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McCain we hear is more that partial to a game of craps – but where’s the gambling man’s winnings and losses – accounted for on his tax returns? Is McCain being dishonest? Has McCain acted legally?

Senator John McCain is a gambler. If I’d known that right away I would have immediately seen what was wrong with his tax returns.

I am a tax attorney, so a tax return means more to me than it would to most. I reviewed McCain’s tax returns as a basic check on the candidates. You can look at McCain’s 2006 and 2007 tax returns for yourself. The tax returns are below a lot of verbiage about his charitable activities.

According to a New York Times article of September 27, 2008 “For McCain and Team, a Host of Ties to Gambling,” reported by Jo Becker and Don VanNatta Jr., McCain gambled at the MGM Grand in May 2007.

Apparently McCain is a habitual gambler; he usually plays craps. He even says, “I am a gambling man.”

Gambling has tax implications. According to IRS Publication 17, “Your Federal Income Tax”, 2007 edition, page 89 “Gambling Winnings. You must include your gambling winnings in income on Form 1040, line 21. If you itemize your deductions on Schedule A (Form 1040), you can deduct gambling losses you had during the year, but only up to the amount of your winnings.” In other words, you can’t subtract your losses from your winnings and just not report. You have to report the winnings, and then claim the losses.

But McCain’s tax returns say nothing about gambling winnings or losses.

As a casino gambler, McCain is likely to have lost more than he won. But by not reporting his winnings, the different percentage calculations built into the tax calculation are thrown off, and if he gambled much at all, he has underpaid his tax. The amount of understatement of tax may be minimal, but that’s not the point.

The real purpose of preparing his tax return and omitting the gambling winnings is so that people would not know how much he gambled. If he won $200,000 playing craps in Las Vegas, it would make a difference in the way voters viewed his suitability as a presidential candidate.

There are circumstances under which the tax returns could be correct, such as McCain gambled once in 2007, not at all in 2006, and lost everything the one time he gambled. Such an explanation is unlikely in light of McCain’s alleged long history of gambling.

I think we are looking at tax returns calculated to hide an aspect of the candidate. My 35 years of experience in taxes tells me these tax returns are wrong, and we do not know the true scope of McCain’s gambling or of his potential obligations to gambling enterprises.

Source: HP

Tax Returns Show a Six-Figure Income Combined With Significant Assets

Republican vice presidential nominee Sarah Palin and her husband, Todd, have assets worth up to $2.1 million, and they paid $24,738 in 2007 income taxes on total income of $166,495, which came from her salary as governor of Alaska and money he earned as an oil worker, fisherman and snowmachine racer, documents released by her campaign yesterday show.

The tax returns indicated that Palin paid no taxes on $16,951 in state payments she received as meal and incidental expenses when she stayed at her home in Wasilla instead of at the governor’s mansion in Juneau.

Alaska’s director of finance has already declared that the state does not consider these $60-a-day payments taxable. Accounting experts and some tax courts have differed on the question of whether such compensation is tax-exempt. Yesterday, the McCain campaign issued a legal opinion from Washington lawyer Roger M. Olsen supporting the state’s view that the payments are not taxable.

Palin stayed in her Wasilla home 312 nights, or 54 percent of the time, when she claimed reimbursements from Dec. 4, 2006, through June 30, 2008. Although her staff has said most of her work as governor is performed in Anchorage, 45 miles from Wasilla, Finance Director Kim Garnero said the state capital in Juneau is considered her duty station, making her eligible for the non-taxable meal and expense payments.

In the couple’s 2007 return, which was prepared by H&R Block, Palin described her occupation as “public service” while her husband declared his as “oilfield.” The couple claimed six exemptions, including themselves and their four children.

Total charitable donations came to $3,325, or about 2 percent of total income. These included $2,500 in various non-itemized gifts and an $825 in-kind donation to the Salvation Army.

On a separate financial disclosure form, the Palins valued their home in Wasilla at between $500,000 and $1 million. Their mortgage interest deduction of only $10,203, reported on their tax return, suggests they have substantial equity in the property, according to one tax accountant.

Todd Palin’s commercial fishing business is worth between $50,000 and $100,000 and the couple’s fishing leasehold in Nushagak River, Alaska, is valued at $100,000 to $250,000.

Along with mutual funds and property, their total assets are between $880,000 and $2.1 million, the form indicated.

Much of the 2007 tax return deals with Todd Palin’s varied business activities. Although he won $17,000 in prize money in Alaska’s Iron Dog snowmachine race, he reported a $9,639 business loss after deducting equipment depreciation, repairs, fuel and other costs of racing.

However, he reported a profit of $15,513 on his commercial fishing operation, even after deducting $12,245 paid to his crew as a share of the catch, along with other expenses.

His major income was $43,518 from his job as an oil-field worker for BP. He paid $204 in union dues.

In 2006 and 2007, the Palins filed their returns in August and September, respectively.

[The Associated Press reported that the Palins underpaid their 2007 taxes by $2,017 when filing for an extension, but that the McCain campaign said the balance had since been paid. It was unclear if they might owe penalties or interest.]

In 2006, they paid taxes of $19,951 on total income of $128,005. That year the bulk of the family income came from Todd Palin’s job as an oil worker, which paid him $102,716.

Palin did not take office as governor until Dec. 4, 2006.

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