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According to Shawshank Redemption’s Red, “In prison, a man will do most anything to keep his mind occupied.” That apparently includes doing income taxes. A real-life Andy Dufresne has been accused of receiving special treatment in exchange for advice on taxes and other matters.

Robert Potchen was initially sentenced to 15 years in prison for holding his wife hostage at gunpoint. However, the 61-year-old was moved to Orange County (Florida) Jail while awaiting a probation violation hearing. According to Orange County court records, Potchen contacted his wife in writing on multiple occasions while in prison, which is allegedly contrary to the conditions of his probation.

Potchen disputes that the communications constituted a probate violation.

While not an attorney, many of Potchen’s court pleadings and related legal correspondences have been pro se (self-prepared). In 2016, the court issued an order that Potchen was “to be given access to the Law Library if it is not a Security Issue.” And while most of his communications and pleadings were in his own handwriting, Potchen also had access to a computer.

Potchen must have used some of that time in the law library to do a little extra research. According to the Orlando Sentinel, an internal investigation by the Orange County Corrections Department (OCCD) found that Potchen advised five corrections officers on financial and legal matters, including how to deal with student loans, taxes, and mortgages. On at least two occasions, Potchen wrote letters on behalf of the officers in an attempt to resolve legal and other disputes; Potchen also reviewed legal documents for the officers. Investigators claim that Potchen also did taxes—at least one of the officers received a refund worth thousands of dollars. Each of the officers accused in the matter—Lisa Rembert, Shawn Kelly, Bobby McDonald, Joseph Rice, and Juan Perez—has since resigned or retired.

In exchange for the advice, Potchen was allowed luxuries not afforded the other inmates, including extra time outside of his cell, access to the internet, smoking privileges, and ordering Chinese take-out.

Potchen’s legal and financial advice didn’t stop with the officers. According to investigators, he also wrote several legal motions for Darryl Patterson, another inmate who was sentenced to 45 years in prison on a rape conviction.

However, inmates who didn’t receive special treatment complained about Potchen. One inmate even wrote a letter to the OCCD about the extra favors, noting, “I believe we should all be treated equally and no one should be given special privileges.”

An investigation into the matter took five months. As a result, Potchen was moved from the general prison population to an isolated cell. Potchen has since filed a civil petition alleging that the move was improper; the complaint was initially dismissed on procedural grounds.

Only two of my kids went trick-or-treating this year. You’d think this would mean that the house would look a little neater than usual post-Halloween. You’d be wrong: Candy is still everywhere. It’s a challenge to figure out what to do with all of the loot—we can’t possibly eat it all. This dilemma inspired a post a few years back. It’s back again, updated to reflect changes under the new tax law. Here are 13 uses for leftover Halloween candy—complete with the tax consequences, of course:

1. Give the really good stuff to your favorite tax pro just because.

Nontax consequences: Everybody loves a gift, including tax geeks. Just be sure to pony up Reese’s peanut butter cups and Milky Way bars—don’t try to sneak in your butterscotch stragglers.

Tax consequences: None. If you’re handing over the candy out of the kindness of your heart (or with “detached and disinterested generosity”) and not expecting anything in return, it’s a gift: gifts are not taxable for income tax purposes. And unless you make a habit of giving your tax pro gifts in excess of the annual gift tax exclusion ($15,000 for 2018) – which I am in no way discouraging – you’re fine when it comes to gift tax, too.

2. Pay your tax professional in chocolate.

Nontax consequences: Depending on costs, this could be a lot of candy. If your tax pro has a sweet tooth, he or she might appreciate some treats, otherwise they’ll probably insist on payment in the way of cash, check, credit card or bitcoin.

Tax consequences: It used to be the case that fees for tax advice or tax preparation – even if made in candy—could be deductible as a miscellaneous deduction subject to the 2% floor. That’s no longer the rule under tax reform. The deductions for tax-preparation expenses and other miscellaneous deductions that exceed 2% of your adjusted gross income (AGI) have been eliminated for the tax years 2018 through 2025.

(You can see other changes to Schedule A here.)

3. Pay your plumber or electrician in Snickers bars.

Nontax consequences: See #2 above.

Tax consequences: None. The cost of most personal services isn’t deductible for individual taxpayers.

4. Take a bowl (or two) of candy to hand out to your colleagues.

Nontax consequences: Your colleagues will thank you for making them happy. Also fat. But mostly happy.

Tax consequences: Giving candy to your colleagues isn’t deductible. Even if they could be couched as ordinary and necessary in your line of work (and who doesn’t think that M&Ms are both ordinary and necessary?) unreimbursed employee expenses are no longer deductible. As noted above, deductions for miscellaneous expenses that exceed 2% of your AGI have been eliminated for the tax years 2018 through 2025.

(You can find more on the elimination of the deduction, including what it means for home offices, here.)

5. Keep a filled candy bowl at the office for your employees.

Nontax consequences: Your employees will think you’re awesome, assuming that you give them the good stuff. Leave out a bowl of unrecognizable nougats and you’ll have a whole group of folks posting nasty comments to Glassdoor.com before you can say butter brickle.

Tax consequences: None. There’s no out-of-pocket cost to the employer for candy that was gathered by trick or treaters, though candy purchased at a store to feed employees would be a business expense. Occasional snacks offered to employees at their workplace are de minimis and are not includable for tax purposes: the Internal Revenue Service (IRS) considers these items “so small as to make accounting for it unreasonable or impractical.” In fact, the Latin phrase de minimis translates roughly to “of little importance” – which means that the IRS clearly doesn’t know how I feel about Junior Mints. But if you were touting hand-rolled truffles a la Google, it could be considered a taxable benefit. Stick to what’s in the trick or treat bags.

(For more on recent IRS guidance regarding meals and entertainment, click here.)

