Roth & Company, P.C. Tax Update Blog
NO DO-OVERS WHEN THE SWAP TAKES TOO LONG
May 13, 2008
A reader poses a Section 1031 problem:
After selling property using a qualified escrow arrangment, Taxpayer A contracts to purchase replacement like kind property. The contract requires the seller, Taxpayer B, to replat the property, but that doesn't happen and the deal doesn't close in 180 days.Can Taxpayer A get an extension of his 180-day deadline?
If you enter into a deferred like-kind "Section 1031" exchange, you have 45 days to identify replacement property and 180 days to close, or the exchange fails to qualify and the escrowed proceeds become taxable. Unfortunately for Taxpayer A, there are no extensions or do-overs. The sale of his original property is now taxable. He may or may not have a case against Taxpayer B under contract law, but as far as the tax law is concerned, he loses.
Link: IRS Fact Sheet on Like-kind Exchanges.
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WE THE TARGETED
May 13, 2008
Robert Schulz, head of the tax protest organization "We the People Foundation," says he has turned over to IRS the names of 225 people who received "legal termination of tax withholding" kits from the foundation. From PostStar.com:
Schulz, the founder of the We the People Foundation and We the People Congress, was ordered to provide the names, addresses, phone numbers and Social Security numbers of the people who received his "Legal Termination of Tax Withholding" -- a packet of information that purports to show how an employee can legally stop federal withholding on paychecks.Schulz was told his stay-of-enforcement application was denied by the office of Justice Ruth Bader Ginsburg at 3:45 p.m. Monday -- 15 minutes before U.S. District Court Judge Thomas McAvoy's deadline.
That's 225 people who can look forward to a little extra IRS attention.
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IRS LOSES ANOTHER ACCRUAL WORKPAPER CASE
May 13, 2008
The IRS has lost its second district court case seeking workpapers used in developing the tax accrual for a public company's financial statements.
According to Tax Analysts ($link), this decision involved 20 documents totaling 151 pages; another 260,000 pages were turned over to the IRS. Tax Analysts reports:
The court conducted an in camera review of the withheld documents. The documents all related to one transaction engaged in by Regions.The core documents -- documents created by E&Y and the law firm Alston & Bird LLP -- expressed opinions, provided legal theories, and listed possible attacks by the IRS. The other documents at issue, called derivative documents, explained, discussed, or quoted the core documents.
This decision, even if upheld, doesn't seem like an enormous taxpayer victory, as it applies to a narrow set subset of the audit workpapers.
Link: Court order and copy of summons
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IRS FACT SHEET ON BUSINESS INCOME
May 13, 2008
The IRS ha issued a "fact sheet" to remind taxpayers that they need to report business income:
Small business owners and self-employed taxpayers must report on their tax returns all income received from their businesses unless specifically excluded by law. In most cases, business income will be in the form of cash, checks and credit card charges.But business income can be in other forms, such as property or services. There are many forms, including: bartering, real estate rents, personal property rents, interest and dividend income, canceled debt, promissory notes, lost income payments, damages, economic injury payments, as well as kickbacks.
All income earned is taxable. Directing payment of income to a third party does not remove the reporting and payment requirements for small businesses and self-employed taxpayers.
"No 1099" doesn't mean "tax exempt."
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I'M SO DISILLUSIONED
May 12, 2008
Al Sharpton, a tax cheat? I thought he was a man of the people. More here. How could I be more disillusioned?
Well, maybe if I found out that the statewide 1-cent sales tax increase enacted last month by the Iowa legislature wasn't really passed just to help the children:
City officials could redirect money collected from local-option sales taxes without the public's vote under a last-minute amendment added to a state budget bill in the final hours of this year's legislative session.It means that special 1-cent sales taxes that voters have approved in hundreds of Iowa cities for such things as road and sewer improvements could instead be used to give tax breaks to developers or in numerous other ways.
The new sales tax replaces county-by-county local option sales taxes. The county taxes had to be renewed every ten years by referendum, and the politicians just hated that. They argued for the new statewide tax on the grounds that the money was needed for education. Some naifs believed them. Or said they did.
"This bill allows cities to use a bait-and-switch on their citizens," Michael King, president of the Iowa State Association of Counties, wrote in a May 2 letter to Gov. Chet Culver.Under the revision, public officials could change the use of the tax collection as long as it's used to help pay for an urban renewal project. Such renewal areas are generally locations that city and state officials have designated as slums or blighted, making them eligible for property tax breaks known as tax increment financing.
