How screwed-up are the banks? Even Ben Bernanke can’t get a loan!

Ever have a problem getting a home loan despite having good credit? Ever have the bank say it’s unhappy with the appraisal, or ask why did you miss a credit card payment three years ago, or tell you (as Bank of America told me) that its records show a lien on your property for a parking ticket that you paid seven years ago?

Well, you’re not alone. These days, even the former chairman of the Federal Reserve is looked at as a questionable credit risk.

As The New York Times noted, Ben Bernanke, who pulls in six-figure sums for giving a speech now that he’s stepped down as chairman of the Federal Reserve, told a conference of the National Investment Center for Seniors Housing and Care in Chicago, “I recently tried to refinance my mortgage and I was unsuccessful in doing so.”

Bloomberg News reports that when the audience laughed, Bernanke followed up. “I’m not making that up,” he said.

The problem in this case is probably that the lenders’ so-called underwriters–sometimes nothing more than computerized credit reports and glorified box-checkers of forms–ding borrowers if they’ve recently switched jobs or, like Bernanke, gone from a wage position to being self-employed.

To the box-checkers, it doesn’t matter that he can command $200,000 for a speech. Can’t you just hear some functionary on the other end of the line? “But, Mr. Bernanke, could you please present the bank with letters from organizations attesting that they will pay you that much in the coming years?

Welcome to the real world of small businesspeople and the self-employed, Mr. Bernanke.

“The Situation” is in a not-so-good tax situation

Did you know that “Jersey Shore” reality show personality Michael Sorrentino, aka “The Situation”, and his brother Marc, grossed almost $9 million in a variety of ventures over four years? Me neither, until I read the U.S. District Court indictment, reported inThe New York Times,charging the brothers with conspiracy and filing false tax returns. Michael was also charged with failing to file a tax return for 2011.

The full amount that the government might try to collect isn’t clear, because the indictment charges the brothers with failing to report all of their income and, as the press release from the US Attorney’s Office puts it , “fraudulently claim[ing] millions of dollars in personal expenses as business expenses, including payments for high-end vehicles and clothing, personal grooming expenses, and distributions – or direct payments – from the businesses to personal bank accounts.”

The brothers face potential penalties of up to five years in prison and a $250,000 fine on the conspiracy charge, and up to three years in prison and a $250,000 fine for each filing of a false tax return. Failing to file a tax return could cost Michael as much as a year in prison and a $100,000 fine.

These are, of course, merely accusations, and the brothers are considered innocent unless and until proven guilty. But this is surely not A Situation that The Situation planned on being featured in.

No more free lunch at Google or Facebook? The IRS is thinking about it . . . .

Employees at Google, Facebook, and other Silicon Valley high-tech companies have long been able to take advantage of free or heavily discounted meals and snacks at company cafeterias. The idea is insidious but simple: don’t give workers excuses to leave the building–or their desks.

Now comes the IRS, possibly preparing to tell the tech world there really is no such thing as a free lunch.

As The Wall Street Journal reported, and other folks like Paul Caron picked up on, the IRS is looking at taxing employer-provided meals as one of its top priorities going forward.

That means the Service may be looking at whether those meals should be taxable fringe benefits, instead of the freebies that they currently are.

In general, employer-provided meals are untaxed if they are “for the convenience of the employer.” In this case, the issue may come down to how convenient it actually is for the employer to have employees eating in-house, vs. the convenience that employees get from not having to go out for lunch, or dinner, or anything else.

Does all this mean that the IRS might start going after the folks responsible for developing the latest cool apps and search codes? Probably not. It’d be a lot more efficient for the IRS to go after the employers themselves, charging them with failing to withhold taxes on unreported taxable fringe benefits.

Watch this space for more…or just Google the topic.

Pay your taxes — or lose your driver’s license! NY State has a cool idea to convince reluctant tax-payers.

I regularly tell clients that cash-starved states have become very entrepreneurial and even aggressive in their tax collection efforts. If you earn money in a state, the tax department will probably be willing to go to court to collect income taxes even if you live hundreds of miles away. (I’m looking at you, New York State.) Revenue departments review business filings and public records to determine if a business has any type of a presence (called “nexus” in tax-geek world) that would make the business liable for state taxes. I even saw an author get a letter from a state tax department informing her that she owed taxes on any books that she sold directly as part of a speaking tour.

And now, something new: Don’t pay your state taxes and you could lose your driver’s license.

Again, we turn our lonely eyes to Albany, where thousands of drivers have had their licenses suspended, as The New York Post reported. The state program targets residents who owe more than $10,000 in back taxes.

The program has resulted in more than $50 million in back taxes coming into state coffers. You can’t argue with success.

Get some reward points when you opened a bank account? Surprise! They’re taxable income!

Did you open a new bank account recently and get rewards points that can be used to buy merchandise? If so, good for you.

Did you know that those points are going to be taxable income? Not so good for you.

In Shankar v. Commissioner (143 T.C. No 5), the Tax Court ruled that the points you get for opening a bank account are taxable income, because they are in essence the equivalent of interest on the money that you deposited into the account. As Forbes Magazine points out, the value of the points becomes taxable when they are actually turned in for something of value.

Banks are expected to issue Form 1099, showing the value of the points, when depositors convert the points into merchandise, whether that’s an airplane ticket, clothing, or even (presumably) a toaster.

If you really have time on your hands you can get a copy of the case by typing “Shankar v. Commissioner” into your web brower and clicking on one of the PDFs that will probably show up at the top of your search request.

By the way, none of this affects the tax-free status of frequent flier points that you get from airlines. So there is that.