Expatriate Owl

A politically-incorrect perspective that does not necessarily tow the party line, on various matters including but not limited to taxation, academia, government and religion.

Friday, April 28, 2006

Money Laundering & State Laundering

Never mind the hidden money! Where are the hidden states?

Your attention is directed to IRS News Release IR-2006-70 (27 April 2006), which announces information-sharing agreements between the IRS and 33 states and Puerto Rico to combat money-laundering activities.

Quoting from the News Release:

"Along with Puerto Rico, the following states have signed partnership agreements with the IRS: Alabama, Alaska, Arizona, Arkansas, California, Connecticut, Georgia, Idaho, Illinois, Indiana, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Minnesota, Nebraska, New Jersey, New York, North Carolina, Ohio, Oregon, Pennsylvania, South Dakota, Tennessee, Texas, Utah, Vermont, Washington, West Virginia, Wisconsin and Wyoming."
So, in addition to Puerto Rico, there are 33 states that are in on the deal. Which leaves 17 that are not.

So far, so good.

But the news release goes on to state:

"Colorado, Hawaii, Montana, New Hampshire, New Mexico and Montana cannot enter into these agreements with the IRS because either state law prohibits them from doing so or they do not regulate the industry."

Never mind that Montana is enumerated twice. The IRS press release still has not accounted for the following 12 states:

North Dakota.
Rhode Island.
South Carolina.

So if you are going to launder money, you now know the states where it is safer to do so.

Thursday, April 27, 2006

Internet Reprimand

Been a while since last post. I have returned from the family out-of-town excursion for the holidays, and am now catching up on my paperwork as my digestive system reacclimates to the leavened bread, beer and whiskey it was deprived of during the Passover holiday.

My undergrad and MBA degrees were each attained with a major in Management. In those days I was somewhat intrigued by the ability of my professors and/or the authors of my textbooks to concoct all of those interesting cases for class discussion (and, sometimes, for course work assignments).

But now, having subsequently gone to law school and having nearly twenty years behind me as a member of the bar, the intrigue and wonderment has all but evaporated. I now know that the creative imaginations of the business school professors and textbook authors do not have to do much imagining at all; they need only observe the proceedings before courts and hearing tribunals, and then write up what transpired.

One such case was recently decided in the New York City Office of Administrative Trials & Hearings. In Department of Education v. Choudhri, OATH Index No. 722/06 (9 March 2006), the NYC Department of Education brought up education analyst Toquir Choudhri on charges of excessive absence, excessive lateness, early departures, making an improper leave request, and disobeying an order to cease using the internet for personal business.

The Choudhri case makes for interesting critique in a Management course for several reasons. For one thing, many of the charges were dismissed because the NYCDOE failed to bring them within eighteen months after the alleged incidents. Other charges brought, such as excessive lateness, did not even cross the NYCDOE's promulgated threshold standards. The only specifications that did stick were for insubordination, specifically, Mr. Choudhri admitted that he continued to access the Internet from his desk for non-employment purposes even after being directed to refrain from doing so. But even this gave the NYCDOE no reason to leave the hearing room holding their heads high. Quite notably, Administrative Law Judge John B. Spooner commented that:

"It should be observed that the internet has become the modern equivalent of a telephone
or a daily newspaper, providing a combination of communication and information that most employees use as frequently in their personal lives as for their work. For this reason, City agencies permit workers to use a telephone for personal calls, so long as this does not interfere with their overall work performance. Many agencies apply the same standard to the use of the internet for personal issues. This widespread recognition that internet use is essential to living in the technological world does not excuse respondent's disobedience to Mr. Barton's order. However, it does suggest that the order that only respondent was prohibited from using the internet for any personal reasons was unusually harsh and arbitrary, motivated by anger rather than a concern for office productivity."

Many jobs require that one remain current on various developments. My undergrad Insurance & Risk professor used to tell the story of an insurance executive who, during the 1950's and 1960's, read Variety (which, for the uninitiated, is a publication about and for the show business and entertainment industry) at his desk every morning. The casual observer (or, for that matter, a supervisor) might view this as recreational goofing-off on company time. But because of the information he obtained from reading Variety, this insurance executive knew that the innovation known as television was beginning to compete with the movie theaters, and was thus in a position to have his company give special scrutiny to the movie theaters they insured (as any firefighter can attest, the friction caused by rubbing a $100,000 business against a $500,000 insurance policy can produce sufficient heat to initiate combustion.).

I had a few run-ins with military officers (and one supervisor) over reading current events publications when I worked for the Department of Defense. But the information value was more than worth it. On more than one occasion I knew what would be coming down the chain of command a week or two before anyone else in the office. And now, as a law practitioner and a college instructor, I have to keep informed because if my clients or students know more then me, then I am in big trouble.

Back to Choudhri's case: Of even greater interest from both a legal and managerial standpoint was the contention by Choudhri's supervisors, with respect to some of the misconduct specifications that they, the supervisors, that they lacked authority to deny Choudhri's leave because he requested it in an "arrogant and cocky" manner. Hey, just who IS the supervisor in that office?

