The Genealogy of My House

Readers of MauledAgain know that one of my “hobbies,” surely overshadowing all the others, is genealogy. Specifically, genealogy of people and their families. There also are house and property genealogies. Though I’ve known about them, I have never tried to research the genealogy of a house.

Until now.

On Friday, the weekly Delaware County (Pennsylvania) Council Public Relations newsletter arrived with an item explaining that it had upgraded its online property records search engine. The website permits a person to deeds, mortgages, and other documents online rather than making a trip to the courthouse in Media.

I knew I purchased my house from John and Elise Tucci. John was a Villanova Law student a year or two ahead of me. He also was a graduate of the University of Pennsylvania.

I knew the Tuccis bought the house from Ronald E and Iris D Frank, because shortly after moving in a postcard arrived from Japan from a young woman seeking to reconnect with a childhood pen pal who was one of the Franks’ daughters. Ron Frank was on the faculty at the University of Pennsylvania Wharton School when I was a student there, and by the time I spoke with him about the postcard he had taken a faculty position at Emory University.

Until Friday I had not tried to identify the person or persons who sold the house to the Franks? Once I accessed the deed that conveyed the property to them, I learned that the house was sold to them in 1965 by William Laurens Van Alen III and his wife Sydney Purviance Van Alen. So much for the realtor websites that state that the house was built in 1968.

Of course, I was curious about the Van Alens, so I did a bit of research. I discovered that William Laurens Van Alen III also was a Villanova Law graduate, in the class of 1962. In the yearbook (also online) his address was the same as mine now is: 219 Comrie Drive. I learned that like me, John Tucci, and others, he attended the University of Pennsylvania before entering Villanova Law. He then clerked for Chief Justice Bell of the Pennsylvania Supreme Court, practice law, and was a sportsman with championships in lawn tennis, court tennis, and golf. I became curious, sidetracked myself into exploring the Van Alen family, and learned he died in 2010 at his residence in Newtown Square, the nearby town where I grew up. His mother was the daughter of Atwater Kent, pioneer radio manufacturer, and a descendant of the Brinton family of Chester County, some members of which married into the Maule family (or is it the other way around?). His father was a well-known Philadelphia architect, attended the University of Pennsylvania, served on the boards of many Philadelphia institutions, and was appointed to the National Council of the Arts.

One last point before getting back to the house. William Laurens Van Alen III, who sold the house to the Franks, married twice. His second wife’s family name is the same as the family name of the husband of one of my nieces. So there’s another side track to explore.

So who sold the house to the Van Alens? They purchased it from the builder, Villanova Construction Company, owned at the time of the deed by William McCue, the surviving owner of the company. The house was built after the subdivision of a larger parcel of land purchased by the Villanova Construction Company from Howard F. and Charlotte Comrie.

And that answered a question that had been batted around for many years. Why Comrie Drive? I knew there was a town in Scotland with the name Comrie. What was the connection? There was the answer. It was named after Howard and Charlotte. Did they require that as a condition of the sale? I don’t know. So, off I went to see if my hunch was correct. It was. Howard Comrie’s great great grandfather was born in Comrie, Perthshire, Scotland and carried the surname Comrie. No, I didn’t try to trace back his ancestry to see if it connected with the Maule family of Panmure, Scotland.

How did Howard and Charlotte Comrie acquire the larger parcel of property? They purchased it from a trust company who held the property on behalf of Alice Rawle Geyerlin, who, if I am properly reading the deed handwriting acquired part of it from Cornelia L. Ewing and part from Charles Quigley.

Then I encountered a problem. The deed books changed from numbers to a combination of letters and numbers. But the website refused to accept letters as part of the book number. There is another path I can follow when I get the time. In her wonderful book, “Radnor: A Rare and Pleasing Thing,” the late Katharine Hewitt Cummin, a member of the Radnor Historical Society, traced the property history of each parcel in the township as defined for purposes of the 1798 federal window tax (that eventually did not get collected). I should be able to trace the property ownership back through the deeds that she researched.

Property genealogies have been done for numerous properties. What interested me was not the fact that the property ownership can be traced, as that is true of all the properties in this part of the country. It’s the connections between the owners of the house and myself. What are the odds that three of the four owners would be Villanova Law graduates? What are the odds that all four would either be graduates of or on the faculty of the University of Pennsylvania? And then there are the court tennis connections but I’ll leave that for another time. And somehow the word tax found its way into this post. Not quite a big surprise.

In a time that history will record as having been flooded with division and divisiveness, it’s nice to find yet another example of connections.

Does Anyone at the IRS Read This Blog?

Reader Morris contacted me with this message, “Maybe the IRS reads your blog posts.” He reminded me of a commentary on this blog from March of 2020, Fortune Cookies and Taxes and pointed me in the direction of a story on Bloomberg Tax from December of last year.

My March 2020 commentary addressed an experience reader Morris had when he went to his “regular Chinese restaurant,” and found in his fortune cookie a message, “Tax tip # 8 Travel could be considered a business expense. Even that island vacay. TaxAct Surprisingly legal. Start for Free: TaxAct.com” Doing some research, I discovered that marketing firms are purchasing space on the flip side of fortune cookie slips to print their messages.

The story that reader Morris shared with me explained that the IRS Director of Stakeholder Liaison announced at a conference that the IRS would be using space on the flip side of fortune cookie slips for messages to taxpayers. Fortune companies are making the space available to the IRS without charge. The IRS plans to provide tax advice, including reminders about deadlines. I suppose the last thing someone wants to put into their brain at mealtime is taxation, though I am confident that some people are thinking about deductions when they pay for a meal.

As for the suggestion from reader Morris that perhaps the IRS reads my blog posts, maybe that happens. But I doubt that my post in March of 2020 generated the IRS fortune cookie plan. My guess is that a professional marketing/PR type of company approached the IRS or was approached by the IRS Tax Outreach, Partnership, and Education Team, and someone suggested making use of the fortune cookie messaging approach.

Now if links to this blog or posts on this blog begin to show up on fortune cookie slips carrying the IRS logo, I will want to know. Then I can revisit the question that I asked in the title to this post.

Is the Tax Return Preparer or the Client Responsible For Unjustified Deductions?

