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Archive for January 13, 2021

IRS Hitting Wealthy & Businesses With Huge Penalties

Teig Lawrence IRS Hitting Wealthy & Business With Huge Penalties

The IRS is aggressively targeting high net-worth individuals and businesses.  The reason is simple, there is more meat on the bone when the government catches a big fish.  Technology has also made it much easier for the government to catch a big fish.

Even the most benign non-compliance can lead to unfair penalty assessments.  Large penalty assessments have become the norm in cases involving foreign non-compliance.  The IRS routinely assesses significant penalties in cases involving Forms 3520, 3520-A, 5471, 8938, and FinCen 114 (FBAR).  Other significant penalties assessed by the IRS include: Failure-to-File (FTF), Failure-to-Pay (FTP), Accuracy-Related Penalty, and Civil Fraud.

Some of these penalties are generated automatically while others are assessed by an examiner.  Regardless of the assessment process, all the penalties mentioned above may be challenged by taxpayers.  The key to penalty relief is demonstrating to the IRS that the taxpayer has “reasonable cause” for their non-compliance.

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California’s Proposed Wealth Tax Is Coming After Your Money

A Silent Taxpayer

Yesterday, we read an article written by Virginia La Torre Jeker, JD that caught our attention! You should read her article as it is beautifully written as she always does an outstanding job.  However, we ask you to carefully read through the Bill No 2088 Text as tax professionals and taxpayers globally will be stunned what Virginia La Torre Jeker brings to light:

“California’s Legislature is contemplating a wealth tax on ANY person who spends more than 60 days within the State in a single year. Assembly Bill 2088 will assess a wealth tax annually for a 10-year shadow period and extend to residents, part-year residents, foreigners – in short, every individual who is in the state for over 60 days in a calendar year.  Even those who move out of California to another state, or foreigners who return to their home country, say, after extended medical care in Cedars Sinai Hospital or attendance at UCLA, would continue to be subject to the wealth tax for a decade.  The law makes no distinction between a nonresident from North Dakota or a nonresident from Dubai.”

Here is a portion of California Legislature Bill No 2088 you will want to read:


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Greece Offers 50% Reduction In Income Tax Rates

Greece Offers 50% Reduction In Income Taxes

It is widely known that brain drain is the worst threat to a country’s prosperity. The Greek government announced legislative initiative to reverse this phenomenon, to attract foreign investment and to invite foreign nationals to settle and work in Greece. The legislative initiatives also provide for a 50% reduction in income tax for the next 7 years, either if the job is transferred to Greece or if the interested individuals settle as self-employed or even as employees in another professional employment in Greece.

It is well known that financial motivation alone is never enough to decide upon one’s return to a country or even to move to another employer.  The excellent lifestyle, the mild climate along with the working conditions (since white collar personnel can work remotely) play a vital role in such decision making. Moreover, with the crisis now behind Greece and the long-term prospects in front of the country accompanied with political stability, will eventually result in an effective state and an economy that can offer more employment opportunities. Greece is one of the safest countries in the world for the expatriate and his family.

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Skating On Thin Ice: IRS Does Not Recognize Organization’s 501(c)(3) Status

IRS Does Not Recognize Organization’s 501(c)(3) Status

Various 501(c)(3) organizations may pursue charitable activities or operate to pursue altruistic purposes. However, what if such activities or purposes do not fall within the Internal Revenue Code’s requirements for charitable organizations? Besides jeopardizing the ability of donor taxpayers to deduct contributions, the organizations may find that they are taxable and have certain filing requirements other than annual Form 990 filings. In a recent Private Letter Ruling, the Internal Revenue Service highlighted that “charitable” organizations, such as hockey organizations, that ultimately take care of their own members may not be so charitable for tax purposes.

501(c)(3) Organizations, Generally

Generally, charitable organizations must meet certain requirements to be exempt for federal tax purposes.[1] First, the organization must operate for limited purposes (e.g., religious, charitable, scientific, testing for public safety, literary, or educational purposes). Second, individuals must not privately benefit from the net earnings of the organization. Finally, the organization must not engage in substantial propaganda or lobbying activities, and the organization must not participate in (or intervene in) any political campaign for or against a political candidate.[2]

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OECD Transfer Pricing Guidelines For Multinational Enterprises And Tax Administrations

The OECD has spent a lot of time developing the Transfer Pricing Guidelines. While they help corporations avoid double taxation, they also help tax authorities to receive a fair share of the tax base of multinational corporations.
This 2017 edition of the OECD Transfer Pricing Guidelines incorporates the substantial revisions made in 2016 to reflect the clarifications and revisions agreed in the 2015 BEPS Reports on Actions 8-10 Aligning Transfer pricing Outcomes with Value Creation and on Action 13 Transfer Pricing Documentation and Country-by-Country Reporting. It also includes the revised guidance on safe harbours approved in 2013 which recognises that properly designed safe harbours can help to relieve some compliance burdens and provide taxpayers with greater certainty. Finally, this edition also contains consistency changes that were made to the rest of the OECD Transfer Pricing Guidelines.  The OECD Transfer Pricing Guidelines were approved by the OECD Council in their original version in 1995.

OECD/G20 BEPS Virtual Conference Open To Public January 27-29, 2021

OECD/G20 BEPS Virtual Conference Open To Public January 27-29, 2021

Date 27-28 January 2021 (Inclusive Framework plenary); 29 January 2021 (Tax and Development briefings)

Time 12:30-17:00 CET (Day 1); 12:30-15:30 CET (Day 2)

Meeting type Virtual Conference

Due to the ongoing health crisis, the 11th plenary meeting of the 137 members of the OECD/G20 Inclusive Framework on BEPS will be held virtually and open to the public, allowing a glimpse into the various international tax-related workstreams undertaken by the Inclusive Framework to date. This work to end international tax avoidance through global co-operation, is especially timely in light of the fiscal challenges countries will face in the aftermath of the COVID-19 crisis. The event will take stock of the unparalleled transformation in international tax policy and administration in recent years, discuss current challenges and what the future holds.

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