by Linda BealeThis is single of those weeks when almost all has a tax angle. Let's survey.Michael Jackson's funeralShould taxpayers have to foot the bill for the extra security surrounding celebrity monument services? Does an estate get to deduct the costs of festival receptions connected with a monument as part of the funeral?International relations and UBSThe Swiss have announced that they may seize the 52,000 account records that UBS holds in Switzerland for what are likely a lot of American tax cheats if the federal court in Florida orders the bank to turn them over in response to the administration summons. I have by now on paper about that on A Taxing Matter, here. This is a game of chicken, where either the US otherwise UBS/Swizterland will blink. UBS has considerable possessions in this country in connection with its banking certify here. The US has jurisdiction over UBS for various reasons and UBS has by now admitted to criminal violations and known up about 250 names. Looks like UBS obviously violated its fit intermediary agreement with the US. If I were betting, I'd bet that the Swiss will be the ones to blink, if the US only has the backbone to stand firm.Health Care ReformDemocrats are internal strife over how to pay for much needed physical condition care reform. On the governing body side, they are apparently taking very seriously the proposal by Citizens for Tax Justice that the Medicare tax be extended to all types of unearned income, not just compensation. (This proposal, of course, has been around, and I have complete it quite frequently myself. CTJ has a specific version, and provides state-by-state figures on what it would mean.) Obviously, since the top quintiles own most of the capital assets, this would be first and foremost a tax increase on them (resulting in a slight increase to the capital gains rate from 15% max for most types of gains to 16.45%).Defense of Marriage ActBack in the 1990s, Congress caved to the "values" lobby (i.e., the group that wants to impose its "values" on all the rest of us, and whines about having others' values imposed on it if it thinks anybody wants to do anything differently from the way it thinks they ought to want to do it) and approved the so-called "defense of wedding act" (DOMA). DOMA says the terms "spouse" and "married" in federal law can only demote to legal ties between a man and a woman --i.e., "traditional" marriage. Of course, there are lots of references to spouses and wedding in the Internal Revenue Code--spouses can transfer property to single another without tax. Spouses can receive alimony when they divorce. Spouses can file joint returns. Spouses can keep out medical benefits from their spouse's medical insurance. And etc. When DOMA was passed, negative state legal gay marriage. Now, some states do. And finally, single of them is challenging the law as unconstitutional (which, you will not be surprised, in my view it obviously is) since it "interferes with the Commonwealth's sovereign authority to define and control marriage" and "constitutes an overreaching and discriminatory federal law." See complaint; AG files first suit challenging DOMA, Mass. Lawyers Weekly, July 13, 2009. Good for Massachusetts.Developers and tax-exempt bondsA retirement community in Central Florida may owe millions in back taxes. The Villages is complete up of "community development districts" that have been used to pay for roads, sewers and water lines that are essential to the developers' being able to sell their developments. The IRS examiner has concluded that $64 million of bonds issued in 2003 shouldn't have been entitled to tax exception since the board members were all allied in single way otherwise another with the developer, and the developer (an passionate Republican, natch) had gotten about $60 million from the region for golf courses and small parks that cost the developer less than $8 million to build. A pretty solid return, in a period of not consequently solid returns for people conducting their business without the aid of the US government. Other bonds are also being investigated. See Fineout, Florida Communities Pay Attention to a Tax Case, NY Times, July 10, 2009.Banks, TARP purchases of poisonous waste, derivatives regulation (or not)?Obviously, the whole economy is impacted by the credit crunch and the enormous amounts of money the federal administration has put on the line for banks, including its plans for "partnerships" with private even-handedness to buy up poisonous waste, with the administration standing to get a meagre amount of the up side (if there is any) but to lose most of the downside (which there will likely be a good deal of). Meanwhile, proposals for regulation of derivatives are tepid at best. "Standard" derivatives would be sort of regulated, but "exotic" ones (the ones, by the way, that have been customized to use in tax shelter deals, otherwise to fool secretarial regulators) will not be. You can create a customized derivative to do anything the standard single would do, consequently who would do a standard derivative if both options exist? (nobody) And why do banks need to be action exotic derivatives in the first place? (they don't). Derivatives have been just single previous way to manipulate tax burdens and get the right bundle of features at the right point to claim the right application of a particular part of the Code. Swap away the taxes. But at this time we are, letting banks continue without restructuring, aiding them with additional US dollars on the line, and action it in a way that allows big aid recipients in the bailout (like GE) to get bigger on additional bailout-related dollars from the government, while progressing to engage in the same behavior as before. What part of this makes sense?More tax shelter enablers biting the dustThis week, another of the BDO Seidman "tax solutions group" (that ended up being a euphemism for tax fraud promotional group) pled guilty to various charges in connection with the offspring of boss type deals complete with defunct law firm Jenkins & Gilchrist. You can read all about that on A Taxing Matter at this time and additional about the shelters and previous cases, at this time and here. Will these guilty pleas help put a stop to the overzealous "tax minimization" norm. For a little while, I suspect. And then the race will be rotten again in a new cycle of tax shelters.And being in Michigan, I can't leave out Ave Maria (hat tip to Paul Caron at Tax Prof)Ave Maria Law School, a Catholic train founded and funded by Tom Monaghan (of Domino's Pizza wealth), is being enthused lock, stock, barrel and sense to a new city and campus in Florida. A number of tenured sense objected to the apparent high-handed way in which Mr. Monaghan was able to control the school's decision creation on the matter. They are negative longer at the train and are contesting their termination. Monaghan claims that they are Catholic ministers and therefore the train is exempt from suit in civil court under the First Amendment religious protections. See Baldas, Ave Maria claims 'ecclesiastical abstention' over termination of three law professors, National Law Journal, July 9, 2009. As single commenter on the Tax Prof redistribution on this noted--so do the sense take the ministerial housing allowance exclusion?Enjoy, and have a great weekend.....
Watch live TV on your laptop or desktop PC within seconds!