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New England Patriot’s defensive back Malcolm Butler posing with the 2015 Chevrolet Colorado truck given to him by quarterback Tom Brady shortly after Brady had been awarded this truck for being the Super Bowl’s Most Valuable Player.
http://www.forbes.com/sites/ryanellis/2015/02/04/irs-to-steal-tom-bradys-super-bowl-mvp-truck/
Healthcare, Fiscal, and Tax
2/04/2015 @ 11:36AM
IRS Is Coming After Tom Brady’s Super Bowl MVP Truck
The world champion New England Patriots will celebrate with the city of Boston today in the now customary duck boat parade downtown. It would be fitting if an IRS agent was waiting for quarterback Tom Brady at the end of the route.
Specifically, he might want to talk about Brady’s new truck. You know, the 2015 Chevy Colorado he won as Super Bowl MVP. The same truck Brady wants to hand over to Patriots rookie cornerback Malcolm Butler, who won the Super Bowl on a last second interception.
The truck is considered a taxable prize under the Internal Revenue Code, section 74. It’s taxed at Tom Brady’s marginal income tax rate of 39.6 percent (plus state income tax, but I’ll leave the focus on federal here).
According to TrueCar.com, the fair market value of a 2015 Chevy Colorado is in the neighborhood of $34,000. This is likely an understatement, since it includes none of the options that Chevy no doubt added to the vehicle.
So Tom Brady will pay ($34,000 x 39.6 percent) in taxes, or $13,500 in income tax on this prize.
But the pain won’t stop there for the greatest quarterback in NFL history.
Don’t forget about the gift tax, Tommy
According to ESPN, Brady has decided to gift the truck to Patriots rookie cornerback Malcolm Butler, who made the game-clinching interception on Sunday night. This is not a taxable event at all for Butler–gifts are never taxed to the recipient.
Brady is not so lucky. He’s going to have to pay gift tax on this transaction. The tax code only allows you to give $14,000 tax free from any one person to any one person before assessing a donor level tax on the gift.
Assuming this will be Brady’s only gift to Butler this year, the transaction sets up a taxable gift for Brady of $20,000 (the $34,000 value of the truck minus the $14,000 gift tax exclusion). Assuming Brady has made at least $5.25 million of taxable gifts up to this point in his life (a safe bet), he will owe a 40 percent gift tax on this $20,000 taxable gift. That’s an $8000 gift tax on top of a $13,500 income tax on the truck, for a combined federal tax hit of $21,500.
That’s over half the value of the truck itself.
What about his game check?
Note that the above analysis is only for the federal income tax owed and gift taxes due on the MVP prize. What about the paycheck Brady collected for winning the Super Bowl?
According to CNBC, the NFL pays a player on a Super Bowl winning team a salary of $97,000 for the game. Brady doesn’t appear to have any Patriots team bonuses for the game, so this is likely the amount we’re dealing with.
Brady will face income tax at the top rate of 39.6 percent. In addition, since this is a wage, he will also owe the top Medicare tax of 3.8%, half of which will be picked up by the NFL. Put those together, and Brady will pay $42,000 in federal taxes on the game.
He didn’t get hit that hard by the Legion of Boom Seattle defense, but the IRS is a much bigger foe.
http://www.washingtontimes.com/news/2015/feb/3/irs-offers-extra-tax-refunds-to-illegal-immigrants/
IRS offers extra tax refunds to illegal immigrants granted amnesty by Obama
By Stephen Dinan
The Washington Times
Tuesday, February 3, 2015
IRS Commissioner John Koskinen confirmed Tuesday that illegal immigrants granted amnesty from deportation under President Obama’s new policies would be able to get extra refunds from the IRS for money they earned while working illegally, as long as they filed returns during those years.
Illegal immigrants who are granted the amnesty will be given official Social Security numbers, which means they can go back and amend up to three years of previous tax forms to claim the Earned Income Tax Credit, potentially claiming billions of dollars in additional payments they were ineligible for before the amnesty.
Mr. Koskinen said they will have to have already filed returns for those back-years, and there’s a statute of limitations that governs how far they can go back, but said the agency’s current interpretation of laws would allow them to claim the EITC credit retroactively.
