1
 DISASTER STATES aren't jumping to raise taxes for relief and recovery.
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span

2
 Not yet, anyway.
1
elaboration-additional

3
 Just after Hurricane Hugo battered South Carolina,
4
consequence-n

4
 some officials talked of perhaps adding a penny to the state gasoline tax or raising property taxes.
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5
 Gov. Campbell responded,
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attribution

6
 They're mentioning rope
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7
 when there's been a hanging in the family.
6
circumstance

8
 A spokesman says
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attribution

9
 the governor believes
5007
attribution

10
 he can avoid increases
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span

11
 by relying on federal aid
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List

12
 and shifting funds in state programs.
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List

13
 Still, Hugo's impact may revive unsuccessful proposals
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14
 to give local governments authority 
5011
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15
to levy sales taxes.
14
elaboration-object-attribute-e

16
 A spokesman for North Carolina Gov. Martin says
17
attribution

17
 Hugo hasn't prompted proposals for state or local increases.
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18
 California,
5016
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19
 where earthquake damage may top $5 billion,
18
elaboration-object-attribute-e

20
 plans a special legislative session.
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Same-Unit

21
 Property-tax relief is likely.
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22
 Legislators are talking about temporary rises in sales or gasoline taxes,
5020
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23
 although Gov. Deukmejian says 
24
attribution

24
they should be a last resort.
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25
 Needs aren't clear,
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List

26
 and the state constitution makes increasing taxes and spending very difficult.
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List

27
 But some legislators think 
5024
attribution

28
the time may be ripe 
5024
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29
to revise the constitution.
28
purpose

30
 THE IRS WILL PAY
5028
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31
 if its error burdens you with bank charges.
30
condition

32
 Policy statement P-5-39 sets out terms.
5035
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33
 As a result of an erroneous IRS levy on a bank account,
34
result

34
 a taxpayer may incur administrative and overdraft charges.
5029
span

35
 If the IRS admits its error 
5032
List

36
and the charges have been paid,
5032
List

37
 it will reimburse a taxpayer 
5031
span

38
who hasn't refused to give timely answers to IRS inquiries 
5030
List

39
or hasn't contributed to continuing or compounding the error.
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List

40
 The IRS recently amended the policy 
5037
span

41
to cover stop-payment charges for checks
5036
span

42
 lost by the IRS.
41
elaboration-object-attribute-e

43
 If the IRS asks for and gets a replacement for a check
5039
span

44
 that it concedes 
45
attribution

45
it lost in processing,
5038
span

46
 it will reimburse the taxpayer for the stop-payment charge on the original.
5040
span

47
 Reimbursement claims must be filed with the IRS district or service-center director
5041
span

48
 within a year after the expense accrues.
47
temporal-after

49
 If the IRS seeks late-payment interest 
5044
span

50
because of the lost check,
49
reason

51
 you should request interest abatement,
5045
span

52
 publisher Prentice Hall notes.
5045
attribution

53
 JUST FIVE ACRES MORE are all
5050
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54
 we need 
5049
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55
to feel really at home,
54
purpose

56
 they say.
5050
attribution

57
 A couple 
5052
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58
we'll call the Blandings 
57
elaboration-additional-e

59
spent nearly $800,000 on a 15-acre plot and main home 
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Same-Unit

60
and have an old $175,000 mortgage exempt from the new limit on mortgage-interest deductions.
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List

61
 They plan to expand the home site 
5057
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62
by buying five adjoining acres for $200,000,
5056
span

63
 borrowed against a first mortgage on the five acres
5055
List

64
 and also collateralized by the 15 acres.
5055
List

65
 Their debt will be well under the $1 million limit
5060
span

66
 -- on borrowing 
5059
span

67
to acquire, build, or improve a home --
66
purpose

68
 that qualifies for mortgage-interest deductions.
5060
elaboration-object-attribute-e

69
 As you can guess,
70
comment

70
 the Blandings want to deduct home-mortgage interest on the $200,000 loan.
5063
span

71
 But,
5065
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72
 IRS private ruling 8940061 notes,
71
attribution-e

