Tax clips from the Web: Kanye’s charity blunders, D.C. lobbyists and identity fraud
A Federal Trade Commission report listed identity theft as the top complaint from consumers in 2011 – for the 12th year in a row. Of those 280,000 complaints, about 24% were tax or wage-related. This is something of a stark wake-up call to the perils of our electronic lives, which can be hacked without our knowledge, right up until we hit the send buttons on our electronic tax returns, says Jonnelle Marte for Smart Money’s tax blog: “For some victims, the fraud isn’t discovered until they hit the send button on their electronic tax returns — and get a rejection note from the IRS. Other times it takes a little longer to know something is wrong, such as not receiving a refund check.”
If you have been unlucky enough to be hacked, correcting the error could take the IRS from 6-12 months, according to Marte.
Home on the range
Here is a quote from the author of the Tax Foundation’s annual rating of the states with the best tax climates -“The lesson is simple,” wrote study author Mark Robyn, “A state that raises sufficient revenue without one of the major taxes, all things being equal, has an advantage over those states that levy every tax in the state tax collector’s arsenal.”
Millionaire Corner notes that at the top of the list this year is again Wyoming, with no corporate or individual income taxes. New York spends another year at the bottom of the list, with New Jersey right behind as the nation’s worst state for taxes.
Accounting firm Ernst & Young has a lobby arm, Reuters reported on March 9. This came as news to many, perhaps especially to those who view the roles of independent accounting firms as essential to the validity of corporate activities.
“Surely lobbying for a corporate client is way over the line,” writes David Albrecht, a professor of accounting at Concordia College’s Offutt School of Business.
School of charity
“At most, 15 percent of a charity’s cash flow should go toward administrative costs,” according to watchdog group Charity Navigator. How much did Kanye West’s now defunct charity spend on costs? Well, in 2009 the charity reported expenses of $553,000. The amount that went to charities from Kanye’s group in 2009 was…$583. That’s right, 583 dollars. Kay Bell points to a couple of well-intentioned bits of advice for charitable foundations on Bankrate.com’s tax blog. The best is to ask for records of where charity dollars were given by any organization that you may donate to.
Inside the beltway
The IRS has expanded its ‘Fresh Start’ program by easing rules in two areas, writes Kay Bell for the tax blog at Bankrate.com. One is by providing relief to unemployed filers, and the other is allowing more people to make their tax payments in installments. It’s already surprising this option did not previously exist for people who needed it. It was previously restricted to taxpayers who owed $25,000 or less, writes Bell.
Finally…It takes you 22 hours to fill out your 1040, according to IRS (as Kay Bell points out in her personal tax blog – Don’t Mess With Taxes).