Senate: No Profiles In Courage Here
So get this: the Senate Finance Committee, under the “leadership” of Dem Max Baucus has ordered the cloak of secrecy to surround submissions of Committee members regarding the comprehensive tax reform study presently underway!
According to a recent memorandum from the Senate Finance Committee Tax Staff to Senate Committee members, all submissions of tax reform ideas will be held under lock and key – kept secret – until December 31, 2064! That would be about fifty years, for those of you who may be arithmetically challenged.
This all started, you see, when Baucus and ranking member Orrin Hatch (R-UT) wrote a letter on June 27, 2013 to their Committee colleagues, asking for their input as the Finance Committee moves forward with comprehensive tax reform. “America’s tax code is broken,” said the letter. “Colleagues, now it is your turn. We need your ideas and partnership to get tax reform over the finish line. In order to make sure that we end up with a simpler, more efficient and fairer tax code, we believe it is important to start with a ‘blank slate’ – that is, a tax code without all of the special provisions in the form of exclusions, deductions and credits and other preferences that some refer to as ‘tax expenditures.’”
But lest any Committee member be held to have publicly gored somebody’s ox (in suggesting abolition of a favorite deduction or credit), whatever the members put forth will be deemed confidential, and not disclosed for more than two generations.
How courageous of our elected representatives – we wonder why this hasn’t come up before.
And from our “don’t spend it all in one place” department comes a district court decision slapping down an heir who may have spent all of her inherited dough before the estate taxes were paid.
Seems Joseph L. Mangiardi passed away with an estate of over $8 million clams, of which the Revenooers were to have shared to the tune of about $2.6 million of estate tax. And showing uncharacteristic lenience, the government actually granted not one, but SIX extensions of time within which to pay the tax, based on the claim that the majority of the assets to be used to pay the tax were marketable securities whose value was depressed (due to market conditions), and the forced liquidation of these assets (for use in paying the tax) would result in significant losses.
Meanwhile, however, the taxpayer (daughter Maureen) and her co-trustees did not actually hold onto the securities, but instead engaged in active trading through all of the extension periods, and paid themselves hundreds of thousands of fees, eventually resulting in an insolvent estate, by the time the IRS lowered the boom, looking for the then total of over $3 million due to the government.
At the date of death, one of the decedent’s assets was an IRA, worth over $3.8 million which was automatically distributed to his beneficiaries, including each of his nine kids. Maureen’s share was a bit more than $400,000, which IRS claimed from her to settle at least part of the unpaid estate tax, on a “transferee liability” theory. Despite a few esoteric arguments raised by Maureen, however, the Court slapped her down in agreeing with IRS: pay up, sweetheart!
CONSULT YOUR TAX ADVISOR – This article contains general information about various tax matters. You should consult your CPA regarding the implications to your own particular situation.
Jeff Quinn, the author of this article, is a shareholder in Ashley Quinn, CPAs and Consultants, Ltd., with offices in Incline Village and Reno. He may be reached at 831-7288, welcomes comments at firstname.lastname@example.org, and invites readers to consider his other commentary at http://blog.nolo.com/taxes.