Monday, January 25, 2010

IRS: Haiti Relief Donations Qualify for Immediate Tax Relief

IR-2010-12, Jan. 25, 2010

WASHINGTON — People who give to charities providing earthquake relief in Haiti can claim these donations on the tax return they are completing this season, according to the Internal Revenue Service.

Taxpayers who itemize deductions on their 2009 return qualify for this special tax relief provision, enacted Jan. 22. Only cash contributions made to these charities after Jan. 11, 2010, and before March 1, 2010, are eligible. This includes contributions made by text message, check, credit card or debit card.

"Americans have opened their hearts to help those affected by the Haiti earthquake," said IRS Commissioner Doug Shulman." This new law provides an immediate tax benefit for the many taxpayers who have made generous donations."

Taxpayers can benefit from their donations, almost immediately, by filing their 2009 returns early, filing electronically and choosing direct deposit. Refunds take as few as ten days and can be directly deposited into a savings, checking or brokerage account, or used to purchase Series I U.S. savings bonds.

The new law only applies to cash (as opposed to property) contributions. The contributions must be made specifically for the relief of victims in areas affected by the Jan. 12 earthquake in Haiti. Taxpayers have the option of deducting these contributions on either their 2009 or 2010 returns, but not both.

To get a tax benefit, taxpayers must itemize their deductions on Schedule A. Those who claim the standard deduction, including all short-form filers, are not eligible.

Taxpayers should be sure their contributions go to qualified charities. Most organizations eligible to receive tax-deductible donations are listed in a searchable online database available on under Search for Charities. Some organizations, such as churches or governments, may be qualified even though they are not listed on Donors can find out more about organizations helping Haitian earthquake victims from agencies such as USAID.

The IRS reminds donors that contributions to foreign organizations generally are not deductible. IRS Publication 526, Charitable Contributions, provides information on making contributions to charities.

Federal law requires that taxpayers keep a record of any deductible donations they make. For donations by text message, a telephone bill will meet the recordkeeping requirement if it shows the name of the donee organization, the date of the contribution and the amount of the contribution. For cash contributions made by other means, be sure to keep a bank record, such as a cancelled check, or a receipt from the charity showing the name of the charity and the date and amount of the contribution. Publication 526 has further details on the recordkeeping rules for cash contributions.

This year’s special Haiti relief provision is modeled on a 2005 law that, in the wake of the Dec. 26, 2004, Indian Ocean tsunami, allowed taxpayers to deduct donations they made during January 2005 as if they made the donations in 2004.

AP: December home sales down nearly 17 percent

Home sales plunge nearly 17 percent in December after tax credit deadline extended

By Alan Zibel, AP Real Estate Writer , On Monday January 25, 2010, 12:32 pm EST

WASHINGTON (AP) -- Sales of previously occupied homes took the largest monthly drop in more than 40 years last month, sinking more dramatically than expected after lawmakers gave buyers additional time to use a tax credit.

The report reflects a sharp drop in demand after buyers stopped scrambling to qualify for a tax credit of up to $8,000 for first-time homeowners. It had been due to expire on Nov. 30. But Congress extended the deadline until April 30 and expanded it with a new $6,500 credit for existing homeowners who move.

"It's 'exit stage left' for first-time homebuyers," wrote Guy LeBas, an analyst with Janney Montgomery Scott.

December's sales fell 16.7 percent to a seasonally adjusted annual rate of 5.45 million, from an unchanged pace of 6.54 million in November, the National Association of Realtors said Monday. Sales had been expected to fall by about 10 percent, according to economists surveyed by Thomson Reuters.

The report "places a large question mark over whether the recovery can be sustained when the extended tax credit expires," wrote Paul Dales, U.S. economist with Capital Economics.

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Friday, January 22, 2010

The Atlantic: State Unemployment Data Darkens Jobs Picture

by Daniel Indiviglio

Jan 22 2010, 12:34 pm

Today, the Bureau of Labor Statistics released December's state-by-state unemployment data. It isn't pretty. Even though the national rate was unchanged last month, most states saw their unemployment rates worsen. 43 states and the District of Columbia saw their unemployment rates increase from November to December, many significantly. This is a major change-in-direction from November's good news, when 36 states saw their unemployment rates decline.

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Wednesday, January 20, 2010

Former Detroit Mayor Kwame Kilpatrick Ordered to Pay Over $300K in Restitution

JANUARY 20, 2010, 7:19 P.M. ET
The Wall Street Journal (WSJ.Com)

DETROIT—A Michigan judge on Wednesday ordered former Detroit Mayor Kwame Kilpatrick to pay more than $300,000 to taxpayers in the next three months to avoid returning to jail, including nearly a quarter million in loans from a trio of prominent businessman that he hadn't previously disclosed.

The flamboyant former mayor has been in and out of court in recent months after being accused by local prosecutors of trying to avoid payment of $1 million in restitution he owes the city stemming from multiple felony convictions, including perjury.

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Tuesday, January 12, 2010

CNBC: Many Firms Reluctant to Hire Because of New Taxes, Rules

By: Albert Bozzo
Senior Features Editor

A potential wave of new regulation and higher taxes may be scaring many businesses from

hiring, prolonging any rebound in employment, say business groups and economists.

The prospect of increased federal and state regulation and taxes has been particularly disruptive to the hiring plans of small- and medium-sized businesses, which have historically generated about two-thirds of the nation’s jobs.

“I don’t really see the private sector hiring much in the next few months,” says Brian Bethune, an economist at Global Insight. “For the small-business sector there is just too much uncertainty about what happens beyond 2010."

