I.R.S. Warns States Not to Circumvent State and Local Tax Cap

Re:I.R.S. Warns States Not to Circumvent State and Local Tax... by throwaway76543 on Wednesday May 23, 2018 @11:14PM (#17140800)

All of this has been tried before with folks trying to funnel profits into charities. The IRS is going to say "no, we're considering these entities to be a single entity" and they may even say "and furthermore it's criminal tax evasion and you're all going to prison."

This is a news article about a notice they've just issued indicating as much.

The law is not a computer program. Being clever about definitions does not often have pleasant results. This approach is unlikely to work.

[ Parent | on HN ]

Re:I.R.S. Warns States Not to Circumvent State and Local Tax... by toast0 on Thursday May 24, 2018 @02:41AM (#17141580)

The IRS previously said these types of programs were fine [1], although in a way intended not to set prescedent. There are a lot of other cases referenced in the memo, some of which probably did set some prescedents. State governments could easily set up targeted funds, if just dropping the money into the general fund is a non-starter.

[1] https://www.irs.gov/pub/irs-prior/p526--2011.pdf

[ Parent | on HN ]

Re:I.R.S. Warns States Not to Circumvent State and Local Tax... by JumpCrisscross on Wednesday May 23, 2018 @11:27PM (#17140855)

> The IRS is going to say

The IRS is powerful. But so are the states. If you think this is a simple case, you're mis-understanding it. Fully expect this to go to the Supreme Court.

[ Parent | on HN ]