IRS Eyes New Ways To Tax Miles of Frequent Fliers

Americans who keep large balances of unused American Express Membership Rewards points, or airline or hotel points, are not all that different from those who choose to buy gold or Bitcoins. They are choosing to store value in something other than U.S. dollars.

And while you're considering whether your  frequent flier miles or hotel loyalty points are income, consider this list of items considered income according to IRS Publication 525:

• Bribes.   If you receive a bribe, include it in your income.

• Found property.   If you find and keep property that does not belong to you that has been lost or abandoned (treasure-trove), it is taxable to you at its fair market value in the first year it is your undisputed possession.

• Free tour.   If you received a free tour from a travel agency for organizing a group of tourists, you must include its value in your income. . . . You cannot deduct your expenses in serving as the voluntary leader of the group at the group's request.

• Illegal activities.   Income from illegal activities, such as money from dealing illegal drugs, must be included in your income on Form 1040, line 21, or on Schedule C or Schedule C-EZ (Form 1040) if from your self-employment activity.

• Stolen property.   If you steal property, you must report its fair market value in your income in the year you steal it unless in the same year, you return it to its rightful owner.

• Whistleblower's award.   If you receive a whistleblower's award from the Internal Revenue Service, you must include it in your income.

Just so you know.

Raining Red

Yesterday, it was raining after work so after going home and changing into workout gear we drove to the mall to do our walking. (See definition of senior citizen.) After twenty minutes, I was $200 poorer and three pairs of red shoes richer.

Hubby is hoping for better weather today.

Now You See It

Of Course He Is

KPMG Inside Trader to Give CPE Webcast on Ethics Before Going to Prison

To register for the webcast, which is eligible for 4 hours of CPE credit, visit http://cpe.cpacrossings.com/GZSLLI1?leadsource=GaryZeune.

Nearly Here

I've not been as far away as it may seem. I've been updating Three Sheets with the yacht club doings over the weekend. It was a fun, albeit damp, weekend - as usual. The food was delicious and the activities were plentiful. I took lots of photos which I should probably put up on Flickr so the gang can see them all (far more than I could post) but I'm plum tuckered out so I'm just going to think about that for a while.

I just finished reading Bad Monkey by Carl Hiaassen which was a fun read. Good motivation, too, since the deal I made with myself was that I would get back to work on Now & Then when I was done with Monkey. I like Hiaasen's style; he has a voice I would like to emulate. I always thought my writing would take on some flavors from Janet Evanovich and Jasper Fforde but I need to have some Hiaasen in the mix. Definitely.

My first task is to read what I have so far. I sent the current manuscript to my Kindle but I haven't checked to see whether it worked or not. (I'll do that tomorrow.) I think I'd rather read it on my Kindle than on my computer. But no more books from the library until I get this done. Whatever it is.

I've also been asked by an organization to be their Historian. So I'll be spending some time figuring out what that is. I have some thoughts about what I'd like to do with it but I want to spend some time reading what previous Historians have done first. Perfect time waster, right? If I do it right, I'll never write a single word.

I'd like to see this organization utilize social networking a little more so I intend to play around with that some and see what comes up.

But now, it's time to get dinner on the table. Tonight's recipe is: Rape Asado con Tapenada Negra Y Pimientos Morrones. (Look it up. Or, you could just click the link.)

If it turns out reasonably well, I'll put it up on Eat Me.

Going Pro

Hubby has a game on his iPad that keeps track of how much time he spends goofing off. Available stats include time spent on the the current game, time spent goofing off today, or a cumulative sum of wasted time since the game was installed. He points to the game as documented proof of the time committed to goofing off and now claims to be a professional.

While being a professional avoider of work may seem oxymoronic, the professional in me suggests that as a pro he is now eligible to deduct the expenses associated with goofing off. As with professional poker players, the ability to deduct expenses rests solely on the ability to prove one plays poker for a living and not for recreation.

It would seem that the expenses associated with goofing off would be minimal but just imagine the possibilities for a moment. A book from the library wouldn't cost a dime but that is for amateur avoiders. A professional might spend hours on the internet (which even at a coffee house would incur the cost of several cups of coffee) searching to purchase the proper electronic reading device, followed by subscriptions to expensive publications, downloads of the most recent best sellers, and a trip to the nearest tropical beach to soak it all in.

The downfall here, as you might suspect, is there is generally no income involved in goofing off. Even if deducting goofing off expenses would serve to reduce one's taxes, the IRS might become suspicious of the "business nature" of the enterprise. Truly a dilemma for one seeking professional status in the arena of work avoidance.

Play on, my dearest. Your efforts at avoiding work are duly noted. It's quite possible that there's no such thing as a professional avoider of work but I welcome you to a small group of pioneers who are blazing the trail.

"Blazing" might not be the right word. "Waiting for it to happen" is more like it. Don't worry, you'll get the hang of it.

In My World

On Monday, we spotted the first lemonade stand of the season. Could be a good summer, if that's any indication.

Yesterday, we spotted a parroted pirate parading on the Padden Parkway path. No joke!

Which got me to thinking . . . 

I'm considering Camas as the location for the Condiment Conglomerate Conspiracy and including a Colonel (ret.) who gets concussed by candelabra in a conservatory. Maybe by Manuel, a middle manager of a mustard manufacturer who is maniacally miffed about misappropriation of materials.

Now and Then will have their work cut out for them this time!

Catching up on my reading

And now you are too.

IRS awards bonuses to 1,100 who owe back taxes

The IRS said it has developed a new policy linking conduct and performance bonuses for executives and senior level employees.