6. Exchange your Whoppers for other stuff.

Nontax consequences: If you use a program like Halloween Candy Buy Back, participating businesses will “buy” back your candy in exchange for cash, coupons, and other creative exchanges; businesses may then work with groups to send candy to our soldiers, children’s hospitals, homeless shelters or other deserving folks. That should give you a reason to smile.

Tax consequences: Property held for personal use is considered a capital asset and you have to report any gain from a sale or exchange as a capital gain. Assuming that your candy is exchanged for an equivalent item, there should be no gain and no tax consequences. But what if you lose out by trading a stash of Reese’s cups for a gift certificate to a restaurant that you’ll never patronize? You can’t deduct losses from the sale of personal property (more on losses here). And don’t get fooled into thinking you can take a charitable donation: you can only claim a charitable deduction for gifts made to a qualifying organization to the extent that you don’t receive something in return (more on quid pro quo here).

7. Donate your candy to charity.

Nontax consequences: Warm fuzzies. You did a good thing.

Tax consequences: Assuming that you contribute to a qualified charitable organization, you can deduct the value of the goods as an itemized deduction. Document your gift and get a receipt. There’s one more caveat: In addition to making sure that the organization actually wants your extra candy, if you’re donating property that’s not related to the charity’s exempt purpose, your donation may be limited. In other words, if you’re giving candy to an after-school program, you can be reasonably sure that the program will use the candy to accomplish its charitable purpose. But if you donate that same candy to an art museum, not so much. So, use common sense—and a little courtesy (ask first).

8. Use candy as prizes for bingo and card games.

Nontax consequences: Kids, including big ones, love bingo. We play at our house because it’s fun, it’s easy, and notwithstanding some tricky advice from the seniors in my hometown, it doesn’t require much skill.

Tax consequences: Our family bingo games don’t have tax consequences because we play for peanuts—well, literally for peanut M&Ms, but you get the point. In general, bingo winnings are taxable to the winner as income on line 21 of your federal form 1040: It does not matter whether the winnings are in cash or property (though clearly if you eat the winnings, they’re pretty hard to trace, not that I’m suggesting you evade taxation by this method). And in case you’re wondering if your unorthodox method of play really qualifies as bingo, there is a tax statute for that: 26 C.F.R. § 1.513-5 in the Treasury Regulations.

9. Use candy for tips.

Nontax consequences: I’m not suggesting that you not give the paperboy a cash tip. But why not hand over some yummy candy as well? It can’t be a bad thing to be known as the house on the block that gives out the best tips ever. But that means you have to give out the good stuff (giving out Necco wafers isn’t going to win you any kudos).

Tax consequences: It depends on who you’re paying. You can’t deduct tips to the paperboy or the pizza delivery girl. However, to the extent that you’re tipping the babysitter or other employees, tips are taxable to them (and thus possibly deductible to you) – but see #10.

10. Make gifts for the babysitter, maid, etc.

Nontax consequences: Who doesn’t like getting a nice gift now and again? With a little ingenuity, you can fill a cute gift bag filled with candy. Voilà! Minimal cost and effort to let folks know they’re appreciated.

Tax consequences: No matter what you want to call it (a thank you, a bonus, a perk), a gift made to an employee is considered compensation. There’s an exception for small noncash gifts considered de minimis: Those gifts are not taxable. So, a few Hershey bars in a gift bag would be de minimis and nontaxable—a tower of Godiva truffles, likely taxable, though clearly still delicious.

11. Recycle your stash of candy at Christmas.

Nontax consequences: If you put leftover candy in the freezer, you can recycle it for later. Money saved. Just be sure to sort out the candy with ghosts and pumpkins otherwise you’ll have to explain why Santa and the elves are handing out Halloween candy. (Note to new parents: Trying to make up a story about the rarely seen “Christmas bat” almost never works.)

Tax consequences: None. Even if you had paid for it, you can’t claim tax deductions for personal expenses like food or candy.

12. Conduct science experiments.

Nontax consequences: Candy is pretty awesome, and science is pretty awesome, so why not combine the two? There are all kinds of experiments on candy to keep your budding scientists interested, from melting Starbucks to floating Skittles (you’ll find details on those and more at Candyexperiments.com).

Tax consequences: There’s no allowable tax deduction for tutorials and extras to keep your kids at the top of the class since they’re considered a personal expense (exceptions exist). If you’re a teacher, however, the results are different. Despite threats that the deduction would be eliminated as part of tax reform, teachers may still deduct up to $250 if they use out-of-pocket cash to buy classroom supplies (depending, candy could qualify as “supplementary materials that you use in the classroom”). It’s an above-the-line deduction, which means you don’t need to itemize.

13. Eat it.

Nontax consequences: Halloween candy is delicious. You might, however, have to explain to your son why you ate his Butterfinger without asking (pro tip: there is no suitable answer). If you decide to sneak an extra treat, remember that there could also be potential long-term effects like cavities and an extra pound or two.

Tax consequences: No immediate consequences. Dealing with some long-term consequences of eating candy, however, might be deductible. While you can’t deduct the cost of going to the gym or joining a weight loss program to get rid of those extra pounds, dental and medical expenses did survive threats under tax reform. The floor was even lowered, so for 2018, you can deduct out of pocket expenses paid for medical care exceeding 7.5% of your AGI. That means that you can deduct dental expenses if you end up with a mouth full of Skittle induced cavities – but even I’ll admit that’s one heck of a way to squeeze out a deduction.

On May 19, 2018, well-wishers around the world watched as Prince Harry tied the knot with Meghan Markle (now “Her Royal Highness The Duchess of Sussex”) at St George’s Chapel, Windsor Castle. About 600 guests attended the wedding, including luminaries like David Beckham, Oprah Winfrey, and Idris Elba, while another 1,200 lucky guests lined up outside of the chapel to watch.

