It Is April Fools Day But We Have Good News.
When the Federal Reserve Chairman Speaks everyone listens, says BusinessWeek front page on April 2, 2001, "Feeling The Heat."
This is a very timely topic since everyone is concerned about the upcoming Tax Cut Proposals, and their effect on the economy, long term or short term. Some are even smart enough to think throwing $300 to every taxpayer [$600 if you are married] for a quick $60B [1%] in our $5T Economy will jump start something, we clearly disagree.
How about doing something good for the short term and long term and help 126 Empowerment Zones and Enterprise Communities JUMP START their distressed communities as of January 1, 2001? Is that possible for a total of $1B over five years and $5B over ten years?
San Diego Mayor Dick Murphy, and many other Mayors [Portland, OR, Santa Ana, CA, Albany, GA, Providence, RI, Las Vegas, NV, Odgen, UT, Bakersfield, CA, Orange Cove, CA, Watsonville, CA, Calexico, CA] think so. Many Senators and Representatives think it is also a great idea, and so does the parent of Union Bank of California and Bank of America, all of whom have written Chairman Bill Thomas [R-California] of the House Ways and Means Committee.
They have all requested that the "Community Renewal Tax Relief Act of 2000" be amended effective January 1, 2001 as follows:
Support for these changes is growing by the day and we hope to have the Federal Reserve Board this week, see below.
This Thursday and Friday, April 5th and 6th the Federal Reserve
Board is holding its second annual conference on Community Lending
and the New Financial Markets, and one of the topics could be the
New Markets Tax Credits, the increase in Tax Exempt Financing for
Empowerment Zones, and IRC Section 1397B, the Capital Gains
Rollover for Empowerment Zone Assets acquired after December 21,
The Taxman86 has a special relationship with the Community Affairs Group and now we will see how effective we can be. We are also meeting with the Community Empowerment Board, Vice President Dick Chaney Chair, at the White House on the either the 9th and 10th, thus these events could be timely.
As many of you know we have focused primarily on the Federal Empowerment Zones and Enterprise Communities, but we have not forgotten that California has 39 Enterprise Zones and other Tax Benefit Areas, with many thousands of dollars in State Income Tax Credits, including $30,000 to $33,000 per qualified Employee over five years.
If you are a California Employer, including a C Corp., in one of these tax benefit areas, which pays W-2 wages [including tips] to a qualified employee, including shareholder/employees you may be entitled to these credits. If you forgot to take them you can amend your State Returns, but these credits are only available against income earned from the Enterprise Zone from which the Credits are earned.
Most financial institutions are exempt from California Taxation on the income earned in these Enterprise Zones and as such can not use these hiring credits earned by branches in the Enterprise Zones.
Fortunately the Taxman86 has clued them in to this defect and they are working to make these tax credits be available against all California income, and moreover are working to get these earned tax credits available for sale to investors. Taxman86's website has a new page called California Enterprise Zones, and a State Tax Credit Survey which will tell you how much in tax credits you may have earned and not taken.
ENJOY and wish us luck in Washington, D.C. next week.
Jim Schneider, LL.M.
The Taxman86 Speaks... is copyright 1998-2010 by James E. Schneider, LL.M. Inc.