taxgirl » taxes of the rich and (in)famous

Romney’s Tax Returns are Remarkably… Unremarkable

Kelly — Tue, 24 Jan 2012 15:29:03 +0000

I know, I know. You, like me, woke up this morning and your first thought was: what’s on those darn Romney tax returns?

Okay, maybe you didn’t. But I did (true story, ask my husband). And not because I really care in a this-will-dramatically-change-my-life kind of way but rather I was interested in what the release would mean to the campaign and to the primary. And. YAWN. Now that it’s happened, I don’t think it means a thing.

Of course, that’s what Romney was banking on. He’s clearly anxious to move beyond the tax return issue, going so far as to hire former Commissioner of the Internal Revenue Service Fred Goldberg to review the returns. After his review, Goldberg released the following statement:

I have reviewed Governor and Mrs. Romney’s joint tax return for 2010, including returns for the Ann and Mitt Romney Family Trust, the Ann D. Romney Blind Trust, and the W. Mitt Romney Blind Trust. I have also reviewed the return in process for 2011. These returns reflect the complexity of our tax laws and the types of investment activity that I would anticipate for persons in their circumstances. There is no indication or suggestion of any tax-motivated or aggressive tax planning activities. In my judgment, they have fully satisfied their responsibilities as taxpayers. They have done so by relying on a highly reputable return preparer and other advisors, who have in turn relied primarily on information provided by third parties to them and to the IRS. The end result of that process has been returns that include a multitude of schedules, IRS forms and accompanying statements that provide appropriate transparency and the proper payment of taxes that Governor and Mrs. Romney owe under current law.

Meh. Take that with a grain of salt. That’s like me saying it. Okay, a little more impressive than me. But it’s still the mere opinion of a tax professional. It’s not the same as a tax clearance.

But if had been an honest to goodness tax clearance, would it matter?

I don’t think anyone really believes that Romney is cheating on his taxes. That’s never been what this has been about, despite Gingrich’s statements that he wanted Romney to release the returns to ensure that there’s nothing on them that will come back to hurt the GOP. Let’s call a spade a spade. This whole exercise has been about making Romney unlikeable. Here’s what some politicians want you to know:

Romney is not just rich, he’s über rich.
Romney invests offshore.
Romney pays a 14-15% tax rate, lower than many taxpayers.
Romney gives lots of money to the Mormon Church.

Check ‘em all off. They’re all true. And you can’t possibly have thought differently before those returns came out.

With that in mind, I breezed through the 2010 federal income tax returns for the Romneys this morning (all 203 pages of them) and found them rather unremarkable, all things considered (though I did enjoy poking through them in a tax geeky kind of way).

Here’s what you probably already knew:

He files as married filing jointly.
He had more in capital gains last year than most people will ever see in a lifetime (about $12 million).
He itemizes his deductions on his returns.
He is subject to the AMT.
He is the beneficiary of a few trusts (including a blind trust a la Kerry, Bush and Cheney).
He makes a lot of money from speaking (even though he doesn’t think it’s a lot, per his statements on the campaign trail).
He has Swiss bank accounts and interests in tax havens like the Cayman Islands, Bermuda and Ireland.
He donates a lot of money to the Mormon Church.
He has a few household employees.

Here’s what you maybe didn’t know:

Less than 1% of the interest earned by Romney was tax exempt. Far less.
He claims foreign tax credits and has for years.
Most of his income is passive, largely from investments and trusts.
He filed his 2010 return on extension. As in really on extension (signed on 10/15/2011, the last day you can file if granted an automatic extension).
He makes significant charitable donations to the Tyler Charitable Foundation, a private foundation in Boston.
He made a few section 83(b) elections last year with respect to restricted stock.
He gets a fairly good rate on health insurance (he’s self insured).

And here’s what Romney probably wishes you didn’t know:

His first name is Willard.

You can see the returns here (downloads as a pdf and warning: they’re loooong).

I haven’t yet sorted through the trust returns or the 2011 estimates. I plan on doing that later today. If I find something worth reporting, I will. But I wouldn’t hold your breath that I’ll find anything astonishing.

The returns are – as predicted – remarkably unremarkable. Are we okay with moving on now?

