For example, in Minnesota the tax authorities found a tax evader after he announced on his MySpace page that he was returning to his home town to work and mentioned his new employer.  Genius!

Agents in Nebraska caught a DJ after announcing one of his gigs.  Brilliant!

California caught wind of a rigger of sails through an on-line thread to collect a 4-figure sum.  Outstanding!

Personally, I love these stories.  Can’t get enough of them.  Of course, I also watch all of the “Caught in the Act” and “World’s Dumbest Criminals” episodes I can.

Back in the real world, Tom Quinn and I help people with their IRS, Rhode Island and Massachusetts tax problems on a daily basis.  If you owe the IRS, Rhode Island or Massachusetts taxes, contact us at 401-421-5115 or by e-mail at mmclaughlin@mclaughlinquinn.com or tquinn@mclaughlinquinn.com for more information on how we can help you.

On December 19, 2007, President Bush signed the Energy Independence and Security Act of 2007 into law.  This law had been approved a day earlier by 314 Representatives and on the previous day by 86 Senators.  Included in the many provisions of this law is a requirement that all incandescent lightbulbs in America be phased out between 2012 and 2014 in favor of compact flourescent lamps (CFLs).  Ostensibly, ths change will help America gain its “Energy Independence” and enhance our “Security.”  The other thing it will do is require all Americans to replace the lights bulbs that we are used to in exchange for CFLs.

A well-known lighting consultant, professor and artist has written a recent article on this topic in the Wall Street Journal explaining why the light emitted from CFLs is inferior in many ways to the light from traditional light bulbs, and the other problems and costs associated with converting to and using CFLs.  Click here for the full article, which explains why the Law of Unintended Consequences always applies to new legislation and what the impact will be to most Americans.  I won’t give away the answer, but it’s does not bode well for us.

Not to mention to the problems associated with the mercury contained in CFLs.  CFLs operate more energy-efficiently because they use mercury, a known harmful substance.  Click here for more information about CFLs and mercury, including the 2-page guide explaining how to clean up a mercury spill in your home that will occur when a CFL breaks.  “Step 1:  Have people and pets leave the room, and don’t let anyone walk through the breakage area on the way out.  Open the window and leave the room for 15 minutes or more.  Shut off the central/forced air heating/air conditioning system, if you have one.”  Sounds safe to me.  And, you know that the average person, or less-than average person, will, I’m sure, know about and follow all of these safety guidelines.  Click here for the EPA’s guidelines to safe disposal of CFLs.  Better follow these “guidelines” or (i) our landfills will become saturated with poisonous mercury, seeping into our water supply and (ii) the EPA police could track you down.  The good news is that I doubt any of the manaufacturers will ever get sued (clas action) by those who are harmed (or not) by the leaking mercury.

Hope to “see” you in 2014!

According to the Wall Street Journal, the Democrats in the Rhode Island legislature increased spending this year by 12% while requiring the Governor to cut spending by around $68 million.  The Governor is utilizing these furloughs as part of his plan to cut spending.  Naturally, the state employees unions have vowed to fight this furlough, and they may win.  Click here for the full Wall Street Journal article.

Whether or not the unions prevail, tax experts are concerned about the impact on taxes in the Ocean State.  The Governor and the Legislature already raised the tax rate on long-term capital gains from 1.67% to 9.9%.  Given their reluctance to actually cut spending or to take any sort of business-friendly measures which would increase the base upon which the state income tax is calculated, the Legislature may see no other option than to increase the tax rate (directly or indirectly) on income.  They could, of course, increase other tax rates, such as the sales and use tax, or broaden the sales and use tax base (e.g. to include services).  The Legislature and the Governor already imposed a new tax on Amazon.com and other on-line retailers.  We are still waiting to see how much additional tax revenue the state will receive after several on-line retailers withdrew from Rhode Island.

The tax attorneys at McLaughlin & Quinn, LLC are keeping an eye open and an ear to the ground monitoring any rumors or discussions of changes to the Rhode Island tax laws.  As soon as we hear anything, we will post an entry to the M&Q Blog or send out an e-mail alert.  If you are interested in receiving our e-mail newsletters and alerts, please contact Michaela Costa by e-mail at mcosta@mclaughlinquinn.com and ask to be added to our list.

In the meantime, business owners, investors and everyone else in Rhode Island will just keep operating under the current rules, while wondering who’s running Rhode Island.

Traditionally, individuals who did not report all of their income to the IRS faced the possibility of various criminal tax charges including tax evasion or the filing of a false tax return.  A taxpayer is required to disclose on an individual income tax return (Form 1040, Schedule B), whether at any time during the preceding year he or she had an interest in, or signature authority over, a financial account in a foreign country containing over $10,000. If so, a separate Form TD F 90-22.1 (“Report of Foreign Bank and Financial Accounts,” commonly known as an “FBAR”) must be filed with the IRS.

The failure to file an FBAR with the Treasury Department may be charged as a separate criminal offense if a willful violation has occurred.  While these charges are serious, the limitations on IRS resources and the difficulties in investigating assets located offshore traditionally limited IRS enforcement in this area.  However, a combination of recent legislation, changes in the case law, and newfound access to offshore information by the IRS and the Justice Department has changed the dynamics in this area substantially.

The IRS recently announced a settlement offer for those that voluntarily and timely disclose unreported offshore income.  Those meeting the terms of the offer will have to pay back-taxes and interest for six years, and pay either an accuracy or delinquency penalty on all six years. They will also pay a penalty of 20% of the amount in the foreign bank accounts in the year with the highest aggregate account or asset value. In other words, 20% of the highest asset value of an account anytime in the past six years. However, those who come forward on a timely basis will not face criminal prosecution.

Contact McLaughlin & Quinn, LLC Partner Moore McLaughlin, Esq., CPA for more details on this amnesty program at mmclaughlin@mclaughlinquinn.com or by calling 401-421-5115.  Time is of the essence.

Click here for a recent Wall Street Journal article discussing this issue.

Click here for Mr. Laffer’s latest Wall Street Journal editorial.