“This is the problem you get into,” said Sen. Charles E. Grassley, an Iowa Republican who demanded a solution to the loophole. “The IRS’s interpretation of the EITC eligibility requirements undermines congressional policy for not rewarding those working illegally in the United States.”
The loophole stems from the way the IRS handles illegal immigrants. While the immigrants are not authorized to work in the U.S. legally, the IRS still wants to be paid taxes on the earnings of those who do work, and so it has issued millions of Individual Taxpayer Identification Numbers, or ITINs, to illegal immigrants, enabling them to pay up.
Some tax credits are only eligible to those with a valid Social Security number. Those who get valid numbers, however, can go back and claim them.
The IRS website says taxpayers have until April 15 this year to file back to 2011 claiming tax credits they didn’t ask for in their previous returns, and have until April 15, 2016, to claim tax credits from 2012.
Mr. Grassley asked Mr. Koskinen to go back and revisit his agency’s interpretation of the laws.
The Obama administration says up to 4 million illegal immigrants could earn “deferred action,” or a stay of deportation and work permits that would accompany it. It’s uncertain how many of those were paying taxes using ITINs, and thus could be eligible to claim the EITC.
The EITC isn’t the only tax credit to be ensnared in the immigration debate. The IRS already pays out billions of dollars a year to illegal immigrants under a program known as the additional child tax credit.
The IRS says the law is vague on who is eligible for the child credit, so to be on the safe side they pay it out to illegal immigrants.
Backers argue that the children claimed for the child tax credit are likely U.S. citizens, even if their parents are here illegally, and so it would be unfair to strip the money.
In 2010, the government paid out $4.2 billion to illegal immigrants who claimed the child tax credit, the IRS’s inspector general found.
Former disgraced chief of the Internal Revenue Service Lois Lerner tries to bust into a neighbor’s home in order to avoid answering a Reporter’s questions while she’s walking her dogs. Oh, how the mighty have fallen.
I.R.S. — They Got What It Takes To Take What You’ve Got (spotted on a bumper sticker)
[It was 27 years ago this month when I began my journalism career as a newspaper reporter with the Salem Observer in Salem, NH. One of the major issues that I was soon confronted with would be that community’s approval of a wood-chipping business known as, Granite State Natural Products.
The two major principles representing GSNP through the various Salem board and committee process were a couple of local attorneys: Frank Hekemian, who was a truly brilliant silver-tongue orator as well as an excellent lawyer; and Bruce Barron, who was also a pretty sharp cookie but appeared to be the ‘silent partner’ between these two when it came to addressing town officials at the public board meetings.
I guess some of the major concerns brought forth by the abutters and neighbors of the then-proposed GSNP operation, at that time, included potential noise pollution and violating the local wetlands area. Earlier on this same blog, I stated the many, many crazy exploits of then-Salem selectman Joseph W. Gagnon, who was truly a local politician that never encountered a controversy he didn’t like. Although Gagnon was a staunch advocate against the approval of GSNP, the wood-chipping company never sued the Town of Salem for defamation of character or anything else — thank God for small miracles. But Attorneys Hekemian and Barron had all their ducks in order, so to speak, and GSNP would eventually get the town’s approval to operate its business about a year or so later.
As for Yours Truly, I moved on to a somewhat more lucrative line of work within about two years after I started at the Salem Observer. When I ran into a politically-entrenched local yokel in Salem several years later, I was rather shocked to learn how GSNP wound up. The operation itself went “belly-up” soon after it started, which didn’t surprise me too much because I never could comprehend how there was any potential “big money” surrounding wood chips.
So then, this same individual told me that Atty. Barron had committed suicide mainly due to the constant harassment the Internal Revenue Service had initiated on both him and his family when he tried to claim his financial losses from the demise of GSNP on his Federal tax return. Aside from generating a fair amount of ink from newspapers like, The Cape Cod Times (see below), Barron’s situation with the IRS also got nationwide exposure from at least one of the more popular TV news magazines, such as Dateline, 60 Minutes, or 20/20.
From what my friend explained to me, the actual harassment by the IRS towards the Barron family was a lot worse than what this article indicates – but even what’s stated here is bad enough.