While those outside the chapel might not have been able to rub elbows with the Queen, they didn’t go home empty-handed. The newly married couple issued commemorative gift bags for the occasion. The monogrammed gift bags included such goodies as a royal wedding water bottle, shortbread and a gold-wrapped chocolate coin.

I would have been tempted to eat the shortbread immediately, but some guests were a little more mercenary, putting the bags up for sale after the wedding. Some bags have been listed on eBay: As of this writing, one such listing has already drawn 66 bids, driving the price up to £13,000 (US$17,465.50).

(Quick caveat: If you head over to the site, you might not be able to stop clicking. Other commemorative wedding items for sale include a KFC Limited Edition Harry & Meghan Royal Wedding Golden Bucket—yours for just £400 (US$537). You’ve been warned.)

Most of the sellers appear to be located in the United Kingdom, but taxpayers located in the United States have to assume that the Internal Revenue Service (IRS) is paying attention. Almost any time that you sell an item, you have potential accession to wealth, and under section 61 of the Tax Code, that’s generally taxable. The language is pretty broad, declaring that “gross income means all income from whatever source derived.” That includes gains from the sale of capital assets, no matter how you acquire them.

How you acquire the items does matter, however, when it comes to figuring out how much tax you might owe. When you sell or otherwise exchange an item for value, you calculate your gain by subtracting your basis from the selling price. Your basis is generally the price that you pay for an item. So, if you buy Facebook stock for $50 and you sell it today (it’s expected to open at $184.49), your gain is $134.49, or $184.49 – $50.

But what happens if you’re selling an item that you didn’t pay for in the first place? The tax treatment for the sale is the same–but figuring the basis can be different.

When you receive a gift, your basis is the same as it was for the person who made the gift. So if your great-aunt Janie gave you Facebook stock that she bought for $1, your basis is $1, no matter when she made the gift–even if, on the day that she gave it to you, that Facebook stock was worth $100.

But not every “gift” is a true gift. Remember when every member of Oprah Winfrey’s studio audience found themselves with a new $28,500 sedan? Those cars weren’t gifts at all, but rather part of a 2004 promotion for Pontiac (previously a brand of cars under the General Motors umbrella). The result was a tax bill to the recipients of about $7,000 per car. Audience members who didn’t want or need a car could sell them, of course. The basis was the fair market value of the car–the same amount reported as income. If the car was then sold for, say, $30,000, the gain would be $30,000 (selling price) less $28,500 (basis), or $1,500.

The same goes for those Hollywood gift bags. For years, stars took home tax-free gift bags packed full of fantastic items. The theory was, of course, that it was a “thank you” for just being so darn fabulous. But the IRS thought otherwise. In 2007, as part of an “outreach program aimed at the entertainment industry,” the agency announced that “[t]hese gift bags are not gifts for federal income tax purposes because the organizations and merchants who participate in giving the gifts bags do not do so solely out of affection, respect, or similar impulses for the recipients of the gift bags.” Instead, like those “free” cars, those diamond-encrusted bras and Gucci sunglasses are considered promotions and the recipient has “taxable income equal to the fair market value of the bag and its contents and must report that amount on his or her federal income tax return.” Similarly, any subsequent sales are taxed as capital gains using the fair market value as the basis.

But what if it is a real gift? I think that’s the case with the royal wedding gift bags, even if the contents are quite a bit nicer than your run-of-the-mill bottle of bubbles. I’d argue that these gifts were actually driven by “affection, respect, or similar impulses” and not a promotion (note, for example, the lack of branding outside of the monograms). If that’s the case, under U.S. law, there would be no income to the recipient. That means that most of the guests likely happily devoured their shortcake and chocolate, income tax-free. As for the few souls who hope to profit from their attendance at the big event? If they do, the gain is figured the same as before: the selling price less the basis. In this case, however, the basis would be the cost of the items paid by the gift-giver (just like the Facebook stock from your great-aunt Janie in the earlier example) and not the fair market value of the gift.

Here’s the takeaway: Not everything that’s “free“ is actually free. When it comes to promotions and giveaways, there’s a lot of room for debate (just ask the Cincinnati Reds). If ever in doubt, remember that section 61 of the Tax Code attempts to grab at almost everything. It’s best to consult with a tax professional if you’re not sure.

The most popular names for babies born in the United States for 2017 are Liam and Emma.

Emma (1), the most popular name for a girl, topped the list for the fourth year in a row. Liam (1) made its first appearance on top of the list, edging out Noah (2). The popularity of the names, as determined by Social Security Administration (SSA) data, is based on just over 3.8 million babies born in the United States for 2017 – the lowest number of births in nearly three decades.

Which names missed the top ten? Former favorites Michael (12) and Emily (12) didn’t make the cut, a status that the pair of names had previously held for decades.

Which names were recent additions? Everybody’s favorite, Amelia (8, and I might be biased), made the list for girls, together with Evelyn (9), while Logan (5) and Oliver (9) were fresh adds to the list for boys.
The complete top 10 list for boys for 2017:

  1. Liam
  2. Noah
  3. William
  4. James
  5. Logan
  6. Benjamin
  7. Mason
  8. Elijah
  9. Oliver
  10. Jacob

The complete top 10 list for girls for 2017:

  1. Emma
  2. Olivia
  3. Ava
  4. Isabella
  5. Sophia
  6. Mia
  7. Charlotte
  8. Amelia
  9. Evelyn
  10. Abigail

For purposes of the list, variations and alternate spellings are treated as different names. That’s why Liam (1) made the list as well as William (3). Ditto for Mia (6) and Amelia (8) – The Princess Diaries, anyone? That also explains why you’ll see Sophia (5) in the top ten list for girls and see Sofia (15) a little further down.