(Editor’s note: Earlier today, I reported that Romney made donations to the Tyler Foundation which serves families whose children are undergoing treatment for epilepsy at Children’s Hospital Boston and UMass Memorial Children’s Medical Center. That was my mistake: the folks at Tyler Foundation responded to my request for more information by noting that Romney is not a donor to their organization. It is a different Tyler Foundation, which appears to be a private foundation. I regret the error.)

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After Loss, Romney to Release Tax Returns

Kelly — Mon, 23 Jan 2012 03:13:50 +0000

So, show of hands: who really thought that former Massachusetts Governor and current GOP presidential hopeful Mitt Romney would win South Carolina?

My hand will stay firmly by my side. I expected Romney to lose South Carolina. I also still fully expect him to get the nod from the party at the GOP Convention despite noting earlier that no Republican candidate for President has ever failed to win South Carolina and gone on to secure the nomination. I think he’s the exception. (No, this isn’t an endorsement, it’s an educated guess.)

I know South Carolina pretty well. I grew up in North Carolina (much of my family still remains) and spent many a summer in Greenville; I’ve been to family reunions in Georgetown; been porch sitting in Rock Hill and wandered around the naval base in Charleston with my brother. And yes, I once bought a Fiat in Pumpkintown. With my background, I feel confident that I easily could rattle off ten reasons why Romney lost South Carolina.

Not releasing his tax returns isn’t one of them.

Despite that fact, which I’m sure his handlers already know, Romney is still getting grief about not releasing his returns. This week, apparently still reeling after the primary loss to former House Speaker Newt Gingrich, Romney is going to do something he’s never done before: make his tax returns public. He plans to release his 2010 returns and offer an estimate of what he’ll pay in 2011 (someone get that tax preparer a redeye quick).

I don’t think it will make much difference in the race at this point – which is exactly why Romney is releasing the returns. This is his Obama birth certificate moment. I think Romney realizes that voters are going to talk about those returns until he makes them public. The more that voters focus on the lack of returns, the worse he’s going to look. Romney’s supporters want to move the discussion along.

So what will those tax returns reveal? My guess is nothing we haven’t heard already. We know that he’s rich. Crazy rich. We know that he has offshore accounts. And we know that he pays “about 15%” in taxes.

What else is there to see? I’m sure there’s something there to pick on. But I don’t think we’re going to see any game changing information in those returns. But it sure makes good fodder for Gingrich, who told NBC’s David Gregory:

If there are things in there that can be used against him, we better know it before the nomination. The last thing Republicans want to do is nominate somebody that collapses in September.

You know, like an old ethics violation related to federal tax laws.

Good thing Gingrich is just looking out for the party.

All that said, when the returns are released later this week, I think we’re going to see a flurry of activity that turns out to be pretty much a non-event. I think, by midweek, we’ll all be saying, “There’s nothing to see here, folks, let’s move along.”

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Fix the Tax Code Friday: Buffett’s Tax Advice

Kelly — Sat, 27 Aug 2011 03:23:48 +0000

It’s Fix the Tax Code Friday! This week, Warren Buffett continued to be all over the news for his statements about taxes for the very wealthy. In case you’ve missed it, Buffett has amped up the rhetoric on tax reform by suggesting that those in higher brackets benefit disproportionately from existing breaks in the Tax Code and that those taxpayers should pay more, not less.

This is nothing new for Buffett. He made similar statements in 2010 and prior to that, famously said about his tax rates:

I’m willing to bet anyone in this room $1 million that those rates are less than the secretary has to pay.

Some tax professionals have questioned whether his statements are accurate, suggesting that Buffett benefits more from tax deferral than from breaks. Others have opined that even if he’s right, raising rates wouldn’t be fair.

So I’m throwing it out to you. Today’s Fix the Tax Code Friday question is:

Do you think that existing tax breaks for the wealthiest taxpayers should be scaled back or eliminated? In other words, should the wealthiest taxpayers pay more in tax?

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Rapper Beanie Sigel Back in Court, This Time On Tax Charges

Kelly — Thu, 11 Aug 2011 02:51:56 +0000

Rapper Beanie Sigel, whose real name is Dwight Grant, may be facing more time in prison – this time for tax troubles.

