LA Flood Disaster: Links on Government Aid & Where to Donate

By: Philip Hackney
14021650_1231410703559771_2524920277260321497_n (1)I live in Baton Rouge, LA where I teach at LSU Law Center.  Baton Rouge and surrounding communities are currently experiencing unprecedented flooding. The devastation stretches from around the Louisiana-Mississippi border all the way over to Lafayette -maybe 100 miles across. This story does a nice job explaining the weather phenomenon that caused this massive flood event. Neighborhoods that have never flooded before in our recorded history are under 4 -6 ft. of water, and some higher than that. Almost the entirety of certain cities are submerged. The last data I had for my area is that 20,000 were displaced and 10,000 in shelters. I expect that number to go up over the week. Even though it has stopped raining, the flood waters cannot drain because the rivers are too high and cannot take runnoff from tributaries. I am fortunate to live in a house that has been spared from this devastating water. The picture on the left is of Gonzales City Hall underwater.

This is just a quick post on some resources for navigating the legal benefits of a disaster. I highly recommend the tremendous article by my fellow blogger Francine Lipman entitled Anatomy of a Disaster Under the Internal Revenue Code.  It discusses all of the income tax impacts of various benefits that you might apply for and receive. In many cases the Code excludes amounts you receive in disasters. The two most significant probably are gifts you might receive from family and friends. Those are excludable under 102 of the Code. More significantly, benefits from the government will often be excluded as qualified disaster relief payments under section 139 of the Code. The fact that President Obama declared this a disaster allows this provision to kick in for the affected areas. Continue reading “LA Flood Disaster: Links on Government Aid & Where to Donate”

DC Circuit Seems to have Decided IRS Violated Constitution Before Trial in True the Vote Appeal.

By: Philip Hackney

graphics-882729_1280In 2014, a District Court dismissed (based on 12(b)(6) and 12(b)(1) motions) the complaint of a number of conservative organizations who alleged that the IRS “targeted” them by subjecting them to greater scrutiny in their applications for tax exemption. The lead organization, True the Vote, sought 501(c)(3) charitable organization status; the others primarily sought 501(c)(4) social welfare organization status. The world became aware of this targeting controversy in May 2013 when Lois Lerner, the head of the Exempt Organizations division of the IRS apologized to the Tea Party and other conservative groups for how the IRS treated their applications. To this day Taxprof Blog continues the IRS Scandal post over three years later dedicated at least in part to this controversy.

The primary complaints were the second and fifth claims: (2)  the IRS violated the organizations First Amendment rights to freedom of speech, and (5) the IRS violated the Administrative Procedures Act. The District Court concluded that because the IRS had granted exempt status to these organizations, the complaints were moot. True the Vote appealed this dismissal to the DC Circuit Court of Appeals.

Last week the Circuit Court breathed new life into claims 2 and 5. Though the Court found that some of the complaints were moot (including Bivens complaints against IRS employees and a claim of violation of 6103 disclosure rules), it allowed claims 2 and 5 forward because it found that the IRS had not voluntarily ceased its unlawful actions.

In reading the opinion, I find astonishing that the Circuit Court appears to have already concluded, without trial, that the IRS acted unconstitutionally. I recognize that for a 12(b)(1) motion the court is to assume the complaint true, but the court appears to have done much more than make assumptions. I focus on this issue. Continue reading “DC Circuit Seems to have Decided IRS Violated Constitution Before Trial in True the Vote Appeal.”

Child Care in the Presidential Campaign

CCA-IG-CostsCompared_v1bToday, Donald Trump laid out a series of economic proposals. Included, naturally, were a series of tax proposals, which I assume we’ll address on this blog as time goes on. For now, I want to focus on just one of his proposals: easing the cost of child care.

While the cost of child care varies, it has risen dramatically, nearly doubling over the last 25 years. And although the cost of child care varies from state to state—and even from city to city—the numbers can be eye-opening. In Illinois, the average annual cost of child care for an infant and a 4-year-old is more than $22,000. At the same time, the median income for a single parent is about $24,000, and the median household income for married parents is about $88,000.[fn1] That means that the cost of child care for two children represents 25 percent of the median Illinois married couple’s household income, and fully 94 percent of the median income of a single parent.

