Employment Gap Between Rich and Poor Widest on Record

The gap in employment rates between America's highest- and lowest-income families has stretched to its widest levels since officials began tracking the data a decade ago, according to an analysis of government data conducted for The Associated Press.

Rates of unemployment for the lowest-income families - those earning less than $20,000 - have topped 21 percent, nearly matching the rate for all workers during the 1930s Great Depression.

U.S. households with income of more than $150,000 a year have an unemployment rate of 3.2 percent, a level traditionally defined as full employment. At the same time, middle-income workers are increasingly pushed into lower-wage jobs. Many of them in turn are displacing lower-skilled, low-income workers, who become unemployed or are forced to work fewer hours, the analysis shows.

"This was no equal opportunity recession or an equal opportunity recovery," said Andrew Sum, director of the Center for Labor Market Studies at Northeastern University. "One part of America is in depression, while another part is in full employment." Read more >>

IRS issues final rules on Obamacare's 'individual mandate'

A centerpiece of Affordable Care Act, also known as Obamacare, is a requirement that all individuals carry some minimum health insurance or pay a tax. The new system aims to provide insurance through state marketplaces and subsidies for tens of millions of Americans who lack it.

If individuals choose not to carry insurance, they are subject to a penalty, starting at $95 per person per year or 1 percent of income in 2014, whichever is greater, and eventually reaching $695 per person or 2.5 percent of income by 2016.

The IRS, which is administering parts of the law involving revenue collection, released the final rules spelling out the details of what constitutes minimum essential coverage, and how individuals are responsible for spouses, children and other dependents, among other topics.

The individual mandate is distinct from the employer mandate, which imposes a fee on most large employers that do not offer a minimum level of coverage. The Administration delayed that provision, putting off the effective date until 2015. Read more >>

For First Time Majority Finds President Untrustworthy

Whatever the deteriorating economy could not achieve (courtesy of Ben Bernanke's relentless bubble blowing and pumping of the S&P 500-driven "wealth effect" distraction) for the past four years, one NSA whistleblower succeeded in a few short days, when earlier today, CNN - hardly a media known for its criticism of the administration - released a new poll according to which not only did Obama's approval rating drop by 8% in the past month, "one of the sharpest, fastest plunges in his presidency" to 45% from 53% (the first time the majority had a negative opinion of the president), not only did the majority find Obama to not be honest and trustworthy for the first time ever in his presidency, but Obama's support with one of his core constituencies - young Americans under 30 - imploded, plunging by 17 points. CNN adds:

"That's particularly discouraging heading into 2014 because Democrats have felt they have a lock on the youth vote after the 2012 elections. "The drop in Obama's support is fueled by a dramatic 17-point decline over the past month among people under 30, who, along with black Americans, had been the most loyal part of the Obama coalition," CNN Polling Director Keating Holland said."

Ted Turner's news network adds the following:

The president also dropped 10 points among independent voters, from 47 percent last month to 37 percent. Obama's disapproval among independents jumped 12 points to 61 percent. Again, more bad news for Democrats because those independents are especially important in mid-term elections in which older, more conservative Americans predominate.

The network pointed to several major scandals as evidence for the drop.

"The White House has been under siege over telephone and Internet surveillance, the Internal Revenue Service's targeting of conservative groups, its handling of the terror attack on the U.S. consular post in Benghazi, Libya, and the Justice Department's collecting journalists' phone records as part of the government's investigation into leaks of classified information," CNN reported.

"It is clear that revelations about NSA surveillance programs have damaged Obama's standing with the public, although older controversies like the IRS matter may have begun to take their toll as well," Holland told the network. Read more >>

Boston woman pays $560K for 2 parking spots

(Photo: Michael Dwyer AP)

Parking is such a precious commodity in Boston that one woman was willing to pay $560,000 for two off-street spaces near her home.

Lisa Blumenthal won the spots in the city's Back Bay neighborhood during an on-site auction Thursday held in a steady rain by the Internal Revenue Service. The IRS had seized the spots from a man who owed back taxes.

