Employees from the US Nonprofit housing group ACORN were fired after being caught on hidden camera assisting a man posing as a pimp and a woman pretending to be a prostitute, advising them to lie to the Internal Revenue Service (IRS) and giving guidance on how to claim underage girls from El Salvador as tax dependents.

Initially, two ACORN staffers from the Baltimore office were fired on Thursday, September 10, for recommending illegal activities to secure a housing loan. 24 hours later two ACORN staffers in the Washington office were also fired for offering to help the same “pimp” and “prostitute” secure a loan.

25-year-old independent filmmaker James O’Keefe, posing as the pimp, secretly taped the meeting that have ignited calls for investigations of ACORN, the Association of Community Organizations for Reform Now.

ACORN’s leaders said Friday they were “appalled and angry” at what their employees had done, but insisted the videos were part of a political “smear” campaign and not representative of the institution as a whole.

“But that does not excuse the behavior of the employees,” wrote ACORN’s president Alton Bennet and executive director Mike Shea. “We have fired them and are initiating an internal review of practices and reminding all staff of their obligation to uphold the highest legal and ethical standards.”

Rep. Charles Boustany, R-La., called for a hearing to investigate ACORN’s tax filing assistance programs following the release of the videos he said suggested multiple incidents of tax fraud.

“In light of the apparent flagrant and willful attempts to suborn tax fraud, I … (am seeking) a hearing of the Oversight Subcommittee of the House Ways and Means Committee as soon as practicable to investigate ACORN’s activities,” he said Friday.

O’Keefe was accompanied by 20-year-old Hannah Giles, posing as a prostitute. They both sought help from ACORN workers in Baltimore, who advised them how to falsify tax forms and seek illegal benefits for young girls from El Salvador they wanted to smuggle in as prostitutes.

“There’s like 10 girls,” O’Keefe says. “There’s ten El Salvodoreans.”

The ACORN staffer replies, “I understand what you are saying.”

ACORN — the Association of Community Organizations for Reform Now — calls itself a network of families “working together for social justice and stronger communities,” according to its Web site.

The organization has been accused by Republicans and conservatives of committing fraud in voter registration drives.

“Taxpayers should be outraged that their money has gone to an organization that, in addition to facing charges of voter fraud and tax violations, is willing to facilitate prostitution,” said Rep. Steve King, R-Iowa.

“As this video confirms, ACORN continues to operate as a criminal enterprise.”

The videotape was made public Thursday, September 10 by BigGovernment.com. Portions of the video were aired throughout the day on FOX News.

source: Fox News

According to a report by the Champaign-Urbana, Ill. on Nov 5, 2008, nearly 160 people in Champaign County and 42 in Vermilion County are due federal tax refunds or economic stimulus payments, but the IRS has been unable to deliver them.

“In Illinois, the average undeliverable stimulus payment is $569, and the average undeliverable regular refund is $957,” said Sue Hales, an IRS spokeswoman in Illinois. “That’s a lot of money that could come in handy as the holidays approach.”

It’s crucial that taxpayers who may be due a stimulus check update their addresses with the IRS by Nov. 28. By law, economic stimulus checks must be sent out by Dec. 31 of this year.

At least one person whose name appeared on the list of people due payments said he’s already received his check.

“They messed up my stimulus payment, but I got it straightened out and did receive it,” said William Clary, who lives on Duncan Road in Champaign.

Clary said the IRS told him the original check was issued July 11. After he asked where it was, he was notified Sept. 9 a new check would be issued. He deposited the new check about three weeks later.

“They said it was undeliverable,” Clary said. “I’ve only lived here 12 or 13 years. They don’t have trouble finding me any other time.” Barry Rowe, a retired Champaign school teacher, said he was able to arrange for his stimulus payment shortly after being notified Thursday by The News-Gazette that he was on the list.

He said he called the IRS and was told he would receive the check in three to four weeks.

Rowe said he thinks his “undeliverable” status was related to his May 2007 move to the Turnberry Ridge subdivision.

“We moved, and our accountant had actually put the old address on our return,” he said.

Oddly enough, notice of the impending stimulus payment came to the new address, but the check itself never arrived. Rowe wondered whether it might have been deposited directly into his account.

Now that the check has been reissued, Rowe, a former technology director for Champaign schools, is considering what to do with it.

Maybe “buy a new computer,” said Rowe, to help keep track of future checks.

Nationally, the IRS says fewer than 1 percent of the checks it mails out are returned by the postal service as undeliverable.

Through September, the government had distributed 116 million economic stimulus payments, with only about 279,000 checks being undeliverable. The IRS distributed more than 105 million regular refunds, and only about 104,000 of those were undeliverable.

