Archive for the ‘Las Vegas’ Category

We’re Number One!

Sunday, March 15th, 2020

I think we can all use a little levity right now, and in the email was a study from IPX1031 about where the biggest tax procrastinators are. Not surprisingly to me, it’s fabulous Las Vegas–my home.

A friend of mine is a tax professional in Orlando, and he tells me has few people who wait until September to file. Our rush in September – October is greater than the April tax deadline rush!

So where are the biggest procrastinators?

  1. Las Vegas
  2. Denver
  3. Seattle
  4. San Francisco
  5. Washington, DC
  6. Portland, OR
  7. Austin
  8. Baltimore
  9. Dallas
  10. Houston.

If we look at this based on states, Nevada is only number two:

  1. California
  2. Nevada
  3. Texas
  4. Colorado
  5. Oregon
  6. Washington
  7. Hawaii
  8. Georgia
  9. Arizona
  10. Maryland

Given that I expect an announcement in the coming days postponing the April 15th deadline (for those interested, as of today federal tax returns are still due on April 15th), I think statistics for the 2020 Tax Filing Season will be quite different.

My Day on Jury Duty

Monday, January 4th, 2016

Around Thanksgiving I received a summons for jury duty here in Las Vegas. I was asked to report on a day I had an Appeal scheduled (which had taken lots of negotiating to find a date that worked for everyone), so I had my summons date changed to January 4th. I thought you mind find my day interesting…for those who will be serving.

Back in 1989 I served on jury duty in Van Nuys, California. My then employer paid for wages for up to two weeks of jury duty. The one thing I remember most about the service was “Hurry up and wait.” A 15 minute break routinely lasted 20 – 25 minutes. It was, at times, excruciatingly slow.

Fast forward 27 years and change states. I was summoned for jury duty here in Las Vegas, with a report time of high noon. The first hour included thanking us for coming, instructions on parking, and instructions on what we could and could not do. After watching a video on the court process and a 15 minute break (yes, it ran 20 minutes), 60 of us were called for a criminal panel. (Either 14 or 16 jurors were needed–it’s a little unclear if there would be two or four alternates.)

The judge and the attorneys described the case and witnesses, and asked all of us (in turn) whether any of us had some reason why we couldn’t serve on the trial that would last an estimated four days, and whether we knew any of the witnesses. After questioning all of us generally, we were sent on a 15 minute break…that ran 25 minutes.

We then reentered the court, and the first 24 individuals received more extensive questioning on their backgrounds and whether or not they could fairly try the case. This took ninety minutes, and after that the attorneys began exercising their preemptory challenges on jurors. The preemptory challenges were done so that you didn’t know who was removed; rather, the judge played static (yes, static) on the court speakers so everyone in the court couldn’t hear a thing. The attorneys then went up for a discussion with the judge, then exited the court to talk. After another 15 25 minutes, the judge excused the first 24 prospective panelists with an order to return tomorrow. The other 30 or so individuals left (myself included) were then excused from jury duty. (Nevada has a rule: One day or one trial–if you serve for your one day be it sitting in the jury services room or are called for a case and are not needed, your jury service is done.) So I cannot be called back for jury duty for 18 months.

Some thoughts for prospective jurors:

1. Bring a book, your laptop/tablet, and lots of patience. The legal process reminds me of the IRS Practitioner Priority Service—slow.

2. I had nice conversations with fellow jurors while we were waiting (and waiting). Our panel was really a cross-section of Las Vegas: There were at least two surgeons, a legal counsel for one of the major hotel chains, several dealers (most of whom happen to work for the same hotel), a couple housewives, and several students. We were really diverse (in how we looked, too) and it’s clear to me that the defendant would be tried by a jury of his peers.

3. For a case where you summons a panel at 1:45pm (the time we headed up to the courtroom), realize that it will be impossible to complete voir dire on all 60 people in the three hours you have. Perhaps just taking 30 people and if more are needed, you get those individuals tomorrow? I suspect, though, the procedure in Nevada is to always take a panel of 60 no matter what.

4. I do appreciate the judge, the marshal, and the jury services personnel. All were friendly, and they did answer the questions we had.

So it’s back to the real world tomorrow.

It’s Only Wrong by Three Days

Sunday, January 3rd, 2016

Friday’s Las Vegas Review-Journal included a free calendar (with a retail price of $2). Remember the cliche, “You get what you pay for”? Well, that was definitely the case with this free calendar.

Highlighted on Friday, April 15 is “Tax Day.” There’s only one problem with that—Tax Day is Monday, April 18th this year, not Friday, April 15th. Oops.

