NRA – Dooms Day!

Hey this is Debra Marie The Tax Queen coming back atcha. There has been a lot of discussion regarding the dissolution of the NRA due to Fraud and even having a lawsuit against them by Attorney General Letitia James.  So, in this post, we will be discussing why the NRA may be finished and what may be the cause of their demise.

So, let’s get started!

So, New York Attorney General Letitia James Moves To Dissolve The NRA After Fraud Investigation.

The attorney general of New York acted Thursday to dissolve the National Rifle Association following an 18-month investigation that found evidence the powerful gun rights group is “fraught with fraud and abuse.”

Attorney General Letitia James claims in a lawsuit filed Thursday, August 6, that she found financial misconduct in the millions of dollars and that it contributed to a loss of more than $64 million over a three-year period.

The suit alleges that top NRA executives misused charitable funds for personal gain, awarded contracts to friends and family members, and provided contracts to former employees to ensure loyalty. The New York Attorney General is alleging that senior leaders of the non-profit group wasted millions of dollars of members’ money on their own luxury travel, personal gifts from retailers like Neiman Marcus and Bergdorf Goodman, family vacations to the Bahamas and big game hunts in Africa. Ms. James said that the four named defendants – Mr. LaPierre, Wilson Phillips, Joshua Powell and John Frazer – “instituted a culture of self-dealing, mismanagement and negligent oversight at the NRA that was illegal, oppressive and fraudulent”.

Seeking to dissolve the NRA is the most aggressive sanction James could have sought against the not-for-profit organization, which James has jurisdiction over because it is registered in New York. James has a wide range of authorities relating to nonprofits in the state, including the authority to force organizations to cease operations or dissolve. The NRA is all but certain to contest it.

The NRA said in a statement that the legal action was political, calling it a “baseless premeditated attack on our organization and the Second Amendment freedoms it fights to defend… we not only will not shrink from this fight – we will confront it and prevail.”

Now let’s get this straight. The NRA does not represent the 2nd amendment they represent gun manufactures.  So, if you think this is an attack on the 2nd amendment you are 100% mistaken.

Within the NRA’s 5 million members are dissidents who have been clamoring for reform for years, only to be defeated as NRA leadership and its 76-member board of directors closed ranks behind Executive Vice-President Wayne LaPierre.  In depositions cited by the lawsuit, LaPierre does not deny the expenditures but justifies them as legitimate expenses.

“I’ve been trying to wake people up for years as to the corruption,” said Tim Harmsen, a lifetime NRA member and host of the Military Arms Channel online. He goes on to say “The NRA is broken on the inside. It needs new leadership. Wayne has to go. It’s almost as if he’s purposely trying to run the organization into the ground.”

Ms. James alleges that the gun lobby is rife with corruption and no longer has the right to call itself a non-profit charity.

Let me explain in a short and simple way of how a nonprofit should work so that you can understand why the NRA may be dissolved like any nonprofit who does not go by the guidelines of having a charity.  There are six areas where ethical issues arise in the nonprofit sector: compensation; conflicts of interest; publications and solicitation; financial integrity; investment policies; and accountability and strategic management.

According to National Council of Nonprofits, when people join a nonprofit board of directors, they agree to conduct prudent use of assets, make decisions in the best interest of the organization, and ensure that the organization abides by applicable laws and acts ethically.

Is the NRA a charity? I thought that charities could not be involved in politics.  Well, the answer to that question is that The National Rifle Association (NRA) is not a charity in the same way that, say, Red Cross and United Way are charities. They are, however, both tax-exempt organizations.

The NRA is not a section 501(c)(3) organization. Rather, it is organized as a section 501(c)(4) organization. Those are described in the Tax Code as civic leagues or organizations not organized for profit but operated exclusively for the promotion of social welfare, or local associations of employees, the membership of which is limited to the employees of a designated person or persons in a particular municipality, and the net earnings of which are devoted exclusively to charitable, educational, or recreational purposes.”

Like section 501(c)(3) organizations, section 501(c)(4) organizations are tax-exempt for federal income tax purposes. But payroll, sales, real estate, and other taxes may still apply.

However, there is one significant difference: Section 501(c)(4) organizations may engage in lobbying so long as it pertains to the organization’s mission. The trade-off, as you might have guessed, is that donations made to 501(c)(4) organizations are typically not deductible by the donor as charitable contributions for federal income tax purposes.

So now that we got that out of the way. Is the NRA a Charity?  You can now see the reason behind the decision of New York Attorney General Letitia James.  It has nothing to do politically and it is not an attack on the organization and the Second Amendment freedoms it fights to defend. It is solely being done to protect the members and the taxpayers from fraud of mishandled funds.

