Tax Attic

Useful tax tips and information from Jerry Coon of Action Tax Service.

Tax Attic August 1, 2013

August 1, 2013 // 0 Comments

I opened one of my favorite sections of Sunday’s Grand Rapids Press, the Sports, and found an interesting article detailing the fact that three people were being posthumously inducted into the Baseball Hall of Fame. What is interesting is that for only the second time in the last 42 years, no currently eligible players who are alive were selected for inclusion into one of the most exclusive clubs on the face of the earth. Usually two or three currently eligible players are nominated but not this year. A Veteran’s Committee recommended the inclusion of the three old-timers. Colonel Jacob Ruppert was the long-time owner of the New York Yankees and one of the most-hated men in Boston. Just owning the Yankees is enough to be hated by all Red Sox fans, but even worse for Ruppert, soon after buying the Yankees in 1915, he manufactured the trade that all of Boston and many other slightly more neutral baseball fans have bemoaned since, Babe Ruth went from being the Red Sox’ best player to being the Yankees’ best player. The Yankees have never looked back while I’m not sure the Red Sox have totally fully recovered. Hank O’Day was a respected umpire who officiated in over 4,000 games. The term “respected” and “umpire” are not terms usually put into the same sentence so he must have been a good one. James White, known for catching barehanded, batted lead-off in the first professional game on May 4, 1871 and hit a double. It was probably a legitimate hit but maybe the fielders weren’t wearing gloves either. However, as one who has caught more than my share of games, anyone who caught with his bare hands was one tough cookie. I’m sure these three are worthy of the honor. As the article detailed, many players eligible today are tainted by the usage of performance enhancing drugs, i.e. steroids or PEDs. Apparently players such as Barry Bonds of the San Francisco Giants, Sammy Sosa of the Chicago Cubs, and Roger Clemens of various teams including both Boston and New York, “will be judged in a different light.” Each of these players has Hall of Fame statistics. Each was a marvelous player. Everyone likes to see players hit home runs […]

Tax Attic July 25, 2013

July 25, 2013 // 0 Comments

I finally got to visit New York City. Deb has been there a couple of times but I just haven’t had the opportunity to get there. Even though it was approximately 100 degrees daily, we saw sights that can be seen only in New York. It was definitely worth the wait. We toured Liberty Island, the home of the Statue of Liberty. I wondered if it would be as impressive in person as it is in the magazines and brochures. It was more impressive in person to me. At the time of construction, it was the highest standing structure on the east coast. I can only imagine what it must have looked like before the copper oxidized into the present green. The sun reflecting off the bright copper must have been truly magnificent. All of us, but particularly the millions of immigrants whose first sight coming into the harbor was the Statue of Liberty owe a debt of thanks to the French for their gift. With that sight, they knew at long last they had arrived in the land of the free and the land of opportunity. The 9/11 Memorial was fascinating. Deb had visited it not long after the attack occurred and wondered what it would look like as it stands today. Where there were just enormous holes previously, there are now twin square water-falls and reflecting pools surrounded by the names of the victims of terror and 400 white oaks and one pear tree. There are more improvements to come and a museum yet to be finished. It’s taking time but it looks like they have a great plan. Central Park was interesting. Where else would you find a polar bear exhibit, a penguin exhibit, a sea lion exhibit, petting zoo, and over 800 acres of green-space, all in the middle of a city of skyscrapers and concrete? The polar bear looked a little stressed but I’m not sure it looked any more stressed than me! I can see why, however, people line up to get a seat just to people watch. Times Square is smaller than I imagined and Rockefeller Center is darned small but all of it is much more crowded than I imagined. The M&M store should consider asking the […]

