Stay Up to Date with the Latest Notices

Written by Theodore M. David, Chair, Tax Law Committee

Current Items:

1) Beat Washington
2) One Billion Mark

1) Rutgers Class of 1969. Actually, 1965 to 1969. Like many high school kids back then selecting college was not with the greatest of guidance. In my case, a cold beer on a Saturday afternoon got me to the Banks of the Old Raritan. A good friend of mine’s brother was a fraternity brother at Delta Sigma Phi, 40 Union St., New Brunswick, NJ. Phil asked me if I had any interest in going down to visit his brother. It was a beautiful fall-like day, as far as I can remember. We pulled up in front of what looked like a typical suburban two-story house with a wide porch out front. Lounging about were guys my age and a few somewhat older. From the hallway stepped the “Mule” Phil’s brother John. I hadn’t seen him in a number of years, but I could see where he got the nickname. He introduced us around to his brothers in the living room, TV on, couches covered with more smiling faces. And then he said the magic words: Would you like a beer? I looked at Phil, and Phil looked at me: beer in the afternoon on a college campus? We were led downstairs to a knotty pine-lined basement with a small bar strategically placed in the corner, hiding a keg of beer on ice. John stepped inside, gave the keg a few pumps, and voilà cold beer at the first fraternity house I had ever been in.

Now, to be honest, that wasn’t the first glass of brew I had ever entertained, but the setting was nearly perfect. By the second glass, I had made up my mind: I would become a Rutgers man. At that time, there were no women at Rutgers in New Brunswick. It was a men’s college. Douglass, the female version, fortunately, was about a mile or so away, and though women there had a reputation of being a whole lot smarter than we men here on the Rutgers college campus, they were welcomed with open arms. When the time came, I left my hometown willingly and took up residence in that “noisy college town.” As the years went by lots of glasses of beer were consumed at parties with great friends. I actually got to become vice president of that fraternity house a somewhat dubious accomplishment I still regard as a high honor. But the best part of those four years were the football games at the Rutgers Stadium. It was nothing but a grass field three quarters surrounded by concrete benches the tiny scoreboard hard to read. RU had publicized it as the place of the first collegiate game in 1896 I think. Going to the game was a dress-up affair, especially on Big Weekends like the Princeton match-up. Men in sports coats, women in dresses. That didn’t stop us from getting looped in the stands as liquor was permitted to be brought in.

Years later, the Stadium, like college fraternities themselves, would go dry. So it was with a sense of nostalgia that I got to go to the recent Rutgers-Washington football game at the new and amazing Rutgers football stadium. The game itself was sold out, but fortunately, my old fraternity brother Glen had season tickets and a wife unavailable for the 8 PM kickoff. Things have changed. Yes, it was a football game, but also a spectacular event, a pyrotechnic exhibition of modern technology at its best. Drones overhead syncopated by a computer program somewhere spelled out the word “Believe” as the band played the famous Journey song. A youthful explosion of energy, laughing, screaming, dancing, cheering, hi-fiving, fist-pumping, wild-eyed, and beer-guzzling. Fifty thousand plus fans all united in one dream… To beat Washington. The Rutgers marching band, with 250 members with lights on their helmets in the dark, created pictures at halftime of the map of New Jersey, the Turnpike Exit 9 sign, and Sandcastle, complete with beach umbrellas and beach balls. I wanted to reenroll and do my four years over again. But the real question comes in what way this story can be connected to federal tax law.

It’s the beat Washington thing. Taxpayers who have let tax debt to the IRS ruin their lives can play a game called “Offer in compromise.” Like the old TV show “Let’s Make a Deal,” the IRS is willing to compromise back tax liabilities under various kinds of circumstances. Now, the IRS recently has warned that there are offers in compromise “mills”, unscrupulous companies that promise instant results and produce most often nothing. But for the vast majority of taxpayers in need of relief the IRS website provides tools for them to see whether or not they would qualify. There is no need to suffer under the burden of tax debt. Under the right circumstances, they can, in fact… Beat Washington. By the way Rutgers beat Washington 21 to 18 in a thriller of a game. They are 4 and 0. Go RU!

2) Nothing like the excitement of the Rutgers Washington game is the recent announcement by IRS that they have hit the $1 billion mark for taxes recovered from wealthy nonfilers since the funding provided by the Inflation Reduction Act. The loot IRS says came from 1,600 otherwise deadbeat millionaires.

Questions or Comments should be emailed to [email protected]

Written by: Theodore M. David, Esq., Chair of the Tax Law Committee

Current Items:
1) North of the Border
2) Whistleblower Day?