Not only is the Obama administration seeking to push through major overhauls of energy and health care policy, it is also expected to impose dozens of new workplace rules and raise income taxes.

As Washington and Wall Street grow increasingly restless about the unusually slow pace of job creation and the risk of a so-called jobless recovery, key business groups have begun to bang the drum more loudly.

In reporting that its small business optimism index fell for the second straight month in December, the National Federation of Independent Business Tuesday said members' No. 2 reason for not expanding payrolls was the prospect of government policy initiatives.

Twelve percent said it was not a good time to expand because of the political environment. Over the next three months, 15 percent said they plan to reduce employment, while eight percent plan to create new jobs.

“We're hearing it more and more from our membership,” says Bill Rys, the NFIB's tax counsel. "At the federal level, there’s uncertainty about tax rates, health care costs, energy costs. You also have what’s going on at the state and local levels, with new fees and taxes. They're reluctant to jump back in.”

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Thursday, January 7, 2010

NY Times: Law School Admissions Lag Among Minorities

Published: January 6, 2010

While law schools added about 3,000 seats for first-year students from 1993 to 2008, both the percentage and the number of black and Mexican-American law students declined in that period, according to a study by a Columbia Law School professor.

What makes the declines particularly troubling, said the professor, Conrad Johnson, is that in that same period, both groups improved their college grade-point averages and their scores on the Law School Admission Test, or L.S.A.T.

“Even though their scores and grades are improving, and are very close to those of white applicants, African-Americans and Mexican-Americans are increasingly being shut out of law schools,” said Mr. Johnson, who oversees the Lawyering in the Digital Age Clinic at Columbia, which collaborated with the Society of American Law Teachers to examine minority enrollment rates at American law schools.

However, Hispanics other than Mexicans and Puerto Ricans made slight gains in law school enrollment.

The number of black and Mexican-American students applying to law school has been relatively constant, or growing slightly, for two decades. But from 2003 to 2008, 61 percent of black applicants and 46 percent of Mexican-American applicants were denied acceptance at all of the law schools to which they applied, compared with 34 percent of white applicants.

“What’s happening, as the American population becomes more diverse, is that the lawyer corps and judges are remaining predominantly white,” said John Nussbaumer, associate dean of Thomas M. Cooley Law School’s campus in Auburn Hills, Mich., which enrolls an unusually high percentage of African-American students.

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Wednesday, January 6, 2010

Federal Reserve Sees High Unemployment as Key Concern

Federal Reserve members expressed concern at a policy meeting last month that unemployment would "remain elevated for quite some time," and limit economic growth, minutes released Wednesday showed.

Baltimore Mayor Dixon resigning post

Wednesday, January 6, 2010, 2:55pm EST
Baltimore Business Journal -
by Robert J. Terry Staff

Baltimore Mayor Sheila Dixon, convicted last month on one count of embezzlement, is stepping down.

WBAL AM-1090 reported Wednesday afternoon Dixon would leave office Feb. 4.

The decision by Dixon, a Democrat, was revealed Wednesday as her lawyers were set to argue in court that the mayor deserved a new trial because of juror misconduct. She was scheduled to be sentenced Jan. 21.

Under the state constitution, Dixon would have been required to step down as mayor upon her sentencing, with City Council President Stephanie Rawlings-Blake assuming Dixon’s mayoral duties. Speculation had run rampant in recent weeks that city leaders were pressing Dixon to resign.

Dixon’s conviction stemmed from her use of gift cards given to the city by developer Patrick Turner. Turner claimed they were intended for the needy.

The trial offered a window into what critics have long derided as a pay-to-play mentality at City Hall that tarnished Baltimore’s reputation.

Dixon was the former president of the Baltimore City Council who became mayor in January 2007. She ascended to the top job after then Mayor Martin O’Malley became governor, defeating Republican Robert Ehrlich.


Sunday, January 3, 2010

Al Sharpton Calls for Us to Fix Our Prisons

by Rev. Al Sharpton 

As the battle lines for health care reform are being drawn – and redrawn – a silent segment of the population is strategically left out of the conversation.  A group of individuals who have been deemed enemies of society, and cast away behind iron bars to fend for themselves.  In California, health care in the state’s 33 prisons is so inadequate that one unnecessary death takes place per week, as inmates are often stacked in triple bunk beds in hallways and gymnasiums.  With nearly twice the number of prisoners than it was designed to hold, California prisons will have to be cut by about 40,000 in the next two years – and it’s about time.

Federal judges just released a 184-page order demanding that California’s inmate population be reduced by 27%, and gave the state 45 days to come up with a plan.   In what they termed an ‘unconstitutional prison health care system’, the three-judge panel concluded that disease was spreading rampantly and prisoner-on-prisoner violence was all but unavoidable.  Forced to close a $26 billion dollar budget gap, California will now have to look at mechanisms to reducing its extensive prison spending, which in 2007 topped out at nearly $10 billion (approximately $49,000 for each inmate).

Whether it’s for pure economic reasons or for an actual concern over the well being of prisoners, California will hopefully serve as an example for a reversal of the ever-growing prison industrial complex.  A system that unfairly profiles and detains minorities, American jails produce a vicious cycle of recidivism and community breakdown.  Last year, the Pew Center on the States released a scathing report stating that one in every 100 American adults was in jail, and that an astonishing one in 15 Black adults was behind bars.  According to government reports in 2007, there were three times as many Blacks in jail than in college dorms, with Latinos not far behind at 2.7 times more behind bars than in secondary schooling.

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