Thursday, August 23, 2012

Ryan Paid Federal Tax Rate of 20% in 2011 on Income of $323,416


(Bloomberg) Republican vice presidential candidate Paul Ryan paid effective federal tax rates of 20 percent in 2011 and 15.9 percent in 2010, tax returns released Friday night show.
Paul Ryan
In 2011, Ryan and his wife, Janna, paid $64,764 in federal taxes on $323,416 of adjusted gross income. In 2010, the Ryans paid $34,233 in taxes on $215,417 of adjusted gross income.
Over the past two years, they have donated a total of about $15,500 to charities, including the Boy Scouts of America and St. John Vianney Parish in Janesville, Wis., their hometown.
Presumed Republican presidential nominee Mitt Romney announced Ryan, a Wisconsin congressman, as his running mate on Aug. 11. The Ryan returns were released by Romney’s campaign.
Romney so far has released only his 2010 returns, which showed he and his wife Ann paid a 13.9 percent effective federal tax rate on more than $21 million in income.
The tax rate paid by the Ryans topped Romney’s for that year, in part because a much larger share of income for the Ryans came from wages, rather than investments taxed at lower rates. The top marginal income tax rate is 35 percent while capital gains are taxed at 15 percent.
In 2011, Ryan reported $153,359 in wages, $33,153 in capital gains and $29,987 in dividends. Another $116,043 came from “rental real estate, royalties, partnerships, S corporations, trusts, etc.” Among the itemized deductions the Ryans claimed in 2011 was $16,143 in mortgage interest.
‘Several’ Years
The previous year, Ryan reported $153,741 in wages as well as $26,052 in dividends and $3,135 in capital gains. Another $39,013 came from “rental real estate, royalties, partnerships, S corporations, trusts, etc.”
Though Ryan said he gave Romney “several” years of tax returns during his vice-presidential vetting process, the filings released Friday night matched the number of returns Romney has said he is willing to make public. The former Massachusetts governor has pledged to release his 2011 return when it is completed, while rejecting calls from Democrats and some Republicans that he release additional years of returns.
Under pressure from Democrats and some Republicans to release more information about his personal finances, Romney said on Aug. 16 that he has reviewed his returns “and over the past 10 years, I never paid less than 13 percent.” He also said that “if you add, in addition, the amount that goes to charity, why, the number gets well above 20 percent.”
Obama Offer
President Barack Obama’s re-election campaign earlier Friday called on Romney to release at least five years of returns, saying it would let the issue rest if he did so.
Romney’s campaign manager, Matt Rhoades, rebuffed the offer, responding that “it is clear that President Obama wants nothing more than to talk about Governor Romney’s tax returns instead of the issues that matter to voters, like putting Americans back to work, fixing the economy and reining in spending.”
The average household paid 17.4 percent in all federal taxes in 2009, according to the nonpartisan Congressional Budget Office. That figure includes all federal levies, such as the Social Security payroll tax.
Obama and his wife, Michelle, paid 20.5 percent in federal taxes on $789,674 in adjusted gross income for 2011.
Vice President Joe Biden and his wife, Jill, reported paying $87,900 in federal taxes for 2011 on $379,035 in adjusted gross income for a 23.2 percent rate.

IRS Claims Flavor Flav Owes Nearly $1 Million in Back Taxes

Rap singer and reality TV star Flavor Flav reportedly owes $906,250.56 in unpaid taxes to the Internal Revenue Service.
The IRS has filed liens for unpaid taxes dating back to 2004 against the founding member of the hip-hop group Public Enemy. Flav owes unpaid taxes of $52,243.47 for 2004, $303,035.93 for 2005 and $550,971.16 for 2006, according to TMZ.
The 53-year-old rapper, whose real name is William Jonathan Drayton, Jr., starred in several reality TV series on VH1, including “The Surreal Life” and “Strange Love,” which chronicled his budding romance with actress Brigitte Nielsen, and “Flavor of Love,” in which he searched for romance after his breakup with Nielsen. He is known for his flamboyant outfits, including a gigantic clock that he often wears as a necklace when performing.
Flav has been in legal trouble before, including jail time for robbery and burglary, assaulting his girlfriend, shooting at a neighbor, drug charges, and driving with a suspended license.

