Have a Coke and a Tax

Coca cola taxes

When most of us hear the word “tax,” we immediately think “IRS.” It’s natural to associate those three-letter words with each other (even if “IRS” is an acronym and not a word). But our friends at the IRS are hardly the only tax collectors with their hands out for your money. State and local governments need love money too, and they don’t have as many options for raising it as Uncle Sam. So every now and then, someone makes headlines with a plan to tax something new.

Philadelphia’s incoming mayor Jim Kenney is the latest local official to propose quenching his city’s fiscal thirst with a new tax. His inaugural budget would impose a three cents per ounce tax on soda, juices, iced tea, and other sugary drinks. The mayor claims the measure would raise $400 million over the next five years. The issue has even bubbled up into the presidential race — Hillary Clinton supports the tax, while her challenger Bernie Sanders condemns it as disproportionately harmful to the city’s poor.

This isn’t the first time governments have tried carbonating their revenue by taxing soda — since 2008, 40 similar taxes have been rejected around the country, including twice previously in Philadelphia. Only one place, famously progressive Berkeley, California, has succeeded. New York Mayor Michael Bloomberg actually banned drinks larger than 16 ounces before a state court doused the rule. (Grateful Gothamites fondly remember it as “Bloomberg’s $#*@ing Big Gulp ban.”)

Now Philadelphia’s Kenney is hoping the third time will hit the sweet spot. But this time, he’s coming at it from a different direction. He’s not positioning it as a public health measure or using it to fight obesity or diabetes. He’s just looking to reinvest some of the soda companies’ profits into the communities where the biggest customers live. The $400 million would go towards funding universal pre-kindergarten, creating community schools, and renovating parks, community centers, and libraries.

School funding advocates and public health officials are all for it. New York’s Bloomberg has joined the fray in support. But naturally, Kenney’s proposal has drawn opponents. You’ll be shocked to learn that the American Beverage Association has spent $2.6 million to oppose it. (They poured $9 million down the drain fighting the Berkeley referendum.) Local Teamsters oppose it, too, arguing that flat soda sales will cost jobs. And plenty of city residents feel squeezed enough already — for example, there’s already a $2 per pack tax on cigarettes that helps fund local schools.

Political infighting is fierce, and council members are looking at a whole menu of alternatives. One council member proposed a 15 cent tax on beverage containers, designed to hit the people who drink mineral water and fancy kombucha teas just as hard as the people who guzzle Mountain Dew. She also introduced a “healthy beverages tax credit” to encourage stores to stock drinks worth drinking. Others are considering taxing (gasp!) diet sodas. But time is running out — council has to pop the top on a final budget by the end of June.

We realize that a three-cent tax on an ounce of soda won’t get in the way of your financial goals. But if you’re one of the millions who look somewhere besides coffee for your daily caffeine fix, it would be a constant reminder of the government’s power to tax. We never forget how destructive that power can be, and that’s why we work so hard to give you a plan to pay the least amount possible — and avoid the unpleasant surprise of a “shook-up” can! If you have any questions or concerns, please give us a call at (773)728-1500.

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Ch-ch-ch-ch-changes

Rock & roll fans lost an icon last month with the death of David Bowie just two days after his 69th birthday. Bowie made a career out of breaking molds, pioneering “glam rock” and reinventing himself constantly along the way. Rolling Stone magazine’s obituary hailed him as “one of the most original and singular voices in rock & roll for nearly five decades,” whose “flair for theatricality won him a legion of fans.” His last album, Blackstar, dropped on his birthday and immediately hit #1 on several Billboard charts.

Rock stars are famous for earning enormous sums of money, and blowing those fortunes on pricey mansions, pricey cars, and pricey entourages. (They’ve even been rumored to dabble in pricey drugs.) But Bowie’s fame made him a man who’ll take things over — he became one of rock’s savviest money managers, and that naturally included proactive steps to beat the tax man.
Bowie’s first wife Angie wrote in her autobiography that in 1979, Bowie was living large in California. But he found himself under pressure from $300,000 tax bill, and it seemed the taste was not so sweet. “These were tax debts accumulated over the past few years,” she recalled, “during which time vast quantities of taxable cash he had generated had vanished into various murky areas.” Strange fascination indeed!