Tax Attic July 18, 2013

July 18, 2013 // 0 Comments

The fish in Michigan are tougher to catch than the fish in Canada. That’s my personal observation of fishing in Canada for 40 plus years and fishing in Michigan for 50 plus years. There are some exceptions of course. When the walleyes are biting on Saginaw Bay, the Detroit River, or Lake Erie, the catch would match the best that Canada has to offer. I have been a participant when the big lake fishery for salmon and trout of Lake Michigan was just spectacular. Canada has trouble matching the salmon and trout fishery. In the spring, we can catch a limit of crappies on Rainbow Lake in a very short time or a nice mess of blue gills on Wabasis Lake. Canada always has Rice Lake, however, and the blue gill fishing over there is pretty hard to beat. Overall when I have gone to Canada for fishing purposes, we expect to catch fish; eat fish; and bring home our limits. On the flip side, when I go to Muskegon to fish for those big fish, I am positive we are going to catch fish. I’m an optimistic person at heart so, of course, we are going to catch fish. But it doesn’t always work that way and sometimes we work really hard for zero fish. Because it’s tougher fishing here, we tend to have more equipment. I know my wife, Deb, doesn’t like to hear that, but there is a reason there are now three Cabelas in Michigan and one near the border in Indiana. We buy fishing equipment like it’s going out of style. Because the fishing is tougher, we are always on the look-out for the newest lures and tackle that we are forced to buy. I bring one medium-size tackle box, two trays of miscellaneous Mr. Twister type tails and jigs; and three spinning rods and reels when I go to Canada for a week of fishing. When I go to Muskegon for a day, I bring nine downrigger rods and reels, two downriggers, four planer boards, two medium-sized tackle boxes, and several trays of lures. We might have to use every bit of that equipment to get a fish or two. I guess that’s one of the reasons we keep […]

Tax Attic July 11, 2013

July 12, 2013 // 0 Comments

The Internal Revenue Service (IRS) certainly has been taking some abuse lately. We all have an expectation that the IRS is going to treat all taxpayers equally; not playing favorites in a positive or negative fashion. The IRS even puts it in writing in its mission statement: “To provide America’s taxpayers top quality service by helping them understand and meet their tax responsibilities and enforce the law with integrity and fairness to all.” Some of the employees of the IRS seemed to have forgotten the “integrity and fairness to all.” Earlier this year it was made public that the IRS since 2010 had been targeting some specific groups that had applied for non-profit status by delaying the application process or making unnecessary and perhaps illegal information requests. A total of 296 groups experienced intentional delays in processing. 98 of those that suffered delays had the words “Tea Party, Patriot or 9/11 Group” in the application or in the group’s title. In addition, there were also some very bad You Tube IRS training videos that became public that were just bad public relations for the IRS. We all can have a bad day or two but the IRS was on its’ way to having a bad year. In light of the fore-going, have you ever wondered who audits the IRS to see if it has done anything wrong or if there even is a separate department somewhere in the federal government with over-sight authority over the IRS? The answer is yes, there is a department within the Department of Treasury with over-sight authority. Apparently it has enough pull that the IRS has listened and made not only personnel changes but also policy changes. The name of the department is the Treasury Inspector General for Tax Administration or TIGTA. TIGTA was created by Congress when it passed the Internal Revenue Service Restructuring and Reform Act of 1998. At that time, it was given independent powers to over-see the IRS. Since 2004, J. Russell George, an attorney and native of New York City, has been the head of TIGTA. On May 14, 2013 TIGTA issued a 48 page report that detailed what it found while investigating the IRS and making nine recommendations that involved developing and providing training […]

Tax Attic for July 4, 2013

July 3, 2013 // 0 Comments

Last week, the Supreme Court, in a 77 page document, ruled that the Defense of Marriage Act (DOMA) was unconstitutional. The 1996 Defense of Marriage Act was passed when Bill Clinton was President and defined a legal marriage as consisting exclusively of a man and a woman. This was a big decision with fully yet-to-be-determined consequences. Along with the DOMA definition of a man and a woman went approximately 1,000 federal family benefits confined to only a man and a woman. Currently, however, 12 states, including Washington, New York, Iowa, Massachusetts, and the District of Columbia have passed laws allowing same-sex couples to marry. The majority of the remaining states either have laws banning same-sex marriages or a constitutional ban on same sex marriages. Michigan, by the way, is one of those states having a constitutional ban. According to the latest federal census, over 130,000 same-sex couples have taken advantage of the various states’ laws to marry. This federal/state differential has created confusion in the income tax world. 12 states and DC said a marriage between two men or two women was legal while the federal government said it was illegal. For starters, were same-sex married couples allowed to file a joint federal return or were they required to file single returns? Next, were same sex couples allowed the same estate tax benefits as their DOMA-defined brethren? The answer is no and no. Prior to the Supreme Court striking down DOMA, federal tax law trumped the states laws in that legally married same-sex couples were not allowed to file a joint tax return nor were they allowed estate tax spousal unlimited marital deduction provisions nor were allowed to take advantage of any of the 1,000 federal benefits that were afforded to a married man and woman. As of June 26, 2013, that world changed. The Supreme Court ruling was prompted by a case brought against the federal government by Edith Windsor of New York. She sued the federal government for a refund of $363,053 in estate tax that was paid when her same-sex spouse, Thea Spyer, passed away in 2009. Without DOMA in effect, Thea would have been able to pass on an unlimited amount of assets to Edith and no tax would have been […]

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