Tuesday, August 6, 2013

All Blog Posts Now Under New Site

I have moved my blog over to FLGZ's main website. It can be reached by following this link. Please add your email address at the top of that page to subscribe to future blog posts.

Wednesday, July 3, 2013

Ohio Tea Party to Challenge Executive Salaries of Nonprofit Hospitals in Fight Against Medicaid Expansion

From the Associated Press:

In a confidential email sent to fellow Ohio tea party leaders and obtained by The Associated Press, Tom Zawistowski laid out a strategy for invoking a little-known IRS provision that allows citizens to challenge executive salaries and the nonprofit statuses of charitable hospitals. ...

Zawistowski identifies the hospitals as big backers of expanded Medicaid. His email said tea party groups will “make Medicaid personal” by publicizing large salaries of those seeking federal money to help the poor.

“The goal is to change the narrative,” Zawistowski wrote. Rather than have people wondering why tea party groups don’t want to help the poor, they should wonder why hospitals need more federal tax dollars to care for the poor when they’ve got plenty of cash on hand, he wrote.
Zawistowski said by phone that [Ohio Governor Kasich] has “hauled out” hospital CEOs at pro-Medicaid rallies that are making millions of dollars. In his emails, he singles out the $2.5 million salary of Cleveland Clinic CEO Toby Cosgrove, whose nonprofit hospital had more than $9 billion in assets in 2011.

“This guy’s making $2 million a year, pleading poverty to help poor people,” he said. “It just seems a little disingenuous to us in the tea party who volunteer for nothing. We’re curious to see their definition of poverty.”

Friday, June 28, 2013

Don't Make Section 501(c)(4) The Patsy of the IRS Scandal

The Visalia Times-Delta recently published an editorial of mine defending section 501(c)(4) organizations that have been vilified as of late as a reactionary response to the IRS tea party scandal.  I defend both their tax-exempt status and the fact that donors' names are kept confidential. 

Thursday, June 27, 2013

How the Prop 8 Ruling Threatens Prop 13 (and other future tax reforms)

California's ballot initiative process is vital to Californians and helps ensure that the will of the people is expressed, even when California politicians are uncooperative.  Over the years, ballot initiatives have been proposed and passed that have advanced both liberal and conservative causes.  In each of these cases, the initiative process was the only way to advance these issues as the legislature would not, or could not, pass effective legislation. 

While the recent Supreme Court case on Proposition 8 may have advanced gay marriage, its unintended consequence is to put into question the sustainability and power of future ballot initiatives.  Justice Scalia ruled, in essence, that the defenders of the Prop 8 initiative did not have standing to sue because only the State of California had standing to defend Prop 8 from attacks.  While Gov. Brown and Kamala Harris, the State A.G., put up a begrudging defense of Prop 8 at the trial level, they opted not to appeal the trial court decision finding Prop 8 unconstitutional.  Defenders of Prop 8 then stepped in and decided to appeal.  The California Supreme Court held that clearly, the Prop 8 defenders had standing and could appeal the decision and were essentially representing the interests of the State. 

Unfortunately, Justice Scalia's holding now weakens almost any ballot initiative--especially those that the Governor and Attorney General personally dislike. Consider the following hypothetical.  A homeowner sues alleging that Prop 13 violates their equal protection because their neighbor who bought their home 50 years ago pays much less than they do for their new home, despite the fact the homes are identical and have the same value.  Although merit less, the Governor and state AG could opt to not defend the suit.  All of a sudden, an injunction is issued finding Prop 13 to be unconstitutional.  The State decides it won't pursue an appeal and the defenders of Prop 13 have no standing in federal court to pursue an appeal either.

In a single opinion, Justice Scalia was able to do something many California politicians have been trying to do for year--weaken the initiative process. 

Monday, June 24, 2013

IRS Sent $7,319,518 in Refunds to a Sinlge Bank Account Used by 2,706 Aliens

According to a recent audit report by the Treasury Inspector General, the IRS sent $7,219,518 in tax refunds in 2011 to what where--at least on paper--2,706 different aliens who were not authorized to work inside the United States.  Unbelievably, all the funds were deposited into a single account.

In terms of strengthening fraud and theft detection, you would think that stopping this type of obvious abuse would be the "low-hanging fruit". 

Thursday, June 20, 2013

IRS FBAR Tax Forms Due June 30

Chances are, if you immigrated to the U.S. or if you travel frequently abroad, you have a foreign bank account.  However, what most don't know is that you must take active steps to notify the IRS of these foreign accounts even if they are not earning any income.  Failure to do so can lead to massive penalties.  In particular, the penalty for knowingly failing to file the requisite form is up to 50% of the total value of the account.

  What must be filed is referred to as an FBAR, and it must be received by the IRS by June 30th.  If you have failed to file FBARs in the past then there are ways to come into compliance at a minimal tax cost.  Keep in mind that foreign banks are now repeatedly turning over U.S. account holder information to the DOJ and IRS and so the notion of a "secret" foreign account (Swiss or otherwise) is a thing of the past.  If the IRS discovers the account before you come clean, it is likely that the penalties and interest will exceed the value in the account, even if absolutely no taxable income was earned by the account.