Blumenthal, who lives in a multimillion-dollar home near the parking spaces, tells The Boston Globe she didn't expect the bidding to go quite so high for the spots she says will come in handy for guests and workers. Read more >>

IRS Buying Spying Equipment: Covert Cameras in Coffee Trays, Plants

The IRS, currently in the midst of scandals involving the targeting of conservative groups and lavish taxpayer-funded conferences, is ordering surveillance equipment that includes hidden cameras in coffee trays, plants and clock radios.

The IRS wants to secure the surveillance equipment quickly – it posted a solicitation on June 6 and is looking to close the deal by Monday, June 10.  The agency already has a company lined up for the order but is not commenting on the details.

“The Internal Revenue Service intends to award a Purchase Order to an undisclosed Corporation,” reads the solicitation. The following descriptions are vague due to the use and nature of the items,” it says. “If you feel that you can provide the following equipment, please respond to this email no later than 4 days after the solicitation date,” the IRS said.

Among the items the agency will purchase are four “Covert Coffee tray(s) with Camera concealment,” and four “Remote surveillance system(s)” with “Built-in DVD Burner and 2 Internal HDDs, cameras.”

The IRS also is buying four cameras to hide in plants: “(QTY 4) Plant Concealment Color 700 Lines Color IP Camera Concealment with Single Channel Network Server, supports dual video stream, Poe [Power over Ethernet], software included, case included, router included.” Read more >>

Lawsuit from 25 Conservative Groups Against IRS

The scandal plaguing the IRS has just taken another twist as the agency is being hit with lawsuits filed in district court by the American Center for Law and Justice (ACLJ) on behalf of many groups who claim they been unfairly targeted by the tax agency.

ACLJ’s Chief Counsel Jay Sekulow announced this morning that he was filing “an inch-thick” complaint from 25 groups. Sekulow also believes that original complaint will be amended next week to “add another dozen or so groups.”

Among ACLJ’s evidence that this was not a low-level problem created by two rogue employees in Cincinnati:

15 letters to various groups demanding answers to IRS questions were all hand-signed by Lois Lerner. (as seen on TheBlaze on 5/17)

At least 4 different offices were involved over the past year and a half.

Jay Carney claimed the targeting stopped in May of 2012, one of Jay’s clients has a letter from May of this year. Read more >>

Washington launches four different investigations into IRS scandal

Capitol Hill aides spent their Memorial Day weekend scanning hundreds of pages of documents related to the IRS scandal in order to prepare their bosses for what will inevitably be a frantic month of June involving multiple simultaneous investigations into government wrongdoing. By the time lawmakers return to session next week, at least four different investigations will be underway.

As The Daily Caller has reported, at least five different IRS offices including Cincinnati, Ohio; Baltimore, Maryland; Chicago, Illinois and El Monte and Laguna Niguel, California improperly targeted conservative nonprofit groups for extra scrutiny between 2010 and 2012.

The IRS’ shenanigans, chronicled in a damning report by Treasury Inspector General J. Russell George, started when a “team of [IRS] specialists” came together in April 2010 to process the tax-exempt nonprofit status of conservative groups that might be “potential political operations” (page 13 of the IG report). The IRS added “additional specialists” to this effort in December 2011. Read more >>

Poll: Majority of Americans believe federal government too powerful

The 54 percent that expressed that belief, however, is only slightly higher than reported in 2012 and slightly lower than reported in 2010 and 2011, Gallup said. Only 8 percent of Americans said they thought the federal government has "too little" power, while 36 percent said the government has about the right amount of power, the Princeton, N.J., polling agency said.

Results indicated more than twice as many Republicans as Democrats said the government has too much power, 76 percent to 32 percent. Forty-six percent of Americans said they agreed with the statement that the federal government "poses an immediate threat to the rights and freedoms of ordinary citizens," while 53 percent disagree, Gallup said.

Gallup said recent allegations that the IRS targeted conservative organizations and reports of U.S. Justice Department investigations into The Associated Press and Fox News records and emails did not alter Americans' views of the federal government's power. Read more >>

Obama facing accusation after accusation of impinging on civil liberties

But as U.S. president for the last 4-1/2 years, Barack Obama has faced accusation after accusation of impinging on civil liberties, disappointing his liberal Democratic base and providing fodder for rival Republicans as he deals with the realities of office.

