Multinationals seek tax heavens, er, havens . . . oh, what’s the diff?

More and more U.S.-based corporations are growing wings and flying away from their U.S. tax obligations.

Bloomberg puts it as simply as possible: “U.S. companies looking for lower tax bills are heading for the exits, and Congress is doing nothing to stop them.”

The immediate impetus for the story was Pfizer’s proposed purchase of AstraZeneca, which would result in Pfizer reincorporating in Britain while tapping literally billions of dollars it has been holding outside the U.S., as The New York Times reported.

What’s the solution? Congress could grow a set and change the tax laws so that there is a crackdown on companies that use tax havens to keep profits outside of the U.S. system, as Steven Rattner suggests. Rattner also suggests in essence giving up on taxing corporations and instead increasing taxes on profits at the shareholder level, which would effectively increase the taxes paid by the wealthiest Americans.

I don’t know what the solution is, but when you consider that the effective federal tax rate paid by corporations has dropped from more than 40% in the 1950s to about 15% today, it seems clear that something has to change.

IRS getting scammed for $Billions by refund fraudsters

Stories of scammers claiming to be with the IRS and taking advantage of unsuspecting taxpayers appear regularly, including here.

Turns out that the IRS is getting scammed as well.

As this Associated Press story from The Boston Globe reports, the IRS issued $4 billion — yes, billion with a B — in fraudulent tax refunds over the course of a year to criminals who were using other people’s personal information.

In some cases, the IRS’s desire to issue quick refunds plays right into the bad guys’ hands: The AP reports that 655 refunds were sent to ONE address in Lithuania.(Wouldn’t you think somebody might notice that?)

So how do the scammers do this? It all starts with stealing your Social Security number, and then filing a fraudulent tax return that generates a refund — which goes into the thief’s bank account, not yours.

The taxpayer typically doesn’t find out there’s a problem until she tries to electronically file her own tax return and gets a message from the IRS that another tax return using the same Social Security number has already been filed.

In the Pacific Northwest, more than 1,000 employees and volunteers with the Catholic archdioceses of Portland and Seattle may have been victimized, as The Oregonian and the Seattle PI reported.

When someone else successfully files a fraudulent return using your Social Security number, your only recourse is to file your own return on paper and then fill out Form 14039, Identity Theft Affidavit. Then, hopefully, you’ll get your refund and be able to electronically file your return the following year.

Here’s a link to an IRS webpage on Identity Theft, which can also take you to that Theft Affidavit form.

Bitcoin: IRS says, “It’s property, and it’s taxable!”

A lot of people are still trying to figure out just what Bitcoin is, but the IRS has seen enough to decide: It’s a type of property and not a form of currency.

So what, you say? Here’s what: Because, as The New York Times has reported, the IRS is going to treat Bitcoin as property, people who buy and sell it are going to have to calculate the change in value from when they acquired it, and pay tax (or claim losses) on the difference.

That means you could buy Bitcoin, use it to purchase something, and then have to report a “trade” on the change in Bitcoin value between when you bought it and when you used it.

Oh, and if you’re one of those smart guys or gals who can actually electronically “mine” a Bitcoin, you are going to have to report the market value of the Bitcoin as income.

For Michael Jackson estate, $1B disagreement with IRS is no thriller

There’s the average person’s disagreement with the IRS over a tax bill. And then there’s the estate of Michael Jackson.

The executors of Jackson’s estate pegged his net worth at $7 million. But papers filed with the U.S. Tax Court in Washington, DC, show that the IRS believes his estate is worth $1.125 billion, which is, as The Los Angeles Times so nicely put it, “a difference so vast it looks like a typo.” (10 free articles and then a paywall.)

At that level, the estate would owe more than $500 million in taxes, plus another $200 million in interest and penalties. Among the areas of dispute: The IRS says Jackson’s image & likeness are worth about $434 million; the estate filing put the value at…$2,105.

Inheritance tax disputes are often settled before trial, but I’d like to see this case go to court, if for no other reason than that the testimony, and eventual ruling, is bound to be fascinating.

Washington Post’s maps paint a fascinating – and unexpected – picture of the USA

The Washington Post’s “GovBeat” feature is doing some great work, including this story and link to 25 maps and charts of the United States (your first 10 stories a month at Washingtonpost.com are free; then the paywall rises up.)

One, “Finding America’s Uninsured,” (#23) shows that the national problem of people not having health insurance may be strangely localized, with 116 counties (out of more than 3,000 total) accounting for more than half of all the uninsured in the U.S. Another, “Cartogram of Total Disenfranchisement rates by State,” (#16) features a stunningly distended Florida, where more than one out of every five black adults are not allowed to vote because they were at some point convicted of a felony.

On the other hand, it’s worth giving your brain a bit of a break and focusing on the maps of “Where The Breweries Are,”(#5) and “Where the Closest Pizza Joints Are” (#25).