It must be remembered that Choudhri's job duties include ensuring the accurate collection of various attendance data for teachers, and fielding questions from teachers regarding probation, seniority, and retirement issues. In other words, his area of expertise falls under the general heading of personnel. Ignoring, for the moment, my legal training and experience, and viewing this from a strictly managerial perspective, it seems that the work atmosphere NYCDOE is not an optimal one. Not when the personnel office supervisors can't get personnel matters straight regarding those who work in their own shop. And not when they can't even figure out the plain English meaning of their own personnel regulations.

One of the more memorable professors from my MBA curriculum was Charlie Halpin, who taught the Personnel and Labor Relations course; and one of Prof. Halpin's more memorable quotes was the maxim that employees come to work when they are sick and stay home when they are well. More than a bit facetious (and containing a dollop of cynicism), but it highlights the point that in too, too many workplaces, a little piece of the employee's soul unnecessarily dies each work day, and that management does too little to inspire optimal and wholehearted performance.

This is the bottom line reason why I left the IRS for the private practice of law, and the reason why I continue my current teaching gig despite the fact that I can be earning more dollars by devoting more time and trouble to my law practice. Every job has its substandard days now and then, but it is rare indeed that I feel depressed and hopeless when I arrive on campus and walk to my office. Though I did enjoy the work I did with the IRS (I cannot discuss particular cases, but many really WERE interesting), and the people I worked with (including most of the managers to whom I reported), a part of me died every morning when I entered the front door of the office. At the end of my final day with at the IRS I walked out the back door to my car in the parking lot and drove home. I did not look back!

In fact, I have yet to meet anyone who left the IRS who later regretted it.

And if the NYC Department of Education is a gloomy and uninspiring place to work, just how effective a job can the teachers be doing? And what effect does that have on the future of New York City and America?
Choudhri, by the way, was recommended for "a reprimand, the most minor penalty available under the Civil Service Law."

Tuesday, April 04, 2006

Personal Info and Tax Credits

Been busy, but have some free time to make a blog entry. This may be the last one before the Passover holiday, and if so, then best wishes from me and my family to everyone for a happy and kosher Pesach.

Much has been going on in the taxation arena since my last posting, most of which I am not at this time postured to dwell upon, due to time constraints

Brief mention is made of two tax matters.

First of all, in the 8 December 2008 Federal Register, the IRS proposed new regulations which would allow paid tax return preparers to make certain disclosures of taxpayer personal information to third parties. At the time, I thought that the tax return preparers were being given too much leeway, which threatened the security of their clientele. Now, it seems, several members of Congress (including my own Representative) agree with me, and, on 30 March 2006, sent a letter to Treasury Secretary Snow and IRS Commissioner Everson to protest the proposed regs. It is now too early to call this one, but my gut hunch is that the final regulations will not be as permissive as the ones now proposed. We shall see.

Secondly, per article in today's New York Sun, Brooklyn Bishop Nicholas DiMarzio has taken personal affront at New York Assembly Speaker Sheldon Silver's failure to include tuition tax credits in the State budget. Silver has expressed concern that instituting the proposed $500 tuition tax credit would lead to corresponding tuition increases, thus nullifying all of the intended benefit to the affected families.

As mentioned in the prior post of 22 January 2006, my own son goes to a private Jewish religious day school, and we pay the tuition accordingly. The proposed tuition tax credits would not benefit us for various reasons, including the fact that our income level exceeds the proposed ceiling. But there are students in my son's school, and students in other Jewish religious schools, for whose families the proposed tuition tax credits would make a world of difference.

On one hand, it is politically correct within the religious Jewish community to support the tuition tax credits. On the other hand, the common street wisdom is that Assemblyman Silver is supposedly one of us who looks out for our interests. So now, we have a conflict.

My take on it: Shelly Silver has a valid point. Having, approximately 10 years ago, served on the board of a religious Jewish day school, I can say that any private school of any religious or non-religious or irreligious bent is under strong pressures to increase their tuition as much as the market will allow. Achieving voluntary cooperation in freezing tuition levels by a majority of the non-public schools in the State of New York would be extremely difficult because most will somehow paint the money a different color (e.g., increases in "activity fees" or "laboratory fees" or "building fund assessment" or "family assessment" or some other designation). Been there and done that!!

Paradoxically, I think that Silver's stance at this time is in the best interests of the financially-strapped parents the proposed tuition tax credits were intended to help in the first place. Having said this, I will also say that while I am not much of an Albany watcher (and indeed, have never physically visited Albany, New York ever in my life), I have been around long enough to instinctively suspect that Silver has some sort of overriding political agenda that has little if anything to do with the students in non-public schools. Further analysis along these lines is left to the Albany watchers, but whatever it is, I do not see how the teacher lobby, which virulently opposes tuition tax credits and vouchers and the like, can not somehow figure into the Silver's equation.