Those bribes in the college admissions scam were tax-deductible. The Washington Post reports on the Key Worldwide Foundation (KWF), the organization established by William Singer, the ringleader of a $25 million scheme to get children into elite colleges. In 2013, the IRS approved KWF as a tax-exempt organization under Section 501(c)3. KWF told the IRS its purpose was to “provide education that would normally be unattainable to underprivileged students.” But the FBI says wealthy parents made five- and six-figure payments to KWF, which they then deducted as charitable contributions. KWF eventually used some of the money to bribe university officials or pay people to take their children’s college admission exams.
IRS fraud detection can trap legitimate taxpayers. USATODAY reports that IRS efforts to prevent fraud can have an unintended effect. National Taxpayer Advocate Nina Olson explains that too many legitimate taxpayers’ returns are flagged, which can delay refunds by up to nine weeks. “There’s just something in the return that make the IRS think it’s not the taxpayer… I’ve heard people say [the IRS] asked about a car loan from years ago [during verification]… Any one of those questions can screw you up.”
House bill would increase the eligibility age for ABLE accounts. Representatives Cathy McMorris Rodgers (R-WA) and Tony Cardenas (D-CA) have reintroduced their bill to raise the age limit for eligibility to open an ABLE account from age 26 to 46. An ABLE account allows family and friends of individuals with disabilities who are under age 26 to contribute up to $14,000 annually without triggering the gift tax. Beneficiaries can make tax-free withdrawals for housing, transportation, assistive technology, home health aides, or other personal assistance.
Washington State senate would require presidential candidates to disclose their tax returns. The Senate-approved bill, which still must be passed by the House, would require presidential and vice presidential candidates to release five years of tax returns before they could appear on the state’s primary or general election ballot. The law could keep President Trump off the ballot in 2020.
Buzzkill in Nevada: It might be losing pot tax revenue. Legislative auditors found that poor bookkeeping and oversight of the legal marijuana industry may be costing the state potential tax revenue. Data from many cultivators’ and dispensaries’ tax returns don’t match inventory. Nevada collected $70 million in marijuana excise taxes in 2018, but an analysis of a sample of returns found over $500,000 in unpaid tax liability in just six months.
And bad news for some Louisiana taxpayers. The state announced that a computer error accidentally doubled tax refunds for some people by direct depositing the amounts a second time. The state has begun recovering $26 million in duplicate refunds.]
Congress is not in session this week. The Daily Deduction will resume its regular schedule on Monday, March 25.
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