During the hearing, Cook slammed the current U.S. tax code for not keeping up with the “digital age.” He also said that the “tax system handicaps American corporations in relation to our foreign competitors who don’t have such constraints on the free flow of capital.”

So, what does Cook suggest the U.S. do about it? He says that the corporate tax rate needs to be slashed. His suggestion calls for a drop from a 35 percent tax rate to a mid-20s tax rate. He also encourages Congress to lower the tax rate on foreign earnings being brought into the U.S.

The result of the above, Cook says, would encourage more investment in the United States and create more jobs. He even explicitly said that Apple will not bring billions in cash back to the U.S. unless Congress lowers the tax rate.

There are many congressman who no doubt agree with Apple on this issue, but one vocally came out in defense of the company yesterday. The Hill reports that Sen. Rand Paul said the subcommittee’s hearing on Apple’s alleged tax avoidance was offensive. He called upon the subcommittee to immediately apologize to the company.

Even after all of this, Apple isn’t quite done defending itself against accusations of tax avoidance. Reuters is reporting that major European leaders will be meeting to discuss what it sees as tax dodging from major tech corporations like Google, Apple and Amazon. Investigations have found that governments within the EU miss out on over €1 trillion, or $1.3 trillion USD, in tax revenue.

[h/t: The Hill] [Image: lemagit/flickr]

According to an Associated Press report on the sentencing, Hill compared the current U.S. economic system to the system of slavery imposed on her ancestors. Hill pleaded guilty to the tax evasion charges. She will spend three months in prison, three months under house arrest, and pay a $60,000 fine.

Hill became famous as part of hip hop group the Fugees before striking out on her own and finding success with her solo album The Miseducation of Lauryn Hill.

Hill last week confirmed on her Tumblr blog that she had signed a new record deal with Sony. She also vaguely commented on her legal and financial troubles:

I’ve remained silent, after an extensive healing process. This has been a 10+ year battle, for a long time played out behind closed doors, but now in front of the public eye. This is an old conflict between art and commerce… free minds, and minds that are perhaps overly tethered to structure. This is about inequity, and the resulting disenfranchisement caused by it. I’ve been fighting for existential and economic freedom, which means the freedom to create and live without someone threatening, controlling, and/or manipulating the art and the artist, by tying the purse strings…

…Only a completely complicated set of traps, manipulations, and inequitable business arrangements could put someone who has accomplished the things that I have, financially in need of anything. I am one artist who finds value in openly discussing the dynamics within this industry that force artists to compromise or distort themselves and what they do, rather than allowing them to make the music that people need. There are volumes that could (and will) be said.

At issue is whether or not Google makes sales to UK customers from the UK itself. According to Reuters, Google’s Matt Brittin has said that it does not, but some Google staff and UK customers believe otherwise. In light of this, the Public Accounts Committee is calling upon Google representatives to explain themselves. Reuters’ Tom Bergin writes:

Lawyers and academics say that if UK staff did sell to UK customers, that could have implications for Google’s tax status in Britain, opening the possibility of much bigger tax bills.

Brittin, Google’s Vice President for Northern and Central Europe, told the PAC in November that “Nobody (in the UK) is selling.” He said Google employs “a couple of hundred” staff at its European headquarters in Dublin who are responsible for selling to UK clients.

Ernst & Young has refused to comment on Google’s activities, for confidentiality purposes.

Google’s tax practices have been the center of controversy in Europe time and time again, perhaps most notably in France.

The Hill reports that Rep. Charles Boustany, chairman of the Ways and Means subcommittee on Oversight, sent a letter to the IRS asking the agency to explain how it obtains emails, and when it thinks it can obtain said emails without a warrant. Boustany asks that the IRS provide the following information by April 26:

The IRS hasn’t indicated whether or not it intends to answer the congressman’s questions, but it did issue this statement:

“Our job is to administer the nation’s tax laws, and we do so in a way that follows the law and treats taxpayers with respect. Contrary to some suggestions, the IRS does not use emails to target taxpayers. Any suggestion to the contrary is wrong.”

It’s important to note that the documents obtained by the ACLU never outright said the IRS obtained emails without a warrant. The agency only said it was possible while saying that Internet users “do not have a reasonable expectation of privacy.” Of course, such statements don’t exactly inspire confidence, and people want to know if the IRS ever did take advantage of the ECPA to obtain emails without a warrant.