Now you didn’t think I’d end this podcast without mentioning our president Donald Trump, did you? PRESIDENT DONALD TRUMP on Thursday called New York’s lawsuit against the National Rifle Association “a very terrible thing” and suggested the organization move to Texas and lead a very good and beautiful life,” calling the state “an appropriate place” for the NRA.

Now what he said makes no sense whatsoever, because no matter where they move it is still illegal and unethical to do what the leadership is doing and have been doing for years within the NRA.

So, there you have it folks.  A breakdown of the Lawsuit against the NRA aka the National Rifle Association.

Thank you for hanging out with me I hope you enjoyed and until next time this is Debra Marie The Tax Queen …. Bye.

Meals and Entertainment Changes Under the Tax Cuts and Jobs Act

office holiday party

OH NO! Are the HOLIDAY PARTIES still DEDUCTIBLE?
In general, the new Tax Act provides for stricter limits on the deductibility of business meals and entertainment expenses. Under the Act entertainment expenses incurred or paid after December 31, 2017 are nondeductible unless they fall under the specific exceptions in Code Section 274(e).  One of those exceptions is for “expenses for recreation, social, or similar activities primarily for the benefit of the taxpayer’s employees, other than highly compensated employees”  (i.e. office holiday parties are still deductible).

Business meals provided for the convenience of the employer are now only 50% deductible whereas before the Act they were fully deductible. Barring further action by Congress those meals will be nondeductible after 2025.


Businesses should keep the new rules in mind as they plan their 2018 meals and entertainment budgets. 

2018 Expenses – New Rules

  • Office Holiday Parties – 100% deductible
  • Entertaining Clients – Meals 50% deductible / No deduction for entertainment expenses
  • Employee Travel Meals – 50% deductible
  • Meals Provided for Convenience of Employer – 50% deductible (nondeductible after 2025)

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Will Trump Sign the Newly Passed Tax Bill before Christmas as Promised?

Will this still be an early Christmas Gift for the Taxpayers?

new years at white house

Trump may wait until January to sign the tax bill into law.   The reason this may happen is because once this tax bill goes into law it will add to the deficit and when that happens it will trigger a 2010 law known as “PAYGO,” or “pay-as-you-go.”   Once this happens the budget law will require spending cuts to Medicare and other programs.  The reductions would cut spending on Medicare by $25 billion in 2018, according to the Congressional Budget Office.

If Trump signs the tax bill into law in January it would likely defer those spending cuts until 2019,  giving Congress almost a year to come up with a solution.

So what will the Taxpayers get out of the tax saving plan.  Well, let’s see!

In 2018, taxpayers earning less than $25,000 would receive an average tax cut of $60, the nonpartisan Tax Policy Center found.  Those earning between $49,000 and $86,000 would get an average cut of about $900; those earning between $308,000 and $733,000 would receive an average cut of $13,500; and those earning more than $733,000 would receive an average cut of $51,000.

And in 2025 these tax cuts will expire for individuals but the corporations tax cuts will remain permanent.

Happy Holidays Everyone!!!!

 

The Christmas Tax Bill

 

Senate Republicans passed President Donald Trump’s tax plan on December 2, 2017. Republicans still have a lot of differences between the House and Senate tax bills to compromise on.   The House and the Senate have to pass the “same” tax bill.   So which one would be “better.”   Better for whom, would be the question to ask.

I’m going to keep this simple for now.   After this bill is put into law that’s when things will get complicated.    But for now I will go over just a few things that make the House tax bill and the Senate tax bill different.

Family and Child Tax Credit
The House bill expands the credit to $1,600 per child and begins to phase it out for married couples making more than $230,000.   The Senate bill expands the credit to $2,000 per child, with a phaseout beginning at $500,000 of a couple’s income.

Mortgage interest deduction
The Senate bill keeps the limit for the mortgage interest deduction in place for homeowners  for  the first $1 million of home debt.   While the House bill caps it at the first $500,000 of debt.

Medical and Student Loan Deductions 
The House bill eliminates deductions for high medical expenses and student loan interest.  The Senate bill would leave the aforementioned deductions, intact.

The Affordable Care Act (ObamaCare)
The Senate bill repeals the Affordable Care Act requirement that individuals buy health insurance coverage.   Currently, the mandate is enforced via a tax penalty for people who fail to purchase coverage.  The House bill does not touch the mandate.

Trump predicts final passage before Christmas…..