As the IRS noted

The filing deadline to submit 2015 tax returns is Monday, April 18, 2016, rather than the traditional April 15 date. Washington, D.C., will celebrate Emancipation Day on that Friday, which pushes the deadline to the following Monday for most of the nation. (Due to Patriots Day, the deadline will be Tuesday, April 19, in Maine and Massachusetts.)

Well, one would hope that the Review-Journal would check with their accounting department or just do a basic search or maybe ask a local tax professional before printing their calendar…and one would be wrong.

Uber and Under-the-Table Kickbacks

Sunday, October 4th, 2015

The ride sharing services Uber and Lyft are now active here in Las Vegas. There’s an interesting article on Buzzfeed about how Uber and Lyft got into Nevada. One of my clients asked me a question: Does he have to pay income tax on kickbacks from the local strip clubs, err, gentlemen’s clubs?

The last time I checked the Tax Code there was no exemption for kickback income from these clubs. Yes, it’s taxable. And further, some of the clubs are now issuing 1099s for these kickbacks. The IRS has investigated both clubs and taxi drivers here in Las Vegas in the past few years. The IRS ordered clubs to issue 1099s and taxi drivers to report kickbacks as income. Uber and Lyft drivers will also have to report their income…unless they want to get in trouble.

Another Las Vegas Preparer Gets In Trouble Over the Foreign Earned Income Exclusion

Sunday, June 7th, 2015

The Foreign Earned Income Exclusion is pretty simple to understand. An individual who is either a bona fide resident of a foreign country or is outside of the United States for 330 days out of a 365-day period can exclude about $99,000 of earned income from income tax. Seems fairly straightforward, right?

There is a codicil to the Exclusion. “This period can be waived when the Secretary of the Treasury determines, after consultation with the Secretary of State, that individuals were required to leave a foreign country due to war, civil unrest or other conditions that preclude the normal conduct of business, among other things.” A list of such countries is published each year. I prepare a lot of tax returns with the Exclusion. I have yet to prepare any with the Exclusion based on the waiver.

Sheila Bunting of North Las Vegas looked at that waiver list as a way to make her clients happy. She apparently repeatedly used the waiver clause of the Exclusion to get her clients a lower tax bill. Unfortunately, her clients weren’t in those countries. The IRS wasn’t amused, and Ms. Bunting found herself facing a lawsuit from the Department of Justice. She consented to a permanent injunction last week.

The DOJ press release
notes, “The injunction requires Bunting to provide a list of customers that identifies by name, social security number, address, e-mail address, telephone number and tax periods, all persons for whom she has prepared federal tax returns or claims for refund since Jan. 1, 2012, that reference foreign earned income.” If you used butning’s 5 Star Tax LLC and have the Foreign Earned Income Exclusion (Form 2555) on your tax return, you can expect to receive a “Dear Soon to be Audited Taxpayer” letter from the IRS.

This is the second Las Vegas preparer who recently has been in hot water over the Exclusion. Earlier this year Harvey Cage was sued by the Department of Justice for the same thing. I’d say it was something in the water but Las Vegas is in a desert.

Varagiannis Gets 15 Months for Tax Evasion

Tuesday, January 6th, 2015

Manny Varagiannis received 15 months at ClubFed for tax evasion. Mr. Varagiannis was arrested back in 2012 on a count of structuring, but pleaded guilty in April to not paying $230,651 in taxes. He must also make restitution.

The charges relate to Midnight Entertainers, an escort service here in Las Vegas. Mr. Varagiannis supposedly sold the business, but back from 2009 – 2011 he didn’t report all of his income from it…and got caught.

According to the Las Vegas Review Journal,
the US Attorney and the Las Vegas police believe that Mr. Varagiannis is offering kickbacks to cab drivers and others. It was also alleged that Mr. Varagiannis remains the real owner of Midnight, Inc. (the legal name of Midnight Entertainers) and the current owners are just fronting him. It’s definitely possible that Mr. Varagiannis may face more charges over these allegations.

In any case, Mr. Varagiannis will be reporting to ClubFed in April.

Cash & Carry

Wednesday, September 10th, 2014

Myong Ho Pak is the owner of Yama Sushi restaurant here in Las Vegas. The restaurant is popular and has done quite well; it features all you can eat sushi. It may have done a bit worse on its 2008 to 2010 tax returns than it really did, though. You see, the owner only included his credit card receipts on his tax return.

It turns out that Mr. Pak’s accountant received his business bank statements but the cash from the business went directly into his personal bank accountant. It’s a good scheme when it works. Unfortunately for Mr. Pak, the IRS discovered the evasion.