Ex-IRS Agent Pleads Guilty to Ordering Hit Job on Tax Clients

A former Internal Revenue Service revenue agent and tax preparer has pleaded guilty to charges that he tried to hire a hit man to kill four of his former clients who were scheduled to testify against him in a tax fraud case.
Steven Martinez pleaded guilty August 10 in a federal court in San Diego to criminal charges including murder-for-hire, witness tampering involving attempted murder, solicitation of a crime of violence, mail fraud, filing false tax returns, Social Security fraud, aggravated identity theft, and money laundering. Martinez pled guilty to a total of 12 counts in the superseding indictment.
As part of his guilty plea, Martinez admitted that in late February 2012, he solicited a third party to murder four former clients who were victims of his fraud and were slated to testify against him in his pending criminal tax case. Martinez reportedly directed his limousine driver, Norman Russell Thellmann, to deliver cash to a hit man who had been promised $100,000 to carry out the hit job.
The purported hit man instead contacted the San Diego division of the FBI on Feb. 28 to report the murder-for-hire plot by Martinez. According to the complaint, a subsequent meeting between the third party and Martinez was recorded and videotaped by the FBI.
According to the complaint, Martinez told the would-be assassin “he could make him rich for the rest of his life, $100,000 cash, if he eliminated the lady in Rancho Santa Fe and the lady in La Jolla.” The third party said Martinez “suggested that the former employee use two different pistols for the murders and that he acquire a silencer.”
Martinez admitted in court that he tried to prevent the former clients’ testimony by offering the third party $100,000 to murder them. He admitted he provided the hit man with four written packets of detailed information about the former clients, including photos of the soon-to-be murder victims, their homes and personal information. Martinez admitted that once the murders took place, he would pay the perpetrator $40,000 in cash, followed by the remaining $60,000 in cash within 72 hours of the murders.
In addition, Martinez admitted that he filed false tax returns and defrauded his clients by stealing over $11 million in tax payments. Martinez admitted that he presented his clients with completed tax returns indicating that they owed a significant amount of tax. He requested that his clients write checks payable for the amount of taxes due and owing to an alleged client trust account, instead of directly to the IRS or the California Franchise Tax Board.
Martinez also convinced the same clients to write checks during the tax year for estimated tax payments to the same alleged client trust accounts. Instead of depositing the checks into a true trust account, Martinez admitted that he took the checks and deposited them into several nominee bank accounts. In an attempt to conceal his fraud, Martinez admitted that he filed a different set of false tax returns indicating that his clients owed little or no income tax. Martinez admitted that he converted approximately $11 million in stolen taxpayer funds for his own personal benefit, and used them to make home improvements, purchase real estate, purchase a beach home in Mexico, pay for the use of a private airplane, make investments of more than $2 million in other entities, and make payments of more than $2 million for his personal use credit cards and loans.
As part of his fraudulent tax scheme, Martinez admitted that he committed Social Security fraud and aggravated identity theft by using the Social Security numbers of his clients without authorization when he filed the false tax returns with the IRS. Martinez admitted he committed mail fraud by mailing the false tax returns to the IRS. Martinez also admitted that he laundered approximately $2 million through nominee bank accounts for his own business and personal use. Finally, Martinez admitted that he knowingly and intentionally filed false personal income tax returns for tax years 2004, 2005, 2006 and 2007.
This case is being investigated by Special Agents with the IRS’s Criminal Investigation division, and the Federal Bureau of Investigation. A sentencing hearing has been scheduled for Nov. 30.

Thursday, August 9, 2012

Parents Get Failing Grade...Again!

Many children aren’t learning much about money from their parents, a new survey shows.
Three in 10 parents never talk to their children about money or have had just one big talk with their children on the subject, according to a U.S. telephone survey conducted for the AICPA by Harris Interactive.
On average, children are 10 years old when their mother or father has their first conversation with them about money, and mothers are more likely to talk with children about money at an earlier age than fathers, the survey showed. Just 13% of parents surveyed talk daily with their children about financial matters.
Sixty-seven percent of parents surveyed strongly agree that they know enough about personal finance to teach their children good habits. Yet parents participating in the survey were more likely to have talked to their children about other important topics, including:
  • The importance of good manners (95%).
  • The benefits of good eating habits (87%).
  • The importance of getting good grades (87%).
  • The dangers of drugs and alcohol (84%).
  • The risks of smoking (82%)

Tax Strategy and the Health Care Law

Odds have now turned against those hoping that the health care law passed in 2010 will "just go away." The Supreme Court has spoken and legislative repeal seems more remote. On the other hand, President Obama has now indicated a willingness to improve the law and perhaps some of the more controversial provisions will work themselves out ... eventually.
The Treasury, Internal Revenue Service and Department of Health and Human Services also have considerable administrative flexibility in how they interpret and apply many provisions. This may be especially true following the Supreme Court's Mayo decision, which appears to allow agencies more leeway in interpreting statutory requirements. That said, some health care law provisions are already in place and others are set to start in less than five months, beginning in 2013. When faced with these realities, dealing with the law as it now exists, and within the parameters of the limited guidance already released, appears to be an appropriate course of action. Read More in Accounting Today.

Deloitte Overlooked Bank’s Transactions with Iran

Deloitte allegedly provided a bank accused of doing business with the Iranian government with a “watered down” independent report that omitted any mention of the suspicious transactions. Standard Chartered Bank is under investigation by the New York State Department of Financial Services, which accused the London-based bank of scheming with the Iranian government and hiding from regulators roughly 60,000 secret transactions, totaling at least $250 billion, while the bank reaped hundreds of millions of dollars in fees. Read more in Accounting Today.