The Social Security Administration has released baby name data since 1997 although if you head over to the website, you can find data ranging well before that: Names in the database range as far back as 1880.

The lists are compiled from names on Social Security card applications. Nowadays, the process of getting a Social Security number at birth is so streamlined that the application typically happens when you submit information for the birth certificate.

If you decline to get a Social Security number for your child when you submit information for the birth certificate, you can always apply later – but that’s a little more complicated and time-consuming. You’ll have to appear at the SSA office with a form SS-5 (downloads as a PDF) and your child’s original birth certificate. If your child is over the age of 12 when you make the application, the child has to come along with you even if you’re the person signing the application on that person’s behalf. For more on how to get a Social Security number, you can check out this pamphlet from SSA (downloads as a PDF).

There is no charge to get a Social Security number and card for your child.

Of course, unless you have a Gerber baby, chances are that your little one won’t be headed to work immediately. So why get a Social Security number at birth? Taxes. Your child must have a Social Security number for you to claim your child as a dependent on your income tax return. If you can’t claim your child as a dependent, you can’t claim certain tax breaks, including the earned income tax credit (EITC) and the newly expanded child tax credit (more on your taxes in 2018, including the rates here). Additionally, without a Social Security number for your child, you can’t file as head of household (HOH) or qualifying widow(er) with dependent child.

If you don’t want a Social Security number for your child, you don’t have to get one. Some folks may object to having a Social Security number assigned for religious reasons. You can request an exemption/waiver on this basis but, ironically, you have to get a Social Security number to do so. What happens, practically speaking, is that you obtain a number solely for the purpose of filling out form 4029 (downloads as a PDF). Assuming you qualify for the exemption/waiver, you must notify the Social Security Administration that this is your intention and that you do not want a Social Security card created or mailed.

Most Americans do get a Social Security number. More than 450 million taxpayers have received Social Security numbers since the first number was issued on December 2, 1936. That first number, SSN 055-09-0001, belonged to John D. Sweeney, Jr. of New Rochelle, New York (fun fact: Sweeney never received Social Security benefits).

Social Security numbers are widely used today for a variety of purposes although there are only about 40 official uses approved by Congress. That said, the Social Security Act also allows state and local governments to require a Social Security number for tax and other reasons. Having the number now will make things a lot easier for little Liam or little Emma later.

Earlier this month, a friend shared this meme on Facebook:

student loan interest meme

I’m not sure where it originated, but the meme has clearly made the rounds. The above version was linked to a union-oriented Facebook page but it is stamped The Other 98 (a nonprofit organization). It’s been widely shared on a number of sites, and folks have been quick to offer their comments, including firsthand accounts of how they had been affected by the alleged tax changes.

There’s just one problem: The meme is not true. The student loan interest remains in place, and there is no tax deduction for private school tuition.
I suspect the confusion stems from the evolution of the tax reform bill. Under the House and Senate proposals, most above-the-line deductions, including the deduction for student loan interest, would have been eliminated. In the final version, however, the deduction for student loan interest was retained with the current cap of $2,500.

Similarly, tax reform expanded 529 savings plans to include public, private and religious elementary and secondary schools – but that’s not the same as a deduction. A 529 plan is a tax-favored savings plan traditionally used for college. Neither the earnings nor distributions in 529 plans are taxable for federal purposes so long as the plan is used for qualified educational expenses.

This meme, like many of those being shared on the internet, has some roots in what was true, which is why it was so easy to believe. But facts and details matter. So does timeliness: Even if part of the meme was tied to a proposed change, it’s being widely shared as though it’s true now, which is not accurate.

Not sure whether something is accurate? It’s worth doing a little digging before you believe what you see in an internet meme, and definitely before you share. When it comes to tax and budget memes and stories, consider:

  • The original source. It’s always a good idea to try and locate the original source when you’re referencing a law, tax or otherwise. In this case, the meme is referring to the tax reform law, sometimes referred to as the Tax Cuts and Jobs Act (TCJA). You can read the whole thing here (downloads as a PDF).
  • Trusted sources. Even when you can locate the original source, it can be tricky to navigate through to the right bits. The tax reform law, as printed, and without additional reference material is 185 pages long. If that’s too much for you to wade through, or if you need an interpretation, find a trusted source. You can read my synopsis on the tax reform law; you can also find other summaries from financial and tax journalists. Try to steer clear of sites with a definite agenda – if the source of the meme is akin to “ThePresidentStinks.com” or “PaulRyanIsAlwaysRight.com” (both of which are not actual sites as of this writing), keep looking.
  • The IRS website. If you have questions about a tax deduction, credit or other adjustment, consider the IRS website at www.irs.gov. It’s not perfect, but it has a lot of good information, including FAQs, calculators and tools, and helpful publications.
  • Check out a fact-checking website. Fact-checking websites like Snopes.com and Politifact.com can be useful resources for determining whether something is true or false, or somewhere in between. The information on these sites, however, may be limited to a specific question and may not be all-inclusive.
  • Ask a tax pro. If you have a tax question, ask a tax professional. Don’t ask your neighbor, your mom, or your co-worker (unless those folks happen to be tax professionals). They might be wonderful people. They might be super-smart. But some of them are willing to believe which Hogwarts House they should be sorted into based on a breakfast foods quiz. While that might make them experts on wizards or doughnuts, it doesn’t mean that they know any more than you do about tax. If you want the right answers, ask the right people.
  • Don’t share without confirming. Part of the reason that these memes take on a life of their own is that they are so widely and quickly shared. If you don’t know whether something is true, don’t assume that your friends do either. Take a moment to do your own homework. To quote former President Ronald Reagan, “Trust, but verify.”

It’s my mostly annual and wildly popular Taxgirl Tax Haiku!