Sometimes I write about tax (and now and then, other) issues popping up in television court shows, in posts such as Judge Judy and Tax Law, Judge Judy and Tax Law Part II, TV Judge Gets Tax Observation Correct, The (Tax) Fraud Epidemic, Tax Re-Visits Judge Judy, Foolish Tax Filing Decisions Disclosed to Judge Judy, So Does Anyone Pay Taxes?, Learning About Tax from the Judge. Judy, That Is, Tax Fraud in the People’s Court, More Tax Fraud, This Time in Judge Judy’s Court, You Mean That Tax Refund Isn’t for Me? Really?, Law and Genealogy Meeting In An Interesting Way, How Is This Not Tax Fraud?, A Court Case in Which All of Them Miss The Tax Point, Judge Judy Almost Eliminates the National Debt, Judge Judy Tells Litigant to Contact the IRS, People’s Court: So Who Did the Tax Cheating?, “I’ll Pay You (Back) When I Get My Tax Refund”, Be Careful When Paying Another Person’s Tax Preparation Fee, Gross Income from Dating?, Preparing Someone’s Tax Return Without Permission, When Someone Else Claims You as a Dependent on Their Tax Return and You Disagree, Does Refusal to Provide a Receipt Suggest Tax Fraud Underway?, When Tax Scammers Sue Each Other, One of the Reasons Tax Law Is Complicated, An Easy Tax Issue for Judge Judy, Another Easy Tax Issue for Judge Judy, Yet Another Easy Tax Issue for Judge Judy, Be Careful When Selecting and Dealing with a Tax Return Preparer, Fighting Over a Tax Refund, Another Tax Return Preparer Meets Judge Judy, Judge Judy Identifies Breach of a Tax Return Contract, When Tax Return Preparation Just Isn’t Enough, Fighting Over Tax Dependents When There Is No Evidence, If It’s Not Your Tax Refund, You Cannot Keep the Money, Contracts With Respect to Tax Refunds Should Be In Writing, Admitting to Tax Fraud When Litigating Something Else, When the Tax Software Goes Awry. How Not to Handle a Tax Refund, Car Purchase Case Delivers Surprise Tax Stunt, Wider Consequences of a Cash Only Tax Technique, Was Tax Avoidance the Reason for This Bizarre Transaction?, Was It Tax Fraud?, Need Money to Pay Taxes? How Not To Get It, When Needing Tax Advice, Don’t Just “Google It”, Re-examining Damages When Tax Software Goes Awry, How Is Tax Relevant in This Contract Case?, Does Failure to Pay Real Property Taxes Make the Owner a Squatter?, Beware of the Partner’s Tax Lien, Trying to Make Sense of a “Conspiracy to Commit Tax Fraud”, Tax Payment Failure Exposes Auto Registration and Identity Fraud, A Taxing WhatAboutIsm Attempt, When Establishing A Business Relationship, Be Consistent, as the Alternative Can Be Unpleasant Litigation, Sadness on Multiple Levels: Financial Literacy, Factual Understanding, Legal Comprehension, and When the Lack of Facts Produces “Rough Justice” in a Tax-Related Case.

From time to time, the two topics meet. Thanks to reader Morris, I’ve learned of this sort of situation in a People’s Court case from several years ago. The facts are simple. The plaintiffs returned to the tax return preparer they had used the preceding year with no issues. The preparer told the plaintiffs to save all their receipts, though it was not clear that the plaintiffs understood that the preparer would go through the receipts to identify those that were relevant for income tax purposes. Though there had been no deductions on the previous year’s return prepared by the preparer, deductions were claimed on the return in question that amounted to 50 percent of the husband-plaintiff’s W-2 income. The deductions in question consisted of employee business expenses. The husband-plaintiff worked for a railroad and so deductions were taken for meals, lodging, uniforms, and similar expenses. The IRS determined that there was a deficiency, which with interest, amounted to about $5,000. The plaintiffs sued the preparer, asserting that the preparer should pay the taxes and interest, in effect blaming the preparer for the problem. When the IRS audited the return, it asked for a letter from the husband-plaintiff’s employer stating the employer’s reimbursement policy and details about its reimbursement plan, a letter that in theory could substantiate some or all of the deductions. The plaintiffs failed to request the letter because by the time the IRS asked for it the husband-plaintiff no longer worked for the railroad. The judge found that response to be questionable, and proposed that the husband-plaintiff did not ask for the letter because he knew that the return was claiming excessive amounts of deductions.

The judge concluded that the preparer was not responsible for the taxes owed by the plaintiffs. She also concluded that the preparer was not responsible for the interest, stating that the plaintiffs would otherwise have obtained an interest-free loan for several years.

The judge then admonished the defendant, telling the preparer that she was aggressive. The judge also told her that she had an obligation to manage her clients’ expectations. The judge told the preparer that she knew what she was doing. I interpret that as a warning to the preparer to do something more than simply prepare a return with deductions so high that it would be, in the judge’s words, a “red flag” for the IRS.

When a preparer prepares a return that shows “red flags,” which may or may not turn out to be an indication that something is wrong, the preparer should asked clients for evidence. In this case, the preparer, after seeing the amount of the deductions, should have asked the plaintiffs for the letter from the employer at that point. Then, if the IRS did audit, which in fact it did, the supporting evidence would be at hand. Of course, in this case, it is highly unlikely that the letter from the employer, if obtained, would have supported the deductions in question. And, as the judge told the plaintiffs, when a client looks at a return and sees something extraordinary, such as deductions amounting to 50 percent of income, the clients should know something isn’t quite right.

Is There Ever a Free Lunch, Even in the Tax Return Preparation Business?

Almost always, when I write about tax return preparers who have crossed the line, it involves businesses operated by one or a few individuals. Occasionally it involves a franchise of a much larger entity. I have written about the woes of tax return preparers in posts such as Tax Fraud Is Not Sacred, More Tax Return Preparation Gone Bad, Another Tax Return Preparation Enterprise Gone Bad, Are They Turning Up the Heat on Tax Return Preparers?, Surely There Is More to This Tax Fraud Indictment, Need a Tax Return Preparer? Don’t Use a Current IRS Employee, Is This How Tax Return Preparation Fraud Can Proliferate?, When Tax Return Preparers Go Bad, Their Customers Can Pay the Price, Tax Return Preparer Fails to Evade the IRS, Fraudulent Tax Return Preparation for Clients and the Preparer, Prison for Tax Return Preparer Who Does Almost Everything Wrong, Tax Return Preparation Indictment: From 44 To Three, When Fraudulent Tax Return Filing Is Part of A Bigger Fraudulent Scheme, Preparers Preparing Fraudulent Returns Need Prepare Not Only for Fines and Prison But Also Injunctions, Sins of the Tax Return Preparer Father Passed on to the Tax Return Preparer Son, Tax Return Preparer Fraud Extends Beyond Tax Returns, When A Tax Return Preparer’s Bad Behavior Extends Beyond Fraud, More Thoughts About Avoiding Tax Return Preparers Gone Bad, Another Tax Return Preparer Fraudulent Loan Application Indictment, Yet Another Way Tax Return Preparers Can Harm Their Clients (and Employees), When Unscrupulous Tax Return Preparers Make It Easy for theblo IRS and DOJ to Find Them, Tax Return Preparers Putting Red Flags on Clients’ Returns, When Language Describing the Impact of Tax Fraud Matters, Injunctions Against Fraudulent Tax Return Preparers Help, But Taxpayers Still Need to Be Vigilant, Will the Re-Introduced Legislation Permitting Tax Return Preparer Regulation Be Enacted, and If So, Would It Make a Difference?, Can Fraudulent Tax Return Preparation Become An Addiction?, Tax Return Preparers Who Fail to File Their Own Returns Beg For IRS Attention, Using a Tax Return Preparer? Take Steps to Verify What Is Filed on Your Behalf, When Dishonest Tax Return Preparers Are Married, There Was Nothing Magical About This Tax Return Preparation Business, Don’t Get Burned By a Tax Return Preparer, Tax Fraud School: When It’s Not Enough to Be a Fraudulent Tax Return Preparer, It’s Not Just Tax Return Preparers Assisting in the Preparation of Fraudulent Tax Returns, Overused Fraudulent Tax Return Preparation Ploys, It’s Not Just Law Enforcement That Confronts Misbehaving Tax Return Preparers, When An Injunction Doesn’t Stop a Tax Return Preparer from Filing False Returns, Filing a Fraudulent Tax Return Is Bad, Filing More Than 3,000 Is Outrageously Bad, When It Comes to Fraudulent Tax Returns, It's Not Always the Preparers, A Procedural Twist on Dealing with Fraudulent Tax Return Preparers, Can Tax Return Preparers Learn from the Misdeeds of Other Preparers?, and Should Tax Return Preparers Use Their Full Legal Names?

Recently, reader Morris directed my attention to a case involving the third-largest tax return preparation business, Liberty Tax. According to the Attorney General of the District of Columbia, an action was brought against Liberty Tax, alleging that it “misled and overcharged” at least 7,300 residents of the District of Columbia who obtained tax return preparation services from Liberty tax. The case rested on a Liberty Tax “cash in a flash” marketing angle. According to the Attorney General, Liberty Tax offered $50 in cash to anyone who filed their returns through Liberty Tax, and described the cash as coming with “no catch.” The Attorney General alleged that Liberty Tax charged customers who accepted the $50 an average of $200 more than what it charged customers who did not accept the $50.