News in the past week of the federal seizure of phone records from the Associated Press news agency and the Internal Revenue Service's targeting of conservative Tea Party groups, has intensified criticism already simmering over the Guantanamo Bay prison camp and aerial drone strikes abroad.

When he took office in 2009, Obama promised to close the Guantanamo camp for foreign terrorism suspects, but it remains open with 166 detainees, many on hunger strikes in protest at indefinite detentions. Obama said last month he would revisit that pledge and blamed Congress for blocking his plan to close the camp, partly through restrictions on transfers of detainees. Read more >>

IRS targeted groups that criticized the government

At various points over the past two years, Internal Revenue Service officials targeted nonprofit groups that criticized the government and sought to educate Americans about the U.S. Constitution, according to documents in an audit conducted by the agency’s inspector general.

The documents, obtained by The Washington Post  from a congressional aide with knowledge of the findings, show that on June 29, 2011, IRS staffers held a briefing with senior agency official Lois G. Lerner in which they described giving special attention to instances where “statements in the case file criticize how the country is being run.” Lerner, who  oversees tax-exempt groups for the agency, raised objections and the agency revised its criteria a week later.

But six months later, the IRS applied a new political test to groups that applied for tax-exempt status as “social welfare” groups, the document says. On Jan. 15, 2012 the agency decided to target “political action type organizations involved in limiting/expanding Government, educating on the Constitution and Bill of Rights, social economic reform movement.,” according to the appendix in the IG report, which was requested by the House Oversight and Government Reform Committee and has yet to be released. Read more >>

U.S. citizens ditch passports in record numbers

Americans are ditching their U.S. passports in record numbers, a sign of growing frustration with a system that taxes U.S. citizens on their global wealth whether they live in Montana or Mongolia.

The latest bold-faced names to relinquish their U.S. citizenship include Mahmood Karzai, a brother of Hamid Karzai, the president of Afghanistan, according to federal data released Wednesday.

Also on the list, published quarterly by the Internal Revenue Service, is Isabel Getty, the daughter of jet-setting socialite Pia Getty and Getty oil heir Christopher Getty. In total, more than 670 U.S. passport holders gave up their citizenship -- and with it, their U.S. tax bills -- in the first three months of this year. That is the most in any quarter since the I.R.S. began publishing figures in 1998.

And it is nearly three-quarters of the total number for all of 2012, a year in which the wealthy songwriter-socialite Denise Rich (christened "Lady Gatsby" by Yachting magazine) and Facebook co-founder Eduardo Saverin joined more than 932 other Americans in tossing their passports.

If the recent quarter's pace continues, 2013 will become a landmark year for saying goodbye to America, tax-wise. Read more >>

IRS: We can read emails without warrant

The Internal Revenue Service (IRS) has claimed that agents do not need warrants to read people's emails, text messages and other private electronic communications, according to internal agency documents.

The American Civil Liberties Union (ACLU), which obtained the documents through a Freedom of Information Act request, released the information on Wednesday.

In a 2009 handbook, the IRS said the Fourth Amendment does not protect emails because Internet users "do not have a reasonable expectation of privacy in such communications." A 2010 presentation by the IRS Office of General Counsel reiterated the policy.
Under the Electronic Communications Privacy Act (ECPA) of 1986, government officials only need a subpoena, issued without a judge's approval, to read emails that have been opened or that are more than 180 days old.

Privacy groups such as the ACLU argue that the Fourth Amendment provides greater privacy protections than the ECPA, and that officials should need a warrant to access all emails and other private messages. Read more >>

Millionaires Got $80 Million in Jobless Aid in Recession

The U.S. government paid almost $80 million in unemployment benefits during the worst of the economic downturn to households that made more than $1 million, including a record $29.9 million in 2010, tax records show.

Almost 3,200 households -- about 20 percent of them from New York -- that reported adjusted gross income of more than $1 million received jobless-insurance payments averaging $12,600 in 2010, the latest year for which figures are available, according to IRS data compiled by Bloomberg. Those payments outpaced the total incomes for about 25 million U.S. households.