Even if the IRS did access emails without a warrant, it may not be able to do so much longer. Both the House and the Senate are working on laws that would update the ECPA to require a warrant when government agencies wish to access emails.

The Gazette, a local Maryland newspaper, reports that new regulations put into place by the EPA require Maryland to reduce the amount of stormwater that flows into the Chesapeake Bay. The reduction in run off would reportedly drop nitrogen levels by 22 percent and phosphorous levels by 15 percent. It’s a noble endeavor that comes with a $14.8 billion pricetag.

So, where is Maryland going to get the money needed to comply with EPA regulations? The state will be implementing a tax on property that contains “impervious surfaces.” In other words, any surface where rain water can run off instead of being absorbed into the ground will be taxed.

As you can probably already tell, such a tax has caused quite the commotion in Maryland. For starters, it’s a ridiculous tax that’s almost impossible to track. With other taxes, like those on alcohol and cigarettes, the government can count how much is being produced and sold, and apply taxes accordingly. With this rain tax, the government will use satellite imagery to calculate the amount of “impervious surfaces” on a resident’s property, and add to their property tax based upon the amount of rain that fell.

The rain tax will only affect 10 of the largest counties in the state, and the government hopes to raise $482 million a year from the tax to pay the $14.8 billion required by the EPA.

The basic premise of the legislation is that it would enable state governments to collect sales tax from online retailers that don’t reside in their state for purchases from residents in their states. As previously noted, the main difference between the actual Marketplace Fairness Act and what was just passed in the Senate, is that the amendment doesn’t include mandatory simplification, and is non-binding. Still, supporters of the Marketplace Fairness Act are considering it a win.

Would such a law be good for businesses? For consumers? Share your thoughts.

CNET’s chief political correspondent Declan McCullagh put it well: “It appears to be intended as a clever political hack: secure plenty of votes on a non-binding Internet tax amendment, then use those vote totals to argue there’s sufficient support for S.336 when it’s up for a binding vote later.” This is a sentiment shared by opponents of the legislation, such as eBay.

Wired quotes Durbin as saying, “Today’s vote proves that an overwhelming majority of Senators support this bipartisan legislation to level the playing field for brick-and-mortar retailers.”

It’s important to note that the Senate didn’t just vote on this issue. It was only one of many amendments to the bigger budget proposal, so it’s hard to say how much real support there was for this legislation itself.

Chris Morran at The Consumerist said on the day the vote took place, “The amendment is one of numerous budget amendments being put before the Senate and passed late Friday afternoon by a vote of 75 to 24. If that number maintains through the voting process on the actual Act, it means that opponents would not have the numbers to force a filibuster. However, it is worth noting that today’s vote does not bind the senators to voting the same way if and when the Act comes up for debate.”

The Alliance for Main Street Fairness, a coalition supporting the Marketplace Fairness Act, shared some reactions to the vote from small business owners:

“It’s about time small business owners like me got some good news from Washington,” said Tee Miller, owner of Black Mingo Outfitters in Georgetown, South Carolina. “Now that the Senate has voted in support of the Marketplace Fairness Act, it’s time for Congress to act quickly and pass this much-needed legislation so I can finally compete fairly with online-only retailers who have enjoyed an unfair price advantage for far too long. Thank you, Senator Graham for showing South Carolina retailers and small businesses your support.”

“Today, Senators Warner and Kaine voted with Virginia’s local businesses to close the online sales tax loophole,” said Sarah Pishko, owner of Prince Books in Norfolk, Virginia. “Their vote in support of the Marketplace Fairness Act is the first step to ensure taxes are applied fairly and government isn’t picking winners and losers by making some businesses collect taxes while others get a free pass. I want to thank them on behalf of Virginia business owners for voting to support Main Street.”

The coalition itself calls the vote a “win” on the Marketplace Fairness Act. Again, this topic was only one of many amendments.

R Street, a Washington-based think tank, has an open letter to Congress calling for opposition to the Marketplace Fairness Act (via Forbes). It was written earlier this month, before the vote. Here’s a sample from that:

Despite what some supporters claim, this legislation is bad news for conservative principles and the cause of limited government. It would dismantle proper limits on state tax collection authority while causing serious damage to electronic and interstate commerce.