Bowie had several choices. He could stay in sunny California, where combined federal and state rates topped out at 81%. He could head home to England and pay 83%. Instead, he sent Angie to her birthplace in Switzerland and arranged residency in the village of Blonay above Lake Geneva. Sure, it meant spending “significant amounts of time in Switzerland.” But Angie likened it to “work release from a very nice, court-ordered health resort,” with “an almost ludicrously low tax rate of about ten percent.”
In 1992, Bowie opted for a more modern love and married the supermodel Iman, who preferred the glamour of London and New York to the quiet charms of a Swiss village. Would that mean a return to high taxes? Of course not! He bought a 640-acre estate near Dublin in Ireland, which exempts artistic royalties from tax.

Then, in 1997, Bowie released his greatest financial hit: the so-called “Bowie bond.” Bowie needed cash to buy out his former manager. But he didn’t want to sell the rights to any of his songs. Instead, he transferred the copyrights into a special purpose trust which then issued $55 million in bonds secured by the royalties to the songs. By borrowing against those future royalties rather than selling them, he was able to take tax-free cash. Bowie’s deal made him a hero for artists looking to securitize future royalties. It even offers significant estate-tax advantages — an artist’s heirs can pay estate tax on their intellectual property without having to sell it.

How well did Bowie’s moves succeed? Time may have changed Bowie, but in his golden years, he really did become a richer man. This weekend, reports surfaced that he left a $100 million estate, with half going to his wife and half to his children. He also left $2 million to his longtime personal assistant and $1 million to his daughter’s nanny. (We realize that half plus half plus $3 million equals more than the entire estate, but when you’ve sold 140 million (!) records, you can get away with that sort of math.)

Want to put the same smart tax moves to work for yourself? You sell the records and we’ll handle the rest! Seriously, though, you don’t need to hit #1 on the charts to pay less. You just need a plan. We are CPAs and Tax Preparers in Chicagoland . So call us at 773-728-1500  when you’re ready to “turn and face the strange”!

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We Bring Good Things to Boston

Way back in 1889, the inventor Thomas Edison and the financier J.P. Morgan put their heads together to create the Edison General Electric Company. Just seven years later, it was one of the original twelve companies listed on the new Dow Jones Industrial Average. Today, GE is the fourth-largest company in the world. It’s the very model of a modern “multinational,” with 350,000 employees generating $150 billion in annual revenue from jet engines, financial services, clean energy, life sciences, appliances and lighting, and railroad equipment.

 
Naturally, all that money sloshing around attracts the tax man’s attention. GE files literally thousands of tax returns every year, for every country in the world (or at least every one that requires a tax return), every state in this country, and more cities than you can name. Their federal Form 1120, which is the corporate equivalent of your Form 1040, runs over 50,000 pages — and it gets audited every single year. So naturally, GE works hard to avoid paying anything more than it has to. The New York Times reports that the company’s tax department “is often referred to as the world’s best tax law firm,” and its staff of 975 lawyers takes advantage of every trick in the book to pay the legal minimum. And all that work pays off — from 2008 to 2012, the company paid zero federal corporate income tax.
40 years ago, GE moved its headquarters out of Manhattan to suburban Fairfield, Connecticut, a WASPy town on the coast of Long Island Sound. But last year, Connecticut legislators adopted a budget that raised taxes by $1.9 billion statewide. The very next day, GE chairman Jeffrey Immelt stamped his little foot and said “I’m taking my ball and playing somewhere else!” Who would have expected him to wind up in the commonwealth formerly mocked as Taxachusetts?

 
That’s right, GE has announced they’re moving their headquarters and 800 jobs to Boston’s Seaport District neighborhood. (No word yet on whether the company’s Yankees fans will be expected to start rooting for the Sox.) The city’s concentration of elite universities and innovative tech firms was the main draw. But city and state officials seasoned that chowder with one of the richest incentive packages in Massachusetts history, too.

