Wednesday, July 30, 2014

Collecting An Existing Tax is Not a Tax Increase

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A recent commentary from The Institute for Policy Innovation bemoans the possible derailment of the Permanent Internet Tax Freedom Act by ...
Monday, July 28, 2014

Tax Myths: Part XIV: Retired People Do Not Pay Income Tax

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I must admit I was surprised to discover someone asserting that “Obviously retired people do not pay INCOME TAX.” I had not previously enco...
Friday, July 25, 2014

Tax Myths: Part XIII: Children Do Not Pay Tax

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It isn’t difficult to find web sites that contain statements claiming that children do not pay tax. For example, an answer to the question H...
Wednesday, July 23, 2014

Tax Myths: Part XII: The Internal Revenue Code Fills 70,000 Pages

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The assertion that the Internal Revenue Code consists of 70,000 pages is one of my favorite tax myths because it is so silly, so easily debu...
Monday, July 21, 2014

Tax Myths: Part XI: Alimony Always Is Taxable

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Perhaps in the rush to be succinct, people present general rules as absolutes. For example, a responder in this thread advised that “And yes...
Friday, July 18, 2014

Tax Myths: Part X: The Flat Tax is Simple

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One of the most persistent, widespread, and enticing tax myths is the unfounded claim that the flat tax is simple. Three years ago, the Heri...
Wednesday, July 16, 2014

Tax Myths: Part IX: The Tax Rate Confusion

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Most people do not understand income tax rates. Some law students enrolled in the basic income tax course struggle to understand tax rates. ...
Monday, July 14, 2014

Tax Myths: Part VIII: The Use Tax Myth

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Retailers operating in states that do not have sales taxes entice out-of-state purchasers to cross the border to make purchases by emphasizi...
Friday, July 11, 2014

Tax Myths: Part VII: Tips Aren’t Taxed Because They Are Gifts

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Though there are rare instances in which a tip can be characterized as a gift excluded from gross income, as a general proposition tips are ...
Wednesday, July 09, 2014

Tax Myths: Part VI: “The IRS Gave Me a Refund”

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Sometimes, people say to me, quite excitedly, “The IRS Gave Me a Refund,” or “The IRS Is Giving Me a Refund.” Closely related to the “I’m Ge...
Monday, July 07, 2014

Tax Myths: Part V: “I’m Getting a Refund and Not Paying Tax”

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Though I haven’t kept a count, I know that there have been dozens of times when someone would tell me that because they were getting a tax r...
Friday, July 04, 2014

Tax Myths: Part IV: It’s Not Income If It’s Not on a W-2 or 1099

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Most taxpayers understand that income reported on a Form W-2 or Form 1099 must be reported on their tax return. Whether they understand why ...
Wednesday, July 02, 2014

Tax Myths: Part III: If It’s Not Cash, It’s Not Income

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From time to time, someone asserts that because they have been paid with property and not cash, the payment is not subject to the income tax...
Monday, June 30, 2014

Tax Myths: Part II: The IRS Enacted the Internal Revenue Code

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It is not uncommon to discover someone’s assertion that the IRS has enacted a particular Internal Revenue Code section or even the entire Co...
Friday, June 27, 2014

Tax Myths: Part I: Introduction

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Misperceptions about taxes abound. I’m not referring to the parade of rationalizations from the tax protest movement, though the terrible co...
Wednesday, June 25, 2014

Look at What No-Taxes Gets Us

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It’s a common complaint, tinged with a bit of humor, often heard when summer driving season rolls around. Highway construction slows traffic...
Monday, June 23, 2014

Taxes and Jobs

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New Jersey is in a quandary. A budget quandary. It’s not alone, but it presents an interesting example of the sort of choices that must be m...
Friday, June 20, 2014

Taxes Ought Not Be Hidden

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Earlier this week, in a Philadelphia Inquirer op-ed , Nicholas E. Calio, president and CEO of Airlines for America, came out in support of t...
Wednesday, June 18, 2014

The Contagiousness of Tax Noncompliance

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Almost two weeks ago, in Is It Fraud, Negligence, or Simple Tax Hatred? , I wrote about a Republican member of Congress who claimed a proper...
Monday, June 16, 2014

Almost Always, in Tax, We Must Get It Right the First Time

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A recent case, Baur v. Comr. , T.C. Memo 2014-117, demonstrates why, sometimes, the tax law doesn’t provide a reset button. If we don’t get ...
Friday, June 13, 2014

When the Poor Need Help, Give Tax Dollars to the Rich

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It truly is amazing that some of the people who complain about their tax bills appear thrilled with a deal that the state of New Jersey has ...
Wednesday, June 11, 2014

Eliminating Taxes Cannot Buy Happiness

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There is, I think, an addiction that gets little, if any, attention, though some studies, such as the one described in this report , are beg...
Monday, June 09, 2014

Is It Any Wonder People Think the Tax Law is Wacky?

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The facts are simple. The taxpayer is hired, the employer pays a salary, and the employer also sets aside some money in a deferred compensat...
Friday, June 06, 2014

Is It Fraud, Negligence, or Simple Tax Hatred?

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Reaching into my pile of topics waiting for attention, I pulled out this story from three weeks ago. A homeowner in Indiana computed the pr...
Wednesday, June 04, 2014

It’s Not a New Tax, Yet Again

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About a year ago, in It’s Not a New Tax , I explained why legislation to shift collection of a tax is not the equivalent of a new tax. Today...
Monday, June 02, 2014

It’s Not Just Taxes

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Bartlett D. Cleland, at the Institute for Policy Innovation , has published commentary in which he asks, “What's Wrong with the Middle ...
Friday, May 30, 2014

What Does It Mean to Dispose of A Passive Activity?

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Section 469(a) prohibits a taxpayer from deducting passive losses in excess of passive income. Under section 469(b), passive losses that can...
Wednesday, May 28, 2014

When Tax Cuts Matter More Than Pothole Repair

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The danger faced by Americans from the preaching and successes of those who despise taxes and user fees is no less real and surely more exte...
Monday, May 26, 2014

Windfalls Are Taxed, Even If The Taxpayer Thinks It is Unfair to Do So

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It is a basic tax law principle that economic windfalls are taxed. That principle applies to a variety of transactions, and as a recent tax ...
Friday, May 23, 2014

No Deduction If Entitled to Reimbursement

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It is a long-established principle of federal income tax law that a taxpayer is not permitted to deduct an otherwise deductible expense to t...