago, the police paid Method Man a visit for, you guessed it, the same thing. In March, the Department of Taxation showed up on Method Man’s door with a number of police officers. At the time, the rapper was said to owe more than $50,000. And he had a great explanation for it:

Because I got high, I forgot to pay. It was stupid. I’m an idiot for that.

The government took his 2008 Lincoln Navigator to satisfy part of his obligations. Method Man insisted that he could have paid had he not been high, declaring, “I got plenty of money!”

Six months later, apparently he hasn’t worked out his tax and “other” issues. And I’m guessing the NY Department of Taxation doesn’t find it very funny quite as funny as he does. He faces up to four years in prison if convicted of the charges.Similar Posts:

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I’m a little bit obsessed with Elvis Presley. You may not know this about me (and perhaps now, are a little frightened). Yes, I’ve been to Graceland and I might have bought a few things. I have both volumes of Elvis Gold. And Elvis songs sit very comfortably on my iPod between Elton John and Eminem.

So you can imagine how my ears perked up tonight when Elvis was mentioned on a feature on “delebs” (that’s dead celebrities to you and me) on “60 Minutes.” (Quick explanation in case you’re eyeballing the blog post date: I missed the debut of “Amazing Race” – my favorite reality TV show – earlier in the week so I DVRed it – just getting around to watching it now).

On the show, Robert Sillerman, who paid $100 million to buy Elvis Presley Enterprises in 2004, discussed the wild popularity of Elvis after his death. Sillerman cited a 2002 BBC finding that over 84,000 people claimed “Elvis impersonator” as their primary occupation on their tax returns.

Now, I haven’t been able to find the actual BBC report, nor anything from IRS (yet!), to back this up… But I’d like to think that the fact checkers at “60 Minutes” didn’t let this one go without checking it out.

It’s a crazy statistic: I’m all shook up.

Thank you, thank you very much!

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Richard Hatch is not having a good year. After qualifying for early release from federal prison, where he was serving time on tax evasion charges, he was allowed to spend the remainder of his sentence at his sister’s house as house arrest. Hatch, not necessarily being the most conventional guy, apparently had a different interpretation of his media appearance rules than the Bureau of Prisons did: his recent stints on TV and radio landed him in hot water when he failed to get the proper permissions.

And Hatch went back to jail. He then asked to be able to return to his sister’s house to serve out the remainder of his sentence. A federal judge denied that request.

Now, Hatch is appealing that decision and he has a surprising ally: the ACLU. The ACLU has been concerned about Hatch’s treatment since returning to jail among allegations that Hatch is being punished for speaking out against prosecutors in his case. If you recall, Hatch doesn’t actually think he went to jail for cheating on his taxes – he told Matt Lauer that it has everything to do with being gay.

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Or least his people did.

Rapper Ludacris, whose real name is Christopher Brian Bridges, made 20 families who needed a hand up pretty happy this week. He partnered with Nissan South, a car dealership in Atlanta, to give away 20 cars to folks in need as part of his own stimulus package.

The giveaway worked like this: to qualify for the free cars, contestants submitted an essay to Ludacris’ Foundation. Applicants were asked to write a one page essay on why they feel they deserve the car. To qualify, applicants had to be at least 18 years old, have a valid GA drivers license and not currently own a car.

Roberta Shields, President of The Ludacris Foundation, explained: “This year we want to do something to help youth and families manage during these tough economic times. Having a vehicle to get back and forth to work and daycare can make the difference in getting and keeping a job.”

More than 4000 folks vied for the used vehicles, which also included free gas for 30 days. The winners were responsible for the rest: tags, registration, insurance and – yes – taxes. After the winners of Oprah’s car giveaway learned the hard way, Ludacris made it clear on his website that winners were responsible for paying any applicable taxes.

The winners of the cars were visibly moved. Crystal Beauford, a single mom and college student, used to ride two buses to get to work. Now the proud owner of a used Saturn Ion, she said, “This is going to help me out so much,” she said. “It’s a blessing.”Similar Posts:

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Though the health care reform bill has officially been tabled until after the break, there is still work to do in Congress before a vote can be scheduled. At the top of the list? Find a way to pay for the bill.

The Senate Finance Committee has considered a number of funding options but nothing seems to generate the right balance of Congressional and, more importantly, taxpayer support. But they keep trying.

If only they could think of something to tax that could be spun as promoting health…

Yes, you guessed it. The so-called “soda tax” is now back in the picture.