Yet the next time a sales tax or bond referendum goes down in flames, the elected officials will be just astounded that they aren't trusted.
State 29 has more.
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TAX EVASION KILLS?
May 12, 2008
From guardian.co.uk:
Illegal tax evasion by companies is depriving the developing world of $160bn (£82bn) a year, which could be used to prevent the deaths of 1,000 children every day, Christian Aid says today.In a new report, Death and taxes: the true cost of tax dodging, the charity says the sums being lost to tax evasion globally are equivalent to almost one and a half times the amount of foreign aid given to poor countries each year. If legal tax avoidance were added in, the sums would be several times greater.
If the money lost to illegal evasion were allocated according to current spending patterns to prevent poverty and disease, it says, the lives of 350,000 children, 250,000 of them infants, could be saved each year.
I don't buy it. In much of the developing world governments are merely lawless gangster regimes. Millions of people trying to scratch out a living in countries without the rule of law survive only because they, or their employers, hide enough to eat from their parasitical overlords. In such places tax evasion saves lives by letting people feed their children, rather than their dictators' Swiss bank accounts. It's hard to see where the people of Burma, for example, or companies that operate there, have a moral obligation to feed a government that won't even let outsiders in to help feed their subjects after a humanitarian disaster.
It's wrong to apply the same kind of ethical standards to tax evasion in a despotic land that applies in the U.S. While our tax system has flaws (heaven knows it does), at least you have some predictability as to what is taxable, and you have a reasonably fair system to turn to if you disagree with the IRS. Try telling, say, the Cuban or Russian government that you disagree with their tax assessment and see how far you get.
UPDATE: The Tax Prof has more.
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GOOD ON TAXES, NOT SO GOOD ON ECONOMICS
May 12, 2008
Villanova tax professor James Maule and I have had a friendly discussion going over tax and economic policy. Well, economics, really, as I'm not sure I have any disagreements I have with him over tax policy.
Dr. Maule worries about future resource scarcity, and he thinks the government should mobilize to do something about it. He says that the market can't be relied on to provide "essential" items.
I think it's exactly the opposite - only the market can provide essentials. The history of the Soviet Union and the Eastern Bloc was a 75-year experiment that demonstrated the inability of governments to reliably supply essentials. This continues to be demonstrated in the countries were the communist experiment continues in spite of all reason: Cuba and North Korea. Whenever the government meddles, they inevitably just make things worse.
An Instapundit correspondent sums it up well:
Good Lord, now we've got Republicans proposing Five Year Plans and Seven Step programs like some 1930's Soviet Beet Kommissar. The last thing we need is the know-nothings in Congress pretending they have the expertise required to plan the future of a market segment as huge and critical as energy. They have no such knowledge because that knowledge doesn't exist anywhere as some type of accessible whole. It takes a market with millions upon millions of people, each with their own intimate knowledge of their own needs and capabilities, participating in an open energy marketplace with free prices to coordinate such an unimaginably huge, ever-changing body of knowledge and action.
But when Dr. Maule talks taxes, he talks wisely. Here he speaks of the so-called "anti-foreclosure" legislation going through Congress:
The provision that would provide a tax credit to encourage the purchase of homes in foreclosure has been replaced by a provision that would allow a tax credit to first-time home buyers. How this prevents foreclosures baffles me. How it rescues the housing market also baffles me, because the foreclosures are hitting higher-priced markets far more severely than they are affecting entry-level markets....
This bill is a classic example of bad tax policy and bad legislation. First, the provisions do not address the underlying cause of the housing market mess. Second, the provisions will not accomplish what they are marketed as accomplishing. Third, tax breaks wholly unrelated to the mess are tagged onto the legislation as it works its way through the legislative process, for a variety of reasons that are far more political than economically sound. Fourth, the legislation will make the tax law and tax return preparation more complicated. Fifth, it will make tax compliance and tax return preparation more difficult.
Amen, brother Maule.
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SLOW START
May 12, 2008
Sorry for failing to serve up freshly warmed-over tax news so far this morning. I had to clear about 700 spam comments from the site. I had to add a few new blocker words to the spam filter. My apologies in advance to anybody who for some reason tries to post a non-spam item with the words "Nokia" or "ringtones."
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HAVE A GREAT MOTHERS DAY WEEKEND!
