Only Three Months of Tax Free Poker Left

The IRS recently cleared up some rules that had left poker players and tournament organizers scratching their heads. Previously it had been unclear whether poker winnings, especially the large pots that are awarded in tournaments, were reportable.

Now it’s clear - beginning March 4, 2008, the IRS will require all tournament sponsors to report tournament winnings of more than $5,000.

So, that means you have just over three months to rake in the winnings before they will be reported. Good luck!

‘Tis the Season to Give – Make Sure It Counts Next April

It is the time of year when a lot of taxpayers like to take the time to give something back. Whether you contribute money or property to your favorite charity, make sure that you are familiar with IRS regulations if you intend to claim a tax deduction.

In the first place, you need to know if the organization even counts. Some don’t. The IRS says that qualified organizations include, but are not limited to, “Federal, state, and local governments and organizations organized and operated only for charitable, religious, educational, scientific, or literary purposes, or for the prevention of cruelty to children or animals.” It’s best to check with the people that run the organization itself; they’ll know. Be sure to get the appropriate paperwork from them if the contribution is worth more than $250.

Time doesn’t count. While contributing your time to a charitable cause is certainly adminrable, it can’t count towards a tax deduction. Expense incurred can but not the time itself.

So, embrace the spirit of the season now. But just take a moment to review the IRS’s rules if you plan to claim deductions in April.

Does the IRS Owe You Money?

The nation’s tax collecting agency is searching for certain taxpayers. It seems that these citizens have moved or the IRS is having trouble reaching them at their current address. This is regarding the matter of a certain unreceived check and needs to be cleared up ASAP.

But names in the “Pay to the order of” section of these checks are the taxpayers’. These are refund checks that we’re talking about. This is a problem that the IRS encounters every year: undeliverable refund checks.

Although the checks only account for less than one tenth of one percent of all the refunds issued, they do represent and impressive $110 million in unclaimed money.

In their recent press release about their search, the IRS makes some suggestions for avoiding this problem in the future. First is to always notify the IRS and the Post Office when you have a change of address. Second is to set up direct deposit for refunds.

Could you be one of the taxpayers that the IRS is looking for? Check out the IRS’s “Where’s My Refund” page to see.

No Campaigning From the Pulpit

In case you missed it, there’s a prohibition against preaching about candidates. Churches and other 501(c)(3) nonprofits and charities aren’t allowed to back a candidate running for political office. They are able to take positions on issues but even that rhetoric needs to be limited.

In a recent public statement Commissioner of IRS' Tax Exempt and Government Entities Division, Steven T. Miller, said that he wanted issue this reminder now in light of the earlier than usual presidential campaigning.

Need more information? Check out the IRS’s Tax Information for Charities and Other Non-Profits page.

Squeezing the Hedges

Recent legislation known as pay-as-you-go or paygo requires that new spending produced by the US federal government be funded by new and equal income. Radical idea, I know, but if Congressional members need help getting their heads around it they could talk to, well, any average tax payer out there that learned how to do this a long time ago. In the abstract this is a nice idea; it’s time we teach the jerks some responsibility. But we still get that pork that our Rep promised us, right?

But the IRS officials have more immediate concerns with this new paygo structure. They know that the government will turn to them for the extra money. Caught between the Bush tax cuts and this new rule, coming up with the money is going to be a challenge.

One source of extra funding may be private equity and hedge funds. Watchdog groups and anyone with common sense have long suspected that there is a lot of untaxed money moving through the complicated machinations of off-shore accounts, under-the-table loans, and unreported income that appears to be common in these monetary devices. The IRS plans to do some in depth studies of these funds in search of new taxable sources. And no doubt the hedge fund managers are scrambling to defend their carefully arranged financial empires.

Smithers, release the lawyers!