The soda tax (which failed when proposed in New York) has been proposed in the House and Senate as a potential revenue generator to pay for health care reform. The tax would be a 3 cent surtax on soda, energy drinks and “other” sugary drinks (various proposals have included taxing, for example, certain kinds of juices). The Congressional Budget Office estimates that the increase would generate $24 billion over the next four years. If you’re doing the math, that works out to 200,000,000,000 drinks per year (or 800,000,000,000 over four years). Yeah, we in America love our sugary drinks.

And it’s clearly what’s making us fat. At least that’s what Congress is hoping we’ll believe. The bill to tax these drinks is being pitched as part of a strategy to help Americans “lower consumption of sugary drinks” and therefore, improve your overall health.

The argument has some weight (*clears throat*) behind it. A New England Journal of Medicine article published in April argued that sugary drinks “may be the single largest driver of the obesity epidemic.” The article goes on to say that “interventional studies show that reduced intake of soft drinks improves health.”

So, the theory goes, soft drinks are “bad” and raising taxes on them would be “good.” The revenue from the tax would help pay for obesity-related health spending, which reached $147 billion last year. In fact, research shows medical spending averages $1,400 more a year for an obese person than for someone whose weight is considered to be normal. Keep in mind, though, that those numbers include spending on diabetes and heart disease, which are considered to be “more common” in obese persons but not always connected to weight.

Basing their research on increases in taxes on tobacco products, scientists at Yale believe that higher prices for soda would result in reduced consumption. Estimates vary as to the actual drop in demand, but the initial research suggests that for every 10% increase in price, consumption would decrease by 7.8%. Those that stop drinking soda and sugary drinks would then switch to healthier drinks, which would result in less weight gain and therefore, fewer health problems (and costs).

Voila! Problem solved!

Only maybe it’s not so black and white.

Statistically, it is the poorest Americans who are continuing to pack on the pounds. Research suggests that while rates of obese adults are leveling off for some, the rate is not decreasing for poorer Americans. A tax increase would hit those Americans the hardest – but would it change behaviors?

Maybe not.

In 2008, the New York Times reported that food and beverages made up about 15 percent of the average person’s spending. Spending on soda represented about .3% of a person’s overall budget in 2008, statistically, fairly insignificant. And while the cost for soda remains relatively low, the cost of many healthy foods increased last year; the cost of eggs, for example, increased at a rate of more than 15 times that of soda. In 2009, the price index for fruits and vegetables increased more quickly than that for soft drinks or sweets (Source: Bureau of Labor Statistics). In other words, eating healthy is expensive (nothing new there) and making it more expensive to consume less healthy treats won’t necessarily make people more healthy. It may just make people more poor.

The American Beverage Association, agrees (no surprise there). They have consistently argued that the tax would affect poor Americans the most. In response to the ramped up rhetoric on the tax, the association has formed a coalition called Americans Against Food Taxes in opposition to the tax. The coalition claims that education, not taxation, is the answer to America’s obesity problem. They cite studies which indicate that “the sensitivity of individuals to changes in relative food prices is not sufficient to make ‘fat taxes’ a viable tool to lower obesity.” In other words, they argue that taxing soft drinks won’t make us more healthy.

So which is it? Will a soda tax fit society’s ills? Or at least put a dent in it? I’m not convinced that it will.

Besides, if you believe Coca Cola, you can’t tax soda! It brings both Democrats and Republicans together, remember?

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Rumors are swirling around the possibility of manslaughter charges may be filed in the death of pop superstar Michael Jackson. Jackson’s personal doctor, Dr. Conrad Murray, is considered a “person of interest” in the case but has not been charged.

Raids at Dr. Murray’s office and storage unit in Houston on Wednesday raised eyebrows. Among the items removed from the storage unit by federal officials were notices from the IRS. You can read the entire list of items removed from the storage shed as evidence here, downloadable as a pdf.

Was Dr. Murray in some kind of trouble with the IRS? So far, there is no clear answer and the IRS does not comment on pending matters.

However, there has been speculation that Dr. Murray was in considerable financial difficulty. In addition to defaults in home loans and unpaid child support, there are at least three state tax liens which have been filed in Arizona and California against Dr. Murray, one as recently as 2003. Murray’s Nevada medical practice, Global Cardiovascular Associates, was ordered last year to pay court judgments totaling nearly half a million dollar to vendors and banks; at least two other lawsuits against the company are still pending.