The case did not go to trial because the parties settled. Under the settlement, Liberty Tax must pay $550,000 to the District of Columbia residents who accepted the $50 and then were overcharged. It must also pay $200,000 to the District of Columbia. The settlement requires Liberty Tax to stop using the “cash in a flash” program throughout the nation, and prohibits it “from creating new incentive programs that impact the prices the company charges for tax prep for those consumers who receive the incentive.” To ensure that these settlement provisions are followed, Liberty Tax must report to the Attorney General’s office “any incentive programs implemented to attract consumers, including submitting all of their marketing and training materials,” along with information that enables the office to determine whether incentive programs are affecting the fees charged to customers who accept the incentives.

Lest anyone think that this sort of “cash up front, we’ll get it back and more on the back end” arrangement was invented by, or used solely by Liberty Tax, or that it is specific to the tax return preparation business, rest assured that it is a marketing technique used for decades or longer and used across all sorts of industries and economies. If anyone enticed by this sort of promotion stops to think about it, they would realize that the cash incentive must come from somewhere. Putting aside the possibility of a business printing counterfeit money, there are four possibilities. First, the business does what Liberty Tax did, simply increase the price charged to recipients of the incentive. Second, increase the price charged to customers who don’t receive the incentive. Third, let profits decrease by the amounts paid out in incentives. Fourth, reduce salary and benefits paid to some or all employees. Perhaps there is a fifth, which is to somehow get one or more governments to subsidize the incentive, which shifts the economic burden onto those who pay taxes to those governments, those who receive other benefits from those governments, or a combination of both.

The bottom line is that oft-repeated axiom, “there is no such thing as a free lunch.” The enticement of quick cash or some other benefit, coupled with a lack of understanding of how economics works, makes it easy for marketing ploys such as the one used by Liberty tax to succeed. How can this be stopped? One approach is what happened in the District of Columbia. Government, acting under laws enacted to protect consumers, step in to stop the practice and in some instances provide a remedy. The disadvantages of this approach are that not every deceptive practice is identified, some legislatures are anti-consumer and refused to enact such laws or fund enough oversight, and the chorus of “we don’t need no regulation” from the anti-government, pro-I-have-freedom-to-do-what-I-want crowd continues to grow in volume and intensity, making it increasingly difficult to protect people from deception. Another approach is to educate people, starting from an early age, so that they indeed understand that there is no such thing as a free lunch, learn to spot these come-ons, and develop skills to make economic and financial decisions rationally rather than impulsively or emotionally. The challenges with this approach are the lack of time and resources dedicated to enlightening people and the ever-increasing trend of prohibiting schools from teaching skills and materials that enable people to learn how to think for themselves.

Should Tax Return Preparers Use Their Full Legal Names?

I have written many times about tax return preparers who have been investigated, indicted, convicted, sentenced, or subjected to an injunction or restraining order. I have discussed these sorts of events in commentaries such as Tax Fraud Is Not Sacred, More Tax Return Preparation Gone Bad, Another Tax Return Preparation Enterprise Gone Bad, Are They Turning Up the Heat on Tax Return Preparers?, Surely There Is More to This Tax Fraud Indictment, Need a Tax Return Preparer? Don’t Use a Current IRS Employee, Is This How Tax Return Preparation Fraud Can Proliferate?, When Tax Return Preparers Go Bad, Their Customers Can Pay the Price, Tax Return Preparer Fails to Evade the IRS, Fraudulent Tax Return Preparation for Clients and the Preparer, Prison for Tax Return Preparer Who Does Almost Everything Wrong, Tax Return Preparation Indictment: From 44 To Three, When Fraudulent Tax Return Filing Is Part of A Bigger Fraudulent Scheme, Preparers Preparing Fraudulent Returns Need Prepare Not Only for Fines and Prison But Also Injunctions, Sins of the Tax Return Preparer Father Passed on to the Tax Return Preparer Son, Tax Return Preparer Fraud Extends Beyond Tax Returns, When A Tax Return Preparer’s Bad Behavior Extends Beyond Fraud, More Thoughts About Avoiding Tax Return Preparers Gone Bad, Another Tax Return Preparer Fraudulent Loan Application Indictment, Yet Another Way Tax Return Preparers Can Harm Their Clients (and Employees), When Unscrupulous Tax Return Preparers Make It Easy for theblo IRS and DOJ to Find Them, Tax Return Preparers Putting Red Flags on Clients’ Returns, When Language Describing the Impact of Tax Fraud Matters, Injunctions Against Fraudulent Tax Return Preparers Help, But Taxpayers Still Need to Be Vigilant, Will the Re-Introduced Legislation Permitting Tax Return Preparer Regulation Be Enacted, and If So, Would It Make a Difference?, Can Fraudulent Tax Return Preparation Become An Addiction?, Tax Return Preparers Who Fail to File Their Own Returns Beg For IRS Attention, Using a Tax Return Preparer? Take Steps to Verify What Is Filed on Your Behalf, When Dishonest Tax Return Preparers Are Married, There Was Nothing Magical About This Tax Return Preparation Business, Don’t Get Burned By a Tax Return Preparer, Tax Fraud School: When It’s Not Enough to Be a Fraudulent Tax Return Preparer, It’s Not Just Tax Return Preparers Assisting in the Preparation of Fraudulent Tax Returns, Overused Fraudulent Tax Return Preparation Ploys, It’s Not Just Law Enforcement That Confronts Misbehaving Tax Return Preparers, When An Injunction Doesn’t Stop a Tax Return Preparer from Filing False Returns, Filing a Fraudulent Tax Return Is Bad, Filing More Than 3,000 Is Outrageously Bad, When It Comes to Fraudulent Tax Returns, It's Not Always the Preparers, A Procedural Twist on Dealing with Fraudulent Tax Return Preparers, and Can Tax Return Preparers Learn from the Misdeeds of Other Preparers?.

I don’t write every time I read an article or press release announcing the arrest, indictment, or conviction of a tax return preparer. In many instances there’s nothing particularly instructive because the preparer in question has repeated what another preparer has done. Other than differences in the number of returns and the dollar amount of lost revenue, there usually isn’t anything that grabs my attention. But a press release issued yesterday by the Department of Justice caused me to think about an aspect of tax return preparation I had not previously considered.

According to the press release, a tax return preparer pleaded guilty to inflating her clients’ tax refunds by preparing and filing “false tax returns that claimed fraudulent deductions and fictitious business profits and losses.” These filings caused a revenue loss of at least $400,000. The preparer also obtained more than $83,000 in Paycheck Protection Program loans by submitting false IRS forms with fake business income from “bogus businesses.” She also filed a false claim for unemployment insurance with the Maryland Department of Labor based in false federal income tax forms, and as a result, receiving more than $55,000.

What caught my eye was that the preparer did business as “The Tax Lady” and as “5 Starr Business Solutions.” Starr is the preparer’s surname. Should individual preparers be required to do business using their full name, or at least display their full name underneath any business name? Without such a requirement, a prospective client who is doing due diligence vetting needs to do research to learn the legal name of the preparer in order to see if that preparer operates other businesses under different names for which there are records of inappropriate or worse business practices. Most people do not know how to learn the legal name behind a business. Sometimes it’s easy. Too often it’s difficult and occasionally almost impossible.

But what of the corporate tax return preparation companies that employ hundreds or thousands of tax return preparers? Those companies are much easier to find. They are accountable for misdeeds by any of their employees. They are big enough that they cannot hide the way some individual preparers do and have done.

