Phil Hart, who continually pointed to his role as an Idaho legislator as an excuse for not dealing with more than $500,000 in unpaid taxes, has been slapped with a motion in U.S. Court in Boise asking a federal judge to allow the U.S. government to seize his log home in northern Idaho.
Hart, who lost his four-term seat in the Idaho House in the May 2012 Republican primary, stopped paying federal income taxes in 1996, challenging the constitutionality of the tax.
The Associated Press reports that U.S. attorneys want to foreclose on a home that Hart built in the 1990s, using trees that he acknowledged taking from Idaho lands without paying. Hart also tried to shield the home from seizure by putting the property under his daughter's name, but the Internal Revenue Service rejected the transfer.
The AP's Rebecca Boone reports that feds also want Hart to be hit for improper deductions on past tax returns and therefore the former lawmaker should be penalized with additional late fees and interest.
The Idaho State Tax Commission has dropped the maximum homeowner's exemption for 2013 to $81,000, from this year's exemption of $83,974.
"This reflects the fact that the housing prices trended downward, but at a slower pace than last year," said Alan Dornfest, the commission's property tax policy supervisor.
Idaho homeowner's exemption began in 1980 at a maximum of $10,000. It was bumped up to $50,000 in 1983 and $75,000 in 2006, with future limits tied to the House Price Index.
In the Tax Day sunshine, Dave Vitluski, Doreen Warren and Liz Rodosovich collected the last-minute tax returns of Idahoans, standing beneath a decorated awning in the Tax Commission's parking lot.
"April weather can be tricky," said Vitluski, an administrative clerk for the Internal Revenue Service, his eyes shielded by sunglasses. "I've been doing this for four years. This is the first nice day it's been in a while."
Vitluski teamed up with his State Tax Commission peers Warren and Rodosovich to collect envelopes from taxpayers. Over the course of the lunch hour, more than a dozen pulled into the commission's parking lot at 800 Park Blvd., Plaza IV of the Washington Group Plaza.
"We have dog treats, too, in case people bring their pets," said Rodosovich, a public information officer for the commission. She stressed that the dog treats and a basket of candy were paid for by the employees themselves.
While the majority of curbside filers pulled up in vehicles, a few cyclists dropped off their returns. A handful were walk-ups. One woman removed her headphones as she jogged up, envelope in hand.
Alex Larson, a young man in his 20s, walked up from his parking spot at the other side of the lot.
"Do I need a stamp?" he asked. "I'm filing this return for my grandmother."
He was informed he did not. Before he left, he grabbed a tootsie roll for the road. Just before noon, a retired tax commission employee showed up with cookies for the state employees. The drive-thru dropoff service is available until 4:30 p.m. today.
With Tax Day looming, the debate over the so-called "Buffett rule" intensifies this week. Today, the U.S. Senate is expected to vote on President Barack Obama's proposed rule that would impose at least a 30 pecent tax on those earning more than $1 million in an attempt to make America's wealthiest citizens pay rates comparable to those paid by middle-class citizens. The measure, named after billionaire Warren Buffett, who backs the concept, could raise as much as $47 billion.
This Thursday, the Republican-dominated House of Representatives is planning a vote on legislation providing a 20 percent tax deduction for small businesses with fewer than 500 workers.
Since April 15 fell on a Sunday and today is a holiday in the District of Columbia, this year's deadline for filing taxes is tomorrow, Tuesday, April 17. The Internal Revenue Service said it had received, through April 6, 99 million of the 145 million expected returns. So far, 80 million refunds have been issued, averaging $2,794 down $101 from last year.
Idaho taxpayers still waiting to file their returns can take advantage of a special promotion by the State Tax Commission and Internal Revenue Service: a curbside filing service during the business day of April 17.
Last-minute filers need only head over to 800 Park Blvd., Plaza IV of the Washington Group Plaza, between the hours of 8:30 a.m. and 4:30 p.m. to drop off their completed returns, due Tuesday, April 17, this year for both state and federal taxes. They say those who participate won't even have to leave their cars.
Tax Commission and IRS officials will be stationed in the lot, ready to accept returns. While the Tax Commission can accept state returns, including those with payments, their IRS counterparts will not be able to accept payments.
For those returns, taxpayers should head to the IRS Taxpayer Assistance Center in the federal building at 550 W. Fort St.
Last-minute tax information is available at tax.idaho.gov.
Cautious optimism greeted Idaho's recently released report card on its financial strength. The Idaho Division of Financial Management revealed Wednesday that tax revenue through the first eight months of the 2012 fiscal year is nearly $33 million ahead of forecast. February receipts topped forecasts by $19.5 million - the largest surplus of the fiscal year.
As of February, Idaho had collected $1.64 billion, ahead of the $1.5 billion the state took in during the same period a year ago.
Not all revenue categories exceeded their targets, however. Sales tax revenue came in $2.5 million below the forecast.
Drilling into the data reveals that income tax collections were positively affected by an unusually low number of tax refunds - $12.7 million lower than expected.