The Philadelphia rapper pleaded guilty this week to failing to file federal income tax returns for 2003, 2004 and 2005. The IRS believes that Sigel failed to pay nearly $350,000 in federal income taxes over that time period on more than $1 million in income, though Sigel’s attorney, Fortunato Perri, Jr., has reportedly denied that the amount is accurate.

Sigel rose to fame in 1999 with his hit, The Truth, which reached #5 on Billboard records. The Truth was recorded with the fledging label Roc-A-Fella Records which had been founded a few years earlier by Shawn “Jay-Z” Carter, Damon “Dame” Dash, and Kareem “Biggs” Burke for the purpose of releasing a Jay-Z album. Jay-Z turned to Beanie Sigel and Philly rapper Freeway, among other artists, for collaboration and with that, it appeared that Sigel might be well on his way to super stardom.

In 2001, Sigel released his album, The Reason, which picked up an award at the BET Awards for Album of the Year. The following year, Sigel founded the rap group, State Property, with Philly rappers Freeway, Peedi Peedi, Oschino, Eric Pletcher and Omillio Sparks, and the Young Gunz (Young Chris and Neef Buck) and female R&B singer Casha. The founding of the new group lead to a number of new business opportunities including film appearances and the launch of an urban wear clothing line. It is alleged, during this time, that the Sigel was not filing federal income tax returns or paying federal income taxes, though Sigel’s tax charges do not include these years.

In 2004, Sigel was sentenced to a year long stint in prison after pleading guilty to gun and drug charges in Philadelphia. Prosecutors had recommended a longer sentence but U.S. District Judge R. Barclay Surrick gave Sigel credit for good behavior, noting that Sigel had made efforts to turn his life around since the arrest. Apparently, that didn’t include filing tax returns.

Over the next few years, Sigel worked on a new album and shot a number of videos. The timing also coincided with the departure of Jay-Z from Roc-A-Fella Records to become president of Def Jam Records. Jay-Z’s departure lead to a number of feuds, including infighting within Sigel’s own group. Nonetheless, Sigel eventually signed again with Roc-A-Fella for his fourth album, The Solution.

The years leading up to Sigel’s departure from Roc-A-Fella were volatile, including another jail term for Sigel. After beating an attempted murder charge (for which he was tried twice), Sigel was eventually sentenced to jail and time in a halfway house for violating the terms of his probation. After his third violation, Sigel was sent back to prison for three months.

Despite his legal troubles, Sigel remained popular in the hip hop world. He also gained admiration in his hometown of Philadelphia when he contributed to a reward fund for information about missing Philadelphia woman Latoyia Figueroa. Figueroa’s body was eventually found due to a tip which lead police to her boyfriend, who later admitted killing her. Sigel, who posted the reward while in jail, said:

I was booked when I heard the story about the girl missing. Wasn’t nobody really doing nothing. They had a reward for $10,000 but ain’t nobody really going to try to do anything for that. I wanted to start something. I was like, ‘Damn, I’m in jail.’ I wanted to do anything I could. All I had was a radio. I felt like if I’m in jail and I could make a move to find this girl, everybody else could do what they could do too. I wanted to just motivate people to try and find the girl.

Sigel clearly had some money while he was locked up. The IRS alleges that while Sigel was making money – and spending time in prison – he was failing to report his income. Sigel apparently agreed, considering the guilty pleas. He faces a November 18 sentencing where he could receive up to three additional years in federal prison.

Sigel counts rapper Lil Wayne, who has faced tax troubles of his own, as one of his favorites on the scene these days, though Sigel isn’t making his own music right now. Nonetheless, he says:

I consider myself relevant in the rap game at all times, After you party and do all that, now the real world kicks in. The pain, the stress, agony. The lessons you learn. Your come ups, your downfalls. The real world–which I deal with in my music–is always relevant. All the shit I might go through in the course of a day is on my album. I’m talking about religion, spiritually, getting a piece of mind. All that counts and all that’s in my music.

We’ll see if he sings a different tune in a few years.

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Rapper Ja Rule Sentenced in Tax Case

Kelly — Tue, 19 Jul 2011 16:10:24 +0000

Rapper and actor Ja Rule, whose real name is Jeffrey Atkins, was sentenced this week to more than two years in federal prison for failing to file income tax returns between 2004 and 2006. He had faced up to three years in prison for the charges.