And what of individual tax return preparers who operate through a corporation using an invented corporate name? Again, it isn’t all that easy to identify the preparer who is behind that corporation. Should tax return preparers be prohibited from operating through an invented name?

When certain professionals, such as physicians and attorneys, operate a business that isn’t their actual name, whether or not in partnership, LLC, or corporate form, they are required to display their name or names in the appropriate place. Their names are on the firm’s or practice’s website, on emails, on letterheads, on court filings, on prescriptions, on medical reports, and on any other relevant document. If they can do that, so, too, can tax return preparers. Note that some states permit the use of fictitious names by physicians but from what I can figure out, the physicians need approval and it’s granted when a physician wants to omit a middle name, use their original name after changing their legal name due to marriage, or shortening their name if it is long and difficult to pronounce. That is a totally different issue than practicing medicine or law using an invented name that disguises the person’s identity.

People want to know who is giving them legal advice, representing them in negotiations or litigation, giving them a medical examination, or prescribing their medications. Do not people want to know who is preparing their tax return?

Not That More Proof is Needed, But Here’s Yet Another Example That Taxes Aren’t “Just Numbers”

Many people, including law students who approach enrollment in a basic federal income tax course, think and often fear that tax is nothing more than manipulating numbers. Of course, that’s not the case. Though numbers are used in tax, just as they are used in other areas of law and life, numbers are just a tiny part of what tax practitioners do. I wrote about this in Why Tax Practitioners Must Be Good With Words, and Not Just Numbers. I offered examples of tax issues in which words were in play mattered and numbers were on the sideline in posts such as Medical Expense Deductions for Embryo and Cord Blood Storage, Pets and the Section 119 Meals Exclusion, and Not That More Proof Is Needed, But Here’s Another Example That Taxes Aren’t “Just Numbers”.

Today one of my tax-related email alerts drew my attention to another example of why tax is much more than just numbers. In Philadelphia Energy Solutions Refining and Marketing, LLC v. U.S., 2022-1834 (Fed. Cir. 3 Jan. 2024), the U.S. Court of Appeals for the Federal Circuit affirmed the decision of the Claims Court that a mixture of butane and gasoline did not qualify for the alternative fuel mixture credit. That credit is designed to offset the excise tax on alternative fuels. There also is an excise tax on taxable fuels, which by definition are not alternative fuels. An example of a taxable fuel is gasoline. Examples of an alternative fuels include benzol, benzene, and liquefied petroleum gases. The petroleum industry treats butane generally as a liquefied petroleum gas.

About ten years after Congress enacted the credit, the taxpayer filed refund claims for each taxable quarter in the years 2014 through 2017, claiming that it paid excise taxes on a mixture of butane and gasoline, and that it was entitled to an alternative fuel mixture credit to offset those taxes. It argued that the mixture in question was an alternative fuel. The IRS did not respond to the taxpayer’s filing so the taxpayer sued for a refund in the Claims Court. The Claims Court denied the taxpayer’s claim, holding that butane is not an alternative fuel and that a mixture of butane with gasoline is not an alternative fuel.

The Court of Appeals pointed out that although this was the first time it had faced the question, two other Courts of Appeal had done so and had held as did the Claims Court. Somehow I did not notice those other two Court of Appeals decisions.

The Court of Appeals explained that under the statutory definition, an alternative fuel mixture is “a mixture of alternative fuel and taxable fuel (as defined in subparagraph (A), (B), or (C) of section 4083(a)(1)) which— (A) is sold by the taxpayer producing such mixture to any person for use as fuel, or (B) is used as a fuel by the taxpayer producing such mixture.” The Court explained that there was no dispute between the parties that gasoline is a taxable fuel. Under the statute, taxable fuel “means—(A) gasoline . . . .” The parties also did not dispute that under the same definition, butane is a taxable fuel, because the statute provides that the term gasoline includes “any gasoline blend stock.” The regulations under the statute state that gasoline blend stocks “means (A) Alkylate; (B) Butane; (C) Butene; . . . .” Accordingly, because both gasoline and butane are not alternative fuels, a mixture of the two is not an alternative fuel because an alternative fuel requires a mixture of a taxable fuel and an alternative fuel.

Nonetheless, the taxpayer argued that the credit should apply to the mixture because liquified petroleum gas is included in the definition of alternative fuel, and under industry understandings, butane is a liquified petroleum gas. The taxpayer argued that because the Congress did not provide a cross-reference in the credit statute to the definition of alternative fuel even though it provided a cross-reference to the definition of taxable fuel, it must have intended that the definition of alternative fuel for purposes of the credit was not the same as the definition of alternative fuel for purposes of the excise tax on alternative fuels. The taxpayer pointed out that the definition of alternative fuel in the credit statute states that alternative fuel “means—(A) liquefied petroleum gas, (B) P Series Fuels . . . .” Accordingly, argued the taxpayer, because the statute did not define liquified petroleum gas for purposes of the credit, the definition should reflect the industry understanding that it includes butane. The Court rejected the argument because even though looking at the credit statute in isolation it might appear that the taxpayer had a point, the analysis required looking at the “statutes as a whole,” which makes it clear that butane is not an alternative fuel. This conclusion was buttressed by the fact that a taxable fuel, such as butane, was by definition excluded from the definition of alternative fuel.

There are several lessons to be learned from this case. First, as pointed out at the beginning of this post, tax practice is more than dealing with numbers. Second, as I’ve pointed out many times, those who practice tax end up dealing with everything in life, not just meal exclusions, medical expense deductions, and similar transactions, but also the definition of fuels. Third, though law students think accounting majors “have the edge for grades” in the basic federal income tax course, they don’t, but perhaps when it comes to the alternative fuel credit chemistry majors would have an advantage but for the fact that no basic federal income tax course of which I’m aware covers these taxes (not only because it is a complex and specialized area but also because it involves an excise tax). Fourth, to no one’s surprise, once again we are blessed with an example of inadequate statutory drafting by the Congress, reinforced by the fact that after the years in issue in the case Congress amended the statute to provide that a mixture of gasoline and butane is not an alternative fuel.

Should (Will) Implementing the Mileage-Based Road Fee Cause Privatization of Highway Infrastructure?

