The slings and arrows
of outrageous taxes

March 23, 2006

I don’t like basketball. There, I said it. I said it here in Austin,
where scores of other residents apparently are riveted as the Longhorns
manage to hang in the NCAA tournament.

For me, March Madness is truly maddening. Basketball is just not my
sport, although Texas Tech’s only national championship came in 1993
thanks to the women’s basketball team. Yay, team and all, but that was a long time
ago. So get this latest Big Dance over with already and on to baseball,
please!

Compounding my frustration with the roundball overload is that
tonight’s games will disrupt my usual Thursday night ritual. Yes, I
watch CSI. I like cop shows. So sue me.

Shakespeare_2
Tonight, with hoops taking over CBS, the hubby and I probably will
probably catch up on some television programs we have on tape. Topping
my recorded list is Slings and
Arrows
, a Canadian series that’s currently running on the Sundance Channel. It follows a
troupe of actors at the New Burbage Theatre Festival and gets its name
from the line in Hamlet, the featured production in the show’s first
season.

Wait! You don’t have to love theater to love this show (although it
does help with some of the jokes). It’s a great ensemble production,
well written, well acted, featuring outrageous characters (actors, you
know) getting in and out of even more outrageous situations. Example:
An actual skull replaces the standard Yorick prop, and that’s just a
minor storyline. Not to worry. It was a special last request and is
done tastefully.

Take the first season. Oliver Welles, the Festival’s artistic director,
dies in the premiere episode (aforementioned skull). He is replaced by
Geoffrey Tennant, whose greatest triumph was playing Hamlet years
earlier in a production directed by Oliver. Geoffrey’s star turn was
cut short, however, by a nervous breakdown in the middle of the play’s
third performance. Now Geoffrey’s trying to rescue this new production
of the play that drove him mad while simultaneously dealing with
Oliver’s meddling ghost.

And that’s just the beginning. There’s romance, corporate intrigue,
back-stabbing actors and management, and a leading actor chosen because
he’s, horrors!, an American action-film star.

How could season one’s Hamlet be topped? Try Macbeth. This year the New
Burbage players are putting on the world’s most
cursed play in tribute to the almost dearly departed Oliver. As a
backdrop, the Festival is struggling to survive financially and
alienating patrons thanks to a new-age ad agency’s absurd, subversive
and borderline obscene ad campaign.

And the cherry on top of my viewing sundae: Taxes have a major role
this season. Ellen, the character playing Lady Macbeth, is having to
deal with a supremely egotistical leading man who refuses to take
direction; the crazy but artistically brilliant Geoffrey, with whom she
has an on-again, off-again relationship; and a
Canadian Revenue auditor.

Poor Ellen. She’s learned a sad fact. Tax collectors the world over are
insistent on accuracy. They also want substantiation. Among the things
that got Ellen in trouble was trying to write off too many things as
business expenses when in reality they had only a vague, quasi-legitimate
connection to her job.

Down south here in the lower 48, as well as in Alaska and Hawaii, tax
examiners apply similar standards. You can check out exactly what the
IRS expects, and how it will go about making sure it gets what it
expects, here.

And, after years of putting on a "kinder, gentler" face as mandated in
the IRS Reform and Restructuring Act of 1998, the agency is now getting
a lot tougher. This statement from
the IRS commissioner details the enforcement highlights for fiscal
year 2005. And yes, for the IRS, there were definite highlights,
including:


  • A record $47.3 billion from the agency’s collection, examination and
    document matching activities.
  • More than 1 million returns audited, a
    20% increase from 2004 audits and the highest since 1998.
  • More audits
    of higher-income (more than $100,000) taxpayers.
  • Increased audits of
    both small and large businesses.
  • A jump in IRS liens and seizures to
    pre-reform 1998 levels.


So how can you avoid a visit with an IRS examiner (the agency prefers that term to auditor)?

The best way is not to cheat. Judging from the initial results of the
new poll (upper left of the page; please vote!), that’s going to be a
problem for some.

But even the most honest sometimes find their returns get pulled for a
second look. In that case, make sure you have, as Ellen is discovering, the
documentation to support your claims. If you’re taking legitimate
deductions or credits or other tax breaks, even the pickiest IRS
examiner can’t take them away from you.

It also tends to help if you’re just another face in the tax crowd.

Basically, if your deductions are out-of-the ordinary, the IRS will
probably want to look a little closer to see exactly why. What is
ordinary? Of course, each taxpayer’s situation is unique, but CCH, a provider of tax and business law information and publications,
has put together average deduction amounts per income ranges based on
2003 data.

CCH determined that the average mortgage interest deduction for a filer making
between $15,000 and $30,000 was just over $6,800. Medical expenses for
this taxpayer averaged almost $6,400 and he made around $2,000 in
charitable contributions.

A filer at the top end of CCH’s table ($200,000 or more) averaged
$20,381 in mortgage interest; almost $26,000 in medical costs; and
donations of around $18,000.

You can see the full table, along with other items that might tempt the
tax auditor, in this story I
wrote for Bankrate.com.

Why I like CSI: First and foremost, there are all those gadgets. If any
one police department had access to all the equipment those guys do,
the city would be totally crime-free. It’s fun to watch from week to
week to see how they are going to top themselves. I’m still waiting for
the automatic DNA-separating lie-detecting centrifuge with suspect
specific GPS capabilities.

I’ve always been a big fan of William Peterson. Manhunter: Best. Hannibal Lecter.
Movie. Ever. Then there’s To Live
and Die in L.A.
and, in a lighter vein, Long Gone.

I’ve become a big fan of Gary Dourdan, and not just because of his great green eyes.

George Eads is a fellow Texan. But what’s up this year with the hair issues, facial as well as atop his head?

And what’s not to love about a Vegas showgirl turned criminalist? You go girl!

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