1). I must apologize for the tardiness of this bulletin. I almost didn’t make it at all. Not for any nagging health concerns but rather a vacation in the Bel Provence of Québec. That Provence which includes Québec City is as large as France itself. Should you have an ability to “Parlez un Peu” it is the France you can actually drive to. Depending on where you are situated this could be a 7 to 9 hour drive which if you are partially insane can be completed in one day. But be forewarned that you must in fact cross the border. Our drive up for the most part was uneventful with a stopover in Brattleboro, Vermont. Getting to the border to enter Canada was no more than a two minute wait. There a Richard Gere look-alike with a sly French smile and a nasal’ Bon Jour” welcomed us with open arms. He asked us where we were staying and then commented about the beauty of the region. In five minutes we were off with our SUV stuffed to the brim with bicycles and other goodies consisting of snacks of all varieties. In 2007 the Canadian dollar was at parity to the US dollar these days one US dollar is worth 73 Canadian cents. In other words there is a 27% discount on everything you buy or consume.

While the French have had the reputation of being somewhat snarky to Americans I have never in all my years traveling to Canada seen any of that. You can also count on the temperature being anywhere from 10 to 20° cooler than New Jersey should you travel in the summer. Add to all of this the fact that French food made from locally grown or produced products seems much tastier to me than the US variety. Americans tend to think that the only place they can get a decent meal is in Europe. This is simply not true. So my Canada experience as it has been in the past was delightful. And then came the fateful day to return to New Jersey. Crossing the border back into the states with our US border guards supplemented with Homeland Security guards reminded me of the movie Alice’s Restaurant. That one was a Vietnam War protest movie with Arlo Guthrie being arrested for littering which eventually saves him from the draft. In one part of the movie during his draft induction he is told by the Army Sgt. to sit on the group W bench. That group W bench was the place where even the Army was not interested in the inductees for their past criminal behavior. When these murderers, rapists and kidnappers find out that Arlo was attempting to get out of the draft because of a littering violation they all moved away from him on the bench. When he added disturbing the peace they all moved back. Now I’m sure at this point you’re wondering how this is going to get back to being a tax bulletin. Sit tight its coming.

Now the Internal Revenue Service has had a policy of voluntary disclosure for many years for tax non-filers. That policy says criminal action will not be taken if taxpayers fess up without IRS detection and involvement. Recently that voluntary disclosure policy has been applied to the employee retention credit which was used and often abused by many businesses on the advice of hucksters who promised refunds when claims were made. In essence the new policy allows these employers to pay only 85% of the tax due and have both penalties and interest waived. But the employers must come forward themselves and admit they were not entitled to claim the credit on their tax returns. Now getting back to the border crossing. Approaching the US border from the Canadian side it was evident that this would not be a five minute wait. Two lanes of traffic backed up for a quarter-mile while only two border guards appeared to be working.

Eventually it was our turn. Unlike our entry, the US fellow seemed stern, a no nonsense guy with not even a “Bonjour” to spare. He reminded me of the Department of Motor Vehicles inspection officers in the 90s. I handed him our passports and he rattled off: “Do you have fruit, vegetables, alcohol, tobacco, firearms, and animals with you? Not interested in giving up my leftovers from a wonderful Italian meal the night before I of course denied it. “You have no fruit?” With that he asked me to open the rear window stuck his hand in and pulled out an orange. “What is this?” he said. I turned and said “an orange.” With that I was told to pull over to station number two where an officer would examine our entire car. Standing around with my hands in my pocket a voice over a loudspeaker said “Go into the room.” I expected to see Arlo Guthrie there. There was a long wooden bench. We were alone on our own Group W bench. We were told to sit without pacing or using cell phones. Three agents in this vast open space behind bullet proof glass seemed to be standing around doing nothing. One told us she would be examining the contents of our car. She came back after 20 minutes with the same look the cop in Alice’s Restaurant had on his face when Arlo’s name was found on a pile of illegally dumped garbage. She said we had 5 bags of food including fruit and vegetables.

That was not possible and in point of fact some of that stuff had been taken from New Jersey to Canada and was being brought back, but we were in no position to argue. After getting a dressing down for being smugglers of at least one orange, two apples, one tomato, a handful of grapes and two bananas we were told that the penalty could be a fine of $300.00. I resisted asking if we could pay in Canadian dollars. The whole episode could have been filmed as a Seinfeld sitcom. At least they waived the fine, but they took my orange and other damning fruit which I assume they enjoyed with lunch. The only thing I got from the encounter was if asked by a border agent coming into the United States whether you have fruit simply say yes and avoid the whole business. Sort of Voluntary Compliance. I know a reader of this bulletin is going to explain that my fruit was a threat to national health and security to them I say “Je ne pense pas.” Do they even grow oranges in Canada?

2). You, like me, may have missed National Whistleblower Day on July 30. Apparently that day is selected because in 1778 the Continental Congress passed the nation’s first whistleblower law. That act was created as a result of Continental Navy officer Esek Hopkins being reported on by fellow officers torturing British prisoners of war. The law provided for legal expenses in the event that whistleblowers were the subject of legal proceedings. The first law related to whistleblowers on tax violations was enacted over 90 years later in March 1867. The agency has paid over $1.2 billion in awards since issuing its first award in 2007. IRS successfully collected $7 billion from taxpayers who were not in compliance all because of these patriotic snitches. An excellent side gig perhaps for those so inclined.

Questions or Comments should be sent to:  [email protected].