I have supported the implementation of the mileage-based road fee for many years in posts such as Tax Meets Technology on the Road, Mileage-Based Road Fees, Again, Mileage-Based Road Fees, Yet Again, Change, Tax, Mileage-Based Road Fees, and Secrecy, Pennsylvania State Gasoline Tax Increase: The Last Hurrah?, Making Progress with Mileage-Based Road Fees, Mileage-Based Road Fees Gain More Traction, Looking More Closely at Mileage-Based Road Fees, The Mileage-Based Road Fee Lives On, Is the Mileage-Based Road Fee So Terrible?, Defending the Mileage-Based Road Fee, Liquid Fuels Tax Increases on the Table, Searching For What Already Has Been Found, Tax Style, Highways Are Not Free, Mileage-Based Road Fees: Privatization and Privacy, Is the Mileage-Based Road Fee a Threat to Privacy?, So Who Should Pay for Roads?, Between Theory and Reality is the (Tax) Test, Mileage-Based Road Fee Inching Ahead, Rebutting Arguments Against Mileage-Based Road Fees, On the Mileage-Based Road Fee Highway: Young at (Tax) Heart?, To Test The Mileage-Based Road Fee, There Needs to Be a Test, What Sort of Tax or Fee Will Hawaii Use to Fix Its Highways?, And Now It’s California Facing the Road Funding Tax Issues, If Users Don’t Pay, Who Should?, Taking Responsibility for Funding Highways, Should Tax Increases Reflect Populist Sentiment?, When It Comes to the Mileage-Based Road Fee, Try It, You’ll Like It, Mileage-Based Road Fees: A Positive Trend?, Understanding the Mileage-Based Road Fee, Tax Opposition: A Costly Road to Follow, Progress on the Mileage-Based Road Fee Front?, Mileage-Based Road Fee Enters Illinois Gubernatorial Campaign, Is a User-Fee-Based System Incompatible With Progressive Income Taxation?. Will Private Ownership of Public Necessities Work?, Revenue Problems With A User Fee Solution Crying for Attention, Plans for Mileage-Based Road Fees Continue to Grow, Getting Technical With the Mileage-Based Road Fee, Once Again, Rebutting Arguments Against Mileage-Based Road Fees, Getting to the Mileage-Based Road Fee in Tiny Steps, Proposal for a Tyre Tax to Replace Fuel Taxes Needs to be Deflated, A Much Bigger Forward-Moving Step for the Mileage-Based Road Fee, Another Example of a Problem That the Mileage-Based Road Fee Can Solve, Some Observations on Recent Articles Addressing the Mileage-Based Road Fee, Mileage-Based Road Fee Meets Interstate Travel, If Not a Gasoline Tax, and Not a Mileage-Based Road Fee, Then What?>, Try It, You Might Like It (The Mileage-Based Road Fee, That Is) , The Mileage-Based Road Fee Is Superior to This Proposed “Commercial Activity Surcharge”, The Mileage-Based Road Fee Is Also Superior to This Proposed “Package Tax” or “Package Fee”, Why Delay A Mileage-Based Road Fee Until Existing Fuel Tax Amounts Are Posted at Fuel Pumps?, Using General Funds to Finance Transportation Infrastructure Not a Viable Solution, In Praise of the Mileage-Base Road Fee, What Appears to Be Criticism of the Mileage-Based Road Fee Isn’t, Though It Is a Criticism of How Congress Functions, Ignorance and Propaganda, A New Twist to the Mileage-Based Road Fee, The Mileage-Based Road Fee: Simpler, Fairer, and More Efficient Than the Alternatives, Some Updates on the Mileage-Based Road Fee, How to Pay for Street Reconstruction, Stop the "Stop EV Freeloading Act" Because The Mileage-Based Road Fee Is a Much Better Way to Go, and Why Is Road Repair and Maintenance Funding So Difficult for Public Officials to Figure Out?.

This morning, reader Morris directed my attention to a commentary that supports implementation of the mileage-based road fee, but that also suggests, and seemingly supports, the idea that the implementation will open the door to privatization. The author argues that privatization is “a concept supported by numerous studies showcasing the efficiency and performance improvements possible through transparent and well-structured public-private partnerships,” and adds, “The private sector has a proven track record of driving innovation in transportation safety. Extending this partnership to infrastructure allows for the implementation of cost-effective technologies, ultimately making our roads safer and more efficient.”

What I do not support is the privatization of government functions. I have explained my objections to public-private partnerships and privatization of public functions in posts such as Are Private Tolls More Efficient Than Public Tolls?, When Privatization Fails: Yet Another Example, How Privatization Works: It Fails the Taxpayers and Benefits the Private Sector, Privatization is Not the Answer to Toll Bridge Problems, When Potholes Meet Privatization, and Will Private Ownership of Public Necessities Work?

Why do I believe that public functions belong in the public sector. There are several principal reasons that I oppose putting public functions into the hands of those who control the private sector.

First, public-private partnerships don’t work out well, as I explained in posts such as Selling Off Government Revenue Streams: Good Idea or Bad?, Are Citizens About to be Railroaded on Toll Highway Sales?, Turnpike Cash Grab Heats Up, Selling Government Revenue Streams: A Bad Idea That Won't Go Away, Turnpike Lease: Bad Policy and Now a Bad Deal , How Do Toll Road Lessees Make a Profit?, The Pennsylvania Legislature Gets It Right, Killing the Revenue Idea That Won't Die, Are Private Tolls More Efficient Than Public Tolls?, and More on Private Toll Roads. These posts pointed out failures in places like San Diego, Orange County, and South Carolina. The failure list grows, and now includes arrangements that did not work for the Interstate 69 project in southern Indiana, and the Pocahontas Parkway in Virginia. From the searching that I undertook, it appears that the problem is a global one and not limited to the United States.

Second, when public functions are re-routed into the hands of private sector businesses, voters lose the ability to control, vote out, or do much of anything with respect to the private entities now running government functions. It is a regression from democracy to a blend of feudalism and authoritarianism.

Third, these arrangements contribute to the corruption of government. They are the product of legislative attempts to find funding without raising taxes while generating revenue for their private sector donors, with hopes that the outcry against tolls and similar charges will be directed against the private entity involved in the project. When things go wrong, legislators don’t react because they perceive themselves at risk of losing funding from the favored private entities and thus at risk of losing the next election, something on which they focus too much.

Aside from the long-term disadvantages of privatizing public functions, the arguments offered in support of that path are flawed. To argue that privatization is “a concept supported by numerous studies showcasing the efficiency and performance improvements possible through transparent and well-structured public-private partnerships,” totally ignores the repeated failures, perhaps because from the viewpoint of the companies and individuals collecting public funds not only find these partnerships to be a success for themselves but manage to persuade everyone else that the success of these private sector participants translates to success for everyone, which is the opposite of reality. The claim that “The private sector has a proven track record of driving innovation in transportation safety” is hilarious when one considers the track record of the private sector when it comes to safety. Aside from noting the Corvairs and Pintos of the world, it has been government that has compelled the implementation of safety features and insisted on recalls due to flawed manufacturing despite the sing-song of the anti-government crowd that chants “we don’t need no regulation.” Yes, you do.

The claim that “Extending this partnership to infrastructure allows for the implementation of cost-effective technologies, ultimately making our roads safer and more efficient” ignores the reality that even if the roads are made safer and more efficient, an questionable claim in and of itself, it makes voter control more difficult rather than more efficient, it funnels public money into the hands of private individuals and companies, and in the long run it increases the cost to the public of using highways, bridges, and tunnels to levels higher than they would be if there weren’t a need to generate profits for those private individuals and companies.

It is sad and alarming that, yet again, when a good idea in the public sector begins to gain traction, the wealthy who yearn for even more wealth, and their acolytes, turn their thoughts into how they can milk more money from the proposal. Enough with the outsourcing of government to privateers.

