Blog Darkness

Sorry for the darkness. Filing season, ya know? Back when I'm able. Carry one without me.

Tax Court Cuts IRS Agent No Slack on Penalties

Ouch. A $30,000 fraud penalty because the petitioner worked for the IRS:

Petitioners' deemed admissions of facts evidenced numerous badges of fraud: (1) Petitioner fraudulently understated income and overstated deductions for all years at issue with respect to the nail kit business; (2) he failed to maintain adequate records for all 3 years; (3) he used his home copier to alter bank statements which he provided to the IRS in an attempt to evade tax; (4) he failed to cooperate with respondent and was nonresponsive throughout the litigation, failing even to appear at his own hearing; and (5) he possessed greater than average knowledge of the requirements of the Internal Revenue Code because of his years of employment with the IRS.

Hiring a CPA: Smart Move or Waste of Resources?

A good take on the unfairness of the Estate Tax but, really, is this shot necessary? (Emphasis added.)

If you're rich enough, however, you can hire professionals who can, for a price, show you how to avoid estate taxes. Many of the very largest estates are so tax-sheltered that the inheritances go to their beneficiaries having paid little or no taxes at all. And all the costs associated with these tax shelters and tax avoidance schemes are pure wastes for the country as a whole and exist solely to circumvent the estate tax. The estate tax in and of itself causes people to waste resources.

Whoa, whoa, whoa. Hold on there, friend. Hiring me to help you save taxes is hardly a waste of resources. It's an investment. And like all monetary transactions, what moves from one party's pocket to another party's pocket - commerce - what may be lost by the one party is a gain for the other. In exchange for the fee I charge, you get a quality work product. I take your fee (Thanks!), pay my staff, my overhead, myself, and then pump that money right back into the economy.

How exactly is that a waste of resources?

This is an argument that's often trotted out when the idea of simplifying taxes is batted about; it costs taxpayer's money to comply with the tax law and that makes the tax law that much more inefficient. Those who make that argument fail to acknowledge my point that money spent on tax compliance is, in turn, spent on groceries, rent, clothing, transportation. In short, money's never lost.

So, let's show some love for your CPA, okay?

Suspending Mark-to-Market: Bad Policy, Bad Time - DealBook Blog

Though this is old news now (I'll be posting something about the new FASB rules about mark-to-market in a few days. I'm a little behind here so cut me some slack.) the New York Times is opposes a change to the FASB rules:

The timing, moreover, is troubling in three ways: first, its proximity to the grilling the FASB chairman, Robert H. Herz, received in Congress earlier this month; second, the short time given for discussion and debate; and finally, the possibility that financial institutions could suddenly paint a rosier picture of their balance sheets in the midst of an already volatile period.

Over all, it seems like a recipe for weakening, not increasing, investor confidence.

Their logic doesn't quite play in that last sentence. Everything about the proposed rule change is intended to increase investor confidence. Investor's don't want the truth, they want a rosy picture. If the rules are changed and the stock market rallies, isn't that rally an act of investor confidence?

I'll have more to say about this later - I disagree that the FASB rules alone were responsible for the crash but it certainly added fuel to the fire - but once upon a time, FASB didn't call for mark-to-market accounting as we understand it now. The rules changed once, they can change again. The NY Times talks about bad timing but what better time would there be than now to change these rules?

Besides, if the NY Times is against it, I'm automatically for it.

Kidding!

Frightful Kindle

Due to poor time management skills, I've fallen out of the habit of reading books; I'm lucky to get a book completely read, as I've noted here before, so I'm not sure a Kindle is just the thing I need right now. Still, from what I've heard about it, it's tempting. Josh Marshall, though, sees its frightful side:

I hope it's clear that I don't view this as a good thing or something I welcome. When I had the realization I described above it felt like a sock in the gut, if perhaps a fillip on the interior decorating front. All the business model and joblessnes stuff aside, that's how I feel about physical newspapers too. There's a lot I miss about print newspapers, particularly the serendipitous magic of finding stories adjacent to the one you're reading, articles you're deeply interested in but never would have known you were if it weren't plopped down in front of you to pull you in through your peripheral vision. Yet at this point I probably read a print newspaper only a handful of times a year.

When I think about it I kind of miss it. In a way I regret not reading them. But I just don't. I vote with my eyes. And I wonder whether I'll soon say something similar about books.

