Posts Tagged ‘taxes’

Contingency fees + IRS = sound policy?

Yet again — we covered this issue last year — lawmakers on Capitol Hill are considering sending private debt collectors on contingency fee after those who owe money to the Internal Revenue Service. Here’s an issue where I can agree with Washington Post columnist Catherine Rampell: contingency fees and tax collection don’t make for a good mix. Will we ever learn our lesson on law enforcement for profit?

Bring Your Own Device legal exposure

Businesses have grown dependent on the practice of employees’ using their own mobile devices in the workplace and for work. Yet the legal complications are rising, including a California appellate decision that “reaffirmed employer obligations to reimburse employees for work related mobile usage on personal devices.” In part because there is no standard metric for breaking down an employee’s data usage bill into work-related and non-work-related portions, it is not easy to attempt tailored reimbursement practices to reflect changing usage: by one estimate, “just the processing of [a manually submitted] expense report alone costs a company between $18 and $29.” As a result, many employers simply settle on a ballpark figure, such as $70/month, as the reimbursement. “If those subsidies were even lightly scrutinized, they’d be deemed, at least partially, an employee benefit subject to taxation to subsidize Netflix and other personal habits.” Add-on services, for a cost, may serve to navigate between the demands of labor regulations on the one hand and tax authorities on the other. [vendor Ben Rotholtz, Forbes]

“The Church Will Not Lose Its Tax-Exempt Status”

Sam Brunson, a Loyola (Chicago) professor specializing in tax law, searched IRS private letter rulings and sums up the results at the Mormon website By Common Consent (via Paul Caron/TaxProf, who assembles other links). For some academics’ views on whether the Bob Jones U. precedent (exemption denied to educational institution on grounds of race discrimination) will or should be pushed further into other areas, see Inside Higher Education and Caroline Corbin, SSRN (sex discrimination).

More on the Bob Jones U. case: Regulation magazine, Jan./Feb. 1982, more via Steven Hayward. More on the parsonage (housing) allowance, one bit of the tax code that does favor religious entities over otherwise comparable nonprofits: Ronald Hiner and Darlene Pulliam Smith/Journal of Accountancy, Erwin Chemerinsky/Duke (anti), Jonathan Whitehead and Becket Fund (pro). Journalists stirring the pot recently: Felix Salmon, Fusion; Mark Oppenheimer, Time.

July 15 roundup

Banking and finance roundup

  • “But the questions of fairness are real and seem to be bolstered by the S.E.C.’s win/loss record in its home court versus its performance in district courts.” [Gretchen Morgenson, New York Times, earlier here, etc.]
  • With Greece as with subprime crisis, same regulators who messed up credit markets will probably ask for and get more power [Arnold Kling]
  • “In fact an AIG-and-taxpayer bailout of Wall Street firms engineered by government officials and Wall Street professionals with deep and ignored conflicts of interest” [Lawrence Cunningham, National Interest via Bainbridge]
  • CSR by way of SEC? “Disclosure Rules Are the Wrong Way to Push Social Change” [Thaya Knight, American Banker/Cato]
  • “Supreme Court Blasts Maryland Taxman’s Double-Dipping” [Elizabeth BeShears, Heartland on this year’s Supreme Court decision in Comptroller v. Wynne, I’m quoted]
  • Dodd-Frank: “Are State Regulators A Source of Systemic Risk?” [Mark Calabria, Cato]
  • Feds’ latest round of mega-settlements against banks prompts usual demands to jail execs. Is it really that simple? [Scott Greenfield]

Police and prosecution roundup

  • Consumer Financial Protection Bureau cracks down on “rent-a-D.A.” scheme in which private debt collector acquired right to use prosecutor’s letterhead [Jeff Gelles, Philadelphia Inquirer, earlier here and here]
  • What Santa Ana, Calif. cops did “after destroying –- or so they thought –- all the surveillance cameras inside the cannabis shop.” [Orange County Weekly via Radley Balko]
  • Maryland reforms mandatory minimums [Scott Shackford/Reason, Sen. Michael Hough/Washington Times]
  • Locking up past sex offenders for pre-crime: “Civil Commitment and Civil Liberties” [Cato Unbound with Galen Baughman, David Prescott, Eric Janus, Amanda Pustilnik; Jason Kuznicki, ed.]
  • Two strikes and you’re out, Sen. Warren? Or is there some alternative to DPAs/NPAs (deferred prosecution agreements/non-prosecution agreements?) [Scott Greenfield, Simple Justice]
  • Covert cellphone tracking: “Baltimore Police Admit Thousands of Stingray Uses” [Adam Bates, Cato, related on Erie County/Buffalo]
  • “Citizens face consequences for breaking the law, but those with the power to administer those laws rarely face any.” [Ken White, Popehat] “61% of IRS Employees Who Cheated On Their Taxes Were Allowed To Keep Their Jobs” [Paul Caron, TaxProf]

Banking and finance roundup

Why would the IRS be outsourcing tax audits to a private law firm?

Sen. Orrin Hatch wants to know why the Internal Revenue Service has hired Quinn Emanuel to assist in auditing Microsoft, with the power to compel sworn testimony [Sean Hackbarth, Institute for Legal Reform] For a sampling of the complications that can arise when governments hire outside law firms to prosecute tax cases, see our coverage of the Mississippi/MCI case or, in another part of the forest, the IRS’s periodic experiments with using private debt collection lawyers.

A new screen for religious-school tax exemption?

In 1983 the U.S. Supreme Court ruled that Bob Jones University in South Carolina could be denied an otherwise applicable tax exemption because of its then policy of forbidding interracial dating among its students; since then, despite much speculation, there has not been widespread yanking of exemptions from other institutions over widely disfavored or execrated but otherwise not unlawful internal policies. Now an exchange between Justice Samuel Alito and Solicitor General Donald Verrilli, at Tuesday’s oral argument in the gay marriage cases, is raising some eyebrows. Verrilli’s comments, if seen as reflecting considered Obama administration policy, might be seen as leaving the door open to wider denial of exemptions. [Sarah Pulliam Bailey, Washington Post; Michael Greve, Library of Law and Liberty]

Tax arguments you can count on to fail

For our folk-law category, a list of sure-loser arguments on behalf of tax non-compliance, including “Paying federal taxes is optional,” “Wages are not ‘income,'” “I got paid in paper money, which is not taxable,” and “You can only tax U.S. citizens, and I just seceded,” all of which are good for amusing tax professionals but not for keeping you out of jail. [Lowering the Bar]