May 09, 2008
Mothers Day week flowers at the Gateway Park, downtown Des Moines
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FARM BILL, TAX BILL
May 09, 2008
Congress has finally reached agreement on just how badly to work over the rest of us to subsidize the ag industry. Tax Vox has a wonderful post about the pending farm bill. Some choice bits:
$451 million in tax breaks for timber companies. Ka-ching. $500 million for biodiesel. Ka-ching. $126 million for racehorse breeders. Ka-ching. $20 million for Aggie bonds. Ka-ching.It is farm bill time, so grab your wallet. When it comes to agricultural subsidies, there are no deficit hawks. There are only farm-state lawmakers, for whom no subsidy is too great, and big city pols, who can only watch in envy.
Crop prices are low? We need subsidies! Crop prices are high? We need... subsidies!
Backers say the bill is fiscally responsible. They point to a small future cut in ethanol tax credits from 51 cents to 45 cents. Sounds good, although I have a funny feeling the credit won’t ever be reduced. Reductions in out-year tax cuts never seem to happen. Instead, they become yet another tax extender.The other alleged nod to fiscal responsibility is an agreement to eliminate some subsidy payments to farmers who make more than $750,000, or $1.5 million per couple. Bush tried to cap the payments for those earning $200,000 or more. But that was a long time ago.
Eliminate "some" subsidies to farmers making over $1.5 million? Those farm budgeteers are just ruthless.
And never fear, there are plenty of winners. It appears that just one company, timber giant Weyerhaeuser, stands to gain $100 million a year in tax breaks. While Congress may trim subsidies for ethanol, it would add $537 million in tax breaks for biodiesel and renewable diesel And, having learned nothing from the ethanol debacle, it would create a “temporary” credit of $1.01 per gallon for biofuels made from farm waste, switch grass and the like.
Don't be surprised if the next step is a provision declaring that "farm waste" means "corn" and "soybeans."
The bill would create a special loss limit for farm losses -- apparently limiting even non-passive farm losses to the greater of $300,000 or net farm income "if the taxpayer receives Farm Bill commodity payments."
The President is pledging to veto the bill; whether the veto would stick is uncertain.
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TAX FREEDOM FINALLY HITS CONNECTICUT
May 09, 2008
The Tax Foundation determines a "Tax Freedom Day" for the U.S. as a whole and for each state. The national Tax Freedom Day was April 23; Iowa's was April 16. The last one was yesterday, in Connecticut. What a dreary honor.
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THE HILLARY TAX PLAN
May 09, 2008
Roni Deutch tackles the Clinton tax program in her series of the candidates' tax policy plans, including her college tax credit plans:
At the heart of her plan to strengthen the middle class is Hillary’s tax cuts designed to make college more affordable for everyone. "When it comes to higher education – we shouldn’t be playing catch-up with the world – we should be leading it," claimed Clinton in a press release about her plan. "I believe that college shouldn’t just be a privilege for the wealthy – but an opportunity for anyone with the talent, determination and ambition to learn. And I believe that every American should have access to lifelong learning opportunities – from apprenticeships, to community college, to the most select four-year institutions."Hillary’s college plan would basically boil down to a $3,500 credit which she claims is enough to cover more than 50% of the cost of tuition at the average public institution.
Remember: When politicians say they want to "make college more affordable," they really mean they want to "raise tuition."
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MARC WARD STARTS 'IOWA LLC BLOG'
May 09, 2008
Marc Ward, LLC maven at the Dickinson law firm and sometime Des Moines school board member, has started the "Iowa LLC Blog." Marc has helped to craft the current Iowa limited liability company statute; he is also an author of the CCH "Limited Liability Company Guide." The blog is on the blogroll to the right under "Friends and Neighbors."
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ARE PAM ANDERSON AND DOLLY PARTON ENTERED?
May 08, 2008
"World Gross Masters Gather for Chest Tournament in Sofia"
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BITTER DIVORCE AND TAX EVASION -- MORE FUN TOGETHER!
May 08, 2008
One subplot of the Robert Beale tax evasion saga was the way his ex-wife ended up with his Florida house during his run from the tax man. It makes one think that fighting a divorce battle while evading taxes might just be too much fun to have all at once. A recent case out of Milwaukee supports that theory.
Ronald Miserendino was a successful Milwaukee-area real estate investor who didn't take his wife's divorce petition well. From the California Divorce and Family Law blog:
According to court records, within a month of the divorce filing, Miserendino secretly set out to liquidate his company's assets and go underground. The divorce court judge, John DiMotto, had ordered that all the company assets be frozen until the divorce was final.Miserendino enlisted the aid of his son from his first marriage, Mark, whom he had made a vice president of Trace. Son [Cynthia Son, Mr. Miserendino's wife], who had been Trace's secretary, was removed from the company roster.