Here’s what you need to know to write a tax haiku (俳句). Haiku is a form of Japanese poetry. The best part? It’s short. Traditional haiku consists of just 17 syllables. The English version is a pattern of three 5-7-5. Haiku in English is usually written in three lines, like this:

Not ready to file?
Super easy to extend –
No need to say why!

Or

Cryptocurrency.
Don’t forget to report it –
IRS target.

Or

Tax Day is coming.
But it’s not here yet – not ’til
April 17.

See? Super easy. And fun – trust me, you’ll get addicted.

You don’t have to be great at it. It doesn’t have to rhyme. It doesn’t have to make me swoon. It just has to be in the 5-7-5 pattern (so being able to count is a plus) and focus on tax. Any kind of tax. Income tax. NIIT. Affordable Care Act. FATCA. Sales tax. Tax reform. It’s all good.

Here are some more haiku from years for inspiration:

Don’t fall for phone scams.
If caller says IRS,
They’re likely lying.

Hiding funds offshore?
IRS will hunt you down.
Why not come clean now?

No health care this year?
Must cough up tax penalty.
No real cure for that.

IRS audit
Not fun, not cheap, not for weak
Call an attorney.

Taxes due again?
Where are the good deductions?
Phased out – too much dough.

Section 1-6-2
You allow me to expense
I think I love you.

And my all-time favorite ->

It’s done, Switzerland.
No more banking secrecy.
Now you just have cheese.

It’s no fun if you don’t play along! Give it a whirl. Again, simply use 5 syllables – 7 syllables – 5 syllables. It’s so easy, even a member of Congress can do it!

To play along, post your own haiku on Twitter, Facebook, Pinterest, Tumblr, LinkedIn, or YouTube (yes, you can upload a video) – wherever the mood strikes you. I might even surprise you with some cool taxgirl merch for playing along.

Haiku away.

National Beer Day falls on April 7 and marks the day that beer was allowed to be legally manufactured and sold following a long, dry Prohibition. On March 22, 1933, President Franklin Roosevelt signed the Cullen–Harrison Act into law which moved the U.S. away from Prohibition by allowing the manufacture and sale of beer which was approximately 4% alcohol by volume (just a little less than the average today) and some wines. After he signed, Roosevelt reportedly remarked to his aide, Louis Howe, “I think this would be a good time for a beer.”

Prohibition would officially remain in place for a few more months, but the ability to drink beer and wine was worth cheering. Here are a few more facts about beer – and its close relationship to tax – to help you celebrate in 2018:

1. Egypt was likely the first civilization to tax beer. Queen Cleopatra imposed a tax on beer in order, she claimed, to discourage public drunkenness, though it is believed that the tax was used to raise money to fund a war with Rome.

2. Beer is the most popular alcoholic beverage in the United States. According to a 2017 Gallup poll, 40% of Americans who drink alcohol say they prefer beer, down a few percentage points from last year. In 2016, the federal government collected $3.6 billion in excise taxes on domestic and imported beer alone.

3. In 1695, Great Britain raised taxes on beer, making gin the cheapest beverage in England. Gin was taxed at 2d (about 2 pennies) per gallon, while beer was taxed at 4 shillings 9d (about 57 pennies) per gallon. The difference in price is considered the root of a serious drinking problem in the country in the 18th century, especially among the poor.

4. In the United States, taxes on the production, distribution, and sale typically eat up 40% of the retail price of beer. That amount includes all taxes imposed on beer. In previous years, the federal excise tax was about 5 cents per drink (the nickel comes from the assumption that the average beer has an alcohol content of 4.5%).

5. If you thought tax reform only lowered income taxes, you’d be mistaken. The new law reduced the federal excise tax on beer according to output. Those rates were reduced to $3.50 per barrel on the first 60,000 barrels for domestic brewers producing fewer than 2 million barrels annually and $16 per barrel on the first 6 million barrels for all other brewers and all beer importers; the excise tax remains at $18 per barrel rate for those producing over 6 million. If those rates sound familiar, they closely mirror previously proposed legislation, including the BEER Act of 2013. There is one downside: Under tax reform, most corporate changes under tax reform are permanent and most individual changes are effective through 2025, the changes affecting the beer market will expire in 2020.

6. German beers are often labeled “Gebraut nach dem Bayerischen Reinheitsgebot von 1516” which translates roughly to “brewed according to the Bavarian Purity Law of 1516.” The law originally limited the ingredients which can be used to make beer in Germany (barley malt, hops, yeast, and water) and allowed the government to tax beer. The Reinheitsgebot became an official part of the German tax code in 1919 but was largely gutted when Germany became part of the European Union.

7. To help pay for the Civil War, Congress imposed an excise tax on beer. The Revenue Act of 1862, signed into law by President Lincoln, included a tax on “all beer, lager beer, ale, porter, and other similar fermented liquors, by whatever name such liquors may be called.” It may not be popular but taxing beer wasn’t a bad idea from an economic standpoint, as it generates billions in revenue each year.

8. Arthur Guinness II – the father of Guinness stout – altered the family beer recipe to include unmalted roasted barley instead of black malt. The unmalted barley wasn’t subject to extra taxes which made it affordable for the Guinness family – it also made the beer’s taste distinctive. By the end of the 19th century, Guinness was the largest brewery in Europe.

9. According to the Beer Institute, last year, directly and indirectly, the beer industry employed nearly 2.23 million Americans, providing more than $103 billion in wages and benefits. The industry pays nearly $63 billion in business, personal and consumption taxes.

10. In 1991, President George H.W. Bush signed a bill which raised taxes on luxuries such as furs, yachts, private jets, jewelry and expensive cars (despite the “no new taxes” pledge) – that same bill nearly doubled the tax on beer. Bush called for the repeal of the tax just two years later, and while most of the taxes included in the bill were eventually repealed, the tax on beer remained in place and is still there today.