When the Lack of Facts Produces “Rough Justice” in a Tax-Related Case

It’s been a while since I wrote about a television court show. My previous explorations include posts such as Judge Judy and Tax Law, Judge Judy and Tax Law Part II, TV Judge Gets Tax Observation Correct, The (Tax) Fraud Epidemic, Tax Re-Visits Judge Judy, Foolish Tax Filing Decisions Disclosed to Judge Judy, So Does Anyone Pay Taxes?, Learning About Tax from the Judge. Judy, That Is, Tax Fraud in the People’s Court, More Tax Fraud, This Time in Judge Judy’s Court, You Mean That Tax Refund Isn’t for Me? Really?, Law and Genealogy Meeting In An Interesting Way, How Is This Not Tax Fraud?, A Court Case in Which All of Them Miss The Tax Point, Judge Judy Almost Eliminates the National Debt, Judge Judy Tells Litigant to Contact the IRS, People’s Court: So Who Did the Tax Cheating?, “I’ll Pay You (Back) When I Get My Tax Refund”, Be Careful When Paying Another Person’s Tax Preparation Fee, Gross Income from Dating?, Preparing Someone’s Tax Return Without Permission, When Someone Else Claims You as a Dependent on Their Tax Return and You Disagree, Does Refusal to Provide a Receipt Suggest Tax Fraud Underway?, When Tax Scammers Sue Each Other, One of the Reasons Tax Law Is Complicated, An Easy Tax Issue for Judge Judy, Another Easy Tax Issue for Judge Judy, Yet Another Easy Tax Issue for Judge Judy, Be Careful When Selecting and Dealing with a Tax Return Preparer, Fighting Over a Tax Refund, Another Tax Return Preparer Meets Judge Judy, Judge Judy Identifies Breach of a Tax Return Contract, When Tax Return Preparation Just Isn’t Enough, Fighting Over Tax Dependents When There Is No Evidence, If It’s Not Your Tax Refund, You Cannot Keep the Money, Contracts With Respect to Tax Refunds Should Be In Writing, Admitting to Tax Fraud When Litigating Something Else, When the Tax Software Goes Awry. How Not to Handle a Tax Refund, Car Purchase Case Delivers Surprise Tax Stunt, Wider Consequences of a Cash Only Tax Technique, Was Tax Avoidance the Reason for This Bizarre Transaction?, Was It Tax Fraud?, Need Money to Pay Taxes? How Not To Get It, When Needing Tax Advice, Don’t Just “Google It”, Re-examining Damages When Tax Software Goes Awry, How Is Tax Relevant in This Contract Case?, Does Failure to Pay Real Property Taxes Make the Owner a Squatter?, Beware of the Partner’s Tax Lien, Trying to Make Sense of a “Conspiracy to Commit Tax Fraud”, Tax Payment Failure Exposes Auto Registration and Identity Fraud, A Taxing WhatAboutIsm Attempt, When Establishing A Business Relationship, Be Consistent, as the Alternative Can Be Unpleasant Litigation, and Sadness on Multiple Levels: Financial Literacy, Factual Understanding, Legal Comprehension.

There are several reasons that I have written fewer television court show commentaries. Almost all of the episodes that have been broadcast during the past year have been reruns. Fewer television court shows are being broadcast. Almost all, if not all, of current episodes are airing on one of the many dozen streaming alternatives, which I do not care to chase down because it is prohibitive to subscribe to all of the streaming services that offer a television court show.

Today, reader Morris picked up an a Judge Judy episode from several years ago. It was an episode I had not seen. He shared with me several questions which I will answer as I describe the episode and the outcome.

The plaintiff was the mother of a child and the defendant was the father of the child. They were not married, and when they broke up they entered into an agreement to alternate claiming the child on their tax return. The plaintiff mother would claim the child in odd years and the defendant father would claim the child in even years. In 2017, the defendant father claimed the child. He explained that he did so because the child’s mother had been sentenced to jail in 2017 for a nine-month sentence though she ended up serving only three months. The defendant received a $6,000 refund on his 2017 federal income tax return though no evidence was submitted to show how much of the refund was attributable to his claiming of the child. The plaintiff sued the defendant for one-half of the $6,000. The defendant had previously paid the plaintiff $1,000, and he counterclaimed for return of that payment.

Judge Judy held that the defendant had violated the agreement. She held that he was required to pay the plaintiff $2,000, and dismissed his counterclaim.

I now answer the questions posed by reader Morris by analyzing the situation.

The agreement between the two parents controls. The agreement provides that the claim alternates yearly, without regard to number of days of residence with either party and without regard to the amount spent on support. So the conclusion that the father should not have claimed the child in 2017 is correct.

What wasn’t correct was the computation of damages. However, that was not the fault of Judge Judy. Here’s why.

First, a procedural issue. The plaintiff should have asked for an order requiring the defendant to amend his return, which would then permit the plaintiff to file an amended return claiming the child. The amount of the refund that the father should not have received (which could have been less than $6,000) would go back to the Treasury, and the plaintiff would get a reduced tax liability, an increased refund, or some combination (which cannot be determined because no evidence was submitted that disclosed whether she had received a refund or had to pay additional tax on her 2017 return).

Second, because the plaintiff did not seek that relief, it is unavailable for Judge Judy to order. It might be that the statute of limitations had run. On that we lack necessary information.

Third, the parties apparently did not provide sufficient evidence for Judge Judy to do the “what if” computations reflecting what the tax liabilities would have been had the plaintiff and not the defendant claimed the child. So she did “rough justice.” That was the best that could be done under the circumstances.

Fourth, there is insufficient evidence to determine if the reduction in the defendant’s refund would exceed or be less than the increase in the plaintiff’s refund. It is possible that collectively they saved taxes compared to what would have happened had the returns been properly filed in the first place.

Fifth, it is possible that both parties will be audited. We don’t have sufficient information. If, for example, the IRS does audit and determines that the father received too much of a refund, there would be more litigation as he would seek to recover from the plaintiff what he paid her.

The last question posed by reader Morris was “Do we have enough facts?” The answer is no. We are missing many facts. When precision matters, facts are important. When important facts are missing, precision disappears. Then guesswork, “rough justice,” and even injustice run rampant.

A Different Thanksgiving

This year, Thanksgiving is different. My mother will not be joining us, because she left this life back in June. It was one thing when she stepped back from being the Thanksgiving cook, as she gradually reduced her participation in Thanksgiving from the sole organizer, shopper, cook, and server to a contributor to a guest at the home of younger family members. It’s a totally different thing when she’s not there in person. I am confident she is here in spirit. Yet I am thankful that for a many dozens of years she was with us, and I remain thankful for all that she did for me and our family. For those interested, this is her obituary.

As I have noted in each of the past ten years, “I have presented litanies, bursts of Latin, descriptions of events and experiences for which I have been thankful, names of people and groups for whom I have appreciation, and situations for which I have offered gratitude. Together, these separate lists become a long catalog, and as I have done in previous years, I will do a lawyerly thing and incorporate them by reference. Why? Because I continue to be thankful for past blessings, and because some of those appreciated things continue even to this day.” When I re-read those lists, I realized that the people, events, and things for which I am appreciative are far from obsolete.

So once again on this one day I will look back at the past twelve months, and remember the people, events, and things for whom and for which I give thanks and have given thanks throughout the year. If some of these seem repetitive, they are, for there are gifts in life that keep on giving:

• I am thankful for my mother’s life, her advice, her stories, her silly antics, her encouragement, and her tending to the care of her family.
  
• I am thankful for the many phone calls with my mother, later in her life, during which we spent hours discussing genealogy, family history, and theology, a most interesting combination of topics.
  
• I am thankful for a wonderful son, daughter, daughter-in-law, grandson, and granddaughter.
  
• I am thankful for all the people who continue to help update the multiple family trees I develop, maintain, update, and publish.
  
• I am thankful for the cousins I have met through FTDNA, ancestry, and 23andme, who I did not know existed, and for the opportunity to get in touch with cousins who I knew existed but with whom I had no contact until they showed up on one or more of those genetic genealogy sites.
  
• I am thankful that a member of the Maull family of Delaware agreed to take a BigY700 DNA test, which proved that the Maull family and the descendants of Thomas Maule of Salem, Massachusetts, share a common paternal ancestor about 400 years ago, and so I am thankful I now have more clues for one of my major genealogy research projects.
  
• I am thankful that my congregation’s choir has been able to continue singing, and now without masks.
  
• I am thankful that we continue to gather in the sanctuary for worship, and, yes, that I continue to ring the narthex bell.
  
• I am thankful for all the people in the world who continue to fight ignorance, crime, terror, evil, and corruption.
  
• I am thankful that awareness of what needs to be done to fight ignorance and corruption is growing and that more steps in that direction are being taken.
  
• I am thankful my health is holding steady.
  
• I am thankful for people being willing to read the things I write.