 
It seems that old “Beantown” offered up to $25 million in property tax breaks. Massachusetts state officials have added up to $145 million in grants, infrastructure improvements, and help with real estate acquisition costs. But the brightest light of all is a special discount on state corporate taxes.

 
Massachusetts imposes a corporate excise tax of $2.60 for every thousand dollars of Massachusetts tangible personal property or taxable net worth, plus 8.0% of net income attributable to Massachusetts. But the state offers what they call a “single sales factor apportionment” break to three specific industries: defense contractors, mutual fund managers, and manufacturers. That break lets eligible companies pay tax solely on their in-state net income. The state’s Department of Revenue reports that this break saved qualifying companies over $3 billion in tax from 1996 to 2011. GE has confirmed that they plan to cash in on the same break moving forward.

 
Now, you probably don’t have the option to simply pull up stakes and move just to save some tax dollars. The good news is, you don’t have to move to pay less. You just need a plan — the same sort of plan that lets GE minimize its tax burden. So call us, we are Chicago Accountants and Tax preparers,   at 773-728-1500 when you’re ready to pay less, and keep rooting for the home team!

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Spinning Garbage Into Gold – Tax Planning Chicago

Centuries ago, medieval alchemists used all the technology at their disposal to try to transform base elements like lead into precious substances like gold. Occasionally they even succeeded! Alas, in most cases, transmutations that seemed too good to be true turned out to be just that, and alchemists who tried to pass off their fools’ gold as the real thing could count themselves lucky if jail was all they got.

Today, a new breed of financial alchemists use all the resources at their disposal to turn ordinary financial transactions into tax-advantaged gold. Occasionally they, too, even succeed! But alas, in too many cases, transactions that seem too good to be true also often turn out to be false — or even fraudulent — and our intrepid schemers are glad that the worst they face is jail.

Joseph Furando, of Montvale New Jersey, is a thoroughly nasty piece of work who came up with a can’t-miss business idea. Biodiesel fuel is made from renewable resources like soybean oil and used restaurant grease. It qualifies for two valuable tax credits — a “blender’s tax credit” of $1 per gallon, plus a “renewable identification number” that manufacturers can use to show compliance with federal renewable fuel obligations. It’s not especially glamorous, but the tax credits make it a predictably profitable proposition.

Furando’s lightbulb idea was to take biofuel that had already qualified for those credits in New Jersey, truck it to a different blender in Indiana, then re-certify it to qualify for the credits a second time. Naturally, he dubbed his scheme “alchemy.” And for two years, life was good. Furando sold 35 million gallons of his fraudulent fuel and spun $56 million in profits. He poured that money into a Ferrari and other cars, a million-dollar home, artwork, a piano, and two biodiesel-fueled motorcycles. (He probably had an enviable pinky-ring collection, too.) Unfortunately for Furando, his scheme attracted the wrong sort of attention, from people like the FBI, the IRS Criminal Investigation unit, and the EPA’s Criminal Investigation Division. (I bet you didn’t know the EPA even has a criminal investigation division.) No need to bore you with the Court TV details — last week, Judge Sarah Evans Barker sentenced Furando to 20 years in the pen and ordered him to pay $56 million in restitution.

And why do we call Furando “a thoroughly nasty piece of work”? For starters, prosecutors claim he threatened to kill anyone who ratted him out. He also has a history of casual violence, like denting a wall with one employee’s head and telling another employee’s mother, “Young guys like your son are found dead in ditches all the time in New Jersey.” When law enforcement officials executed a search warrant on his home, they found 46 firearms, two sets of brass knuckles (because, hey, you can only use two at a time, right?), and three switchblade knives.Surely Furando must have had a mother who loved him. Surely she must have told him “crime doesn’t pay.” Unfortunately, some of us have to learn our lessons the hard way.

The good news is, you don’t have to be a sociopath to take advantage of valuable tax credits. You just have to know where to look. So call us on 773-728-1500 when you’re ready to make sure you’re not missing out on your fair share of these opportunities! We are CPAs and Accountants in Chicagoland.

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Vive le Tax!

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This year, as usual, millions of American tourists took advantage of summer vacation to travel abroad. Favorable exchange rates made European destinations especially attractive. Seeing Old World cultures gives us perspective that we just can’t get when we load up the family truckster and head for Disney World. The sights, the sounds, and the great big smells we encounter abroad shed new light on our ordinary lives. New languages, new governments, and even new taxes can prompt us to reconsider our place in the world.

Take Paris, for example. France is the most popular tourist destination in the world, and the City of Light sees almost 2 million American visitors per year. So what sort of tax system do visitors to Paris encounter?

Income taxes, Sales Tax and Accounting are the first place to start. We don’t see them, of course, but our French hosts certainly do! Impôts sur le revenu start at 14% on taxable incomes over €9,691 (about $10,800) and rise to 45% on amounts over €151,956 ($169,400). There are also surcharges on incomes above €250,000, and again at €500,000.

Income taxes, Sales Tax and Accounting are just the start. French taxpayers also shell out 7.5% for their version of Social Security, a 0.5% “social debt” tax, plus 3.4% in “additional sampling social contribution” and 1.1% in “solidarity labor” tax on investment income. And that’s all before they pay their local professional taxes, residence taxes, and land taxes!

That may sound like a lot. But French employers have even more to grumble about. Employers pay 13.1% of their employees’ wages for medical and disability programs, 5.4% for parenting benefits, 4% for unemployment programs, and at least 18.2% for retirement benefits. Granted, that first 13.1% replaces much of what American employers pay for health and disability insurance. But you can certainly see why the Parisians think twice before deciding to hire someone new. Oh, and don’t forget the 33.1% corporate income tax!

No visit to Paris would be complete without a pain au chocolat at a sidewalk cafe or a late-night degustation of foie gras, escargot, and cheese. The good news is, the price you see on the menu is the price you actually pay. Value-added taxes (which take the place of our sales taxes) and even service charges are included in the marked price. It’s customary to leave a small amount of cash (5% or so) as a tip. But it’s reassuring to know that when the snooty waiter brings you l’addition and sneers at your American Express card, you won’t have to calculate the usual 15-20% that we tack on here. (Go ahead, have an extra macaron, they’re delicious!)

We’re not done yet. France levies an impôt de solidarité sur la fortune (wealth tax), starting at 0.55% on net worth over €790,000 and rising to 1.80% on fortunes over €16,540,000. The wealth tax only raises about two percent of the country’s revenue, but it’s quite controversial — some consider it a symbol of worker solidarity, while others object that it encourages the wealthy to leave the country. Last but not least, droits de succession et de donation (gift and estate taxes) climb as high as 60%, with no unlimited marital exclusion like we enjoy here in the U.S.

Here in the states, we complain that our taxes are too high. But a quick look at the French tax system reveals that liberté, égalité and fraternité don’t come cheap, either! Fortunately, our tax code is stuffed like a crepe with all sorts of deductions, credits, loopholes, and strategies to cut your bill. So call us when you’re ready to pay less, and see how much more you can put towards your dream vacation!

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A Tax in a Pineapple Under the Sea

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You know what’s even worse than paying tax on money you make? Try taking a loss on money you lose. Make $100, pay a 40% tax, and you’ve still got $60 left. But lose $100, take a tax loss, and you’re still out your $100. Yeah, you can deduct it against future income. But it’s kind of like those “mail-in” rebates you get when you walk out of Staples with a new printer. It sounds good when you’re still in the store. But in the back of your mind, you realize you’ll probably never actually mail it in.

It’s no fun if you lose money in a bad investment. It’s no fun if you get ripped off in some sort of fraud. It’s even worse if you get ripped off in an investment fraud! And that brings us to this week’s story, which starts out in the underwater city of Bikini Bottom.

SpongeBob SquarePants is a kids’ cartoon chronicling the adventures of a sponge named Bob, who lives with his pet snail Gary in a pineapple on the ocean floor. (If you’re a parent of a young child, you can just skip ahead to the next paragraph.) SpongeBob has become Nickleodeon’s most popular series, squeezing up a boatload of awards, and spawning two movies. In 2011, mycologists working in Malaysia even discovered a new species of fungus in the Bolotaceae family which they named spongiforma squarpantsii.

With a franchise that successful, every huckster within 20,000 leagues wants a SpongeBob tie-in to promote their business. One of those hucksters was a company called SpongeTech. Don’t let the “tech” fool you; these guys were in the decidedly low-tech business of selling soap-filled sponges, including a SpongeBob SquarePants model filled with baby soap. But their real business was soaking investors — and after all the hype was washed away, SpongeTech was just another penny-stock scam. Scratch that — as one reporter put it, “SpongeTech was no ordinary pump-and-dump penny-stock scheme; it was, to play on Churchill’s famous definition of Russia, a fraud wrapped in a stock-market rig inside a money-laundering conspiracy.”

Robert and Penny Greenberger were two of those unlucky investors who watched their “investment” in SpongeTech circle down the drain. By the time the company filed for bankruptcy, the Greenbergers had lost $569,220. In 2010, they wrote the capital loss off on their taxes. Which was fine, except for one thing. They can carry that loss forward to absorb future gains. But they can only deduct $3,000 per year against their ordinary income. At that rate, they’ll still be writing it off in the 23rd century.

But theft losses are deductible against ordinary income. Right now! So, in 2012, the Greenbergers amended their 2010 return to claim a theft loss, and asked the IRS to send them a refund for $177,102. The IRS said no, and everyone sailed off to court. Last month, Judge James Gwin ruled that, to prove theft, the Greenbergers had to show two things: 1) that SpongeTech’s “nauty” scammers acted specifically to take their money through fraud, and 2) that the Greenbergers had transferred their property to the thieves. Unfortunately for our losing investors, they had bought their stock on “the open market, without any knowledge of who was on the other side of the transaction.” And with that, he sank the Greenbergers’ case.

Remember when you were a kid and your mom told you not to buy something just because there was a cartoon character on it? She was right, and she would tell you the same thing about your portfolio. The most important lesson here may be to make the right financial decision first, then find the most tax-efficient way to do it. So call us for help — we Chicago CPA are here to help you clean up your messiest financial mistakes!

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Smoke ‘Em If You Got ‘Em

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Every year, the IRS Criminal Investigations unit (IRS-CI) releases a surprisingly entertaining report detailing their efforts to protect the Treasury from scammers, fraudsters, and cheats. This year’s edition reveals that, due to budget cuts, activity is actually down. In 2014, IRS special agents initiated 4,297 criminal investigations (down 19.1% from 5,314 in 2013) and recommended 3,478 prosecutions (down 20.4% from 4,364 in 2013). There were 3,272 indictments and 3,110 convictions, which shows the IRS won’t take you to criminal court unless they’re pretty sure they can really nail you to the wall. And 80% of those who were convicted won themselves an all-expense paid trip to a federal penitentiary.

IRS-CI targets all sorts of misbehavior and shenanigans: Swiss banks, corrupt politicians, identity thieves, and crooked tax preparers. They also cooperate with other federal agencies, helping the Drug Enforcement Administration catch drug smugglers and the Department of Homeland Security block funding for terrorists. But some of the most entertaining stories fall under the “general tax fraud” category. Here are four to brighten your April 15:
• Smoke ’em if you got ’em: Billy Gene Jefferson claimed over $12 million in federal and state historic tax credits for rehabilitating a former Philip Morris tobacco factory and ten other buildings, then sold the credits to investors. Turns out he lied about how much he paid for the renovations. After Jefferson ‘fessed up to his fraud, the court released him on bond to sell properties to pay restitution. But he used his freedom to bury up to $2.5 million in cash in a PVC pipe behind his house, blow $2.15 million on trips to Vegas, and steal his brother’s identity to book a one-way charter flight out of the country! For his efforts, Jefferson will spend the next 20 years in an unrenovated facility where residents use cigarettes as currency.
• God hears all prayers? Archie Larue Evans was pastor of the Tilly Swamp Baptist Church and owned a gold and silver business in Florence, South Carolina. Evans sold his parishioners “investment contracts” paying higher interest than the piddly amounts they were earning at the local banks. The banks may not have been paying much interest — but they also weren’t running Ponzi schemes. Now, while we don’t know if the pastor confessed his sins to God, we know he didn’t report anything to the IRS. Now Evans will get to spend the next seven years ministering behind bars.
• Death and taxes: They say that nothing in life is certain except death and taxes. A group of six defendants in St. Louis, led by a disbarred attorney, found a way to roll both of those burdens into a single con. For 15 years, the group sold prepaid funeral contracts to 97,000 customers — promising to keep their money in a secure trust or insurance policy as required by state law. Instead, they “made use of funds paid by customers in ways that were inconsistent both with its prior and continuing representations and with the applicable state laws and regulations.” (That’s what prosecutors call it when you use your customers’ money to pay for a $16 million mansion in Nantucket, a charter yacht, and family vacations.) And because you’ll ask: no, they didn’t pay tax on the loot. The conspirators will spend up to 115 months behind bars, and owe their victims a cool $435 million. (Let’s see, now . . . that’s 11 cents/hour stamping license plates times how many hours?)
• Practicing “law” without a license: Diane Niehaus managed a bank in Centerville, Ohio, where her elderly customers entrusted their money. Despite that trust, she forged all sorts of documents, including fictitious gift letters and fraudulent powers of attorney, to steal over a million dollars from their accounts. She used the money to buy a $460,000 house and a different car for every day of the week. And of course, she forgot to tell the IRS about her new side venture. Oops! Now she’s spending five years at a prison camp in West Virginia, where she’ll get to discover if orange is really the new black.
Look, we know paying tax bites. But you don’t have to cheat to bite back. You just need a plan and our tax preparers can help you. There’s no shortage of court-tested, IRS-approved strategies for saving. So if you haven’t asked us about our planning service, what are you waiting for? You just have to call us, Chicago Accountant at 773-728-1500 and we will do the rest.

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The Tax Man Runneth

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The 2016 presidential election is 20 months away. Sadly, for those of us who don’t watch C-SPAN for fun, that basically means it’s right around the corner. (Keep a sharp eye out for negative campaign ads, coming soon to a TV near you!) Candidates are already lining up donors and hustling voters in early primary states like Iowa and New Hampshire. If it seems like some of them have been running since the end of the last election, it’s probably because they have.

Americans like promoting military heroes to the White House. George Washington won the Revolutionary War and became the “father of his country” before assuming the Presidency. Ulysses S. Grant won the Civil War, and did it with a cocktail permanently occupying a space in his hand, too. Dwight D. Eisenhower defeated the Nazis. ( Of course, generals who aim to become Commander-in-Chief usually do need to win a war first, as Alexander Haig found out the hard way in 1988.)

Now there’s a candidate who’s ready to wage war on an enemy we can all unite against — America’s crazy and convoluted tax system. On March 5, Mark Everson announced he was throwing his green eyeshade into the ring and running for the Republican nomination. Not familiar with the name? Well, from 2003 to 2007, Everson served as 46th Commissioner of Internal Revenue. Oh yeah . . . that Mark Everson!

Everson, 60, graduated from Yale University before launching a career that has taken him from business to government and back to business again. In 2003, George W. Bush nominated him for the IRS position, which he held for four years. He left to become President and CEO of the American Red Cross, and now he’s vice-chairman for a tax consulting company.

Why is Everson running? He says he wants to make federal tax laws more consistent and less complex. (Where have we heard that before?) He would replace that tax for lower-income earners with a value-added tax. “He also says he wants to restructure entitlement programs, including Social Security; set a military draft and system of national service; and break up banks that are poorly managed,” the Associated Press reports.

And what does America’s former top tax collector think of his chances? He candidly admits he has less name recognition than the senators and governors eyeing a race. But he appears entirely serious about his run and plans to pour $250,000 of his own money into the race. “They’re raising serious money, but we’re going to raise serious issues,” he says. “I wouldn’t be doing this if I didn’t believe I’ve got a chance. I think that who becomes president is not up to Wall Street and the fat cats across the country. It’s up to the voters.”

Everson does have one stumble on his resume. In 2007, after six months helming the Red Cross, the board demanded his resignation after he confessed to an affair with a staffer. Everson divorced his wife and, while he hasn’t married his new love, the two are raising their six-year-old son together. “I’ve made mistakes, and I don’t think that that precludes one from going forward and trying to contribute,” he says. We’ll just have to see how closely the voters audit his behavior.

Time will tell whether Everson knows how to translate his IRS experience into a shot at the most powerful job in the world. But here’s one thing he knows for sure — if you want to pay less, you need a plan. So call us, Chicago Accountant at 773-728-1500 and our tax preparers will help when you’re ready for your plan. We’re sure you’ll enjoy your savings, whether you’re a Democrat, a Republican, or anything in between!

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Big News from Washington

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Americans have been complaining about income taxes since the IRS unleashed the first Form 1040 on us back in 1913. Sure, we all hate paying them. But as the tax code has ballooned to twice the length of the Bible (with none of the good news), preparing them has become just as big a problem. As Albert Einstein once put it, “the hardest thing in the world to understand is the income tax.” And if Einstein couldn’t wrap his enormous brain around those ridiculous Alternative Minimum Tax depreciation rules, what chance do the rest of us have?

Today, House Ways and Means Committee chair Paul Ryan (R-WI), along with Ranking Minority Member Sander Levin (D-MI), introduced their attempt to kill both of those birds with one stone: House Resolution 1040, the “Revenue Reform and Restructuring Act of 2015.” As its name implies, the bill is a rare bipartisan effort to repeal the current income tax system completely — and even eliminate the dreaded Internal Revenue Service.

“We know that everyone hates paying taxes,” Chairman Ryan said at a press conference announcing the bill. “But the way we calculate and collect them just adds insult to injury. Former President Jimmy Carter once called our tax code ‘a disgrace to the human race.’ I’m hardly a Jimmy Carter fan,” the Chairman added. “But he was sure right about that.”

“Look, folks, we’re not stupid,” said Representative Levin (as the assembled press corps snickered). “We’ve all seen the polls showing Congress is less popular than hemorrhoids, potholes, and dog poop. But can you guess what Americans hate even more? Just kidding — you’ll totally guess, because it’s the tax code. And we’re the ones who wrote it! So we asked ourselves, what can we do to solve the tax problem and restore our good name?”

The answer, of course, is to scrap the bloated income tax that so many Americans detest, and replace it with something completely new and different. But how to claw back that $2.2 trillion in revenue? The Committee debated various flat tax proposals, but those didn’t go far enough. They considered a sales tax or value-added tax, but that would fall most heavily on the poor. They even considered a carbon tax to discourage burning fossil fuels. Then the Texas delegation remembered that the Department of the Interior manages 155 million acres of public land for animal grazing. And those acres are filled with millions and millions of cows. Their idea: trade a few of those cows for some magic beans, and watch the beanstalks grow to the sky!

“Americans are hungry for something to unite around. They’re crying out for something they can all believe in,” said Ryan. “We’re hoping ‘Beanstalks to the Sky’ can join a ‘New Deal,’ ‘a Chicken in Every Pot,’ and ‘Give ’em Hell, Harry’ in America’s hearts and minds.”