The effort involved taking out a bank loan for $5 million, a $500,000 advance on the company's line of credit, and cashing in Treasury bonds worth more than $10 million, according to court records. Miserendino gave the $5 million from the bank loan to his son. Mark got smaller cashier's checks and sent them to his father, who was secretly in Hawaii, where Trace owned a house and two lots.
The divorce was granted, and the court awarded Cynthia Son $5 million plus the family home in River Hills. But the money was gone -- much of it to taxes and penalties. But Miserendino also had converted nearly $5 million to cash and had stashed it in safe deposit boxes in Australia and in several states, according to court records.
This worked out poorly for Mr. Miserendino. Now the 72 year-old has been sentenced to four years in prison for tax evasion and money laundering charges arising out of the ill-fated divorce planning. The sentence also requires him to forfeit $750,000 property to the government for payment to his ex-wife, who was awarded $5 million in the divorce.
The Moral? Hell hath no fury like a woman scorned, but it's much worse if the IRS is on her side.
Links:
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CAVALCADE OF MAY
May 08, 2008
The new Cavalcade of Risk, the wonderful roundup of insurance and risk management blog posts, is up at Hill's Personal Finance.
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HOPE FOR HIGHER TAXES
May 08, 2008
Roni Deutch is reviewing the tax policy proposals of the remaining presidential candidates. From her Obama review:
In addition to letting the Bush tax cuts expire, Obama also advocates increasing the income cap on payroll taxes. This would essentially be a huge tax increase for taxpayers earning between $97,000.00 and $250,000.00, which goes against Obama’s prior commitment to not raise taxes on individuals making less than $250,000.00.
It would make me bitter, if I didn't have so much hope.
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THE JOB-CREATING IOWA CIGARETTE TAX
May 08, 2008
While the $1-per-pack cigarette tax was primarily a revenue grab by our free-spending state officials, it may have an unintended side effect. It will replace the many of the good meth manufacturing jobs exported to Mexico by the pseudoephedrine crackdown with high-quality cigarette smuggling jobs. From the Tax Foundation:
The blunt fact, which politicians of both political parties are determined to ignore, is that high cigarette taxes in New York have led to a bloody, decades-long smuggling epidemic.While the problem first surfaced during the Great Depression, tax hikes in the early 1960s created a major profit opportunity for smugglers and kicked the epidemic into high gear. By 1967, a quarter of the cigarettes consumed in the Empire State were bootlegged. New York City's finance administrator labeled cigarette smuggling the "principal stoking facility of the engine of organized crime."
Smuggling? That can't happen here!
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THEY CAN ALSO LOSE WEIGHT BY ADDING CALORIES
May 08, 2008
This lead to a Tax Analysts article ($link) promises to solve all of the world's problems instantly:
Senate Democrats introduced energy legislation May 7 seeking to lower oil and gas prices and impose a 25 percent tax on oil company windfall profits, while House Democrats announced they will soon take up a bill that would include similar measures in addition to extending renewable energy tax incentives and expired business tax breaks.
So we lower prices by increasing the producer's costs? The more we tax producers, the lower the cost of what they produce? Why didn't we try that before? If we just impose enough tax, everything will be free!
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MEGAN'S RULES
May 07, 2008
Megan McArdle has some words to live by in making tax policy (emphasis mine):
Complexity is bad because it ups compliance costs, often makes evasion easier, and because complexity itself increases uncertainty: as tax laws proliferate, it becomes harder to know whether you are in compliance. It also makes the government's administrative overhead multiply like those bacteria that can kill you in five minutes after first contact.Uncertainty is bad because it reduces the ability of people and corporations to plan for the future. It's hard to estimate your ROI if the tax laws that govern your investment change every year.
Change is bad in general because every time the tax law changes, your nation experiences a sudden loss of human capital: all the understanding of how the old law becomes useless, and people have to spend valuable hours learning to understand the new law. This is often time that could have been better spent doing new deals, or regrouting the bathtub. Mold doesn't take care of itself, you know.
I could quibble with the mold thing, as it seems to be taking care of itself quite nicely in the coffee cup I forgot behind my desk during tax season.
Ms. McArdle then points out how the candidates have banded together to violate all of these rules. It's short, and worth reading in full.
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FLP DISCOUNTS LIVE
May 07, 2008
Family limited partnerships (FLPs) became a popular way to reduce the taxable value of gifts and decedents estates in the 1990s. The tax law allows partners to value partnership interests at a discount from the underlying assets in the right circumstances; that's because sharing ownership of a property is more complex - and potentially more expensive -- than owning the property alone.