The sentencing follows a plea agreement into the rapper’s finances from 2004 to 2008. As part of the plea, the government dropped counts against Ja Rule for failing to pay taxes in 2007 and 2008.

Ja Rule is already serving a two-year sentence in a federal prison on a gun charge stemming from his 2007 arrest in New York City. At the time of the arrest, Ja Rule was found with drugs and a gun; fellow rapper Lil Wayne was arrested after the same show that evening. Ja Rule pleaded guilty to the weapons charges and asked to have the tax evasion sentence served concurrently with the weapons sentence. He was granted a delay at the start of his original sentence so that he could finish his new album.

While some may have grumbled at the appearance of favorable treatment with the delay, there is a rationale behind it. Ja Rule has been ordered to pay back $1.1 million in unpaid taxes plus penalty and interest; without a source of income, the government doesn’t stand much of a chance in getting its money back.

The rapper once boasted quite the successful career, promoting not only his own albums, but appearing on other artist’s albums as well. In 2002, Ja Rule collaborated on albums with Fat Joe, Mary J. Blige, Bobby Brown and Ashanti. That time period also marked a host of problems for the rapper, including public disputes with fellow rappers DMX, Eminem and 50 Cent.

A couple of years later, in 2004, the rapper was arrested for driving with a suspended license and possession of marijuana. The 2004 arrest didn’t seem to phase Ja Rule at all. His November 2004 release – just a few months after the arrest – of his studio album R.U.L.E. debuted at No. 7, selling 166,000 copies in its first week of release. The album’s lead single, “Wonderful” featuring R. Kelly and Ashanti, peaked at No. 5 on the Billboard Top 100 Singles chart.

This latest prison stint may not have the same outcome. While some rappers, like Snoop Dogg, tend to come out of prison with even more of a following, that hasn’t happened for Ja Rule to date. Let’s face it: “Tax Evasion Was the Case” just doesn’t have the same ring to it.Similar Posts:

Show Biz Lawyer Finally Sentenced in Massive Fraud Case

Kelly — Sat, 11 Jun 2011 14:06:06 +0000

The bizarre saga involving former Hollywood tax attorney Matthew G. Krane appears to finally have come to a close.

Krane was sentenced yesterday to 2-1/2 years in federal prison for his role in a tax shelter scheme. Krane had pleaded guilty in 2009 to evading tax by failing to claim $36 million in undeclared income and attempting to obtain a false passport to flee the country after his participation in the scheme was discovered; at the time of his arrest, law enforcement officials found the fake passport, along with crystal meth, date-rape drugs and horse tranquilizers. Krane also agreed to pay $23 million in back taxes as part of his sentence.

The relatively meager sentence reflected Krane’s cooperation in a lengthy federal investigation into the scheme. Krane testified against Jeffrey Greenstein and former tax attorney Charles Wilk, who were the alleged masterminds behind a tax shelter referred to as the Portfolio Optimized Investment Transaction or POINT. Six investors, including Robert Wood Johnson IV (heir to the Johnson & Johnson fortune and owner of the New York Jets) and Haim Saban, contributed more than $1.5 billion to the tax shelter, which generated false losses.

Part of Krane’s sentence also requires him to refund nearly $18 million in fees to Saban, who was not aware of the criminal nature of the scheme. Saban’s family has indicated that they will donate the returned money to charity. They don’t appear to need it; Saban has consistently been ranked by Forbes magazine as one of the richest people in America for the past few years. Much of Saban’s wealth is a result of his promotion of the annoyingly popular Power Rangers (trust me, you’ve seen at least one kid dressed as a Power Ranger every single Halloween). Saban is also considered one of the Democratic Party’s biggest individual donors though he supported Bush’s re-election in 2004 on national security issues.

Krane’s testimony against Greenstein and Wilk helped prosecutors obtain a guilty plea. Greenstein is the co-founder and former chief executive of the Quellos Group LLC. Quellos was considered one of the world’s largest managers of mutual funds made up of hedge funds: the funds portion of the company was sold to BlackRock in 2007 for $1.7 billion (BlackRock was not part of the investigation). Greenstein and Wilk had initially argued that the scheme was reviewed and blessed by outside firms, including, reportedly, mega-firms Cravath and Bryan Cave but eventually took responsibility.

