Archive for September 24, 2014

The Research & Experimentation Tax Credit To Be Made A Permanent Statute Through The Jobs For America Act of 2014

On September 22nd, The House of Representatives passed, by a vote of 253 to 173, HR 4 entitled “The Jobs for America Act of 2014” (hereinafter “JAA”) , which would simplify and make permanent the I.R.C. § 41 Research and Experimentation Tax Credit (hereinafter “RTC”) on a retroactive basis. JAA also includes several other provisions previously approved by the House of Representatives to extend retroactively and on a permanent basis bonus depreciation; I.R.C. § 179 expensing; select S corporation provisions; and to repeal retroactively the medical device excise tax.

Among other changes to RTC, the bill would increase the Alternative Simplified Credit methodology (hereinafter “ASC”) rate to 20% and eliminate the “Regular” methodology option under Section A of Form 6765. This action by the House of Representatives is part Read More

Written by | Posted in R&D Credit Services

Thank You All For The Overwhelming Response To “The Best Tax Webinar of The Year”

There are not enough words to express our gratitude for those of you who sent emails and made calls to us after the training webinar titled “The Best Tax Webinar of The Year.” We opened up your eyes about the importance of gaining credibility, trust and authority for your tax expertise by getting featured in the media. Your tax reputation is built by executing a very deliberate plan to establish you as an authority in the eyes of the media.

Many of you requested more information about positioning yourself as a Media-Recognized Tax Professional. Getting featured in media powerhouses like ABC, NBC, FOX and CBS is the wisest investment you can make in yourself. Our encore presentation held yesterday afternoon pulled the curtain back on how any tax professional can leverage media exposure to position themselves as the “go-to” expert. Read More

Written by | Posted in TaxConnections

The Minister’s Dual Tax Status

An ordained minister occupies a unique niche in the United States tax code, as he or she is a dual-status taxpayer. A minister is an employee for income tax purposes and is self-employed for social security and Medicare. This dual status has frequently been the source of confusion for both ministers, churches, and tax preparers. A complicating factor is that a minister may opt-out of social security and Medicare but that is a topic for another time.

It is proper for the church to issue a W-2 to the minister. A 1099-MISC is an incorrect treatment in this instance, although many churches do issue 1099-s to their ministers. Some churches do not fully understand their own tax-exempt status and do not give the minister any tax documents at year end. Obviously, this is also improper. Read More

Written by | Posted in Clergy • Individual • Religion

Strategies To Pass Your Tax Exams

Since 1999 I’ve been provided tax revision courses for all the main accountancy qualifications including ACA, ACCA and CPA through my business Tax Grinds here in Dublin city centre.

In 2013 the published pass rates were as follows:

• CPA 43% (Advanced Tax)
• ACCA 41% (P6 – Advanced Tax) dropping to 39% in 2014
• ACA 63% (Overall)

Students fail their professional exams for a variety of reasons but the main one is the wrong study technique. Read More

Written by | Posted in Tax Tips

Back To School Blues And Tax Credits To Go With It

After the horrible 2013 winter doomed by one polar vortex after another, we couldn’t wait for summer to get around. It did finally arrive but amazingly was gone in the blink of an eye! I am always amazed by how quickly every summer flies by and before we know it, school is back in session. This year, summer was a huge deal in our household, we had a kid to send off to college!

Handy-dandy tax consultant that I am, with major life events, tax planning cannot be far behind. So, I thought I should remind my readers of the the college tax credits that are out there for 2014. Now would be a perfect time to see if they would qualify for college credits.

American Opportunity Tax Credit {AOTC} & The Lifetime Learning Credit {LLC}: These Read More

Written by | Posted in Specialty Tax Incentives • Tax Tips

Points From Your Bank

Today, credit card companies and several banks give you “points” of some type that can be redeemed for airline tickets and perhaps other items. Generally, when someone gives you something and expects something in return (such as your continued patronage), it is taxable income (not a gift). However, if what they are giving you is really a reduction in purchase price (such as a dealer giving a car buyer a rebate), it is not income.

In 2010, the IRS issued a private letter ruling (PLR 201027015 – only legally binding on the taxpayer who requested it) saying that points from a credit card company were non-taxable as really being reduction to the price the cardholder paid for items purchased with the card. Read More

Written by | Posted in Tax Tips

Have You Been Subpoenaed To Appear Before A Grand Jury?