S. 336 would countenance an enormous expansion in state tax collection authority by wiping away the “physical presence standard,” a baseline protection that shields taxpayers from harassment by out-of-state collectors. Current law dictates that a state can only require a business to collect its sales tax if it is physically present within its boundaries. Far from a “loophole” intended to advantage the Internet, it is the result of a Supreme Court decision grounded in a bedrock foundational principle of tax policy: states must not be allowed to extend their taxation and regulatory authorities beyond their borders. Dismantling this protection for remote retail sales would create a very slippery slope for states to attempt collection of business or even income taxes from out-of-state entities.

Furthermore, the bill would create a decidedly “unlevel” playing field between brick-and-mortar and online sales. Brick-and-mortar sales across the country are governed by a simple rule that allows the business to collect sales tax based on its physical location, not that of the item’s buyer. Under the “Marketplace Fairness Act,” that convenient collection standard would be denied for online sales, forcing remote retailers to interrogate their customers about their place of residence, look up the appropriate rules and regulations in thousands of taxing jurisdictions across the country, and then collect and remit sales tax for that distant authority.

Imposing this unworkable collection standard on remote retail sales but not on brick-and-mortar retail sales would not only be unfair, it would result in enormous complexity while damaging interstate commerce. Online sellers would be weighed down by substantial compliance burdens associated with the existence of over 9,600 separate taxing jurisdictions, each with its own unique definitions, holidays, and rates. The bill’s paltry “small seller exception” of just $1 million (when the Small Business Administration sets the limit as high as $30 million in some cases) in remote sales does little to mitigate the damage.

In addition to R Street, it has signatures from American Commitment, Americans for Prosperity, Americans for Tax Reform, Campaign for Liberty, Center for Freedom and Prosperity, Center for Individual Freedom, Competitive Enterprise Institute, Digital Liberty, FreedomWorks, The Heartland Institute, Institute for Policy Innovation, Less Government, National Taxpayers Union, Rio Grande Foundation and Taxpayers Protection Alliance.

If it becomes law, the Marketplace Fairness Act would only allow states to determine whether or not they want online businesses to collect tax. It would not require states to collect sales tax from online businesses. Either way, it’s going to amount to more taxes for online shoppers. Some believe it’s unlikely that it will make it to law given the fierce debate.

Should this become law? Do you think it will? Let us know what you think in the comments.

Zorich played for Notre Dame in college and was an All-American before being drafted to the NFL in 1991. He played for the Chicago Bears until 1997, and then capped off his NFL career with one year with the Washington Redskins in 1997. Zorich was a member of the 1988 Notre Dame football team that went undefeated and won the National Championship.

An attorney for Zorich told the AP that he would be pleading guilty to four misdemeanor counts for not filing tax returns between 2006 and 2009. Each misdemeanor count has a maximum one year prison sentence and $100,000 fine. The former athlete is alleged to have made over $1 million during that time, including income from the Christopher Zorich Foundation, a charity he founded in 1993 to help disadvantaged families.

In 2010, the Chicago Tribune reported that over $850,000 was missing from the Christopher Zorich Foundation, and that the organization had not filed taxes since 2003. Late last year, Zorich agreed to pay nearly $350,000 in unaccounted-for funds back to his charity after an Illinois Attorney General investigation.

AB 362, proposed by Democratic Assemblymember Philip Ting (San Francisco), would provide tax relief for employees who receive reimbursement from their employer for federal taxes they paid on healthcare benefits provided to their same-sex partner and dependents.

The law would apply to those who work for public entities or participating private companies who currently choose to reimburse for federal taxes paid on benefits received for their partners – those like Google and Facebook.

And it’s Facebook that’s the first to public suppor the measure.

“Facebook today announced its support of legislation introduced by California State Assemblymember Phil Ting that would provide tax relief for employees who receive reimbursement from their employer for federal taxes they paid on healthcare benefits provided to their same-sex partner and dependents. Facebook Director of Compensation & Benefits Tudor Havriliuc joined Assemblymember Ting and San Francisco Supervisor Mark Farrell at a press conference to unveil the legislation. Parity in healthcare coverage is among a host of equitable benefits Facebook provides all of its employees,” said Facebook in a post on its LGBT@Facebook page.