Under the plea, Greenstein and Wilk agreed to charges of conspiracy to defraud the government and aiding in the filing of a false tax return. They must pay $7 million in penalties plus the cost of their prosecution. They were also required to deliver speeches at their graduate schools about ethics which is kind of weird considering that Greenstein clearly didn’t learn much from the ethics courses that he attended as an attorney. Nonetheless, Greenstein delivered his speech to the University of Washington. Wilk planned to speak at his alma mater, NYU, but the school turned him down and that part of his sentence was eventually dropped. Each of the men were also sentenced to four years in prison.

Now, with Krane’s sentence, the saga involving more than $1.5 billion in tax shelter investments has finally ended – until Hollywood gets ahold of it, course.

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Tax Attorney Alleges Racism at Gucci

Kelly — Wed, 08 Jun 2011 13:51:59 +0000

Josephine Robinson, a former tax attorney for the Italian luxury fashion house Gucci has filed a lawsuit accusing the company of racial discrimination. The lawsuit, Robinson v. Gucci America (U.S. District Court, Southern District of New York, No. 11 CV 3742) which was filed on June 2, specifically names top executives in the company, including Robinson’s immediate supervisor, Stan Sherwood, who serves as executive international tax counsel for the company. Also named in the suit are Matteo Mascazzini, associate president of Gucci and Christy Leleck, Gucci’s director of human resources. Robinson seeks more than $5 million in damages.

Robinson’s career at Gucci spanned from March 2008 until November 2010, when she alleges she was fired in retaliation for complaining about the racist and hostile atmosphere at the company. If true, that would be a violation of Title VII of the Civil Rights Act of 1964.

Prior to her employment at Gucci, Robinson had already built a pretty impressive resume. She received her law degree from NYU, which boasts more tax courses than any other school. Robinson then moved on to Milbank, Tweed, Hadley & McCloy LLP. Milbank is considered a top law firm, with approximately 550 lawyers in 11 offices around the world.

Her work as an international tax attorney for one of the world’s most recognizable brands should have been another feather in her cap. However, Robinson alleges that she was frequently harassed by top executives at the company, including her supervisor, Stan Sherwood. According to a press release issued by Robinson’s attorneys, Sherwood targeted her because of her race, referring to often as “black, very black.” Sherwood also allegedly called Robinson a “loose woman,” “cheap day labor,” a “f-ing bitch” and referred to her as a prostitute.

In the complaint, Robinson claimed that she reported Sherwood to Gucci’s human resource department but nothing was done to stop the behavior. Instead, she was told that she was “asking to be fired” and alleges that she was reprimanded, suspended and fired for bringing the complaints.

The racist atmosphere at Gucci extended beyond Robinson, according to the complaint. Robinson alleges that Sherwood told her that the company “has a high tolerance for racism.” Robinson cited an example involving pop star Rihanna, who is from Barbados. Sherwood allegedly told Robinson to “tax the hell out of her” and bump her withholding to 30%. Robinson alleges that Sherwood did not direct her to treat other clients in the same manner.

Robinson is represented by NY law firm Leeds Morelli & Brown LLP. Robinson’s attorney, Rick Ostrove, has said about the matter:

These alleged actions by Gucci against Josephine Robinson are reprehensible and made all the worse because lawyers, officers of the court, subjected her to such discriminatory behavior.

In addition to more than $5 million in damages, Robinson is seeking an injunction requiring Gucci to clear her employment record of any disciplinary actions.Similar Posts:

Snipes’ Attorney Claims He Can’t Get a Fair Trial in Racist Ocala

And Scene: Snipes Denied by the Supreme Court

Kelly — Mon, 06 Jun 2011 13:50:02 +0000

When Wesley Snipes was found guilty on tax evasion charges, he vowed to appeal. And appeal he did. Over and over. That, however, may finally be coming to an end.

This morning, Snipes’ petition for certiorari was denied by the Supreme Court. You might have heard this referred to as “denied cert” or “cert denied” by lawyers trying to sound cool or, as in my case, those of us in the legal profession who can’t pronounce or spell Latin.

