Archive for Specialty Tax Incentives

Allowable Nontaxable IRA Rollovers

Contributions Interpreted To Mean One Per Taxpayer Per Tax Year in US Tax Court Case – Bobrow v. Commissioner –

In Bobrow v. Comm’r, T.C. Memo. 2014-21, the Tax Court relied on IRC 408(d)(3)(B) regarding the limits and frequency of nontaxable rollover contributions elected by the taxpayer noting that the one-year limitation addressed in this section of the United States Tax Code applies to all IRAs maintained by the individual taxpayer.

So there you have it, as a result going forward I am now advising United States Taxpayers to engage only one IRA rollover per tax year and to be the absolute safest one rollover every 366 days.

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Written by | Posted in Individual • North America • Specialty Tax Incentives

Israel/South Africa Expatriates Face Costly New Tax Rules

In terms of the Right of Aliyah doctrine (the right of every Jew to immigrate to Israel) every Jew going to or intending to go to Israel will be granted an Oleh’s visa. Oleh, for my colleagues not dealing with Israeli law (plural: olim) means a Jew immigrating into Israel. The Oleh Visa is granted by mere expression of the interest to “relocate” to Israel as a qualifying Jew (albeit born outside Israel after 1950).

A person shall not be registered as a Jew by ethnic affiliation or religion and will be denied Oleh Visa, despite being a Jew as defend, inter alia because of political status / activity (i.e. is engaged in an activity directed against the Jewish people or which is likely to endanger public health or the security of the state of Israel) or secondly, where a notification (issued under the Law of Return 5710-1950 as amended by Law of Return Read More

Written by | Posted in Africa • Europe, Middle East • Expatriate • Gift Tax • Individual • International • OECD • Specialty Tax Incentives • Tax Controversy • Tax Fraud/Evasion/Crimes • Tax Policy • Tax Provision/Tax Reporting

Bipartisan Legislation Would Significantly Enhance the U.S. Research and Experimentation Tax Credit

U.S. Senator Chris Coons (D-Del.), leader of the Senate’s Manufacturing Jobs for America initiative, and Senator Pat Roberts (R-Kan.) introduced bipartisan legislation on January 14th to enhance incentives for private firms to invest in research and development within the United States and its possessions (e.g., Puerto Rico and Guam). The Innovators Job Creation Act would help startups and other small companies take full advantage of the Research and Experimentation Tax Credit (hereinafter “RTC”) pursuant to I.R.C. § 41 that are currently unavailable to them based upon the current statute.

“Research and development is the lifeblood of great American companies, turning ideas into innovations that grow businesses and create good manufacturing jobs here at home,” U.S. Senator Chris Coons (D-Del.) said. “If we want to strengthen our Read More

Written by | Posted in Federal • IRS • Specialty Tax Incentives

Tax Breaks A Factor in Australia’s Burgeoning Private Pension Fund Sector

Australia has had a compulsory superannuation system since the late 80’s. Employers are required to contribute an amount equivalent to 9% of gross pay for each employee earning over $450 a month. Most people can choose (nominate) which fund the contributions are paid into.

The contributions are tax deductible to the employer and investment income of the funds is taxed at the lo rate of 15%. At the moment, pensions and retirement benefits paid out to retirees 60 years old or more are tax free.

Self employed Australians have had their own private funds for around 50 years. However, since compulsory pension arrangements were introduced, many more self employed, Read More

Written by | Posted in Australia/Oceania • Specialty Tax Incentives

Top Ten Personal Tax Deductions For 2013 And 2014

You might think it’s too late to make a difference for your 2013 taxes as there is less then a week left of the year. You would be wrong. Here are six ways you can still lower that tax bill before the end of the year:

1. Increase your charitable deductions by making that donation of cash or goods now instead of when you do spring cleaning. Make sure you get a receipt and have a detailed list of items you are giving. If you are giving more then $250 in a monetary donation make sure you get a letter from the charity showing the date, dollar amount, and a statement showing what, if anything, you received in return for the donation.

2. Pay your January payments of your health insurance premiums, mortgage payments, real Read More

Written by | Posted in Individual • Specialty Tax Incentives

Do It Now: Small Business Tax Planning 2013 Expirations (And Large Businesses Too!)