“At the heart of this issue is a question of fairness for same-sex couples,” said Ting. “The federal policy to tax their benefits is discriminatory, and the last thing the state of California should do is make it harder to remedy the injustice by taxing the reimbursement of these costs,” he added.

Facebook, as you probably know, is one of the most pro-LGBT companies in tech. Google could also claim that title, as well.

Should Internet data be taxed anywhere? Let us know what you think.

Eric Pfanner at The New York Times explains:

The report published Friday said a tax on data collection was justified on grounds that users of services like Google and Facebook are, in effect, working for these companies without pay by providing the personal information that lets them sell advertising.

The report says tax rates would be based on the number of users an Internet firm tracked, to be verified by outside auditors. The authors did not recommend tax rates or estimate how much money such a levy could raise.

Obviously the idea has been controversial, and has drawn a great deal of criticism. For example, Nicholas Carlson at Business Insider says the “French view of the Internet will make you want to pull your hair out,” adding, “Users are not, ‘in effect’ or otherwise, ‘working for these companies without pay by providing the personal information that lets them sell advertising. They are using products for free! NO ONE IS MAKING THEM USE FACEBOOK OR GOOGLE, SHEESH.”

Google is reportedly reviewing the report. Perhaps we’ll see a blog post about it from Google in the future.

France has been looking at Google’s tax practices for a couple years now, as the French government has accused the company (and others) of playing the tax system by placing their European operations in places like Ireland or Luxembourg, where tax rates are lower.

On Thursday, French Industry Minister Arnaud Montebourg said France has decided to go after all big Internet firms “curbing legal tax avoidance,” as Reuters puts it, to collect payment of back taxes. Reporter Brian Love writes:

The government had decided, Montebourg said on France 2 television, “to launch tax retrieval procedures covering all of the Internet giants”.

He did not elaborate and it was not clear whether the comment, made in a wide-ranging interview about French industry, referred specifically to existing tax investigations of the Internet search engine and retail giants Google (GOOG) and Amazon (AMZN), or was suggesting a broader campaign.

Amazon received a $252 million back tax bill from the French government in November.

Meanwhile, talks between Google and publishers in France over payments for links are at a stand-still, according to ZDNet, which cites French newspaper Le Monde. We reported on this situation last fall, when Google prepared a note about a link tax proposal by French lawmakers (backed by the publishers).

Google’s Director of Public Policy in France, Oliver Esper, said at the time, “The web has led to an explosion of content creation, by both professional and citizen journalists. So it’s not a secret that we think a law like the one proposed in France and Germany would be very damaging to the internet. We have said so publicly for three years.”

He later added, “We have always been and remain committed to collaborate with French Publishers associations as they experiment and develop sustainable economic models on the Internet.”

Google executive chairman Eric Schmidt met with Hollande back in the fall to discuss the proposal, and the parties involved were supposed to resolve their issues by the end of the year (at least as far as the president was concerned), but so far, it sounds like little has been resolved.

As far as Internet taxes go, while French regulators’ plans may be designed to go after big companies like Google, where are the lines drawn? Will smaller players be affected as well? The very nature of the Internet is global, and that includes France.

Is this a good idea on France’s part? Let us know what you think.

The IRS had originally planned to open electronic tax filing on January 22. The delay is due to changes in tax law passed by congress on New Year’s Day. The American Taxpayer Relief Act (ATRA) was the compromise bill that was the result of the “fiscal cliff” standoff between the president and house Republicans.

The IRS is now updating forms and “completing programming and testing of its processing systems.” The updates should, the IRS states, allow the “vast majority” of Americans to file their tax returns beginning January 30. For those few who need more obscure forms for things such as residential energy credit claims, depreciation of property, or general business credits, further form updating and processing systems changes should allow them to file in late February or early March.

“We have worked hard to open tax season as soon as possible,” said Steven T. Miller, acting commissioner of the IRS. “This date ensures we have the time we need to update and test our processing systems.”

The IRS stated that not even paper tax returns will be processed before January 30, and that taxpayers receive their refunds more quickly when filing electronically anyway. Over 80% of taxpayers in the U.S. filed electronically in 2012.

“The best option for taxpayers is to file electronically,” said Miller.