Why is our country so zealous on collecting its “fair share of taxes” supposedly owed by its own hard-working citizens, YET we’re so hesitant to secure our borders and then proceed to deport “illegal immigrants” who choose to commit heinous crimes against our people with no concern for anyone other than themselves? Heck, it’s too bad that the U.S. government isn’t even half as passionate on bringing some of these reckless illegal immigrants to justice as it was with “requiring” Atty. Barron to pay his fair share of taxes. Sure sounds to me like our country’s priorities these days are a wee bit screwed up.]
http://www.capecodonline.com/apps/pbcs.dll/article?AID=/19980505/NEWS01/305059522
Settlement gives woman peace after husband’s suicide
By
May 05, 1998
A Derry, N.H., woman who settled a $1 million lawsuit with the IRS this week in connection with her husband’s suicide two years ago in their Chatham vacation home says a huge burden has been lifted.
“It’s an enormous relief,” Shirley Barron said yesterday. “I’m free at last.”
The IRS agreed to excuse more than $400,000 in tax debt, release the lien on her Derry home, and pay her legal fees of $44,129, but admitted no wrong-doing. Mrs. Barron said the only thing the agency admitted during the lawsuit was that an agent had not followed proper procedures.
Mrs. Barron agreed to drop her $1 million lawsuit against the agency.
Bruce Barron, a 47-year-old Salem, N.H., lawyer, died of carbon monoxide poisoning after turning on his car in the closed garage of the couple’s home on Emery Lane in Chatham on Aug. 6, 1996. He had come to the Cape alone that day, and his body was discovered the next day when family members arrived for the weekend.
Barron had been struggling with the IRS for two years over back taxes and had just learned his bank was foreclosing on the Derry home because the IRS had placed a lien on it. At the time, the Barrons owed $330,000 in back taxes, penalties and interest that had mounted from an $80,000 loss in an investment in a recycling company in the 1980s.
Barron’s suicide note blamed the IRS and the bank. “The IRS and PBT (Pelham Bank Trust Co.) are bigger than me,” he wrote in his suicide note. “(The IRS) sits and does nothing and watches you die.”
Mrs. Barron said yesterday “I have no doubt” the IRS pressure and tactics led to her husband’s death.
The couple’s tax problems began five years ago when the IRS began trying to collect the back taxes on the lost $80,000 investment. Their accountant originally told them they could deduct the loss on their taxes, but the IRS notified them two years later they could not deduct it and would have to pay. The debt began mounting and had reached $350,000 at the time of his death, as a result of penalties and interest.
Mrs. Barron’s suit was one of the first to test the 1996 amendment to the Taxpayers Bill of Rights that allows taxpayers to seek up to $1 million damages if they can prove the agency “recklessly or intentionally” used unauthorized collection tactics.
In her suit, Mrs. Barron claimed the agency began forcing her husband’s law clients to pay the IRS instead of him, which humiliated him and harmed his business. She said he tried to negotiate a settlement with the agency when he could have cleared the debt by declaring bankruptcy.
One agent agreed to negotiate, but another agent delayed action, causing more debt to mount.
After Barron’s death, the IRS continued to pursue Mrs. Barron, seizing the Chatham home, her wages and retirement account, and placing liens on life insurance benefits from her husband. The agency lifted all the liens as part of the settlement.
The agency sold the Emery Lane home at auction last year for $219,000.
Mrs. Barron said the settlement by no means makes her a rich woman. She will continue to work two jobs as a librarian to make ends meet. And she will concentrate on sending her 18-year-old daughter to college next fall. “But at least it’s over.”
She said she has not been back to Chatham since her husband’s death. The memories of 15 years of coming to the Cape with him, as well as the way he died, still haunt her.
“It’s just too hard,” she said. “I miss it, I do. I loved Chatham and I loved Orleans. We planned on retiring there. Maybe someday I’ll be able to go back.”
She said since her situation started to get national attention, she has had calls from people all over the country who are having their own problems with the IRS, including many on Cape Cod.
“What happened to me could happen to anybody,” she said.
One Bad Decision Away From Homelessness 