Archive for March 26, 2014

Managing Eurocurrency Risk and Offshore Financial Centers

Introduction

The global financial system has inherent risk in financial instruments associated with financial assets. Market risk is a measure of risk that the market value of a financial instrument will decline over time due to a result in changes in exchange or interest rates. (1) It involves understanding the aspect of risk that determines there is a risk that price will fluctuate in one or more components of a financial transaction.

It is the risk of price fluctuation of property purchased, funds borrowed, or currency that is utilized. The fact that changes in exchange or interest rates has such an impact upon market risk necessitates a fundamental understanding of the term exchange rates and Read More

Written by | Posted in International

S Corp vs. LLC – Simple As Choosing Salt Or Pepper?

Someone said, “The 3 C’s of life were: CHOICES, CHANCES and CHANGES. One must make a choice to take a chance or one’s life will never change”. We are faced with choice in every thing we do, and making the right choices requires sound knowledge of the various options available to us.

When choosing an operating entity for a company, it is very important that we thoroughly research the options available. Your business can be a sole proprietorship, a partnership with someone else, a single member LLC, a pass-through entity like an S Corporation or it can be a C corporation. What I will layout in this blog today are the characteristics of an Limited Liability Company and an S Corporation; the pros and cons of choosing each entity type; and converting from one entity to another. Read More

Written by | Posted in Corporate

7 Habitual Mistakes Companies Make – Chapter 7 (10)

TaxConnections Blog Post
Communication to Eliminate Tax Risk –
Tax Risk Management Web Interface System —V1.01 –

On-the-Radar Screen Issues

This is one of the key areas. This displays all tasks that have been identified by the tax team as risk areas within the organization and are known to the IRS. These risks have been quantified, and a total value of the overall tax risk exposure is displayed.

Off-the-Radar Screen Issues

This is another key area. This displays all tasks that have been identified by the tax team Read More

Written by | Posted in Tax Risk Management

A BIT About Tax Treatment of Virtual Currencies

As many of you know who follow TaxConnections Worldwide Tax Blog, I enjoy dabbling in the uncharted waters of the United States Tax Code. It helps me keep fresh. One of the many areas that this includes is the tax treatment of virtual currencies.

With the most recent run up in the price of Bitcoins there were a handful of very fortunate people that quite literally amassed multi-generational wealth over just a few short weeks cashing out their Bitcoins all the way to $1,000 per coin. You know who you are. May God bless you on your journey that you use this new found wealth for good.

Fortunately in your favor the IRS produced Notice 2014-21 explaining how existing general tax principles apply to transactions using virtual currencies, including Bitcoin. The Read More

Written by | Posted in Individual • IRS

Lauryn Hill – Out of Jail, But The IRS Keeps Hounding

Singer songwriter Lauryn Hill was thrown into jail for three months for tax evasion, with another three months of home confinement. This is all based upon her following some scheme by phony tax advisors claiming that she did not need to file and pay income taxes. Like many people, from physicians to celebrities, she fell prey to the tax protesters coaxes.

The IRS had a great time spending tens of millions of dollars prosecuting her but got incredible amounts of publicity to scare other people into filing their tax returns. That is the basis of our “voluntary” tax system. Without people being scared of being thrown in jail, the system would collapse.

Now, the IRS is using Lauryn Hill’s name to keep scaring taxpayers, just before the tax Read More

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

Do My Current Insurance Policies Cover ALL My Risks?

In conjunction with the great people at TaxConnections, 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.

To help potential captive owners determine if they should form a captive, I’ve written the “10 questions,” one of which is:

“Do my current insurance policies cover ALL my risks?”

Read More

Written by | Posted in Tax Risk Management

Are You Married For Tax Purposes?

Marriage Penalty – if you are Married on December 31, you are Married for Tax Purposes –

You are married for tax purposes as of December 31. So, if you were married on or before December 31, 2013, you would be single (or head of household) depending upon the circumstances for the 2012 tax year, but you would be Married for 2013. Even if you were married on December 31. 2013, you are married for the entire year.

As a married person. you may file jointly with your husband or wife, or as married filing separately.

You may not file as single or head of household. Read More

Written by | Posted in Individual • IRS • Tax Deductions • TaxConnections

A Collection… The Humorous Side of Tax… (7)

♦ As a CPA I have learned and continue to learn that I do not know what I do not know and that buying technology to help me get there faster is akin to using speed dial to dial wrong numbers faster. John Dillard 2-1-10

♦ Mark tossed me several pounds worth of IRS instructions which apparently were written in Swahili. Then he left for work, hoping to earn enough money to pay our tax bill. Madeleine Begun Kane.

♦ Q. What’s the definition of a consulting CPA?

– A. It is a guy who will tell you 30 ways to make love but does not know any girls. Read More

Written by | Posted in Tax Humor

Swiss Account Holders – Losing The Right To Be Informed About IRS Disclosure

The Swiss continue to cave in and erode any bastion of bank secrecy within its picture perfect borders. The Swiss Parliament voted on March 6, 2014 to turn over information to foreign governments on certain account holders with undeclared accounts in Swiss financial institutions without providing the holders any advance notice of the disclosure. The move was in reaction to the 2011 admonishment to Switzerland by the Global Forum on Transparency and Exchange of Information for Tax Purposes to take measures to increase its tax transparency. If Switzerland took no action, it risked being placed on a global blacklist. The Global Forum is a division of the Organization of Economic Co-operation and Development (commonly referred to as “OECD”). We understand that the amendment must be finally approved at the end of the current Swiss legislative Read More

Written by | Posted in FBAR • International • IRS • OECD • OVDP

Next Year Double Digit Health Plan Increases

Consumers eligible for Obamacare health plans could see double-digit price hikes next year in states that fail to draw large numbers of enrolls for 2014, according to insurance industry officials and analysts.

The early estimates come as insurance companies set out to design plans they intend to sell in 2015 through the state-based health insurance marketplaces that are a centerpiece of the Affordable Care Act, President Barack Obama’s signature domestic policy achievement that is widely referred to as Obamacare.

WellPoint Inc, which sells plans on 14 Obamacare exchanges, expects health insurance rates nationwide to be higher. Increases for the Obamacare market that has signed up Read More

Written by | Posted in Affordable Healthcare Act

7 Habitual Mistakes Companies Make – Chapter 7 (9)

TaxConnections Blog Post
Communication to Eliminate Tax Risk –
Tax Risk Management Web Interface System —V1.01

The Tax Risk Management Web Interface design should entail some of the following features:

– Interface customization according to each division in the business to be separately identifiable, with a consolidation option.

– Log on through a three-level log-on secure method:

– Username Read More

Written by | Posted in Tax Risk Management

Scam IRS Calls!

I am getting many calls from clients and potential clients saying the are getting calls from the “IRS” and are given strange numbers to call. These are scam telephone calls trying to get personal information such as bank account information, social security numbers, dates of birth, etc., so they can take money from your accounts and use this information as part of identity theft rings. One typical sign of the scam fraud is the caller stating “you were going to jail”.

You will Never Get a Call from IRS without First Receiving a Letter

In fact, you will never get a call from the IRS threatening you in any way about jail, criminal matters or demanding that you give them information over the phone right away. Before you get such a call, you will get a written notice from the IRS. These notices will demand Read More

Written by | Posted in Individual • IRS
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