fbpx
Does saying yes to the dress mean no to the tax?
Share on facebook
Facebook
Share on linkedin
LinkedIn
Share on email
Email

Say Yes to the Dress

The men and women who write our nation’s tax laws aren’t known for their sartorial style. Ohio Representative James Traficant, who served 17 years in the people’s House before serving seven years in the “big” house, raised eyebrows with an occasional denim suit. (We’re pretty sure a Canadian tuxedo would get him fined today.) And Texas Representative Charlie Wilson rocked a unique collection of custom shirts featuring epaulets to hold his suspenders and button flap pockets. But most of the men, at least, are content to settle for a gray suit, blue shirt, and red tie straight off the nearest Brooks Brothers rack.

That all changed for a hot minute this fall. New York Representative Alexandria Ocasio-Cortez, a leader of her party’s progressive wing, has called for raising top tax rates to 70%. On September 13, she showed up at the Met Gala wearing a white off-the-shoulder gown by Aurora James emblazoned with the words “Tax the Rich” in bold red satin on the backside. AOC, as she’s universally known, is used to flattering appearances in Mother Jones and Rolling Stone. Now you’ll find her in Vogue and Harper’s Bazaar, too.

Many of AOC’s critics have called her a hypocrite for showing up at a $35,000-per-plate dinner calling for higher taxes. They seem to think her fellow attendees would be offended at her call to pay more. That attack seems misplaced — if you wanted to start a 12-step program for limousine liberals, you probably couldn’t find a better place than the Met Gala. But there’s another tax story here, too: it turns out that designer James, who also dresses Beyonce, Rihanna, and Megan Markle, doesn’t like paying her own taxes. Maybe she just doesn’t consider herself rich?

In 2011, James formed an LLC to manage her business. From April 2018 to April 2019, the IRS has placed $103,220 in liens on the company for failing to pay withholding taxes on her employees’ paychecks. That didn’t stop her from claiming $41,666 in federal Paycheck Protection Program aid. PPP money was supposed to go primarily towards retaining workers and maintaining payroll, which makes you wonder if she sent Uncle Sam the withholdings on any of those wages, either.

Sign up for The Briefs

Over 20,000 CPAs, tax professionals, and financial advisors subscribe to The Briefs. Subscribe now to receive expert insight on growing your business, links to the latest Tax Beat and Tax Tactics articles. You will also receive invitations to webinars, events, and special offers. Published weekly.

The State of New York has piled on, too. The Department of Taxation and Finance has hit the company with 15 warrants for failing to pay state withholding taxes. They’re still waiting for $14,798. And the state Workers’ Compensation Board has fined James $17,000 for not carrying coverage between March 2017 and February 2018. She owes another $62,722 on the account itself.

The good news is, everything’s cool on the tax front with the $1.6 million house that James bought last year in California. Oh wait, it’s not. It turns out she’s already $2,504 behind in property tax on the Tudor-style house in the Hollywood Hills.

James doesn’t seem to like paying her rent, either. In 2018, her former landlord sued her for over $5,000 in unpaid rent at her shop on West 38th Street in Manhattan’s Garment District. Her next landlord filed to collect $25,000 in holdover rent and evict her from a location in trendy Brooklyn.

Here’s one thing that’s true no matter what you think about AOC’s politics. Those couture gowns the guests wear to the Met Gala can cost tens of thousands of dollars, and you can’t afford them if you’re wasting money on taxes you don’t have to pay! The good news is, all you have to do is accept our invitation to plan better, and you’ll have a better shot at wowing the paparazzi lining the red carpet.

Tax Beat is a weekly column with a unique angle: making taxes entertaining. Every week Ed explores the humorous aspects of taxes and current events. 

Edward Lyon

Edward Lyon

Edward A. Lyon is CEO of the Tax Master Network, where he's coached tax professionals to add planning and financial services to their business since 2005. Go here to join the network. Go here to upgrade your membership or discuss opportunities in financial services.
Edward Lyon

Edward Lyon

Edward A. Lyon is CEO of the Tax Master Network, where he's coached tax professionals to add planning and financial services to their business since 2005. Go here to join the network. Go here to upgrade your membership or discuss opportunities in financial services.

save your clients thousands and build a million dollar business

Get your FREE Copy Of Selling Tax Savings

Previous Issues of The Briefs

Membership includes everything you need to grow your business:

Have questions before you sign up? Schedule a 30-minute meeting.

Get the tools you need
to build your business and impress your clients for $99

Recent articles from Ed Lyon and Tax Master Network

Fat Man. Red Suit.

Here’s how to profit from finding the sweet spot between things that change and things that don’t.

Get Your Free E-Book

Enter your email to receive “Selling Tax Strategies” directly to your inbox!