Here’s what it means: the Supreme Court has what is called “original jurisdiction” over certain kinds of cases. Those cases, which are defined by statute (28 U.S.C. § 1251) go straight to the Supreme Court. The typical case associated with original jurisdiction would be a dispute between the states.

Most cases, including the Snipes matter, don’t have original jurisdiction. To be heard at the Supreme Court level without having original jurisdiction, the losing party must file a petition seeking a review of the case. If the Supreme Court grants the petition and decides to hear the matter, it’s called a writ of certiorari. If the Supreme Court turns the petition down, it’s referred to as certiorari denied. A denial does not necessarily mean that the Supreme Court agrees with the findings of the appellate court; it simply means that appellate decision will stand.

And that’s what happened in this case. Snipes, who is serving a three-year sentence at the Federal Correctional Institution McKean in Lewis Run, Pennsylvania, filed a 49 page petition (downloads as a pdf) raising two issues:

Is an accused person deprived of the right under Article III and the Sixth Amendment to be tried only by a jury of the community where venue is proper, when factual questions determinative of whether venue has been correctly laid are determined solely by a jury selected in the place challenged by the defendant as incorrect?
Where venue is a contested factual issue in a criminal trial, does the government bear a burden of proof beyond a reasonable doubt or only by a preponderance of the evidence?

Neither issue was addressed by the Supreme Court which declined to hear the matter without further comment. Likewise, Snipes did not comment. With that, Snipes will likely now serve the remainder of his sentence.

Snipes was convicted of failing to file federal income tax returns three years ago despite earning an estimated $40 million during the years in question. He was acquitted on more serious charges of tax fraud and conspiracy, despite admitting that he knew that not paying his taxes “sounded too good to be true.”

Snipes was slated to begin his sentence in June 2008 but did not, however, report to prison until November 2010 due to a number of appeals. Originally, Snipes lost an appeal filed based on the length and severity of his sentence. Snipes’ attorneys claimed that the sentence was unreasonable. A federal court disagreed.

Snipes tried again in November 2010, claiming that he did not receive a fair trial. At the center of his appeal was a claim that he could not have gotten a fair trial in Ocala, Florida, which he had previously referred to as a “hotbed of Klan activity.” U.S. District Court Judge William Terrell Hodges denied Snipes a new trial, writing:

The Defendant Snipes had a fair trial; he has had a full, fair, and thorough review of his conviction and sentence by the Court of Appeals; and he has had a full, fair, and thorough review of his present claims, during all of which he has remained at liberty. The time has come for the judgment to be enforced.

Despite that ruling, Snipes tried again. The issues of venue, which were described as “precisely those which led to the colonists’ inclusion of a venue grievance in the Declaration of Independence” were raised again in Snipes’ petition to the Supreme Court.

Whoa. Is it just me or do Snipes’ lawyers sound like they might be moonlighting as screenwriters? This is, after all, the stuff of Hollywood.Similar Posts:

Sharon Osbourne Tweets IRS

Kelly — Tue, 03 May 2011 02:22:18 +0000

Awhile back, I blogged the story of the Osbourne tax lien. Ozzy and Sharon Osbourne, as you may recall, were smacked with a $1.7 million tax lien for tax troubles stemming from the years 2008 and 2009. Sharon Osbourne tweeted about the lien, blaming her financial advisors for her tax woes.

Unlike many of my colleagues who were quick to jump on the “they’re rich celebs so why won’t they pay their taxes” bandwagon, I sympathized with Mrs. Osbourne’s comments that her tax issues were the result of mistakes made by someone she paid to manage her financial affairs. This is something that I unfortunately see a lot of in my own practice: taxpayers who trust their bankers, accountants, lawyers, bookkeepers, financial advisors, (fill in the blank with your own story here) and find that trust misplaced for all manner of reasons. Sometimes it’s bad advice. Sometimes it’s a misunderstanding. Sometimes it’s inaction. The truth is that mistakes happen – from the rich and famous (like Nicolas Cage and former California Governor Arnold Schwarzenegger) to the little guy – and it’s not always the case that it’s the taxpayer to blame.