11. The most expensive state to buy a beer may be Tennessee where state excise taxes reach a whopping $1.29 per gallon, plus sales tax, making it the highest in the country. The cheapest state to buy a beer? Wyoming, where the excise tax is just $.02 per gallon.

12. The oldest operating brewing company in the U.S. is D.G. Yuengling & Son, owned by Forbes billionaire Richard Yuengling, Jr. Yuengling (“Ying-ling” and not “Yoong-ling” or “Yang-ling”), based in Pottsville, Pennsylvania, is one of the country’s five largest beer companies with an estimated $550 million in annual revenue in 2015. The company added a new location in Florida and won’t promise to remain in Pennsylvania, blaming the state’s tax climate in 2012: “Pennsylvania is a great location. But it’s not very business-friendly. You look for fair tax breaks, fair taxation. And the bottom line is more jobs. That’s what it’s all about.”

13. According to Infogroup, with 1.54 beer-related businesses per capita, Bend, Oregon is the most favorable U.S. city for beer lovers. Oregon boasts two cities on the list. It probably helps that Oregon has no state sales tax to boost prices.

14. Sales of craft beer increased 8%, up to $26.0 billion, according to the Brewers Association, and now account for more than 23% of the beer market. California leads the way, boasting 2.2 breweries per 100,000 adults over the age of 21. You can see how your state ranks here.

15. In addition to sales of beer, “beer tourism” is a real thing. Sites like BrewTrail.com help consumers plan road trips and vacations around visits to breweries, which bring additional travel tax dollars. States and regions have gotten into the spirit, offering info on their own “ale trail” recommendations. One example? Just last week, my husband and I left our stamp on my hometown economy via the Wilmington Ale Trail (one of our favorites was Flytrap Brewing).

16. Cenosillicaphobia is the fear of an empty beer glass. Okay, that’s not a tax fact, of course, just a fact. Don’t live in fear: go, get a beer.

If you feel like your cell phone bill gets bigger every time you see it, brace yourself: Rates are about to go up again. As Congress scrambles to balance the budget – even as spending has spiraled to a whopping $1.3 trillion for this fiscal year – they hit upon a realization. Texting is more popular than ever, with nine out of ten American adults owning a cell phone. Billions of texts are sent each year either as phone-to-phone or through mobile apps, which means that a tax on messaging would generate millions of dollars in new revenue annually.

You can’t tax email under current law. Under the Internet Tax Freedom Act (ITFA), there’s a prohibition against taxing email (that’s been the rule since 1998). And while the ITFA had been the source of some debate, on February 24, 2016, President Obama signed the Trade Facilitation and Trade Enforcement Act of 2015, making it public law (you can read Pub.L. 114–125 here).

There is no such prohibition on texts sent using cellular data. And Americans are already used to paying additional fees and taxes associated with cell phones. Nationwide, taxes make up 18.5% of the average U.S. customer’s cell phone bill with some states, like Washington, topping out at 25.58%. It’s easy to include additional taxes without making taxpayers angry because most don’t read their bills closely. Even if they did, taxpayers likely still can’t differentiate between service provider fees and federal, state and local taxes. Minority Leader Nancy Pelosi (D-CA) conceded as much, saying, “Let’s face it. Those cell phone bills are as long as our Congressional bills. We know from the tax reform bill and the omnibus that nobody – including us – reads those.”

That’s why today, House Majority Leader Paul Ryan (R-WI) announced the introduction of legislation that would impose a tax on cell phone text messages, noting that it would be “irresponsible” not to try and tax absolutely everything. The Stop Texting Fair Use Act (STFU Act) would apply to messages transmitted using the Short Message Service (SMS), messages containing image, video, and sound content (MMS), and messages sent using app-to-app services like Whats App and Facebook Messenger. For taxpayers who wonder how the latter would work from a data gathering perspective, no worries: If the Russian government can get your data, so can the Americans.

Here’s how the STFU Act tax would work. A base tax of $1.00 would apply to the first 1,000 characters per month. After that, an additional 10 cents would apply up for each additional 1,000 characters.

It might sound like a small price to pay but it can quickly add up. Studies suggest that 6 billion text messages are sent in the U.S. each day. If you assume 6 words per text, that would result in billions of dollars in new tax revenue per month. Fiscal hawk Sen. Rand Paul (R-KY) urged his fellow representatives to “Just do the math,” pausing and adding, “Literally, do the math. My calculator can’t do billions.” After several minutes and several meters of calculator ticker tape later, most of Congress agreed that the tax would raise “a lot of money.”

What about those ubiquitous memes, emojis, emoticons, and giphys? Emoticons, which represent moods and facial expressions using a combination of punctuation marks, numbers, and letters, are the darling of the texting world. Traced back to the 19th century, they have long been used in friendly notes and communications before digital forms of emoticons were introduced in 1982 by Scott Fahlman of Carnegie Mellon University. Once thought of as superfluous, emoticons are now a serious business with downloadable apps and customized, animated expressions used to convey a quick LOL or SMH. How to tax those – since they aren’t really words – was a surprisingly easy problem to solve. Sen. Chuck Schumer (D-NY) had the perfect solution. “If I’ve learned anything from former Representative Joe Barton (R-TX), it’s that a picture is worth a thousand words. Or characters, as the case may be.” With that, all non-verbal text inclusions – from memes to emojis – will be taxed at a flat ten cents. So one poop emoji or crying Michael Jordan basketball meme would set you back a dime. But totally worth it, right? 😉

As with all tax provisions, the committee agreed that the tax would need to be as complicated as possible. The rate would apply to phones registered to adults, so that text messages otherwise attributable to children would also be captured. Seniors – those over age 65 – would receive a 1,000 character exemption each month, largely because many in Congress felt that it wasn’t fair to reward younger texters who have an affinity for skipping vowels or using alternate spellings, amirite?

