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Some (slightly) good news
May. 31st, 2005 10:18 pmNever let it be said that it's all doom and gloom here. In recent weeks, I've written a number of entries on "Perfectly Legal". Last Wednesday(6/25), the Wall Street Journal had some good news on the tax front.
One of the jet travel loopholes was closed last year. Companies can no longer deduct the difference between the actual cost of the flight and the value given on execs W-2 Also, personal use of corporate jets is receiving more scrutiny from the SEC. This appears to be a result of revelations of undisclosed perks from recent corporate scandals. Executives still pay far less for the use of corporate jets than the actual cost though. It's gotten so bad that the WSJ notes that some frequent flier execs get more in personal trip benefits than they do in salary.
The penalty for filing a frivolous tax return has increased from $500 to $5000. Why does this matter? Well, more severe penalties may deter people from attempting odd tax-avoidance ploys like claiming that the income tax is voluntary*.
It's good that the IRS is looking harder at these situations. I hope they will have the time and resources to follow through. Their 2006 budget includes an increase of 8% for enforcement, so that could happen. Remember, taxes that businesses and executives duck have to be made up somewhere.
*Yes, people do this. Some even brag about in newspapers. Only a few were investigated. See my first entry on "Perfectly Legal":
http://www.livejournal.com/~petardier/37360.html
One of the jet travel loopholes was closed last year. Companies can no longer deduct the difference between the actual cost of the flight and the value given on execs W-2 Also, personal use of corporate jets is receiving more scrutiny from the SEC. This appears to be a result of revelations of undisclosed perks from recent corporate scandals. Executives still pay far less for the use of corporate jets than the actual cost though. It's gotten so bad that the WSJ notes that some frequent flier execs get more in personal trip benefits than they do in salary.
The penalty for filing a frivolous tax return has increased from $500 to $5000. Why does this matter? Well, more severe penalties may deter people from attempting odd tax-avoidance ploys like claiming that the income tax is voluntary*.
It's good that the IRS is looking harder at these situations. I hope they will have the time and resources to follow through. Their 2006 budget includes an increase of 8% for enforcement, so that could happen. Remember, taxes that businesses and executives duck have to be made up somewhere.
*Yes, people do this. Some even brag about in newspapers. Only a few were investigated. See my first entry on "Perfectly Legal":
http://www.livejournal.com/~petardier/37360.html