I think he's right. The Kindle is the camel's nose under the tent; before long we'll have the whole camel and bookstores will become relics of the past, like records stores. That may seem unlikely now but 10 years or so ago, shuttered record stores would have seemed just as unlikely.

That's not necessarily a bad thing. I love browsing iTunes though I miss browsing music stores, too. Still, how many record stores did I patronize regularly? Few. Though it's different for me with bookstores - I just like to look, thanks - I can see the same thing happening. When I ever decide to finally plunk down money for a book, I look for the best deal and that's usually found online. The Kindle sounds like it'll make that easier, and cheaper to do. And like the invention of moveable type, it could actually bring more books to more people. That ain't no bad thing.

So, are we at the beginning of the end of bookstores? I don't know but I intend to enjoy my few sojourns into them even more so, just in case.

Maurice Jarre Has Died

So what, you say? Here's a reminder that, as the writer says, giants walked the earth.

Only a film composer but what films!

Etruscan Treasures From Tuscany

This exhibit looks like the one that was at St. Gregory's in Shawnee not too terribly long ago but since it's now in Dallas, it's OpinionJournal-worthy:

True to form, the Lone Star State manages to defy ordinary expectations. And in the midst of it all, a spectacular and unpredictable show, 'From the Temple and the Tomb: Etruscan Treasures from Tuscany' (until May 17), has just opened at Southern Methodist University's Meadows Museum. It bills itself as the largest such exhibition of Etruscan art and artifacts in the U.S. Why a museum based on the Spanish paintings collected and loved by its eponymous founder, a Texas petro-millionaire who died in 1978, should be sponsoring such an enterprise remains something of a mystery. But it's no more mysterious than much about Texas ways or, more important, about the Etruscans themselves, of whom we know very little.

My carping about unfairness of Texas media coverage over Oklahoma's aside, it's a fascinating exhibit. Well-worth making the trip to see.

Bacardi Moves From Its Cool Building

This isn't huge news
but it is a good excuse to get you to follow the link for some pictures of a beautiful building. The Herald's site is a slide show and I can't figure out how to embed it here so a quick 'net search turned up this picture:



Click on through to the article for some better pictures.

Republican Tax Travesty

It used to be that Republicans were the party of lower taxes. Not anymore:

On March 19, the House of Representatives voted to impose a 90% tax on the incomes of certain executives of financial institutions receiving federal funds. What was remarkable about this vote is that 85 Republicans voted for this travesty. The consequences will be felt for years to come.

The history of tax policy is that it tends to go in one direction until there is a key event that establishes a new direction. Thus the vote by a Democratic Congress in favor of a lower capital gains tax in 1978 set the stage for the Reagan tax cut of 1981 and a decade of lower tax rates. When Republican George H.W. Bush switched gears and supported higher taxes in 1990 it presaged Bill Clinton's 1993 tax increase and many years of rising taxes.

A quick look at the list reveals no surprises. You'll find the usual suspects - Alexander, Hoekstra - but most are unfamiliar. They must think this following the tide of bonus resentment will serve them well at election time but more likely they'll come to regret it. That is, if the voters have a long enough memory.

Lackluster Night for American Idol Lacks Luster

Quite a let down on American Idol this week. Where just about everyone nailed their song choice last week, just about everyone missed it this week. The problem: they sang songs they liked rather than songs they could sing well.

My man Anooooop let me down. Good enough, I suppose, but his desire to be a hip-hop artist leaves me cold it's like he's trying too hard. Same for Matt. He was just trying to impress me and I wasn't. Maybe this'll be the week that Megan goes home because this was just another in her string of lazy performances. Danny finally opened it up with a good performance of a song I liked. Allison was only so-so, her first slip, in my view, but I thought her outfit was kinda cute. Shame on Randy for bringing it up. Scott was okay but I wonder if he wasn't blind if he would have made it this far. Still, I liked the song and I like him, blind or not. Poor Li'l is just not living up to her potential. Didn't like the song, didn't like the way she sang it. On the other hand, I don't like Adam but, boy, did he knock it out of the park last night or what? Again! Darn him. And, finally, Kris' version of Ain't No Sunshine was a good take on a good song. He did himself proud.

So three performance I really liked, one I didn't at all and the rest merely okay. Let's see what the voters say.