73
 no rule or court case bears directly on the issue 
5064
span

74
of adding land to a principal residence.
73
elaboration-object-attribute-e

75
 So the IRS has drawn a rationale from the sale of a home site 
5068
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76
split in two 
5067
Sequence

77
and sold in different years to the same buyer;
5067
Sequence

78
 a court let the seller in that old case treat this as the sale of one residence.
5069
span

79
 Thus,
5071
span

80
 the IRS says,
79
attribution-e

81
 the Blandings' $200,000 loan is home-acquisition debt,
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Same-Unit

82
 and interest on it is fully deductible.
5072
consequence-s

83
 EARTHQUAKE VICTIMS
5077
span

84
 facing imminent filing and payment deadlines
83
elaboration-object-attribute-e

85
 will get extensions and penalty waivers like those 
5078
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86
provided for Hugo's victims;
85
elaboration-object-attribute-e

87
 IRS Notice 89108 has details.
5079
elaboration-additional

88
 Notice 89-107 offers added relief for hurricane-hit concerns
5081
span

89
 that must file pension and benefit-plan returns.
88
elaboration-object-attribute-e

90
 REPORTS OF PAYMENTS to independent contractors for services must be filed by businesses,
91
concession

91
 but don't bet that contractors' unreported income will be detected that way.
5083
span

92
 The General Accounting Office estimates
5084
attribution

93
 that 50% of IRS audits don't spot companies
5084
span

94
 that fail to file the reports.
93
elaboration-object-attribute-e

95
 UH HUH:
5093
comment

96
 A claim by Peter Testa of New York
5089
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97
 that a stranger paid him $500
5088
span

98
 to go into a bank
5087
List

99
 and change $44,400 in small bills into large bills 
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List

100
is unconvincing,
5090
Same-Unit

101
 the Tax Court found.
5090
attribution

102
 It held
103
attribution

103
 that Testa is taxable on $44,400 of unreported income.
5092
span

104
 WHY BE A MIDDLEMAN for charitable gifts?
5095
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105
 a retiree asks.
104
attribution

106
 A retired electrical engineer
5097
span

107
 we'll call Ben
106
elaboration-additional-e

108
 works part-time as a consultant,
5098
Same-Unit

109
 but he doesn't want to earn so much
110
consequence-n

110
 that Social Security reduces his benefits.
5096
span

111
 So he has arranged for a university foundation to set up a scholarship fund for undergraduate engineering students.
5101
circumstance

112
 He plans to tell clients to pay certain fees directly to the foundation instead of to him;
5100
consequence-n

113
 he would omit those fees from income 
5100
span

114
reported on his return.
113
elaboration-object-attribute-e

115
 So he asked the IRS
116
attribution

116
 if the plan would work.
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span

117
 Well,
5105
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118
 notes IRS private ruling 8934014,
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attribution-e

119
 a fundamental principle is that income must be taxed to whoever earns it.
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120
 The rule goes back at least as far as a 1930 Supreme Court decision,
5107
span

121
 Robert Willens of Shearson Lehman Hutton says.
120
attribution

122
 If you assign your income to another,
5109
condition

123
 you still have controlled its disposition
5109
List

124
 and enjoyed the fruits of your labor, even if indirectly.
5109
List

125
 Ben earns any fees
5112
span

126
 sent directly to charity 
125
elaboration-object-attribute-e

127
and is taxable on them,
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128
 the IRS says; 
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of course, he also may take a charitable deduction for them.
5114
hypothetical

130
 BRIEFS:
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131
 Ways and Means veteran Gephardt
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132
 (D., Mo.)
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133
 moves to the House Budget Committee;
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 Rep. Cardin 
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(D., Md.)
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136
 replaces him. . . .
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 Seattle's license fees for adult peep shows vary from those for other coin-operated amusements
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138
 without serving a substantial government interest
137
circumstance

139
 and are unconstitutional,
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140
 the ninth-circuit appeals court holds for Acorn Investments Inc.
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antithesis

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condition

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restatement

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