The IRS should stop California's anti-Trump scheme to help residents evade federal taxes

Opinion: The IRS should stop California’s anti-Trump scheme to help residents evade federal taxes

A proposal by state California Senate President Pro Tem Kevin de León would allow residents to keep deducting the full amount they pay in state and local taxes from their federal taxable income.

Jan. 10, 2018 5 AM PT

To the editor: The California Legislature’s approach to simultaneously creating a tax credit for California that is a deduction is laughable. (“Losers in the GOP tax plan, blue states are unwisely turning to tax evasion,” editorial, Jan. 6)

The Times editorial misses the critical point about that tax treatment: Any federal tax authority for such treatment is based not on any specific federal tax statute, but on Internal Revenue Service administrative guidance that was narrow in scope and may be withdrawn, modified or replaced at any time based on direction from the secretary of the treasury. Think President Obama and his pen and phone.

The Internal Revenue Code contains several civil and criminal penalties for ordinary citizens who “promote” tax shelters. Perhaps the IRS should consider using them against defiant California legislators who are behaving like the large accounting and law firms that marketed gimmicky tax shelters at the turn of this century.

Kip Dellinger, Santa Monica

The writer, a certified public accountant, was the tax policy and practice columnist for Tax Notes magazine.

To the editor: George Skelton forgot something. (“Democrats’ plan to help California taxpayers doesn’t pass the smell test. They should still go for it,” Jan. 8)

While 6.1 million Californians will lose an average of $8,438 in itemized deductions, all people filing returns with their spouses will gain $12,000 more in the standard deduction. Ignoring the increased standard deduction is convenient, but it is not intellectually honest.

Consider: Who benefits most from itemized deductions? Rich people.

President Trump’s opponents often complain that the rich should pay more in taxes, but now they complain that the rich are losing something that allows them to pay less. Do they want rich people to pay more or less? They can’t have it both ways.

Arnie Sklar, Beverly Hills

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