The $80 million represents less than 0.01 percent of this year’s $845 billion projected deficit. Yet the unemployment aid to millionaire households underscores the lack of means-testing in some federal aid programs as the Labor Department reports new jobless figures today. The aid also is a reminder of the difficulty of reining in spending. Read more >>

The Early Tax Deadline You Can't Afford to Miss

For millions of taxpayers, the April 15 deadline to file your 2012 return already looms large. But for a select group of retirement savers, there's a deadline coming even sooner -- and missing it could cost you a huge amount of money.

That select group includes those who have money in traditional IRAs and 401(k) accounts and who turned age 70½ during 2012.

Under what's known as the required minimum distribution or RMD rules, you have until April 1 of the following year to make your first required withdrawal. In subsequent years, you need to take money out of your account by Dec. 31 to cover that year's RMD. Read more >>

Cuts unlikely to deliver promised budget savings

On paper, there's one thing to like about the ugly spending cuts due to kick in on Friday: $85 billion in budget savings at a time when Washington continues to bleed red ink. In reality, the so-called "sequester" is likely to yield less than half that much in the short term.

In part, that has to do with the complex way the government handles its money. But it also reflects the probability that the spending cuts will hurt the economy, which in turn will lower tax revenue and drive up the costs of social safety-net programs like unemployment insurance.

On top of that, federal agencies - especially the Pentagon - will have to pay penalties to suppliers if the sequester forced them to cancel contracts.

Add it up, and the actual savings could be a lot less than budget hawks envision. Read more >>

Some families to be priced out of health overhaul

English: A member of the audience holds a "Thank You" sign during President Barack Obama's speech on medicare fraud and health care insurance reform at St. Charles High School in St. Charles, Mo., March 10, 2010. (Photo credit: Wikipedia)

Some families could get priced out of health insurance due to what's being called a glitch in President Barack Obama's overhaul law. IRS regulations issued Wednesday failed to fix the problem as liberal backers of the president's plan had hoped.

As a result, some families that can't afford the employer coverage that they are offered on the job will not be able to get financial assistance from the government to buy private health insurance on their own. How many people will be affected is unclear.

The Obama administration says its hands were tied by the way Congress wrote the law. Officials said the administration tried to mitigate the impact. Families that can't get coverage because of the glitch will not face a tax penalty for remaining uninsured, the IRS rules said.

"This is a very significant problem, and we have urged that it be fixed," said Ron Pollack, executive director of Families USA, an advocacy group that supported the overhaul from its early days. "It is clear that the only way this can be fixed is through legislation and not the regulatory process."

But there's not much hope for an immediate fix from Congress, since the House is controlled by Republicans who would still like to see the whole law repealed. Read more >>

The Governments Hidden $500 Billion Inflation Tax on Savings

Image by 401K via FlickrThere is a hidden and deeply unfair "tax" that is costing US savers in excess of $500 billion per year. Through forcing interest rates far below the rate of inflation, the government has effectively created a tax on savings that not only takes all real interest income, but quite deliberately confiscates wealth from tens of millions of savers every year - for the direct benefit of the government.

As will be demonstrated with step by step, simple illustrations, the government is imposing the economic equivalent of a 90% income tax on savers. The amount taken annually from savers is equal to more than half of all individual income taxes, and is nearly three times as large as total corporate income taxes.

The tax is not uniformly imposed, but instead targets older middle class savers in particular. The effects include invalidating decades of financial planning, and potentially impoverishing millions of current and future retirees. More...

U.S. Billionaires Avoid Reporting Cash to IRS

When billionaire Billy Joe “Red” McCombs, co-founder of Clear Channel Communications Inc., reported a $9.8 million loss on his tax return, he failed to include about $259 million from a lucrative stock transaction.

After an audit, the Internal Revenue Service ordered him to pay $44.7 million in back taxes. McCombs, who is worth an estimated $1.4 billion and is a former owner of the Minnesota Vikings, Denver Nuggets and San Antonio Spurs sports franchises, sued the IRS, settling the case in March for about half the disputed amount.

McCombs’s fight with the IRS illustrates an overlooked facet in the debate over tax rates paid by the nation’s wealthiest. Billionaires -- from McCombs to Philip Anschutz to Ronald S. Lauder -- who derive the bulk of their wealth from stock appreciation are using strategies that reap hundreds of millions of dollars from those valuable shares in ways the IRS often doesn’t classify as taxable income, securities filings and tax court records show. More...