Also exempt? #SisterJean memes because, as Sen. John McCain (R-AZ) noted, “We all need a reason to smile” and the praying hands emoji which Vice President Mike Pence insisted should be exempt on religious grounds.
Additionally, in response to concerns about the Americans With Disabilities Act (ADA), the proposed Apple disability emojis with hearing aids, wheelchairs, and white canes, would not be subject to the tax.

Finally, with a nod to Trenton Garmon, typos would be ignored but only if they were followed up with a correction marked with an asterisk. For example, if you typed, “I am a gud lawyer,” that would only count as 10 characters so long as you followed up immediately with “*good.” A later amendment clarified that the asterisk, when used as a correction, would always be ignored in the character count. Other exemptions and loopholes would be written in at a later time when no one was paying attention and would be effective retroactively – Rep. Kevin Brady (R-TX) was firmly convinced that all of this information would fit on a postcard.
An amendment to impose a surtax on those who insist on useless group texts for the most simple of tasks – like choosing lunch – was immediately attached to the bill with Sen. Maria Cantwell (D-WA) mumbling, “I’m looking at you, Roberts. Every. Single. Time. Nobody will ever say yes to a group breakfast at Taco Bell.”

If this all sounds confusing, it is meant to be. Thankfully, you won’t have to worry about those calculations: Cell phone and app companies are responsible for monitoring your texting and making the appropriate calculations for the tax. When asked how long it might take to get such systems in place, Facebook founder Mark Zuckerberg simply laughed, noting that the company had been monitoring user text messages for years.

Rep. Ted Lieu (D-CA) raised the issue of whether Congress should be more concerned about taxpayer privacy. His questions about who might have access to the text messages and how the data might be stored were met with chuckles. In particular, Rep. Devin Nunes (R-CA) took several moments to regain his composure before querying, “Wait, you’re serious?” Suggestions included reviving former Vice President Gore’s “lockbox” idea and applying it to text message data. As Rep. Lieu tried to explain that he wasn’t sure that those putting forth the idea completely understood what they were saying, he was cut off by a number of Congressional officials who suggested that the lockbox could be attached to the Internal Revenue Service (IRS) IT systems. He immediately conceded that it was worth the dime to message a facepalm emoji to his staff.

The Trump administration has yet to formally comment on the proposal, though the President did seem to favor the proposal once he determined that tweets didn’t count as text messages.

It was widely agreed the matter would be discussed only on April 1, 2018, April Fool’s Day.

In case it wasn’t quite obvious, this is my April Fool’s Day post: There is no current proposal to tax text messages so feel free to pass the link to this post to all of your friends at no charge.

I have fun with my April Fool’s Day posts every year. You can read some of the prior posts by clicking below:

Happy birthday, Dr. Seuss! Theodor Seuss Geisel, or Dr. Seuss as he is known to most of the world, was born on March 2, 1904. And though he passed away in 1991, his books and his poems are still as popular as ever.
I love the idea of combining silliness with reality and over the past few years, on Dr. Seuss’ birthday, I’ve mixed a little tax in with my Seuss. You can see my previous efforts from 2012, 20132014, 2016 and 2017.

This year, I’ve re-written “Green Eggs and Ham” to be “Thefts, Schemes and Scams.” It seems fitting with the emphasis on tax-related identity theft, including this most recent scam.

I hope you enjoy it!


Thefts, schemes and scams
I am scammed. Scammed I am.
Yes, scammed I am. Yes, scammed I am.
I do not like it, scammed I am.
Do you like thefts, schemes and scams?
I do not like them, scammed I am.
I do not like thefts, schemes and scams.


Would you like them  here or there?
I would not like them here or there.
I would not like them anywhere.
I do not like thefts, schemes and scams.
I do not like them, scammed I am.
Would you like them on your phone?
Would you like them at your home?
I do not like them on my phone.
I do not like them at my home.
I do not like them here or there.
I do not like them anywhere.
I do not like thefts, schemes and scams.
I do not like them, scammed I am.
Would you like them through email?
Would you like them on your cell?
Not through email.
Not on my cell.
Not on my phone.
Not at my home.
I would not like them here or there.
I would not like them anywhere.
I do not like thefts, schemes and scams
I do not like them, scammed I am.
Would you? Could you? Lose your cash?
Quickly! Quickly! They act fast.
I would not, could not, lose my cash.
You may get tricked. You will see.
You may pay a fake fee.
I would not, could not pay a fake fee.
I won’t lose cash! Just let me be.
I do not like them through email.
I do not like them on my cell.
I do not like them on my phone.
I do not like them at my home.
I do not like them here or there.
I do not like them anywhere.
I do not like thefts, schemes, and scams.
I do not like them, scammed I am.
Your PIN! Your PIN!
Your PIN! Your PIN!
Could you, would you, give out your PIN?
Not give out my PIN! Not pay a fake fee!
Not lose my cash! Scams! Let me be!
I would not, could not, through email.
I could not, would not, on my cell.
I will not like them at my home.
I will not like them on my phone.
I will not like them here or there.
I will not like them anywhere.
I do not like thefts, schemes and scams.
I do not like them, scammed I am.
Say! Write a check? You’ll write a check!
Would you, could you, write a check?
I would not, could not, write a check.
Would you, could you, let them win?
I would not, could not, let them win.
Not write a check. Not give out PIN.
Not lose my cash. Not pay a fake fee.
I do not like them, scams, you see.
Not on my phone. Not through email.
Not at my home. Not on my cell.
I will not like them here or there.
I do not like them anywhere!
You do not like thefts, schemes and scams?
I do not like them, scammed I am.
Could you, would you, via text?
I would not, could not, via text!
Would you, could you, pay them next?
I could not, would not, pay them next.
I will not, will not, via text.
I will not ever let them win.
I will not ever give out my PIN.
Not write a check! Not pay a fake fee!
Not lose my cash! You let me be!
I do not like them through email.
I do not like them on my cell.
I will not like them on my phone.
I do not like them at my home.
I do not like them here or there.
I do not like them anywhere!
I do not like thefts, schemes and scams!
I do not like them, scammed I am.
You do not like them. So you say.
Listen! Listen! Because one day…
Listen close because one day…
Scams will never let you be.
There will be new ones, you will see.
Watch out for thefts, schemes, and scams!
Watch out! They’re out there, scammed I am!
And I would not like to pay them next.
And I would not like them via text.
And I will not ever let them win.
Not write a check. Not give out my PIN.
Not lose my cash. Not pay a fake fee.
No matter how good they are, you see!
So I’ll delete that email.
And I’ll hit block on my cell.
And I’ll hang up from my phone.
And I’ll dodge them at my home.
And I’ll avoid them here and there.
Say! I’ll evade them anywhere!
I so dislike thefts, schemes, and scams!
No more! No more, scammed I am!