"Even without a formal policy in place over the past four years, the IRS has not issued awards to any executives that were subject to a disciplinary action," the IRS said in a statement. "We are also considering a similar policy for the entire IRS workforce, which would be subject to negotiations with the National Treasury Employees Union."

Today's Tax News

TIGTA Alimony Report May Cause Crisis Of Conscience Among Tax Professionals

I don't know about "crisis of conscience" but it's an interesting article if you're interested in things of this nature. In theory, if one guy deducts alimony payments on a tax return, the other guy should be picking up the same amount as income on another tax return. It turns out, it's not that simple. Not only that, the IRS isn't doing anything about it. As a result, there is a discrepancy of more than $2.3 billion in deductions claimed without corresponding income reported.

Yesterday's Tax News

I don't know how I missed this one:

Update: IRS misses XP deadline, will spend $30M to upgrade remaining PCs

An oldie but a goodie.

KenKen

It's a gateway game.

No, scratch that. It's the game that will ruin your life.

I played it all day yesterday.

All.

Day.

I phoned in sick, stayed in bed, and didn't blink my eyelids once as I played game after game after game. I feel rather righteous that I haven't succumbed to Candy Crush Saga much in the same way as other people say I refuse to Facebook, as if Facebook was a verb.

No, KenKen is for smart people. Like me. (I did say righteous.)

But how smart is this? I can't stop and it's ruining my life!

I used to have an app on my last phone and I would kill the battery by playing this game - which might say as much about my phone battery as my playing habits. I vowed I wouldn't get the app on my new phone and I kept that promise.

For a few months.

I downloaded the app on the new phone and played it from time to time. I found I could use it recreationally. I could play for a while and then set it aside. But, then, I don't know what got into me. I got stumped by one and down the rabbit hole I went. I had to have more. I was insatiable.

Next, I found myself making up rules. I'll only play one per day. I'll only play for one hour. I'll only play when I'm on an airplane for more than thirty minutes. But that quickly devolved into I have some free time - how about another game?

Ah, but it doesn't work like that. So I came here, to the church of Please Help Me Stop! Better to write about KenKen than play it or I might not surface for days.

Psst. It's free online. Free download, too, but then you're REALLY asking for trouble.

P.S. I was really sick yesterday.

No, really. . . .

De-Regulation

AccountingWeb | IRS Not Continuing Legal Fight Over Regulating Preparers

The IRS argued that the “Horse Act” of 1884 – a statute passed to govern compensation claims for dead horses brought on behalf of Civil War veterans, which is now codified under Section 330 of Title 31 of the US Code – authorized the agency to “regulate the practice of representatives of persons before the Department of the Treasury.”

. . . “By not filing a petition for certiorari, the IRS has wisely chosen not to ride this horse law any further.” 

Who Knew?

In the past three decades, research has indicated that the building of assets can have a sustainable impact on well-being. 

Addressing Wealth Disparities: Reimagining Wealth Taxation as a Tool for Building Wealth

When I first saw this title, I thought it said "Reimaging" - as in, wealth taxation needs a new image. Shoot, all you have to do is tell them that you'll feel better if you have more stuff.

Acer Up The Sleeve

Booted up my Acer today - that little blue netbook I toted around before I got the Mac. (On it now, in fact.) I wanted to see if it still worked and figured it probably needed an update or two.

Booted right up but was pretty sluggish after that as it went to the internet in search of updates.

I'll run the updates. Because, you know, it's nice to have an Acer up the sleeve . . .

New and Interesting, Indeed

On May 1, 

. . . the Treasury Department published the names of individuals who renounced their U.S. citizenship or terminated their long-term U.S. residency (“expatriated”) during the first quarter of 2014.

The number of published expatriates for the quarter was 1,001. This is the second highest quarterly number of published expatriates ever and is only surpassed by the second quarter of 2013.

International Tax Blog

Food For Thought

I heard about this on a podcast of Freakonomics. The topic was "selective outrage — why we get so upset over some things, and then not over others." It's a good episode and food for thought, as it were.

Among the stories discussed was the nefarious side to a particularly common snack dip. Should we be upset? Should we do something about it? Can we?

In the latter half of 2012 and the early part of 2013, the U.S. imported nearly $1 billion worth of avocados from this state [Michoacán]. Not surprisingly, a common nickname for the fruit is oro verde, green gold, because it yields more cash than any other crop—including marijuana. 

“Blood Avocados”: The Dark Side of Your Guacamole

That would attract the attention of a drug cartel, don't you think? What is our complicity as individuals? As a country?

It’s estimated that more than 4 out of 5 avocados sold in the U.S. are grown in the Mexican state of Michoacán, which is the only Mexican state certified by the U.S. Department of Agriculture to export the “green gold.” 

The Mexican Avocado Wars – It’s all about the Guac | Economics 411: Monetary and Financial Theory

Why?

Mexico produces most of the world's avocado, and avocado is one of the primary cultivars for export, the eighth cultivar by production volume. In 2013 the total area dedicated to avocado production was 168,155 hectares (415,520 acres), and the harvest was of 1,109,814 tonnes.The states that produce the most are México, Morelos, Nayarit, Puebla, and Michoacan which accounts for 86% of the total. In Michoacan the cultivation is complicated by the existence of drug cartels that extort protection fees from cultivators. They are reported to exact 2000 Mexican pesos per hectar from avocado farmers and an additional 1 to 3 pesos per kilo of harvested fruit.

Avocado | Wikipedia 

Why has the US certified only one state in Mexico to export avocados? Which came first: US certification or extortion by drug cartels?

Will that change your snack food?