Sixteen years ago, in Giving Thanks, Again, I shared my Thanksgiving advice. I liked it so much that I repeated it again, in 2009 in Gratias Vectigalibus, yet again in 2013 in “Don’t Forget to Say Thank-You”, still again in 2014 in Giving Thanks: “No, Thank YOU!” , even yet again in 2015 in Thanks Again!, even still again in Thankfully Repetitive, yet once more in Never-Ending Thanks, yet even once more in Particularly Thankful This Time Around, again in Quest'anno è il Ringraziamento, once more in Different, But Thanksgiving Nonetheless, again in in Still Different, But Thanksgiving Nonetheless, and last year in One Day of Thanksgiving, A Year of Thanks. For me, it does not lose its impact:

Have a Happy Thanksgiving. Set aside the hustle and bustle of life. Meet up with people who matter to you. Share your stories. Enjoy a good meal. Tell jokes. Sing. Laugh. Watch a parade or a football game, or both, or many. Pitch in. Carve the turkey. Wash some dishes. Help a little kid cut a piece of pie. Go outside and take a deep breath. Stare at the sky for a minute. Listen for the birds. Count the stars. Then go back inside and have seconds or thirds. Record the day in memory, so that you can retrieve it in several months when you need some strength.

I am thankful to have the opportunity to share those words yet again. And I am thankful that it is possible for even more of us to do all of those things, and for others of us to most of those things.

Why Is Road Repair and Maintenance Funding So Difficult for Public Officials to Figure Out?

Concerns about highway repair and maintenance funding continue to grow. Reader Morris directed my attention to a letter to the editor of the Everett, Washington, Herald newspaper responding to an article addressing the question. The letter writer proposed increasing funding by repealing tax exemptions for “vehicles owned by the state, the counties, the municipalities, school districts, fire departments,” along with “other special fuel use tax exemptions.”

Here’s the problem with this proposal. Requiring states, counties, municipalities, school districts, and fire departments to pay fuel taxes means that those entities would need to increase other taxes to provide the funds with which those entities would pay fuel taxes. In effect, that shifts the cost of road repair and maintenance to people paying other taxes who do not necessarily use the roads or use them minimally and are already paying fuel taxes or the alternative surcharge for electric vehicles. As for the special fuel exemptions that the letter writer mentions, those apply “boats or farm machinery or construction equipment (a very broad set category) as well as ferries, and passenger-only ferries, Even aircraft fuel.” Though the letter writer complains that “The actual cost of supporting the state highway infrastructure falls on the personal private non-exempt automobile owner,” it makes no sense to impose fuel taxes to support road repairs and maintenance on boats, ferries, airplanes, and farm equipment because they do not use the roads.

Reader Morris also directed my attention to a referendum in Perris, California that puts to the voters a proposed special business license tax on warehouses. This tax would provide funding for repairs and maintenance of roads in Perris that have been identified as heavily used by trucks servicing warehouses in the city. The rationale for the proposal is that these trucks are causing the roads to deteriorate faster than they otherwise would. There are several flaws in this proposal. It imposes the tax on only some businesses that are serviced by trucks. It doesn’t correlate the computation of the tax with the weight of the trucks and the frequency of their arrivals and departures from the warehouses. It appears that the proposal did not get the required two-thirds approval from voters.

Of course, readers of MauledAgain know, and the writer of the letter in Washington and the officials in Perris would know, if they read MauledAgain, that the answer to road repair and maintenance funding is the mileage-based road fee. I’ve written about this easy-to-apply-and-enforce concept many times, including posts such as Tax Meets Technology on the Road, Mileage-Based Road Fees, Again, Mileage-Based Road Fees, Yet Again, Change, Tax, Mileage-Based Road Fees, and Secrecy, Pennsylvania State Gasoline Tax Increase: The Last Hurrah?, Making Progress with Mileage-Based Road Fees, Mileage-Based Road Fees Gain More Traction, Looking More Closely at Mileage-Based Road Fees, The Mileage-Based Road Fee Lives On, Is the Mileage-Based Road Fee So Terrible?, Defending the Mileage-Based Road Fee, Liquid Fuels Tax Increases on the Table, Searching For What Already Has Been Found, Tax Style, Highways Are Not Free, Mileage-Based Road Fees: Privatization and Privacy, Is the Mileage-Based Road Fee a Threat to Privacy?, So Who Should Pay for Roads?, Between Theory and Reality is the (Tax) Test, Mileage-Based Road Fee Inching Ahead, Rebutting Arguments Against Mileage-Based Road Fees, On the Mileage-Based Road Fee Highway: Young at (Tax) Heart?, To Test The Mileage-Based Road Fee, There Needs to Be a Test, What Sort of Tax or Fee Will Hawaii Use to Fix Its Highways?, And Now It’s California Facing the Road Funding Tax Issues, If Users Don’t Pay, Who Should?, Taking Responsibility for Funding Highways, Should Tax Increases Reflect Populist Sentiment?, When It Comes to the Mileage-Based Road Fee, Try It, You’ll Like It, Mileage-Based Road Fees: A Positive Trend?, Understanding the Mileage-Based Road Fee, Tax Opposition: A Costly Road to Follow, Progress on the Mileage-Based Road Fee Front?, Mileage-Based Road Fee Enters Illinois Gubernatorial Campaign, Is a User-Fee-Based System Incompatible With Progressive Income Taxation?. Will Private Ownership of Public Necessities Work?, Revenue Problems With A User Fee Solution Crying for Attention, Plans for Mileage-Based Road Fees Continue to Grow, Getting Technical With the Mileage-Based Road Fee, Once Again, Rebutting Arguments Against Mileage-Based Road Fees, Getting to the Mileage-Based Road Fee in Tiny Steps, Proposal for a Tyre Tax to Replace Fuel Taxes Needs to be Deflated, A Much Bigger Forward-Moving Step for the Mileage-Based Road Fee, Another Example of a Problem That the Mileage-Based Road Fee Can Solve, Some Observations on Recent Articles Addressing the Mileage-Based Road Fee, Mileage-Based Road Fee Meets Interstate Travel, If Not a Gasoline Tax, and Not a Mileage-Based Road Fee, Then What?>, Try It, You Might Like It (The Mileage-Based Road Fee, That Is) , The Mileage-Based Road Fee Is Superior to This Proposed “Commercial Activity Surcharge”, The Mileage-Based Road Fee Is Also Superior to This Proposed “Package Tax” or “Package Fee”, Why Delay A Mileage-Based Road Fee Until Existing Fuel Tax Amounts Are Posted at Fuel Pumps?, Using General Funds to Finance Transportation Infrastructure Not a Viable Solution, In Praise of the Mileage-Base Road Fee, What Appears to Be Criticism of the Mileage-Based Road Fee Isn’t, Though It Is a Criticism of How Congress Functions, Ignorance and Propaganda, A New Twist to the Mileage-Based Road Fee, The Mileage-Based Road Fee: Simpler, Fairer, and More Efficient Than the Alternatives, Some Updates on the Mileage-Based Road Fee, How to Pay for Street Reconstruction, and Stop the "Stop EV Freeloading Act" Because The Mileage-Based Road Fee Is a Much Better Way to Go.

I continue to wonder. Why is it taking so long for government officials and voters to figure out what needs to be done and to take steps to make it happen? I know, I know, it’s a matter of politics, money, and misinformation. As is the case with too many other issues.

