Author Archives: John

Is he really dead?

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January 15, 2012.

“Hello, Barry, this is Brian Peterson with the IRS. Thanks for sending over the file.” “You’re welcome”, responded the NTSB agent. “Did you ever determine the cause of the crash?”asked Peterson. Barry smiled, because there was no official determination of the crash.

“No, we made no final findings. You see this plane is very air-worthy, one of the safest in the air and they rarely go down. It might have been pilot error or hypoxia due to depressurization of the cabin. Lots of theories in our shop, but nothing definitive.”

“Barry, could Mr. Jones have faked his own death”, Brian asked hopefully. “How do you explain the dead body in the plane which matches the decedent’s description, dental records, and DNA, if it was a fake. And that was a very real plane crash. Now if you were to ask me if he crashed the plane on purpose to kill himself…” Barry’s voice faded off. “Nah, I’m sorry, that’s a real stretch, since the pilot parachuted out. Of course the Pilot might have wanted him dead or killed him, but that’s a stretch, too since he and the Pilot were close according to all witnesses.”

Even if it was murder, Brian thought, that doesn’t get us around the Estate tax since a murderer is not entitled to inherit from the estate, therefore, you can’t even make out a tax fraud case. Better to leave it up to the forensic experts like hot Laura, he thought.

Brian called the dentist, Sam McGonagle. “I understand that you faxed over the dental records for the late Sheldon Jones, is that correct?” asked Brian. “Absolutely, I have a digital image which I got from my offsite digital storage facility, since my hard files were burned in a fire”. “How are you certain that someone didn’t tamper with the records?” queried Brian hopefully. “As far as I know these folks have the state of the art security on their records. Doesn’t mean it couldn’t happen, but they didn’t report anything out of the ordinary to me,” responded McGonagle somewhat perturbed by the insinuation of some IRS sort. “Thanks for your help, who is your offsite storage company?”, responded Brian. “You’ll have to ask my secretary, I don’t know off the top of my head, they’re in New Jersey somewhere”.

Breaking News -Cash for Clunkers-Tax Issues

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We interrupt our tax tales with a breaking story. There is a lot of myth going around about the taxability of the Cash for Clunkers Program. Some news programs have said that you will owe income taxes on the credit. That is not correct. According to Section 1302(h)(2) of the Act creating the program the $4500 is excluded from gross income. Most state income taxes adopt the IRS definition of gross income. As a result there should be no income tax on the money received. However, for sales tax purposes, you would have paid full sales tax in many states for the purchase price of the car including the amount paid by the Government. Some commentators have gotten confused by this. But clearly there is no income tax on the Cash for Clunkers Program.  However, the dealers will pay tax on the rebates received by them, because it goes into their pocket as a gross receipt (this is of course off-set by Cost of Good Sold, inventory deductions, and other deductions).

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The coroner and the Auditor

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December 15, 2011

Brian Peterson opened up the file in front of him. A rich person died in 2010. Sheldon Jones. He looked at the death certificate saw Laura’s name on it and figured it would be a good excuse to call her as if he needed any. Things had been going well between them. He’d even gotten used to the smell of rubbing alcohol and formaldehyde on her.

“Hi Laura, this is Brian.” “Hey, how’s my favorite sexy IRS agent doing?”, Laura purred. “How many other sexy IRS agent’s do you know?” Brian fired back. “I’ll never tell”, said Laura with a mirthful wink in her tone. Brian changed his tone, “I’m sorry Laura but this is a bidness call. You did an autopsy on one Sheldon Jones.” “Yes, plane crash if I remember correctly, DNA and Dental records proved identity and date of death was when the plane went down. Body was burned badly, plane was owned by Jones, and the flight manifest reported that he was the passenger. The pilot apparently jumped out and Jones was unconscious and the Pilot could not get a chute on him.”

“Sounds like an open and shut case to me”, Brian said. “I’ll check with the NTSB and get their report on this before closing this file. Looks like this guy really died in 2010 and there is no trace of any doubt here.

A call to Dad

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July 1, 2011.

Christine could not restrain herself, she had just had a fight with her husband and needed to talk to someone, and Phillipe was not all that interested in listening to her complaining. After getting no satisfaction from her brother she called to Panama. “Hello, Dad?”

“Dammit, Christine, don’t call me Dad, don’t you know that these phones can be bugged. I am Lupe for the rest of my life, got it?” “Sorry, D.., uh I mean Lupe”, she responded. “I’m really upset because Freddy just called me a dumb bitch when I burned dinner!” She started to sob. The voice on the other end spoke soothingly too her with a bit of a central American brogue. “You know I love my favorite little girl. I know people down here now that can have him killed, would you like that?” “Oh stop it”, she cried, “now you’re making fun of me.” “No, just trying to make my favorite one laugh and put things in perspective.”

July 16, 2011.

“Sign here on page 1, Christine and sign this letter requesting prompt assessment. Okay we’re all done, I’ll copy it and get it in the mail today with all the attachments”, Roger Johnson told her. “You’re very lucky in a twisted way your dad died this year and not next year. It saved your family $175 Million in estate taxes. I know that’s small consolation to losing your dad, but at least you don’t have to pay the government, too.” “Thanks Mr. Johnson, you’re very kind to tell me that. I think my dad is probably happy about that too, where ever he is”, Christine responded.

A Funeral and a tax return

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November 2, 2010.

Laura Holden looked at the charred body in front of her. “5’10” height, weight 230 pounds. White man. Dental records match one Sheldon Jones. DNA records confirm it is Sheldon Jones per his physician. Cause of death, plane crash. Probably blunt force trauma to the head since the burned skin appeared to be post-mortem. Clearly, it was Sheldon Jones. Date of death November 1, 2010” She turned off the tape recorder massaged her long neck and called the funeral home, “he’s yours Robbie. I’ll have the death certificates to you in a couple of days”

November 12, 2009

The funeral for Sheldon Jones was other worldly to say the least. It was held at the West Zion Church outside of town. The children didn’t look all that upset for one thing. Some attributed it to their Christian beliefs, others figured they were happy to be rich. There were no eulogies either, other than the minister saying some points of personal privilege. The ashes were kept by the family for a private disposal at sea, so there was no graveside service.

July 15, 2011

Roger Johnson looked at the file in front of him. He had been tasked with preparing the Federal Estate Tax return for one Sheldon Jones. He pulled out the death certificate. “No surprise there, date of death November 1, 2010, plane crash,” he thought. He pulled out he appraisals of the multiple parcels of real property owned by Sheldon Jones. They did the three standard appraisal tests, income, replacement value and comparable sales approaches to get to the Fair Market Value. After adding up all the numbers, it totaled, $735 Million on the date of death, he had debts of $215 Million and a charitable deduction of $100 Million. “Boy, he sure died in the right year”, was the thought that raced through Johnson’s mind. “Wow, what a difference a year makes, $175 Million in savings on Estate Taxes”, he muttered to himself. He carefully filled out all of the pages of the Federal Estate Tax return. After finishing it, he took the return to Christine Jones to sign.