Federal grand juries have a maximum of 23 members, 16 of whom must be present to form a quorum. Indictments are returned by a vote of 12 or more members. Federal grand juries typically sit for a term of 18 months and meet at regular intervals. Grand juries can use the court’s power to subpoena evidence. A subpoena (which translates, essentially, as “subject to sanction”) commands someone to do something. The subpoenas are actually issued by the court clerk’s office.

The prosecutor will go to the court clerk’s office and obtain blank subpoenas. The prosecutor then fills them in, putting in the name of the person or corporation that is being subpoenaed, and telling them what they have to do (testify or produce documents) and when they have to do it. The prosecutor then has someone–often a police officer or federal Read More

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

What To Expect At A Tax Appeals Conference

Tax Appeals conferences are typically rather informal. There is generally no stenographer present to record the issues of fact and tax law discussed, unless specifically requested by the taxpayer via specific procedures. When you or others provide testimony during the tax appeals conference, it is not under oath; however, matters of fact must be stated on a signed affidavit under penalty of perjury (1). If you have evidence to support your position, you must disclose it prior to the appeals conference through your signed affidavit. You cannot simply wait until the appeals conference to present your evidence to the appeals officer for the first time. If you attempt to do so, the Appeals officer can decide to return the entire case back to the local office for verification of the evidence.

When you reach the Appeals conference, the Appeals officer may ask you to provide Read More

Written by | Posted in Federal • Income Tax • Individual • Tax Controversy

Taxpayers Rights When Audited By Tax Authorities In South Africa (Chapter 7.4)

Posted in sections, this is my Doctoral Thesis on taxpayers rights when audited by the tax authorities in South Africa – equally applicable to many English-based law systems in Africa and abroad (eg. India). This will be of particular use to any tax practitioners doing work in Africa and in other English-based legal systems around the world.

Analysis of Challenging The Commissioner’s Discretionary Powers In Auditing Taxpayers under The Constitution of The Republic of South Africa

CHAPTER 7 – CONCLUSION

7.4 ADMINISTRATIVE ACTION, THE RULE OF LAW AND THE PRINCIPLE OF LEGALITY Read More

Written by | Posted in Africa • Audit

Bank Accounts, Savings For Kids And Tax Consequences

When my 13 year old got her first baby sitting check, a range of emotions ran through me. I was happy, proud as a mother hen could be and also a little worried as I thought of how my “baby” was so grown up that she could take care of other “babies”! As she made plans to deposit that money in her UGMA Bank Account, I realized I had an idea for my next blog post!

Like I said, my kids like any self-respecting accountant’s children, were equipped with UGMA Accounts at a tender age. It’s never too early to start saving, I find that it’s also never too early to start teaching about the importance of being financially responsible! It can however be a little overwhelming when trying to decide what account to open for your child. Read More

Written by | Posted in Individual • Tax Tips

Scammers Try To Fool Tax And Business Lawyers

Most of my clients from around the world make their initial contact by email. It is usually a result of my website, blog posts (published on Tax Connections) and Avvo. Usually, they need a lawyer to negotiate a contract or deal with the IRS or State Tax agencies.

When I get an email from a foreign business, even if the English is not perfect, I respond. Unfortunately, the scam artists love a response and try their version of the famous “Nigerian Scam.” The trick usually works that I need to review a simple contract, receive payment from the buyer, deposit it in my trust account and immediately send the money (minus an unusually hefty fee) to them. Of course the check is no good and they will sucker me. Read More

Written by | Posted in Tax Fraud/Evasion/Crimes

European Court of Justice Judgement In The Skandia America Corporation VAT Case (C7/13)

The European Court of Justice held that the supply of services by a non-EU Head Office to a branch situated in the E.U. is now liable to VAT where that branch is part of a VAT group.

VAT grouping allows EU member states to treat two or more companies as a single entity for VAT purposes which means transactions between members of a VAT group are normally ignored for VAT purposes.

However, the ruling on this dispute between Skandia America Corporation and the Swedish Tax Authorities means that services previously deemed to be VAT exempt will now be subject to VAT rates of between 15% and 27%.

This decision is of particular relevance to the financial services industry since the Read More

Written by | Posted in VAT
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