Mr. Pak pleaded guilty on Monday to tax evasion, and has agreed to make full restitution to the IRS of $244,045. He’ll be sentenced in December.

It’s a Ten-Digit World (Especially in Las Vegas)

Saturday, April 26th, 2014

This post has nothing to do about taxes, but everything to do with phone numbers in Las Vegas. Beginning one week from today, the 702 area code (which covers Clark County, Nevada–primarily the Las Vegas metropolitan area) will be “overlayed” with the 725 area code. That means if you dial a phone number in Las Vegas you must dial ten digits (e.g. 702-555-1212 must all be dialed). Beginning in one month, new phone numbers will be assigned with the 725 area code.

The Nevada Public Utilities Commission has a fact sheet available on the new area code.

The Las Vegas Culinary Union Should Look at a Calendar Before Calling EAs in March

Thursday, March 6th, 2014

The Las Vegas Culinary Union (formally, Local 226 of the Culinary Union) doesn’t like non-union casinos here in Las Vegas. One such casino is the Cosmopolitan Hotel. It’s one of the newest of Las Vegas’s mega-resorts, and it’s a beautiful facility. Last year I attended the National Association of Enrolled Agent’s national conference in August at the Cosmo (I was taking the third and final year of the National Tax Practice Institute). The Culinary Union would like all convention business at the Cosmo to vanish. This year’s conference is also scheduled for the Cosmo. The Culinary Union decided on the strategy of calling EA’s…in the middle of tax season.

Today, someone from the Culinary Union called me. I was on the phone, so the call went to voice mail. After listening to the first 20 seconds of the message I hit delete. I don’t have time for much besides work, sleep, and the gym during the height of tax season–and it is just that right now: the height of tax season.

I’m not taking sides for or against the Culinary Union. They may be right in their fight against the Cosmo or they may be wrong. However, they’re dead wrong in calling tax professionals at the height of tax season. If anything, the Culinary Union’s current action is counterproductive. While today’s call will not impact whether or not I attend the conference, if I did make a decision based on the call I’d be attending.

A hint to the Culinary Union: Tax professionals are far less busy after April 15th. We have time to listen then…but not now.

One Year In

Thursday, December 6th, 2012

Nevada Flag

One year ago, I announced my move from, as Joe Kristan put it, “the perfumed air and divine weather of Orange County to the desert wastes of Nevada.” A friend asked me to expound on my move, both the good and the bad.

There isn’t much that’s bad for me to report on. My electric bill is painful in the summer; my July bill went up over 4000% [1]. I don’t have grass in my front lawn (but even in Irvine that was an issue). There’s nothing particularly old or historic to see in Las Vegas. When the historic relics are the old casinos such as the Golden Gate [2], historic items are few and far between.

There’s a lot, though, to love. I was told that I wouldn’t know my neighbors, that people aren’t friendly, and that it’s a transient community. I know my neighbors (who are very nice people), people went out of their way to introduce themselves, and while there are definitely transient neighborhoods (especially areas very hard hit by the housing bust), I live in a typical suburban neighborhood. I have a lot more house than I did in Irvine at a lot less cost. The cost of living here is less, and my state income tax bill is almost zero [3]. I’m reconnecting with friends who moved here, and I’m having fun.

The biggest surprise to me is that I’m doing far less driving than I used to. Las Vegas, like Orange County, is full of strip malls. Indeed, the area I live in (Summerlin) is modeled after Irvine. The Las Vegas valley is smaller, and the distances less. This ends up being a big saving. This is especially true when you add in the cost of gasoline; it’s $0.20 a gallon cheaper here than in California [4].

Knowing what I do now, would I have made the move? Absolutely–and maybe faster.

[1] In Irvine, I rarely needed to run the air conditioning (I lived near the ocean which provided free air conditioning). I signed up for Southern California Edison’s air conditioning cycling program. That caused my summer electricity bills to fall by almost 90%. Here in Las Vegas, I have a larger home that must be air conditioned. In the summer, the air conditioning runs at all hours. I knew that I would have large bills…and it wasn’t a surprise.

[2] The Golden Gate Casino, originally the Sal Sagev, is Las Vegas’ first casino. It’s downtown at 1 Fremont Street. They have a great shrimp cocktail special ($1.99, though you must join their slot club for this price).

[3] Nevada has no state income tax. I will have to pay a small amount of Maryland income tax this year because of our Maryland office; it’s likely under $100.

[4] All gasoline is imported from other states into Nevada (there are no oil refineries in Nevada). Yet even including shipping costs you pay less for gasoline here than in California. The obvious (and true) conclusion is that state taxes drive up the cost of gasoline in California.