The IRS has overturned a number of FLPs in court. If you set up an FLP on your deathbed, or if you treat the partnership as your personal piggy bank after you have allegedly "gifted" interests in the partnership, the IRS is likely to have its way in court.
If you do things right, though, FLPs can still be a powerful estate planning tool. The Tax Court earlier this week allowed a Minnesotan to discount taxable gifts of real estate FLP interests by 33.9% for one year and 35.6% for another - saving the taxpayer somewhere around $2 million.
The Tax Court doesn't say much about the governance of the partnership, but it does say this:
Under provisions of the AFLP agreement, AFLP's net cashflow was to be distributed annually among the partners. The limited partners were not entitled to vote on matters relating to management of AFLP, no outside party could become a partner in AFLP without consent of petitioner as general partner, a limited partner could not sell or transfer any part of his or her AFLP limited partnership interest without consent of petitioner, and no real property interest held by AFLP could be partitioned without consent of petitioner.
So the general partner retained operating control of the entity, but it was supposed to distribute free cashflow. The IRS apparently didn't challenge the reality of the partnership, which leads one to assume that the partnership was operated like a business, rather than as a continuing piggybank for the donor.
The Moral? If you use an FLP for estate planning, you need to respect and abide by the agreement, run it like a business, operate it for other than tax-avoidance reasons, and you need to leave enough assets out of the partnership that you won't starve if you can't raid it.
Cite: Astleford, T.C. Memo 2008-128
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TRACKING YOUR REBATE
May 07, 2008
Kay Bell reports that the IRS has added a new website to check on the status of your Uncle Sugar's Crazy Fun Bux, also known as your stimulus rebate: Where's My Stimulus Payment?
While you're in the neighborhood, you can stop by the IRS "Where's My Refund" page. Iowa has a similar site.
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WHERE THERE'S A WILL, THERE'S A... TRUST?
May 07, 2008
Joel Shoenmeyer explains some of the basics of testamentary trusts at Death and Taxes.
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WHAT HAPPENED WITH THE COURTHOUSE VOTE
May 07, 2008
In today's Des Moines Register, an explanation of the defeat of the referendum to fund a new Polk County courthouse that strikes me as the right one:
The voters of Polk County no longer trust elected officials to spend their money. As we watch the cash go out for CIETC and the CIETC trial, why should we vote to give the county more money to fritter away?
Maybe people believe local government needed the cash if the city and county weren't making equity investments in sports bars.
Via State 29.
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TAX BLOG ALL-NIGHTER?
May 07, 2008
The TaxGrrrl promises a 24-hour blogging marathon on June 20th:
1, At taxgirl.com - and all over b5media - we will blog at least once per hour for each hour of the day beginning at midnight our time (I’m EST). Yep, that’s 24 hours straight blogging.2, NO pre-posting allowed. So, everything that is posted will be fresh - or as fresh as can be whilst sleep deprived.
3, Guest bloggers ARE allowed and are, in fact, highly encouraged.
It will benefit charity, if not TaxGrrrl's sanity.
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HOW TO THINK ABOUT THE GAS TAX HOLIDAY PROPOSALS
May 06, 2008
Megan McArdle shares the secret:
1. Go to the Department of Energy's Energy Information Administration page. Look at the refinery utilization statistics. And the world oil production figures. And, of course, the figures on gasoline consumption. They have all been cleverly marked on the page for just this purpose.2. Take one (1) frosty beer from the refrigerator. Those who do not have beer in the refrigerator may substitute a soft drink, a glass of white wine, or a hard cider. Do not attempt to replace the beer with Zima or wine coolers, however. These are known to cause your IQ to drop by 30 points.
3. Sit down in a comfortable chair with your beverage of choice.
4. Think for two minutes.
You too will be blessed, as if by heaven, with the easy answer: do not fool around with the stupid gas tax. No, I swear. It works every time.
There's more, and it's all worth reading.
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NO, WE CAN'T. AT LEAST NOT WITH STOCK.
May 06, 2008
If I had a dollar for every time somebody asked me if you can use corporate stock in a Section 1031 like-kind exchange, I'd have several dollars by now. A reader asks the question with a little different twist:
Can a 1031 seller purchase real estate in a "C" corp by purchasing all the stock?The "C" corp seller wants to sell all the stock rather then the real estate out of the "C" corp so they can avoid double taxation.
