Archive for February 27, 2014

IRS Criminal Investigation Issues Annual Report

On Tuesday, February 25, 2014, the Internal Revenue Service announced the release of its IRS Criminal Investigation (CI) Annual Report for fiscal year 2013, reflecting significant increases in enforcement actions against tax criminals and a robust rise in convictions, including identity theft.

CI investigates potential criminal violations of the Internal Revenue Code and related financial crimes in a manner to foster confidence in the tax system and compliance with the law.

High points of fiscal year 2013 include:

• a 12.5 percent increase in investigations initiated compared to the prior year. Read More

Written by | Posted in IRS

TaxConnections Launches License Verification Toolkit For CPA, State Law and Enrolled Agent Licenses!

TaxConnections is pleased to announce the License Verification Toolkit, a FREE resource that allows users to look up CPA Licenses, State Law Licenses and Enrolled Agent Licenses. You no longer need to spend hours researching the credential verification of your CPA, EA or Tax Lawyer. TaxConnections has done the research for you to quickly and easily identify and verify your tax professionals licenses.

The “Verify a Certified Public Accountant (CPA) License Map” provides an interactive map of the United States with the specifics to check the CPA credentials of any Tax Advisor you retain. The “Verify a State Law License Map” enables you to verify the state tax law license of any Tax Lawyer. Last but not least, the “Verify an Enrolled Agent License” verifies the EA License of most tax professionals who have represented taxpayers by either passing a Read More

Written by | Posted in Individual • Tax Tips • TaxConnections

Staying With The Trend For The Tax Function

The “Buzz Words” these days for the in-house Tax Function are:

• Transformation
• Value Creation
• Tax/Business Strategic Alignment
• Business Partnering
• Risk Management/No Surprises

Transformation of the Tax Function – The Whys, What’s and How’s

Why does the Tax Function need transformation? Read More
Written by | Posted in Tax Provision/Tax Reporting • Tax Risk Management • Tax Tips

Casualties Involving Law Violations

This article is a follow-up to my previous article “Casualties” on casualty loss deductions in which I set forth the nature of a casualty, qualifying events, how to determine the amount of the loss, and the allowable deduction.

[This case was reported in J.K. Lasser’s Monthly Tax Letter, February, 2014].

Taxpayers built two homes but did not obtain the necessary building permits because they wanted to live without government interference. Several years later, the homes were destroyed by a fire and the taxpayers claimed a casualty loss in the year of destruction. [Note: the article did not say when this occurred].

The IRS disallowed the loss on the grounds that the taxpayers did not comply with state Read More

Written by | Posted in Real Estate • Tax Policy

Employment Taxes And The Self-Employed Global Worker – So “Un”Happy Together – Part I (1)

Domestic Administration of Social Security Taxation and the Scope of International Coordination –

The United States social security program consists of benefits collected from taxes on employers, employees, and the self-employed, and distributions paid out to retired workers and their dependents and survivors. There are three aspects of the United States social security program. First, social security contributions are collected from current workers based on their current earnings. Second, social security benefits are calculated based on past contributions and paid to currently retired or disabled workers out of the funds contributed by current workers. And third, social security benefits received may be subject to income taxation, depending on the taxpayer’s status. Read More

Written by | Posted in International

7 Habitual Mistakes Companies Make – Chapter 6 (2)

TaxConnections Blog Post
Internal Audits Fix Financial Accounting Problems –
Introduction –

CHAPTERS 1 TO 5 have taken the tax risk management process from a proactive one through a tax team creating a Tax Risk Management strategy and then ensuring that the tax manager gets outside input and more facts.

Chapter 6 deals with Tax Risk Management Step 6.

Financial accounting supplies the numbers on which tax compliance is based. Simply relying on these numbers, as is usually the case with most tax managers, is not enough by a long shot. Internal audit procedures must be expanded to self-audit the higher tax risk Read More

Written by | Posted in Tax Risk Management

IRS Issues Criminal Investigation Report

Investigations, Prosecutions and Convictions are up, while Agent Resources were Cut

The Internal Revenue Service released its annual Criminal Investigation report today concerning fiscal year 2013. The Criminal Investigation Division initiated over 5,000 cases and recommended over 4,300 for prosecution; the conviction rate of those cases prosecuted was 93 percent. This is particularly impressive since the Internal Revenue Service agent resources decreased by over five percent. Identity theft was a key area of focus for the Criminal Investigation Division.

For more information, view the IRS Press Release. Read More

Written by | Posted in IRS • Tax Fraud/Evasion/Crimes

Senate Finance Committee Blank Slate Project 2013 – Senator Rockefeller’s Suggestions

Evaluation of Senator Suggestions for the Blank Slate Project

As noted in my 9/9/13 post, I’m going to summarize and analyze proposals senators offered to the Senate Finance Committee, and that the senator made public. Despite falling behind on my project, as tax reform likely heats up in 2014, I’m back at it as I’d like to look at and share what might be a broader array of proposals and issues. In no particular order, the second set of suggestions I’m commenting on are from Senator Rockefeller (D-WV) (7/26/13 letter). Senator Rockefeller is a member of the Senate Finance Committee.

Read More

Written by | Posted in Capital Gains • Federal • Gift Tax • Income Tax • OECD

Who Should Form A Captive Insurance Company? Part II

In conjunction with the great people at the TaxConnections website, we’ve published a new eBook on captive insurance titled “Who Should Form a Captive Insurance Company?”. You can buy a copy HERE. Cost: $4.98.

Part II – A captive insurance company is often a key piece of a larger puzzle assembled for clients. For example, not only is a captive a great way to limit the impact of “stochastic risk” or provide more effective asset protection (see last week’s post), it can also be incorporated into an estate plan. Therefore, one of the key questions to ask when looking at forming a captive insurance company is, “have I started to put together an estate plan?”

Estate planning is the process by which an attorney and his client: Read More

Written by | Posted in Tax Risk Management

A Collection… The Humorous Side of Tax…

Each year during tax season I post some of my favorite tax quotes and tax humor.

♦ “When it comes to taxes, there are two types of people. There are those that get it done early, also known as psychopaths, and then the rest of us.” –Jimmy Kimmel

♦ “The healthcare reform bill now includes a tanning booth tax of 10 percent. You know what this means? This whole thing could be funded by the cast of ‘Jersey Shore.'” –Jay Leno

♦ Did you hear about the cannibal tax accountant? She charges an arm and a leg.

♦ There are only three predators that strike fear into the average man: a man-eating shark, a pack of wolves, and the IRS. Read More

Written by | Posted in Tax Humor

Is it Finally Time to Cost Segregate?

Cost Segregation studies have been around as long as there has been depreciation.  Admittedly, I have no idea if that is true or not, but as long as I have been doing taxes there have been cost segregation studies.  A cost segregation study looks at a building or piece of property and breaks it down into the different parts of that building so you can make sure you are claiming the right amount of depreciation.  There are a bunch of engineering firms around that will help with this.  You as a business owner and me as your accountant don’t have any expertise in determining which percentage of the building costs are allocated to movable fixtures; that’s why you hire an engineer.

Depending on what type of building it is, the results from a cost segregation study can vary.  Generally you will find that some of the building should be 5 year property, some Read More

Written by | Posted in Corporate • Real Estate
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