Internet Law and Business Blog » Taxes

Does Selling on eBay Make You an Auctioneer?

Mike Young — Mon, 14 Apr 2008 22:13:05 +0000

Pennsylvania enhances its bad reputation for being anti-business by threatening a stay-at-home mom with $10 million in fines for selling items on eBay without having an auctioneer’s license. The commonwealth is deciding whether to require an electronic auctioneer’s license (with a licensing fee) or to permit online auctions without such a license.

You can read more about it at philly.com in Bob Fernandez’s article titled “Pennsylvania takes on online auctions.”

What to learn from her experience? Here are three lessons:

1. Vote with your feet by moving to a pro-business state.

2. The government is always looking for ways to control you through regulation and/or taxation.

3. Put the proper legal safeguards in place so that you don’t become the next victim of bureaucracy run amuck.

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Internet Taxes Coming Your Way?

Mike Young — Mon, 01 Oct 2007 18:10:21 +0000

Although the Internet Tax Fairness Act of 1998 has been extended twice, in one month it will expire and you’re going to start getting hit with a bunch of federal, state and local taxes unless Congress acts now to prevent it. The law will expire at that time and politicians are just chomping at the bit to steal more money from your wallet to fund their pork barrel projects.

Some politicians want to make the moratorium permanent. In plain English, they want to ‘permanently’ ban Internet access taxation. Others are seeking a compromise that prevents the U.S. government from fleecing you but lets state and local governments levy Internet access taxes. Think of how bad you already get gouged by taxes on your monthly phone bill.

http://www.youtube.com/watch?v=VFqMsncCNR8

Tell your U.S. Senators and Representative to vote to make the tax moratorium permanent at all levels. Don’t let them weasel out with a compromise vote that lets some taxation start. Once that happens, your tax bill will only get bigger over time.

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Internet Taxes Coming Your Way?

Mike Young — Thu, 24 May 2007 13:04:36 +0000

Congress is debating whether or not to extend the moratorium on state and local government taxation of Internet access.

To promote free enterprise, the ban should be made permanent. However, the National Governors Association, always looking for a new way to tax you, wants the ban lifted.

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Alleged Tax Fraud Destroys Major Dallas Law Firm

Mike Young — Sat, 31 Mar 2007 17:11:15 +0000

Jenkens & Gilchrist will close and pay a $ 76 million civil fine for promoting tax shelters that were allegedly fraudulent. According to the U.S. Internal Revenue Service (IRS), nearly 1,400 individuals received incorrect advice from the Dallas law firm. Some clients have apparently sued the firm for damages incurred because of the advice.

“This should be a lesson to all tax professionals that they must not aid or abet tax evasion by clients or promote potentially abusive or illegal tax shelters, or ignore their responsibilities to register or disclose tax shelters.” - IRS Commissioner Mark Everson

Here’s the moral of the story. If you’re treading a fine line between tax avoidance (legal) and tax evasion (illegal), step back and consider what will happen to you if the IRS and U.S. Department of Justice decide to make an example out of you.

Hat tip to CBS 11 TV.

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How Charitable Is Your Charity?

Mike Young — Fri, 09 Mar 2007 12:27:10 +0000

The Dallas Business Journal reports that the Texas Stampede, benefiting the Children’s Medical Center of Dallas, is in the bottom two (2%) percent of charities as ranked by Charity Navigator. According to the ranking data, 72.9% of the money raised went to pay for fundraising and administrative expenses.
This begs the issue of how effective charity events actually are. If you plan to attend to have a good time (or a tax break), that’s one thing. If you want your money to actually go to the stated charitable beneficiaries, take some time to evaluate the charity.

I’m not trashing the Texas Stampede. Some of the funds are going to a worthy cause. However, if you want to help the Children’s Medical Center of Dallas, wouldn’t it make more sense to cut the check directly to the center instead of having nearly 3/4 of your money spent elsewhere?

Hat tip to Todd M. at Pegasus News Wire.

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A Good Year For Buying And Selling Businesses?

Mike Young — Wed, 07 Feb 2007 11:04:45 +0000

Business brokers think this will be a great year for purchases and sales of businesses. One of the factors cited is Baby Boomer retirement. This will only increase during the next several years as they look to cash out their equity in small businesses to fund retirement.

If you’re considering buying one of these businesses, be sure that you’re not overpaying. Many small business owners have an overinflated view of the value of their enterprises, mistaking personal pride for something that should be part of the purchase price.

One common red flag to consider is the seller who operates with two sets of books - one for the IRS and one which he uses to justify the asking price for his business.

Run, don’t walk, away from such an “opportunity.” The person who commits tax fraud will cut corners elsewhere, leaving you with liability exposure that will outweigh the upside of the deal.

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Legacy Time: Minimum Wages And Social Security

Mike Young — Wed, 17 Jan 2007 05:46:45 +0000

The minimum wage legislation was a done deal but had minimal impact for two reasons: (1) many states increased their minimum wages effective January 1st; and (2) a lot of metro markets pay more than the minimum wage just to find employees who can pass the mirror test (fogging the mirror by having the minimal skill of breathing).

Tax increases would be DOA at the federal level unless Bush caves by raising the Social Security cap for taxable income from $90K to $150K. His Treasury Secretary has been floating that idea as part of a bipartisan effort to “save” Social Security. If that happens, BOHICA to entrepreneurs in order to create a presidential legacy.

Might want to encourage your U.S. Senators to filibuster any such legislation so that Bush doesn’t get it to sign…unless you enjoy paying higher taxes with the hope that Uncle Sam will be solvent when you retire to pay you an abysmal rate of return on your investment (taxes).

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