It’s beginning to look (and feel) a lot like Christmas! If you’re in the gift-giving mood, consider that purchasing all the gifts in the classic carol “The 12 Days of Christmas” will cost you $34,558.65 in 2017, a boost of just about $200 from last year. That’s the official tally according to the 34th PNC Christmas Price Index.

PNC’s Christmas Price Index®, or PNC CPI, is calculated using a method similar to the government’s consumer price index (CPI) and measures the cost of buying the gifts given in the song, “The 12 Days of Christmas.” By way of comparison, the government’s CPI measures the cost of goods and services for consumers. Each month, the U.S. Bureau of Labor Statistics reports on the CPI; since those numbers are tied to inflation, they tend to be indicators on interest rates. That’s important to taxpayers since the Tax Code provides for mandatory annual adjustments to certain tax items based on interest rates. When the Internal Revenue Service (IRS) announced the annual adjustments for 2018, the numbers meant savings for most taxpayers. Why? A higher CPI pushes the brackets upward and increases the standard deduction and exemption amounts, which means that the taxes due on the same income will decrease.

To keep the comparison between government and its own index fair, PNC removes the cost of the swans, typically the most volatile item in the list (the government similarly excludes energy and food prices). By taking the swans out, PNC’s core CPI rose just .9% (the government’s core CPI increased by 1.7%).

Of the 12 items on the list in 2017, nine remained the same as last year. The outliers? Buying a partridge in a pear tree will cost you 4.7% more this year but don’t blame the bird: the cost of the pear tree increased by 5.2% due to the increased cost of living for workers and the limited supply of larger, more mature trees. The Lords-a-Leaping also saw an increase, as prices jumped 2%. But the real mover this year was those Five Gold Rings: the cost of gold boosted the cost of the rings by a whopping 10%.

If you’re looking for a deal this year, you’re out of luck: None of the 12 items got any cheaper to buy.

Here’s the entire list together with the percentage changes from 2016:

  • 1 Partridge in a Pear Tree: $219.95 (+4.7%)
  • 2 Turtle Doves: $375.00 (no change)
  • 3 French Hens: $181.50 (no change)
  • 4 Calling Birds: $599.96 (no change)
  • 5 Gold Rings: $825.00 (+10.0%)
  • 6 Geese-a-Laying: $360.00 (no change)
  • 7 Swans-a-Swimming: $13,125.00 (no change)
  • 8 Maids-a-Milking: $58.00 (no change)
  • 9 Ladies Dancing: $7,552.84 (no change)
  • 10 Lords-a-Leaping: $5,618.90 (+2.0%)
  • 11 Pipers Piping: $2,708.40 (no change)
  • 12 Drummers Drumming: $2,934.10 (no change)

If you add up the cost of all the gifts in 12 Days of Christmas song this year, it would cost you $34,558.65, about $200 more than last year’s total. If, however, you really want to impress your true love by nabbing all 364 items – the number of the items as repeated throughout the song over and over (and over) – you’d have to cough up $157,558.00, about $1,000 more than last year.

Those prices reflect the cost of shopping the traditional way: actually going to jewelry stores, plant nurseries and hiring talent in person. If you bought all of these items on the internet, however, you’d pay $45,096, or $10,538 more than walking into a store. That’s largely attributable to shipping costs – despite lower fuel costs overall, it’s apparently pretty expensive to ship swans and doves.

Sales tax (or use tax, if you’re shopping online) might be payable on your Christmas gifts – but that varies by location. While most states impose some level of sales tax, there is dramatic variation between what goods and services are subject to tax. This is especially true when it comes to the costs of services. PNC is located in Pennsylvania where food (except for ready-to-eat), most clothing apparel, and medicines are nontaxable. But that pear tree? Taxable. Those gold rings? Taxable. Pets and most animals? Also taxable. Those milkmaids, however? Not taxable; as a farm and dairy state, most dairy-related services are exempt. Figuring the exemptions from state to state would be wildly time-consuming, so the CPI is tax neutral.

PNC has figured the CPI each year since 1984. Prices this year are 83% higher than they were in that inaugural year when the cost of the gifts totaled $18,845.97. Here’s how prices have fluctuated over the years:

12 Days Of Christmas history


For most of that time, Rebekah McCahan, Vice President & Investment Strategist, PNC Asset Management Group has been in charge of tallying up those costs. McCahan gets most of her shopping information directly from the source: a national game bird supplier assisted with the cost of the partridge and turtle doves. The sources for the prices generally remain the same to promote consistency. They have, however, changed when necessary – along with economic trends. For an in-depth look at the numbers, you can find the price chart here.