Another Wealthy Stadium Owner Grabs Taxpayer Money

Here we go again. Those who read MauledAgain are familiar with my opposition to public funding of, and tax breaks for, businesses owned by multimillionaires and billionaires. I have written about this problem, particularly with respect to public financing for the sporting dreams of billionaires, in posts such as Tax Revenues and D.C. Baseball, four years ago in Putting Tax Money Where the Tax Mouth Is, Taking Tax Money Without Giving Back: Another Reality, and Public Financing of Private Sports Enterprises: Good for the Private, Bad for the Public, Taking and Giving Back, If You Want a Professional Sports Team, Pay For It Yourselves; Don’t Grab Tax Dollars, Is Tax and Spend Acceptable When It’s “Tax the Poor and Spend on the Wealthy”?, Tax Breaks for Broken Promises: Not A Good Exchange, Tax Breaks for Wealthy People Who Pretend to Be Poor, When One Tax Break Giveaway Isn’t Enough, It’s Not Just Sports Franchise Owners Grasping at Tax Breaks, Grabbing Tax Breaks, Sports Franchises, Casinos, and Now, a Water Park, and Tax Breaks For Starving Team Owners.

Now comes news that the Wisconsin legislature has passed, and the state’s governor intends to sign, legislation that shifts almost half a billion dollars from taxpayers to the owners of the Milwaukee Brewers so that the stadium in which they play can be repaired. I’ll leave to the engineers the question of whether one building that needs that much money for repairs should be fixed or demolished. The legislation succeeded even though the Brewers have sufficient funds to pay for the repairs.

When the legislation passed, a Brewers official stated, ““It’s a great day for the franchise but I think an even greater day for the state.” But is it a great day for taxpayers in the state who aren’t fans of the Brewers?

The governor justified his support by noting that the money will create jobs. On that theory, perhaps all jobs should be financed by taxpayers. Of course, that would make no sense. Just as many jobs would be created if the Brewers paid for their own repairs, just as other property owners pay for their own repairs. Isn’t it interesting that the same politicians who object to government programs to help poor people fix their homes are ferociously eager to use taxpayer funds to help wealthy individuals and corporations fix their properties? There’s some hypocrisy lurking behind this charade.

Of course, the team used the well-worn threat of leaving town if they didn’t get taxpayer money. Then let them leave. If Milwaukee is a great place to have a baseball team and stadium, then free market capitalism will entice another set of owners to move to Milwaukee. And if that doesn’t happen, it demonstrates that Milwaukee cannot support a baseball team in a free market capitalism world. So be it. Interestingly, after making that threat, Brewers officials backed off. Apparently that sort of threat doesn’t make for good public relations.

Supposedly the public funding is palatable because the team is kicking in about 20 percent of the cost. Using that approach, ought not taxpayer funds be used to finance 80 percent of whatever it is that someone wants to purchase? Or is that deal reserved for the wealthy?

Some Republicans in the Senate balked at the original funding plan, and scaled back the state’s contribution from $411 million to $386 million, while the city and county of Milwaukee would kick in $135 million. So where do they get the funds? Unlike the deal in Buffalo that I criticized in Tax Breaks For Starving Team Owners, they apparently aren’t chopping $800 million off the funding of the state’s equivalent of New York’s Office of Children and Family Services. No, instead, they have added a $4 “surcharge” on tickets to non-baseball events and an $10 “surcharge” on luxury suite tickets to non-baseball events. I wonder how baseball fans would react to a “surcharge” on baseball game tickets to fund opera, ballet, and symphonies.

The supporters who claim that it makes sense to fund the wealthy because doing so benefits the public and creates jobs ignore the logic that taking this approach in a fair manner requires public funding for almost everyone, because almost everyone engages in employment, activities, and enterprises that benefit the public and creates jobs. Why doesn’t the person who hires contractors to repair their home get this treatment? Because that homeowner lacks the resources to fund politicians’ campaigns, to hire lobbyists to pressure public officials, and to pay marketers to make the public think that government funding for the stadiums owned by wealthy individuals and corporations is a wonderful thing to do. Worse, they manage to impose “surcharges” on people who are not necessarily fans of baseball or the Brewers. These supporters of public funding for stadiums proclaim their worship of free market capitalism, but when free market capitalism fails to help the wealthy achieve a goal, they are quick to jump in with what gets condemned as socialism if that sort of assistance is proposed for the poor and middle class who encounter free market capitalism failures. The hypocrisy is disappointing and dangerous.

Does This Halloween Practice Foretell a Scary Future?

From the outset of this blog, I have made it a point to work Halloween into MauledAgain, usually looking for the silly or goofy but occasionally taking a more serious approach. The posts began with Taxing "Snack" or "Junk" Food (2004), and have continued through Halloween and Tax: Scared Yet? (2005), Happy Halloween: Chocolate Math and Tax Arithmetic (2006), Tricky Treating: Teaching Tax Trumps Tasty Tidbit Transfers (2007), Halloween Brings Out the Lunacy (2007), A Truly Frightening Halloween Candy Bar (2008), Unmasking the Deductibility of Halloween Costumes (2009), Happy Halloween: Revenue Department Scares Kids Into Abandoning Pumpkin Sales (2010), The Scary Part of Halloween Costume Sales Taxation (2011), Halloween Takes on a New Meaning and It Isn’t Happy (2012), Some Scary Halloween Thoughts (2013), The Inequality of Halloween? (2014), When Candy Isn’t Candy (2015), Beyond Scary: Tax-Based Halloween Costumes (2016), Another Halloween Treat? I Think Not (2017), If Halloween Candy Isn’t Food, Is it Medicine? (2018), The Halloween Parent Tax: Seriously? (2019), Halloween Chocolate Construction Project (2020), The Tax Consequences of Halloween Candy Buy Back Programs (2021), and Two Not Very Amusing, But Scary, Halloween Tax Challenges.

Last week, reader Morris directed my attention to a story that addressed an issue I discussed in The Halloween Parent Tax: Seriously? back in 2019. In that commentary I reacted to the practice of parents taking some or even quite a bit of their children’s candy, with the justification that it teaches them about taxes and prepares them for the “real world.” I pointed out that when my parents consumed a small portion of what my siblings and I brought home from our multi-neighborhood, four-hour Halloween candy collection, it was a lesson in sharing. We learned why it was appropriate and generous to offer candy to our parents in appreciation of their help, not only in accompanying us around the neighborhood when we were younger but also in assisting the design and construction of costumes. So even when we grew older, designed and made our own costumes, and went out on our own, we continued to share candy with our parents.

In the story shared by reader Morris, I learned that New Zealand’s Inland Revenue Department had tweeted that “parenting trends like a lolly tax teach kids responsibility by taking some of their lollies and taxing their trick or treat haul.” It suggested that parents take 33 percent of their children’s candy because that is the top income tax rate in New Zealand. The tweet was quickly criticized, particularly by members of Parliament who object to the government’s tax policies. The story itself shares some of the interesting comments made by people who viewed the tweet as inappropriate. Though the Department explained that the tweet was intended to be “lighthearted” and “in the spirit of Halloween,” it apologized and then deleted the tweet. Of course, the Department did not invent the concept of the “candy tax,” “parent tax,” or “dad tax,” to mention three of the phrases used to describe the parental confiscation of candy, as the idea was shared initially on a variety of parenting blogs and social media platforms. The story also referred to a 2019 survey that revealed 74 percent of parents admitted eating some of the children’s candy, with 17 percent taking more than half. Wow.

It is worth repeating what I noted in The Halloween Parent Tax: Seriously?:

So although some people think Halloween presents an opportunity to teach children that “the government” is going to “take some of what you earn,” I think it provides an even better opportunity to teach children the concepts of generosity, empathy, and sharing. Those character traits are disappearing too rapidly among certain segments of society.

Now, four years later, in a world increasing afflicted by self-centeredness, I wonder what lessons are actually being learned by children who observer their parents taking substantial portions of their candy, not through sharing but by fiat. Thirty years from now, how will today’s children raised under those circumstances treat their children? How will they treat other people? Will generosity, empathy, and sharing be part of their worldview? The reality could turn out to be scarier than Halloween.