Tax Law Archives - Page 38 of 41

Sin Taxes on Soda, Alcohol & Cigarettes: Congress’s Latest Vice

The Heritage Foundation: “So-called ‘sin taxes’ are fashionable in Congress because they fall on unpopular behaviors and activities. This makes them easier to increase than other taxes and a politically convenient funding mechanism for expansion of government programs. Sin taxes are an effort by Congress to curb behaviors that it does not favor. They also lead to higher deficits. Instead of raising taxes on unpopular behaviors and activities to fund its largesse, Congress should restrain spending to live within its means.”

Taxes currently being considered by Congress or recently enacted by Congress:

Soda tax
Alcohol tax
Cigarette tax – In early 2009, Congress passed a law increasing the federal tax on cigarettes from $0.39 to $1.00
Vehicle miles tax or an increase in the gas tax
Stock transaction tax

Obamacare: Buy Health Insurance or Face Fine & Jail Time

Wall St. Journal: “Chairman Max Baucus’s bill includes the so-called individual mandate, along with what he calls a $1,900 ‘excise tax’ if you don’t buy health insurance. (It had been as much as $3,800 but Democrats reduced the amount last week to minimize the political sticker shock.) And, lo, it turns out that if you don’t pay that tax, the IRS could punish you with a $25,000 fine or up to a year in jail, or both.”

Tom Barthold, the chief of staff of the Joint Committee on Taxation, confirmed the fine and possible jail time despite President Obama’s statement to ABC interviewer George Stephanopoulos two weeks ago that his health care plan does not contain any tax increases. After Stephanopoulos read the definition of “tax” from the dictionary, Obama said, “You can’t just make up that language and decide that that’s called a tax increase.”

Is Your Nonprofit at Risk of Losing Its Tax-Exempt Status?

A nonprofit organization that is exempt from federal income tax under Internal Revenue Code Section 501(c)(3) must follow IRS rules or the IRS can revoke its tax exempt status. If you are involved with operating or managing a nonprofit corporation, you should read ” Nonprofits: Are You at Risk of Losing Your Tax-Exempt Status?”

In 2004, the IRS studied 110 § 501(c)(3) organizations and found that seventy-five percent of them had violated federal tax law by engaging in political-campaign activities during the 2004 campaign period. The IRS learned that many of these organizations did not understand the broad scope of the political-campaign prohibition and that organizations’ leaders mistakenly spoke on behalf of their organizations rather than in their personal capacities separate from their organizations. Following the study, the IRS stated that any § 501(c)(3) organization that did not comply with federal tax law’s statutory requirements and restrictions risked losing its tax-exempt status.

As the 2008 campaign was in full swing, the IRS promised to step up its enforcement of § 501(c)(3) requirements. As a result, courts likely will face increased litigation related to § 501(c)(3) organization violations. This Note reviews the requirements and restrictions that are placed on § 501(c)(3) organizations, including the political-campaign prohibition. In addition, this Note proposes a test to assist courts, § 501(c)(3) organizations, and leaders of § 501(c)(3) organizations in determining when organizations’ leaders are acting or speaking on behalf of their organizations and when they are speaking in their personal capacities, exercising their First Amendment free-speech rights.

Arizona Legislature May Tax All Used Car Sales

Arizona Republic: The Arizona legislature is considering a new law that will require all sellers of used cars, including private sellers, to collect a 5.6% sales tax and pay it to the state.

October 15 Tax Deadline for Some Firms

Associated Press: “These are anxious times for some small-business owners who face an Oct. 15 due date for their 2008 income-tax returns. These owners got extensions of the deadline for filing their returns back in April but aren’t ready to file. Or, they can’t pay the government the money they owe. Some of them are just disorganized. Others might have a cash-flow crunch. No matter what the problem is, if you’re one of these owners, you must submit your return by the deadline or face big penalties for late filing. And not filing your return will only prolong the agony.”