All of that said, I was surprised to see Mrs. O tweet that matters had escalated over the weekend:

Just when we thought it was safe with the IRS, here they come again! This time their fault, not mine. Not taking this one laying down.

A minute later she followed up with:

Mine was a fuck up, yours was a “PROCEDURAL ERROR”. The bill has been paid, in fact I’m owed a rebate. Please send. Big Kiss, Mrs O

Mrs. O is referring in her tweets to a new IRS lien in the amount of $375,000 which was slapped on Britain’s second favorite family. She took to her talk show today to explain the whole tax debaucle, saying, “The last couple of years, I have really been concentrating on myself – because I think I love myself a little bit too much – and not taking care of business.”

Reportedly, she found out about the lien from the web site, TMZ.com, and not from her own people. That would certainly confirm the notion that she has surrounded herself with folks who are making her finances a priority, either purposefully so or for other reasons. She said about her accountant, “He did say he’s to blame, but I’m to blame because I didn’t care enough. I was too involved in myself. I canceled two meetings with him over the last 18 months because I was way too busy. And the bottom line is it stops with me. So I have to face up, be a big woman and realize I’m not Mrs. Wonderful.”

It’s a lesson fit for the Prince of Darkness (and family) as well as you and I.

Image by Wiki edit Jonny (Transferred from en.wikipedia) [CC-BY-SA-3.0 or GFDL], via Wikimedia Commons

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IRS, tax, tax professionals, tax lien, Sharon Osbourne, Ozzy Osbourne

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Texas Sized Tax Break for Yacht Owners

Kelly — Sat, 30 Apr 2011 12:49:13 +0000

It seems like most states these days are crying poor, claiming that lower revenues mean that taxes must be raised and cuts may be had. Apparently that is not the case in Texas.

One day after I saw this CNN report about the $60 million high school football stadium being built outside of Texas (yes, it’s a public high school), I read that Texas is considering a sales tax exemption for yacht owners. A committee in the House, led by Rep. John Davis (R-Houston), passed a measure that would put a cap on the maximum state sales tax that you could charge for the purchase of a yacht; the measure would benefit those yacht owners that spend more than $250,000 on such a boat.

Rep. Davis claims the bill is necessary because Florida passed a similar law last year. In fact, Florida Governor Charlie Crist signed the oddly-named Jobs for Florida Bill in May of last year which capped the amount of sales tax you could charge on boats at $18,000. Florida’s rationale? They had to compete with other states who have granted tax breaks.

Tax breaks for boat owners in other states? Which ones? As it turns out, as of last year, South Carolina capped the sales tax payable on the purchase of a boat at $300. North Carolina limits the amount of sales tax payable to $1,500. Both of those states are running at a deficit this year and are considering other tax increases to plug the hole.

Of these states, three of them are on the leader board for top boat sales in the country according to DiscoverBoating.com (report downloads as a pdf): Florida, Texas and North Carolina. California and New York round out the top five. South Carolina isn’t among the top ten.

Before you fire off a comment about how I don’t understand how this all works, believe me when I say that I do. I grew up in coastal North Carolina. I know how important the boating industry is to coastal areas. And I agree that it makes sense to take steps to preserve and protect important industries where possible.

I’ve also read the reports and I’ve seen the statistics about how states believe that not offering these breaks will encourage wealthy residents to look elsewhere, including offshore havens for their purchases. It’s funny how it’s come to that. It would appear that states live in constant fear that wealthy residents – and companies – will exit en masse without a steady supply of tax breaks. And we wonder why our tax system is so convoluted. Here a break, there a break…

That said, all of this movement to spend public dollars and limit tax spending in the Lone Star state gave me the impression that Texas revenue coffers were flush enough to offer these perks. Only that’s not the case. The state is actually facing a $23 billion deficit. Compare that to the total of retail expenditures in the state for the purchase of boats, trailers and accessories at $906 million – and no, I’m not including related industries in that total. Curious, huh?

I get that tax breaks and tax caps have their place in the tax system as it currently operates. In a tough economy, you have to make thoughtful decisions about how to boost revenues and that might include increases for some and cuts for others. Choosing who to placate and who to irritate is a fine line. So, what’s your take? Is this a good move for Texas? Would you want similar breaks in your own state?Similar Posts: