Debates, Bailouts, Tax Evasion, and Other Taxosphere Tidbits

The taxosphere is abuzz with news as the bailout continues to be debated and revised. Meanwhile, day-to-day tax issues still dominate the discussion.

• Linda P on Yahoo! Answers has run into a stick tax situation: what do you do if someone was paid off the books for twenty years, and wants to settle things with the IRS? After a while, it can be tempting to try getting away with it for just one more year — but as the answerers show, that’s just a way to compound the problem.
• At Don’t Mess With Taxes, Kay Bell wants to know if the home sale tax exclusion caused the housing bubble. As one linked source argues, Maybe it wasn’t speculative mania… Maybe much of it was due to changes in public policy. An even more compelling answer: it was a speculative mania fueled by irresponsible policies, and the promise of further irresponsibility. Paul Caron of TaxProf has more.
• In case you were wondering about what happens when you don’t file and don’t fix it, Paul Caron of TaxProf writes about the sentencing of Milton Street, brother of a former Philadelphia mayor. Thirty months in prison for three years of missed filings? Probably not the typical outcome, but still worth noting.
• David Zaring at Conglomerate asks who won from the bailout. I think it’s too early to tell: some big financial players last year thought they were getting bargains when they bought large blocks of stock 50-80% off the high price for the year. But many of those same stocks have dropped further since.
• Russ Fox of Taxable Talk finds a theme in recent tax evasion stories. One of the best: Attorney Christopher Uhl allegedly withheld money from his employees’ wages for payroll taxes. That’s good. He also allegedly didn’t remit that money to the federal government. That’s not good.
• Five Cent Nickel has the full story on the Washington Mutual takeover. It’s always good to review these, even if you’re already familiar with the process. In all the excitement of a multi-billion dollar deal done as quickly as possible, it’s easy to miss some details.
• The Tax Foundation elaborates on all of the errors and omissions made by Barack Obama and John McCain at the Presidential debate last Friday. There are fewer mistakes than I expected, and they revolve around things like the net present value of inflation-adjusted changes, or the indirect impact on individuals of simplified corporate taxes. Overall, easy stuff to mess up.
• James Edward Maule of MauledAgain considers the effect of a financial transaction tax. His essay also explores a few other funding options, and explains some of the more misleading rhetoric surrounding the bailout. A must-read.