What I believe has happened here is that a taxpayer has sold property in a deferred exchange and has escrowed the proceeds. If this is all done properly, the taxpayer can direct the escrow company to purchase replacement property with the escrowed proceeds and distribute the property. The tax law will treat this as a tax-deferred Section 1031 exchange of the sold property for the property distributed out of escrow.
Unfortunately for the taxpayer, it doesn't work with stock. The tax law excludes "stocks, bonds, or notes" from eligibility for tax-deferred swaps under Section 1031 (although like-kind swaps with stock were available as recently as 1918).
A taxpayer could acquire the land with the escrowed funds from the corporation and still have a qualifying exchange, but acquiring the stock doesn't work.
The corporation owner could defer gain by exchanging the land out, but a 1031 deal does nothing to help avoid a second tax when he actually tries to take the cash out of the corporation.
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SCAMOLOGY
May 06, 2008
Kerry Kerstetter has mounted a nice specimen of an e-mail tax scam over at TaxGuru.net.
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A MAY TAX PARTY
May 06, 2008
The Carnival of Taxes is open at Kay Bell's place.
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THEY ARE UNCLEAR ON THE CONCEPT IN IOWA, TOO
May 06, 2008
So House Republicans in Washington are preparing to propose a $10,000 tax credit for first-time homebuyers -- outbidding the Democrats' $5,000 - $7,500 subsidy plan. The funny part? They call this plan "market based." From the Tax Policy Blog:
According to a press release from Rep. Lee Terry (R-Nebraska) (emphasis added):This Republican proposal offers a market-based plan with a tax credit and other reforms that will stimulate the housing market[....]So the idea is to use government tax policy to give subsidies to one group of people, paid for by extracting taxes from others, with the goal of distorting the decisions that would otherwise be made by individuals. That's the opposite of "market-based."
Republicans in the Iowa Legislature have the same blind spot. They think a subsidy provided through tax credits is somehow not a subsidy -- even though taking less tax from your friends or giving cash grants to your friends is the same thing. That's why there has been so little opposition to the dozens of special favor credits in Iowa, in exchange for high tax rates for those of us without lobbyists. Sure, the other party supports the credits (mostly) too, but they actually believe in big government, so they have an excuse.
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STIMULUS II: DEADBEAT RELIEF
May 05, 2008
Congress is endlessly creative when spending your money. TaxGrrrl reports on their latest brainstorm:
As tax rebate checks are slowly (with a huge emphasis on slowly) making their way to taxpayers, Congress is considering a second round of relief. This relief would be targeted to homeowners facing foreclosure as well as increased spending on bridges, roads and transit systems.
So - you buy a house you can afford so your tax money can go to careless people in bigger houses than you have, many of whom make more money than you do.
Oh, and "bridges, roads and transit systems." Because the economy needs more bridges to nowhere and light rail systems nobody uses.
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THE ONE WHO PAYS THE PIPER CALLS THE TUNE
May 05, 2008
The Tax Policy Blog points out a potential downside for those who use your money state film credits to finance their projects.
A New York Times article today shows how politicians in Canada are trying to use the subsidies of film tax credits to censor film content by giving only certain films the handout. Here's a clip.
Most Canadian films and non-news television programs apply for a government cash payment, which is described as a tax credit, to offset some of their labor costs. Sandra Cunningham, the president of Strada Films of Toronto and chairwoman of the Canadian producers’ association, said the payments typically cover about 10 to 12 percent of a production’s budget.To receive that money, filmmakers apply in advance for a certificate declaring their project sufficiently Canadian. The government’s payment, however, does not arrive until the film or television series is completed and it is again reviewed.
How might this play out in Iowa? Maybe all films would have to show all vehicles fueling up with E-85, no films could show indoor smoking, hog manure would be odorless, and legislators would have to be portrayed at smart. No, scratch that last one; fiction can only stretch so far.
How many brave, independent filmmakers will defy the government and turn down government money to protect their independence? I estimate approximately zero.
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CALIFORNIA FRANCHISE TAX REFUNDS
May 05, 2008
California's courts have struck down that state's outrageous gross-receipts-based fees. The Golden State tried to slap many LLCs with a $10,000+ tax if they had even minimal connection to California.
Russ Fox explains how out-of-state LLCs that have paid the fee can claim their refund.
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GARAGE SALE TAXES?
May 05, 2008
Kay Bell explains.
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WESLEY SNIPES WAS GUILTY OF WHAT?
May 05, 2008
For some reason I don't think an accountant would have heard this question the same way Hugh Hefner's girlfriend did.
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