Man jailed for cashing Chase check at Chase Bank - loses car and job

Image via WikipediaBy Eric W. Dolan/Raw Story
A 28-year-old construction worker was mistakenly thrown in jail after trying to deposit a check at a local Chase bank, and the whole ordeal ended up costing him his car and job.

KING5 reported that Ikenna Njoku of Auburn, Washington received a home buyer rebate from the IRS, which Chase Bank sent him in the form of a $8,463.21 cashier's check. When he tried to cash the check, a teller at his local Chase Bank suspected it was a forgery and took it, along with his driver license and credit card, to contact bank support.

When he arrived at the bank the next day to get his money, he was arrested for trying to cash a fraudulent check and thrown in jail.

The following day, on Friday, Chase Special Investigations realized the mistake and left a message with the police department. But Njoku ended up staying in jail until Monday morning.

In the meantime, he was fired from his job for failing to show up to work and his car had been towed from the bank's parking lot and was later sold at an auction.

A year after the incident, Chase has yet to apologize to Njoku.

“It’s one thing to make a mistake,” Felix Luna, a Seattle attorney who offered to help Njoku, said. “It’s one thing to make multiple errors of judgment like Chase has made and then, once you realize that your error has caused such harm to somebody else, to just ignore it for a year. I think he deserved better. I think all their customers do.”

Sen. Sanders' 10 worst corporate income tax avoiders

Image via WikipediaVia Bernie Sanders

Sen. Sanders' 10 worst corporate income tax avoiders.
1)      Exxon Mobil made $19 billion in profits in 2009.  Exxon not only paid no federal income taxes, it actually received a $156 million rebate from the IRS, according to its SEC filings.  (Source: Exxon Mobil's 2009 shareholder report filed with the SEC here.)
2)      Bank of America received a $1.9 billion tax refund from the IRS last year, although it made $4.4 billion in profits and received a bailout from the Federal Reserve and the Treasury Department of nearly $1 trillion. (Source: Forbes.com here, ProPublica here and Treasury here.)
3)      Over the past five years, while General Electric made $26 billion in profits in the United States, it received a $4.1 billion refund from the IRS. (Source: Citizens for Tax Justice here and The New York Times here.  Note: despite rumors to the contrary, the Times has stood by its story.)
4)      Chevron received a $19 million refund from the IRS last year after it made $10 billion in profits in 2009.  (Source: See 2009 Chevron annual report here.  Note 15 on page FS-46 of this report shows a U.S. federal income tax liability of $128 million, but that it was able to defer $147 million for a U.S. federal income tax liability of $-19 million)
5)      Boeing, which received a $30 billion contract from the Pentagon to build 179 airborne tankers, got a $124 million refund from the IRS last year. .  (Source: Paul Buchheit, professor, DePaul University, here and Citizens for Tax Justice here.)
6)      Valero Energy, the 25th largest company in America with $68 billion in sales last year received a $157 million tax refund check from the IRS and, over the past three years, it received a $134 million tax break from the oil and gas manufacturing tax deduction. (Source: the company's 2009 annual report, pg. 112, here.)
7)      Goldman Sachs in 2008 only paid 1.1 percent of its income in taxes even though it earned a profit of $2.3 billion and received an almost $800 billion from the Federal Reserve and U.S. Treasury Department.  (Source: Bloomberg News here, ProPublica here, Treasury Department here.)
8)      Citigroup last year made more than $4 billion in profits but paid no federal income taxes. It received a $2.5 trillion bailout from the Federal Reserve and U.S. Treasury. (Source: Paul Buchheit, professor, DePaul University, here, ProPublica here, Treasury Department here.)
9)      ConocoPhillips, the fifth largest oil company in the United States, made $16 billion in profits from 2006 through 2009, but received $451 million in tax breaks through the oil and gas manufacturing deduction.  (Sources: Profits can be found here.  The deduction can be found on the company's 2010 SEC 10-K report to shareholders on 2009 finances, pg. 127, here)
10)  Over the past five years, Carnival Cruise Lines made more than $11 billion in profits, but its federal income tax rate during those years was just 1.1 percent.  (Source: The New York Times here)