IRS officials had no comment on the proposed legislation. However, one senior staffer, speaking off the record, said “We’re just as happy to get rid of those stupid tax forms as you are. But once we’ve transitioned to a beanstalk-based revenue system, they’ll need us all at the Department of Agriculture.” Across town at the White House, presidential spokesman Josh Earnest had even less to say — reports say that he stared blankly at a copy of Ryan’s speech and asked “Is this some sort of joke?”

What do you think? Are Ryan and Levin on to something? Is the “B.S.” (Bean Stalk) bill as credible as anything else coming out of Washington? Or are we just trolling you with an April Fools’ Day gag?

Either way, you know what’s really foolish? Paying more tax than you’re legally required! But until we really can pay our bills with magic beans, there’s only one way to pay less — and that’s to create a plan with one of our tax preparers. So call us, Chicago CPA at 773-728-1500 if you’re ready to pay less — and you’re not willing to wait for Washington anymore!

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Cleveland Rocks

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Cleveland, Ohio has historically been one of America’s most populous and productive cities, peaking as the fifth-largest back in 1920. Today, “C-town” is a shadow of its former glory, another Rust Belt factory town, best known for the Rock and Roll Hall of Fame. But last year, Clevelanders had reason to celebrate once more. Are we talking about the Republican National Committee’s decision to host their 2016 nominating convention in the city dubbed “the Mistake on the Lake”? Of course not! We’re talking about basketball superstar LeBron James’s decision to leave the Miami Heat and return to the city where he spent the first seven years of his career.

On the face of it, James’s decision seems curious. Few athletes with any choice in the matter would happily trade Miami’s bright lights, sunny pastels, and Caribbean vibe for Cleveland’s cold winters, gray skies, and flammable river. But LeBron, who grew up in nearby Akron, believes in home — and for him, the move is a slam dunk. “My presence can make a difference in Miami, but I think it can mean more where I’m from,” he told Sports Illustrated. “I want kids in Northeast Ohio . . . to realize that there’s no better place to grow up. Maybe some of them will come home after college and start a family or open a business . . . Our community, which has struggled so much, needs all the talent it can get.”

Cleveland fans aren’t the only ones who will applaud LeBron’s move. You can be sure that basketball fans at the IRS will cheer, too. LeBron will make a reported $20.7 million per year in Cleveland — $1.6 million more than the $19.1 million he earned last season in Miami. He’ll pay the top income tax rate of 39.6% on that difference, along with an extra 3.8% Medicare tax — and that, in turn, will mean about $694,000 more for Uncle Sam. (His total Medicare tax on his playing salary will reach almost $785,000, or nearly enough to pay for a heart transplant.)

But the biggest winner here may be the Ohio Department of Taxation. Last season, LeBron played his home games at Miami’s American Airlines Arena, where he enjoyed Florida’s lack of personal income tax. When he returns to Cleveland’s Quicken Loans Arena, he’ll pay Ohio’s top rate of 5.421%. That’s no mere technical foul — state taxes on the half of his games that he’ll play at home will run more than half a million dollars per year!

Fortunately for LeBron, he makes his real money off the court. In 2013, he collected a whopping $50 million in endorsements from Nike, Coca Cola, Cadbury Schweppes, Juice Batteries, Upper Deck, Cub Cadet, McDonald’s, Microsoft, and State Farm — among others. He was an early investor in Beats by Dre, and reportedly parlayed that stake into $30 million when Apple acquired the headphone maker. But LeBron will keep his residence in Florida, which should shelter the bulk of his financial three-pointers. No less a business authority than Warren Buffett has said of LeBron, “He’s savvy. He’s smart about financial matters. It’s amazing to me the maturity he exhibits.”

When it comes time to pay all those taxes, you can be sure that LeBron James doesn’t just drop off a shoebox full of receipts with his accountant on April 15. He’s got a plan to “defend his net” as vigorously as the law allows. Now, you probably can’t fill Lebron’s size-16 sneakers. But you can take advantage of the same sort of proactive planning that superstar athletes use to save millions. And you don’t even have to wait for free agency! You just have to pick up the phone and call us, Chicago CPA at 773-728-1500 and our tax preparers will do the rest. So, what are you waiting for?

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