To find out whether you’re one of them, you can go to the IRS Web site www.irs.gov and use the “Where’s My Refund?” and “Where’s My Stimulus Payment?” tools to check the status of your payment. You can also get instructions on how to update your address.

Those without Internet access can call 1-866-234-2942 to check on the status of a stimulus payment or 1-800-829-1954 to check on the status of a federal tax refund.

Maybe President Obama, the former Senator from Illinois can help his constituents.

Each year, the IRS makes changes to it’s tax code. Here is a high level account of the changes to the IRS tax code for businesses.   I will try to capsulize the changes for each category. It is recommended that you talk to your tax adviser about the specifics if any of the following apply to you:

Depreciation and Section 179 Deduction
In 2008 you will be able to deduct the full purchase price (100%) of “qualifying equipment” that you purchased in 2008, but you must have purchased int the same year.

The limitations are that the maximum write-off is capped at $250,000.
And there is a cap of $800,000 for the total amount of the equipment purchased.  But if you’re purchases are over $250,000, you can get a “bonus” write-off in the same year equal to 50% of the balance leftover.  You can then write off the balance over 5 years (up to $800,000)
<a href=”http://truetaxfacts.com/2008-section-179-tax-changes-business-vehicles” target=”_blank”>Here is more information on this change</a>.

Meal Expenses When Subject to “Hours of Service” Limits
In general, you can deduct only 50% of your business-related meal expenses. However, for 2008 and later years, you can deduct 80% of meal expenses while traveling away from your tax home for business purposes if the meals take place during or incident to any period subject to the Department of Transportation’s “hours of service” limits.

The “hours of service” rule are set forth by the US Department of Transportation’s division of Federal Motor Carrier Safety Administration (FMCSA) governing the working hours of anyone operating a commercial motor vehicle (CMV). This includes truck drivers and bus drivers.

Self-Employment Tax
Beginning in 2008, $102,000 is the maximum amount of net earnings
There is no limit on the the amount of wages subject to the Medicare tax.

Social Security and Medicare Taxes
As stated above, the maximum amount of wages subject to the social security tax for 2008 is $102,000. There is no limit on the amount of wages subject to the Medicare tax.

Federal Unemployment Tax Act (FUTA) Tax Rate
The government has decided to keep the FUTA tax rate at the current 6.2% in 2008. It was scheduled to decrease two percentage points to 6.0% after 2007.

Maximum Automobile Value for Using the Cents-Per-Mile Valuation Rule
For employers who provide a auto, for the first time, for the personal use by an employee, the value of that personal use can be determined using the “cents-per-mile rule”. IF the fair market value of that vehicle is less than $15,000 for a car and $15,900 for a truck or van.

For more information, see Cents-Per-Mile Rule on page 20 of Publication 15-B, Employer’s Tax Guide to Fringe Benefits.

Fringe Benefit Parking Exclusion and Commuter Transportation Benefit
Employers can exclude some of the value of parking, highway credits and transits passes it provides to employees, from employees wages.

For 2008, the monthly exclusion for qualified parking increases to $220 and the monthly exclusion for commuter highway vehicle transportation and transit passes increases to $115.

Health Savings Accounts
Eligibility. For 2008, a qualifying high deductible health plan (HDHP) must have a deductible of at least:

• $1,100 for self-only coverage or
• $2,200 for family coverage and
• must limit annual out-of-pocket expenses of the beneficiary to $5,600 for self-only coverage and
• $11,200 for family coverage.

Employer contributions. Up to specified dollar limits, you can generally exclude your contributions (must be in cash) to the health savings account (HSA) of a qualified individual (determined monthly) from federal income tax withholding, social security tax, Medicare tax, and FUTA tax. For 2008, you can contribute up to the following amounts to a qualified individual’s HSA.

• $2,900 for self-only coverage or $5,800 for family coverage.
• $3,800 for self-only coverage or $6,700 for family coverage for qualified individuals who are age 55 or older at any time during the year.

Nonqualified Deferred Compensation Plans
This topic is tricky and complicated. But in general terms, in 2008, final regulations are replacing many of the portions of the regulations regarding deferred compensations plans.   If you think you may be affected, contact your tax professional.

Penalty for Late Filing of a Partnership Return
Starting this year, the penalty for filing late as a “partnership” is increased to $86 for each month or part of a month (up to 12 months) the return is late or does not contain the required information, multiplied by the total number of persons who were partners in the partnership during any part of the partnership’s tax year for which the return is due.

Expiring Tax Benefits
Each year, certain provisions and tax benefits expire from the IRS Tax Code. However, Congress was expected to consider legislation that would reinstate many of these benefits. Go to www.irs.gov and click on “What’s Hot” in forms and publications for more information or talk to your tax adviser.