Personal Taxes

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15, 25, 28, Hut!

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There's no denying that amateur sports, especially college football, are big business. Together, the 15 top-grossing teams score over $1 billion in revenue, with the University of Texas Longhorns alone generating $71.2 million in profit.

Numbers like that would normally make the "receivers" at the IRS smile. But college football is different. The big Division I schools that sponsor the most competitive teams are all tax-exempt. And the IRS loses again on a juicy revenue stream that's unique to college sports -- required donations, sometimes totaling twice the cost of a season ticket, that fans make to the school to secure those seats.

Back in 1986, boosters couldn't deduct the contributions they made specifically to secure sports tickets. But Louisiana Senator Russell Long, who sat on the Finance Committee, met with lobbyists who argued that his home state

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Watching Out for the Cliff

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Ordinarily, I use these posts to discuss fun items related to taxes and finances. I know that you can read the usual boring articles about the usual boring tax topics pretty much anywhere else. And most of you are happy to let me worry about "the details."

Every so often, though, I need to discuss more serious issues, even if it's just to let you know that I’m on top of them. That's the case today with the so-called "fiscal cliff" -- Federal Reserve Chairman Ben Bernanke's clever term for what happens on January 1, when a bunch of current tax rules expire, and some new rules take effect. Here's a quick rundown of what to expect:

  • The Bush tax cuts expire. That means the top rates on ordinary income goes from 35% to 39.6%; the top rate on capital gains goes from 15% to 20%; and the top rate on qualified dividends jumps from 15% to 39.6%. Much of the debate over tax rates focuses on

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Department of Worst Nightmares

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Last week, I wrote about a recent report issued by the Treasury Inspector General for Tax Administration ("TIGTA") -- an independent board that works to prevent and detect fraud, waste, and abuse within the IRS and related entities. I was amused to learn that 70 federal agencies owed $14 million in unpaid employment taxes on their employees' wages -- and 18 more agencies hadn't even filed their employment tax returns. But I was more surprised to learn that the IRS can't take any effective action to collect those outstanding balances.

While I was busy bringing you the news about Uncle Sam's "Get Out of Jail Free" card, the TIGTA was busy issuing another report that I knew you'd

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Latest Government FAD

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If you don't take care of your taxes, you risk some pretty expensive fines and penalties. Some of those amounts are fixed, like $89 per partner per month for failing to file your partnership return. Others are based on the actual tax due, like the 10% penalty for failing to file employment taxes. If the IRS has to come after you, they can slap liens on your home or other property. They can impose levies to pluck back taxes from your paycheck, your bank account, or your retirement plan. They can even seize your assets and auction them to collect their pound of flesh.

Having said all that, would it surprise you to learn that there's someone with a "Get Out of Jail Free" card for not paying his taxes? Would it surprise you even more to learn that it's Uncle Sam himself?

The Treasury Inspector General for Tax Administration ("TIGTA") is an independent board that oversees the IRS. Their job is to audit, investigate, and inspect the tax system itself, as well as to prevent and detect fraud, waste, and abuse within the IRS and related entities. Last month, the TIGTA issued a report with a bland and vague title: A Concerted Effort Should Be Taken to Improve Federal Government Agency Tax Compliance. But that deceptively bureaucratic name masks a pretty outrageous conclusion:

Don Draper on Taxes

Earlier this week, the Academy of Television Arts and Sciences handed out their 64th Primetime Emmy Awards. Showtime's political drama "Homeland" was the big winner -- stars Damian Lewis and Clare Danes won Best Actor and Best Actress, and the series itself won Best Drama. AMC's period drama "Mad Men" was the big loser, failing to win the Best Drama award after four previous victories. And Mad Men's brooding star Jon Hamm lost again for Best Actor, for the fifth year in a row.

Hamm's character, Don Draper, is an advertising genius who creates campaigns for clients as diverse as Lucky Strike cigarettes, Mohawk Airlines, Menkens Department Store, and Utz potato chips. Don uses all sorts of psychological triggers to promote his clients' products. But one trigger he he hasn't used -- at least, not yet -- is everyone's dislike of paying taxes. So, as Hamm leaves the Emmys empty-handed again, we had to ask: which real-world advertisers have used taxes to promote their products?

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Turns Out Crime DOES Pay

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Back when you were a little kid, Mom and Dad warned you that crime doesn't pay. (They also told you it was the tooth fairy leaving that money under your pillow.) But it turns out that crime does pay — at least for one felon-turned-whistleblower.

Bradley Birkenfeld grew up in suburban Boston before moving to Switzerland to pursue a career in banking. In 2001, he started work at Switzerland's biggest bank, UBS. His job was to solicit American depositors, 90% of whom he said were trying to evade taxes. His main duties included schmoozing clients at UBS-sponsored events like yacht races in Newport or the Art Basel festival in Miami Beach. But he also helped clients create shell companies to hide ownership of their accounts, shredded documents recording transactions in their accounts, and once even smuggled a pair of diamonds through U.S. Customs in a tube of toothpaste. (Doesn't everyone carry their diamonds in their toothpaste?)