Clearly, using averages and medians doesn’t paint an accurate picture of any given family’s situation. But in no state would child care costs make up less than 30 percent of a minimum wage-earner’s income. That’s a pretty dire picture. Dire enough, in fact, that the cost of child care is keeping women out of the workforce. (And note that it’s not just women who can afford to stay out of the workforce because of a spouse’s or partner’s income: 34 percent of stay-at-home mothers live in poverty, as opposed to 12 percent of mothers in the workforce.) Continue reading “Child Care in the Presidential Campaign”

“Taxman” at 50

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Updated lyrics are available here.

The Beatles’ hit song Taxman has just turned 50; it was released August 5, 1966 in the U.K. Taxman, written primarily by George Harrison, famously includes the lyrics

“Let me tell you how it will be
There’s one for you, nineteen for me
Cos I’m the taxman, yeah, I’m the taxman

Should five per cent appear too small
Be thankful I don’t take it all . . . .”

Apparently this song was at least partly inspired by the theme for the 1966 TV show, Batman! batman222june1970And, in the early 1980s, Weird Al Yankovic wrote a parody called “Pac-Man,” though it was not released  on any of his albums.

H&R Block used the Taxman song in a 2002 commercial literally showing only tax men: “It took an Act of Congress to pass 441 changes in the tax law. Will it take an act of God to understand them?” (There’s a different, more diverse version here.)

Did the Beatles really pay a 95% tax rate? According to a Bloomberg article, “The top rate for British taxpayers in the mid- Continue reading ““Taxman” at 50″

Rio 2016!

rioThe Rio Olympics start this weekend.[fn1] And, in spite of the catastrophe that the Rio Olympics may potentially be, we’ll be watching (in the same way John Oliver excoriated FIFA for 12 minutes before announcing that he was “still so excited” for the World Cup).

U.S. Olympians are likely to win a collective 100 or so medals over the next couple weeks. And, in addition to medals, winners will receive cash payments from the U.S. Olympic Committee—it will pay $25,000 for a gold, $15,000 for a silver, and $10,000 for a bronze. Continue reading “Rio 2016!”

Regressivity and Cook County Property Taxes

I was listening to “The Morning Shift” on WBEZ this morning, and they started talking about property tax. Now, property tax isn’t really my thing, but the story caught my ear for a couple reasons.

First, of course, I’m a homeowner in Chicago, so the recent property tax hike is salient enough that it’s worth some of my time. Second, as my wife pointed out to me, the assessment of property values has an aspect that seems tremendously regressive and, therefore, problematic. Continue reading “Regressivity and Cook County Property Taxes”

Examination of Allegations Against Clinton Foundation Part II

By: Philip Hackney

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A week ago I considered one of three allegations Rep. Marsha Blackburn made against the Bill, Hillary & Chelsea Clinton Foundation in a letter Blackburn sent to the IRS, FBI, and FTC. I found the first allegation stated nothing of significance to the IRS. I now look at the other two and find them significantly wanting as well. Recently, IRS Commissioner Koskinen sent a letter indicating the IRS would investigate these complaints. I conclude they fail to state any complaint actionable by the IRS.

The second and third Blackburn allegations seem to come from a book by Peter Schweizer called Clinton Cash. Both allegations suggest that Sec. Clinton provided large governmental benefits in exchange for donations to the Clinton Foundation and payments to Bill Clinton. Both of the claims, already made by Presidential candidate Donald Trump, regarding Laureate University and Uranium One have been rated False and Mostly False by Politifact. Thus, it is difficult to take these allegations seriously.

Nevertheless, there are two things I do in this post. First. I discuss the factual conclusions of others regarding whether there was a quid pro quo arrangement associated with the second and third allegations. Then, I look at how the tax law might treat such arrangements were they true. Continue reading “Examination of Allegations Against Clinton Foundation Part II”