In the Loop: February 10, 2009 Archive

'Why all the tax trouble?' Tax preparers weigh in.

Posted at 12:30 PM on February 10, 2009 by Sanden Totten

Tim Geithner, Tom Daschle, Nancy Killefer . . . and now Hilda Solis too. One by one Obama's picks for Cabinet positions are getting hammered for the same dirty secret: tax troubles.

The taxman is on to you Geithner, Daschle and Killefer(photos by Getty Images)

It's coming up so often I have to wonder, are politicians inherently bad at taxes? Is this a seedy scam or are these honest mistakes?

"I don't think seedy is the appropriate term," Peter Demerjian told me. He's an assistant professor of accounting at Emory University in Atlanta. "Some of these things are very common errors."

Like Geithner forgetting to claim his money from working with the IMF or Daschle neglecting to count a private driver as income. Demerjian doesn't think this batch of nominees are unusually unscrupulous. Rather, he says the Obama administration is being unusually rigorous in scoping out their records and calling out mistakes. After all, the IRS only audits about one percent of all returns. Obama's team is essentially auditing every nominee. But Demerjian admits, while the type of mess-ups we're seeing may be typical enough for your average American, the details aren't:

"Most of us don't have someone offer us a limousine and a driver" Demerjian correctly notes. "But as far as deducting things that shouldn't be deducted or forgetting to do some self employment tax . . . that kind of thing is not that uncommon."

Michael Schaffer has seen tax problems from both ends. He's scrutinized records as a Minnesota state auditor and now prepares returns for individuals and small businesses around the Twin Cities. He says the wealth of the nominees is a big factor in this mess for two reasons:

Continue reading "'Why all the tax trouble?' Tax preparers weigh in."

High drama in the mortgage biz

Posted at 10:22 AM on February 10, 2009 by Jeff Horwich (2 Comments)

I'm in the middle of doing what they say no one's doing right now: Selling my home and buying a new one.

It's certainly not impossible, and still pretty fun once you get to the buying phase. But the market does seem a little slow. The main symptom we experienced is that there's just not that much to look at -- mostly lots of houses that were on the market before the big crash this fall, and still linger there because of some significant flaw.

That said, we sold our home quickly and did find just what we were looking for, at a great price (but if hadn't found that one...there wasn't much else). All told, it was kind of a blessed real estate experience.

But it was fascinating to hear about the drama behind the scenes when it came to getting our loan. Our swashbuckling (that's the best word I can come up with) mortgage guy apologetically described it almost like we had just witnessed Mommy and Daddy fighting: "I'm really sorry you had to witness that."

He had locked in a great rate while rates were at a nadir a couple weeks ago, and worked out a package where we could put 10% down and pay an up-front premium to avoid mortgage insurance. He used the lender's own guidelines to draw up the package -- it was open-and-shut.

But the lender, evidently, freaked. Thus ensued what I understand to be a series of shouting matches, slammed down phones,and flaring tempers, among our mortgage broker, the "processor" middleman, and the lending bank. I'd have never imagined such passion in something as seemingly dry as the mortgage business, but such are the times we're living in.

And who, you might ask, was the lender? Well, I actually won't mention the name, for fear it might jeopardize my loan (paranoid, yes -- but I'm not taking any chances). But it was one of the poster-children for reckless lending during the bubble. And despite what they and the industry are saying -- money is flowing, people with good credit can get a loan, the markets are functioning -- they are clearly chastened by the fall, to the point of being hyper-conservative and even ignoring their own stated guidelines.

In the end, our broker (who seems to love the mortgage business more than I can ever comprehend) wound up quoting the lender chapter-and-verse of their own guidelines, and they were forced to capitulate.

But it turns out those very guidelines are now being revised, and the rather humdrum policies we took advantage of to get our loan will disappear within a few weeks for new buyers.

And so the damage of the financial crash spirals out into the spring...

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First up: Bob Marley Lager and Bob Marley coffee

Posted at 4:12 PM on February 10, 2009 by Jeff Horwich

Sounds like the heirs of reggae star and all-purpose icon Bob Marley are finally taking control of the licensing of his name, image, and catch-phrases.

(Photo by mdemon via Creative Commons)

Would seem to be 'bout time. Since he died in 1981, it's been kind of a free-for-all, as Marley came to stand for everything from freedom, to pot, to love, to...pot. According to today's Wall Street Journal (loves me my WSJ) a private company has invested $20 million to go into partnership with the Marley family to form House of Marley LLC.

Of course, it sounds like they intend to crack down on the fact that every Tom, Dick, and Moonbeam can slap Marley's face on a t-shirt or tapestry and make money without any royalties. Dorm rooms will never be the same.

But they've also got their eye on some new projects, namely Marley Lager and a line of organic coffee from the family's Jamaican plantation.

Because it's really about the social legacy.

Unfortunately, they're a few years too late to stop John Mayer from performing No Woman No Cry.