"This month's low refunds are a timing issue," read the report. "Continuing verification and review improvements by the Idaho Tax Commission result in returns processing slightly later than in the past."
Simply put, tax collectors are taking their time in issuing refunds, thus delaying the output and causing refunds to be lower than expected in the early months of tax filing season.
"As a result, the current individual income tax surplus that is inflated by low refunds should deflate in coming months," said the report.
With hundreds of suits packing the Boise Centre auditorium, a Washington, D.C., economist kicked off this morning's Associated Taxpayers of Idaho Conference with a flurry of numbers concerning—what else?—taxes.
Mark Robyn of the Tax Foundation busted some myths and confirmed some stereotypes:
- The top 1 percent of American earners pay an average tax rate of 24 percent.
- The bottom 50 percent of American earners pay an average tax rate of 1.8 percent.
- We hear a lot about non-payers. There's plenty of them. There's a huge percentage of Americans who don't pay any federal income tax-approximately 55 million tax filers, representing close to 45 percent of all those who file taxes.
- The United States corporate tax rate, 39.2 percent, is the second highest in the world (only Japan is higher) but of course, no American company pays 39.2 percent due to scores of deductions.
Idaho's K-12 public schools are in line to receive $59.9 million in additional funding, the result of a surplus when Idaho financial managers closed the Fiscal Year 2011 books on June 30.
Idaho received $2.44 billion from all forms of tax receipts (sales, income and corporate) in the last 12 months. That's $85.3 million more than January projections from the Division of Financial Management. Senate Bill 1207, passed by the 2011 Idaho Legislature, requires most of the unexpected additional revenue to be distributed to public schools and community colleges.
In addition to the $59.9 million for public schools, the State Board of Education determined that, based on enrollment growth, the College of Western Idaho will receive about $5 million, North Idaho College almost $1.8 million, and the College of Southern Idaho almost $668,000, for a total of about $7.5 million to community colleges.
"Today's positive news is greatly needed and appreciated for Idaho's school districts and community colleges," said Republican Sen. Dean Cameron of Rupert, co-chair of the Legislature's Joint Finance and Appropriations Committee. "I am grateful to the JFAC committee, legislative budget office, the Legislature and the governor for agreeing to this approach."
Additionally, Gov. C.L. "Butch" Otter said the unanticipated revenue will enable the next phased increase to the grocery tax credit for those who file state income tax returns. That should provide about $15 million in income tax relief for Idaho taxpayers.
The Republican Otter made a bet with former Gov. Cecil Andrus, a Democrat, regarding Fiscal Year 2011. Andrus bet Otter that Idaho revenue would exceed the official projection from Otter's budget office.
"I made a silly bet with Andrus," said Otter. "I was hoping that he was right, and then I did everything I could do to make sure he was right. It's a payment that I'm very happy to make."
Otter owes Andrus $100. No word on whether it will be cash or check.
The Internal Revenue Service has brought the hammer down on more than 1,400 Idaho nonprofits, revoking their tax exempt status because the organizations failed to file required paperwork.
A new IRS rule requires nonprofits that collect less than $25,000 annually to notify the federal government each year they are still operating. If three years go by without notification, a nonprofit's tax-exempt status can be revoked. Without a tax-exemption 501(c)(3), nonprofits are not allowed to collect charitable donations.
In the Boise area, more than 350 nonprofits are on the list of agencies that had their tax-exempt status revoked. Included on the list were two American Legion posts, the Idaho Folklore Society, the Idaho Senior Citizens Lobby, Ride Idaho and the Zonta Club of Boise.
Regaining tax-exempt status requires organizations to start at the beginning of the process, as if they were applying for the first time. The IRS requires nonprofits to send detailed information on the organization's purpose and its conflict of interest policies.
April 15 has come and gone. No, you're not in trouble if you haven't filed your taxes. This year, returns aren't due until Monday, April 18, in honor of Emancipation Day—usually observed on the 16th, but as that is a Saturday, taxpayers have a few more days to prepare.
Presuming that you need this extra filing time, the Idaho Tax Commission wants to make the process as stress-free as possible by offering curbside dropoff service and easy options for filing extensions.
The Tax Commission bills its curbside drop-off as being so convenient that taxpayers won’t even have to get out of their cars. From 8:30 a.m.-4:30 p.m. Monday, outside of the offices of the Tax Commission (800 Park Blvd.), taxpayers can submit both federal and state returns as well as federal extension forms. However, returns with payments are not being accepted at the drop-off. For federal returns with payment, the IRS is directing taxpayers to the IRS Taxpayer Assistance Center in the federal building at 550 W. Fort Street.
Not quite ready to file? Extensions are available, too. To qualify for an automatic, six-month extension you need to pay either 80 percent of the tax you owe for 2010 or 100 percent of what you paid for state income taxes for 2009. This will help avoid the penalty for late filing, however, you’ll be charged 4 percent interest annually until it’s paid. The forms for these extensions can be found online or at the Tax Commission offices—where you can drop it off when you’re done.
Last minute tax information is available at tax.idaho.gov.