Normally, no one would care about any of this. So the guy had some financial troubles, who cares? Apparently, the feds do. Speculation continues to build that Dr. Murray may have been involved in supplying Michael Jackson with unnecessary prescription drugs; if so, his activities may be linked to his financial troubles.

The doctor made headlines after it was revealed that he was the last person to be seen alive with Michael Jackson. Murray was considered to be Jackson’s full time personal doctor; he was hired by AEG Live to accompany Michael Jackson to London for his comeback series of concerts.

All of that said, why the feds would seize what would seem to be unrelated tax documents from Murray’s storage shed remains a mystery for now. I’ll update you as information becomes available.Similar Posts:

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A measure to tax the gross receipts of licensed medical marijuana dispensaries in Oakland passed overwhelmingly on Tuesday. The vote makes Oakland the first city in the US to tax marijuana.

The tax was put on the ballot after a considerable push from the medical community. City Council jumped on the bandwagon, too, when it became clear that Oakland would not meet its budget for the year. Rebecca Kaplan, a local councilwoman said, “Given that the medical cannabis dispensaries are something that was legalized in California, why not have revenue from it?”

So that kind of makes sense. In theory, I get the idea of taxing legal substances, like tobacco, to raise revenue. What’s odd, though, is that this is medical marijuana. That is a significant distinction. In California, it would be otherwise exempt under the state sales tax laws which specifically exclude “[s]ales of prescription medicine and certain medical devices.” However, according to the Wall Street Journal, sales tax is collected on the purchase. This, according to the State Board of Equalization, is because marijuana cannot be exempted as a prescription drug since it is classed as a Schedule I drug by the federal government and is cannot be “prescribed.” To actually obtain medical marijuana, your doctor must write a note, not a prescription (insert rolling of the eyes here).

The new tax in Oakland is a gross receipts tax imposed on the dispensaries which are licensed to sell medical marijuana. Currently, four dispensaries inside the city fit the bill. Those dispensaries not only supported the effort to tax medical marijuana, they pushed City Council to put the tax to a vote. Why? While the tax is relatively small (1.8%), it, in effect, legitimizes their product. You may recall a similar effort in Nevada to tax prostitution; though legal, it was not taxed and the sex industry lead the failed effort to have it taxed. For better or worse, taxing a product is perceived as the government’s tacit approval of the sale of the product.

The latter is exactly what has riled those who are fighting to keep drugs out of California. Paul Chabot of the Coalition for a Drug Free California, in addressing those concerns, has said, “With the state in dire straits in finances and the country looking for ways to pay down debt, looking at illegal drugs is the absolute wrong thing to do.”

Only Mr. Chabot doesn’t have it quite right. California is one of 13 states that has passed a law legalizing the sale of medical marijuana; it is not illegal in that regard. Alaska, Colorado, Hawaii, Maine, Michigan, Montana, Nevada, New Mexico, Oregon, Rhode Island, Vermont and Washington have also legalized the sale of medical marijuana. Other states, like North Carolina and Iowa, are considering measures which would legalize the use of marijuana for medical purposes.

But Chabot does have many supporters who believe that the taxation of medical marijuana puts the state of California one step closer to legalizing the distribution of marijuana altogether. Those supporters argue that marijuana is a gateway drug to harder drugs and that legitimizing marijuana will pave the way towards legitimizing other drugs.

That arguments isn’t convincing many government officials. Taxing the distribution of medical marijuana is expected to raise an additional $300,000 for the City of Oakland, though some supporters claim that the number will be as high (no pun intended) as $1 million. Not surprisingly, then, Los Angeles, Berkeley and San Francisco are reportedly considering a similar scheme.

Even more dramatic, as blogged earlier, the state of California is debating a bill which would legalize and tax the sale of marijuana without regard for medical use. That bill includes a measure, ironically, which would exempt the sale of medical marijuana from sales tax.

Interestingly, it was the taxation of marijuana in the 1930s which lead to the criminalization of the drug. Really. The 1937 Marihuana Tax Act imposed a two part tax on the sale of marijuana; one which functioned like a sales tax and an occupational tax for licensed dealers. Violations of the Act resulted in serious consequences.

In 1969, Timothy Leary challenged his arrest for possession of marijuana under the Act; the case of Leary v. United States made it to the Supreme Court. The Court invalidated part of the Act as a violation of the Fifth Amendment (against self-incrimination). The result was a new law, the Controlled Substances Act, passed in 1970, which criminalized the possession or sale of marijuana.

Forty years later, we may end up at the same place again.

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