Monday, April 16, 2018
April 17 - Doubly A Big Tax Day!
April 17 is the due date for 2017 individual returns as well as for calendar year corporations. It's not April 15 for 2018 because that was a Sunday so even with e-filing, a weekend date moves the due date to the next weekday. But, if that is a holiday in the District of Columbia, then it is the next day. April 16 is Emancipation Day in DC making April 17 tax day. But, isn't everyday really tax day since we pay taxes every day?
But April 17, 2018 is also a big day because the U.S. Supreme Court will hear oral argument in South Dakota v Wayfair, et al. The issue is whether the physical presence standard for sales tax nexus, dating back to 1992 from the Court's decision in Quill, should be changed. The relevance is that per Quill, if a seller does not have physical presence in a state, it doesn't have to collect sales tax from its customers in that state. The customers must instead self-assess and pay the use tax (same amount as the sales tax). States don't like this because many consumers don't know about use tax and it is much easier to have vendors charge it and remit it.
I have more on the background and relevance (and links) at this blog for the Southwestern Federal Tax textbooks that I help write and edit - here. I hope you'll take a look.
What do you think? Is the physical presence standard outdated or still necessary to allow e-commerce to continue to grow?
source http://21stcenturytaxation.blogspot.com/2018/04/april-17-doubly-big-tax-day.html
Sunday, April 15, 2018
Saturday, April 14, 2018
Friday, April 13, 2018
Thursday, April 12, 2018
Tax Evasion vs. Hollywood Actors
Guest blog post by Mitchell Collins
The IRS likes going after Hollywood actors and other famous people for tax evasion because it puts the
fear of audit into the hearts and minds of fans everywhere. When the IRS audits popular celebrities or hauls them off to prison for failure to pay their taxes, people quickly realize that they could be next. Here’s a rundown of some of these high-profile cases of Hollywood actors facing off against the IRS on tax evasion charges.
Wesley Snipes
One of the most famous tax evaders in Hollywood is Wesley Snipes who, in 2008, was sentenced to three years in prison for failing to file taxes in the years 1999 through 2004. These misdemeanor convictions were a relaxed penalty compared to the felony conspiracy charges that were filed for attempting to defraud the government. Snipes served his three-year sentence beginning in 2010 at a medium-security federal prison in Pennsylvania, then moved to an adjacent minimum-security “Club Fed,” finishing with a term of house arrest in 2013.
Nicolas Cage
In 2009, Nicolas Cage ran into trouble with the IRS for failing to pay taxes in 2007 amounting to over $6.2 million.The IRS filed tax liens against property owned by Nicolas Cage for 2007 as well as the period of 2002 to 2004, leading Cage to sell off a number of his properties and assets. Cage filed suit against his business manager, Samuel Levin, for his failure to pay taxes on time, among other things. Once believed to be one of the highest paid actors in Hollywood, Cage’s net worth is now estimated at a meager (by Hollywood actor standards) $25 million, with many remaining debts to pay off.
Judy Garland
Judy Garland, famous for starring as Dorothy in the The Wizard of Oz at age 17 and winning many acting awards over her career, ran into substance abuse problems and financial trouble later in life. In 1964, Garland received a $4 million tax bill in New York that she couldn’t pay, plus a failure to pay taxes in 1951 and 1952. This resulted in the IRS repossessing her home, forcing her to live in rental homes and hotels until her death in 1969.
Richard Pryor
The comedian and actor Richard Pryor is famous as much for his history of drug and alcohol abuse as his professional career, a level of fame that overshadowed his run-ins with the tax man. In 1974, Pryor was convicted of tax evasion and served ten days in a Los Angeles county jail. Perhaps trying to add some levity to his trial, Pryor quipped to the judge, “You know, I forgot.”
Stephen Baldwin
Apparently, Stephen Baldwin also forgot to pay his income taxes from the years 2008-2010. In 2013, Baldwin paid $300,000 in back taxes according to an agreement that would have put him on probation for five years until he paid the amount.
Abbot and Costello
The comedy duo of Abbott and Costello, well-known for their “Who’s on first?” routine as well as numerous movies, were forced to sell off their homes, many assets and some valuable film rights to pay off back taxes stemming from tax evasion charges in 1956. They broke up their partnership in 1957.
Christina Ricci
Christina Ricci’s acting career took off in 1991 with her role as Wednesday Addams in the Addams Family franchise of movies. In 2010, the IRS filed a $180,000 tax lien due to unpaid taxes on 2008 earnings. Also in 2010, the IRS informed Shannen Doherty that she owed the government over $44,000 in unpaid taxes.
Lindsay Lohan
Lindsay Lohan, who first became famous as a child actress in the Disney film The Parent Trap, had her assets frozen by the IRS in 2012 for failure to pay taxes in 2009 and 2010 amounting to over $233,000. Lohan paid the 2009 amount of $100,000, but currently still owes for 2010. He also has new tax liens related to 2014 and 2015 totaling over $100,000.
Pamela Anderson
The actress who made Baywatch famous, Pamela Anderson, was hit with a tax lien of $1.7 million in 2009, over $490,000 in 2010 and then for over $370,000 in 2012. In 2010, Anderson landed a spot on California’s list of 250 delinquent taxpayers.
Chris Tucker
In 2014, actor and stand-up comedian Chris Tucker reached a deal to settle a tax lien of $2.5 million. A representative for Tucker blamed “poor accounting and business management.”
John Travolta
In 2000, John Travolta, who achieved fame in the 70s for acting in Saturday Night Fever and Grease, paid over $600,000 related to an IRS bill of $1.1 million in improper reported losses in the years from 1993 to 1995.
Robert Downey Jr.
The actor Robert Downey Jr. has had his share of substance abuse problems and legal troubles, spending some time in jail during the 80s and 90s, and after that time, he ended up owing $2 million in back taxes. His earnings from the successful Iron Man series of movies doubtlessly helped him pay all of it back.
Val Kilmer
Val Kilmer, famous for his roles in Top Gun, Batman Forever and The Doors, faced a tax lien of almost $500,000 in 2010 for back taxes owed from 2008. Kilmer, who is also battling with throat cancer, has certainly had his share of challenges.
The combined influence of fame and fortune seems to lead many Hollywood actors to take risks when it comes to paying (or not paying) taxes. Clearly, the IRS doesn’t care how famous you are, they want your money. According to a law firm that routinely handles federal fraud cases, “the penalties under federal law are often higher than they would be under equivalent state laws” and “the prosecutors are supported by the investigative work of highly trained, well-staffed federal agencies with a lot of resources at their disposal.” As these cases show, the IRS zeroes in on high-profile cases as a way to draw out warnings for the rest of us to heed.
source https://www.theincometaxschool.com/blog/tax-evasion-vs-hollywood-actors/