Tax Legislation

The New Known Unknown

Donald Rumsfeld may be one of the most controversial figures of our time, but you have to respect his resume. He won a seat in Congress at an age (30) when some of today's college graduates are still living in their parents' basements. He served as the youngest Secretary of Defense in American history (under President Ford) and the oldest Secretary of Defense in American history (under Bush #43). Between those positions, he headed G.D. Searle, General Instrument Corporation, and Gilead Sciences, Inc. Those corporate posts helped make Rumsfeld the second-richest member of Bush's cabinet, with a net worth north of $62 million.

Rumsfeld is also known for his unique, sometimes blunt and sometimes slippery, speaking style. Who can forget this response he gave a reporter who asked him about the lack of evidence tying Saddam Hussein's Iraqi government to weapons of mass destruction?

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The verdict is in... Bitcoin will be taxed as property, not as currency

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We have had more than a few clients this past year ask about Bitcoin and trading in Bitcoins from an income tax perspective.  There has been a lot of urban legends out there that claim, since the IRS has not given any formal guidance, that income taxes don't apply. Like most urban legends, that is simply wrong and making that assumption can land you in some real tax trouble.

When we delivered that news it was sometimes not what our client, or prospective client, wanted to hear. We've had to remind everyone that the primary premise of the U.S. Tax Code, Section 61, is pretty simple. It says that "gross income means all income from whatever source derived." So, unless there is a specific exclusion from taxability for the income source, you're on the hook for taxes.

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Resolutions We'd Like to See

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2014 is here, and it's time for New Years' resolutions. Americans across the country are pledging to lose weight, quit smoking, exercise, and find new jobs. Some of them will succeed, others will lose faith before the first snowmelt. (Want to make a fortune? Open a gym that turns into a sports bar on February 1!) So we thought we would take this opportunity to suggest some resolutions to the folks who determine how much tax we pay.

Congress: Put the Tax Code on a diet. According to one count, our tax code runs nearly 4 million words. That's four times the words in all the Harry Potter books put together, with none of the magic and wizardry. (You may think we work a version of the "obliteration charm" when we save you thousands in tax, but we assure you there's nothing supernatural involved.) We say it's high time to put the Tax Code on a diet —

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Thoughts on Taxes for 2014

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2013 has been a big year for taxes. The "fiscal cliff" deal boosted the top federal income tax rate to 39.6%; "Obamacare" added new taxes on top earners; and dozens of state and local governments raised their taxes, too. Congress will finish 2013 even more divided than it began, which will probably protect us from new taxes next year. But here are some quotes to ease the sting of this year's higher bills:

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Coach's Challenge

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December is here, and for millions of college football fans, that means following their favorite coach to a New Year's bowl game. In Birmingham, Alabama's Nick Saban is reeling from the Crimson Tide's last-second loss to archrival Auburn in this year's "Iron Bowl." In Columbus, Ohio State's Urban Meyer is celebrating 24 straight victories after his Buckeyes beat Michigan by just one point in "The Game." And further west, Washington's Steve Sarkisian is celebrating his Huskies win over the Washington State Cougars in the 106th "Apple Cup."

As always, these coaches and dozens more will be paying attention to the latest Bowl Championship Series standings. But this year, they'll also be paying attention to the IRS. That's because a new strategy might help them block taxes when they switch jobs.

College football coaches can make a lot of money. Alabama's Saban will make at least$5.65 million this year, and 51 coaches make more than the average pro player ($1.9 million). In 27 states, the highest-paid public employee is a

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Horsing Around with Tax Preparers

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This is a big week for taxes and technology. State "insurance exchanges" are scheduled to open for business under the Affordable Care Act, which lets consumers sign up for tax-subsidized individual health insurance. The White House has already announced that technological glitches will delay online enrollment on the small business ("SHOP") and Spanish-language sites. That's a decidedly 21st-century, "first world" problem. So, why on earth is the IRS lassoing an 1884 law dealing with lost Civil War horses to regulate tax preparers?

Right now, there are no industry-wide rules governing tax preparers. So, back in 2011, the IRS announced their new "Return Preparer Initiative," which required preparers to register with the IRS, pass a competency test, and take continuing education classes. The new rules apply to any tax preparer who isn't already regulated as an attorney, Certified Public Accountant (CPA), or Enrolled Agent (EA).