Expiring in 2013

The tax credit for Research and Development (R&D) is set to expire in 2013. Even if you are not a technology company, this credit could apply to your business. New processes and developments could count toward this credit. Check with a qualified tax attorney. This credit has been extended before, but why hope and wait to see if it will be extended again?

Drastic Changes in the Section 179 Deduction

Waiting until the new year to buy a new truck for your business? Don’t. Need new servers and computers? Waiting for the after Christmas sales? If you snooze, you lose. Your items must be purchased and used/installed before the end of 2013 to potentially qualify for the Read More

Written by | Posted in Specialty Tax Incentives

CPAs: Review California Clients Today for Enterprise Zone Credits (Up to $50,000 Per Qualified Employee)

TaxConnections Blogger PostsOn June 27, 2013, the California State Assembly passed AB 93, which eliminates the current Enterprise Zone (EZ) program, replacing it with a new set of incentives, which will be statewide in application. This change requires businesses to take action now to get the most out of existing credits while also preparing to take advantage of the new credits that will be effective January 1, 2014.

The EZ program was first established in 1986 and has been used to attract business to depressed areas in California and to support new and existing businesses located in depressed areas of the state. The program has allowed qualified businesses to claim hiring credits on qualified employees and sales tax credits on qualified purchases.

Do your clients need help understanding the immediate steps they must take? If your clients (CPAs: review your California clients) are in one of California’s 42 EZs, pay California income tax, and have employees, they are a prime candidate to review the various credits that remain available. These credits and refunds can be reviewed for the last four (4) open tax years. The time to act is now. After December 31, 2013 — your clients will have forfeited up to $50,000 per qualified employee. Read More

Written by | Posted in Corporate • Individual • North America • Sales/Use Tax • Specialty Tax Incentives • State And Local Tax (SALT) • Tax Controversy • Tax Policy • Tax Provision/Tax Reporting

California Enterprise Zone Tax Credits End 12/31

TaxConnections Picture - Hand Holding Golden DollarEvery business can benefit from hiring based tax credits. Here is something that you may not know …

Did you know that you have an opportunity to get an additional refund? Studies show that up to 60% of businesses did not take advantage of the Federal 2010 payroll tax credit called the HIRE Act. Employees that were hired between February 1, 2010, and January 1, 2011 and were unemployed for 60 days prior to hire can qualify for a refund of 6.2% of the employee wage for 2010. The deadline for this refund is January 10th, 2014 in order to receive the refund check. (HIRE Act Example: General contractor hired 32 qualified employees in 2010. They receive a refund for over $94,000.00.)

You are probably aware of Enterprise Zone HR Tax Credits for clients within California. However, recent legislation changed the existing statutes making it more difficult for businesses to take advantage of this program. The changes include changing the “look back” ability to limit businesses to review only 12 months from the employee’s date of hire. Some of the categories for eligibility are being amended as well to create additional hurdles for you. California Enterprise Zone ends December 31, 2013.

Businesses should also keep in mind the WOTC (Work Opportunity Tax Credit) program. Recent legislation expanded the qualifiers for this program to make it much more accessible. This program is very time sensitive. EDD requires new employee paperwork be submitted to them in less than 28 days from each employee’s respective date of hire. Businesses can receive up to $9,600 per qualified employee.

These are just a few instances of hiring based tax credits.

In accordance with Circular 230 Disclosure

Written by | Posted in Corporate • North America • Partnership • Specialty Tax Incentives • Tax Provision/Tax Reporting

SFC Blank Slate Project 2013 – Senator Cantwell’s Suggestions

SFC Blank Slate Project 2013 - Senator Cantwell's SuggestionsAs 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. In no particular order, the first set of suggestions I’m commenting on are from Senator Cantwell (D-WA) (7/26/13 letter). Senator Cantwell is a member of the Senate Finance Committee.

 

 

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Written by | Posted in Specialty Tax Incentives • Tax Policy • United States

Connecticut’s Tax Amnesty Program Starts September 16, 2013

TaxConnections Picture - Books_Hour_GlassConnecticut Department of Revenue Services (“Department”) will conduct a tax amnesty program (“Program”) during the period of September 16, 2013 until November 15, 2013 for any taxable period ending on or before November 30, 2012 (House Bill 6704, enacted June 18, 2013 and effective July 1, 2013). The Program applies to all taxes administered by the Department, with the exception of the motor carrier road tax. The Program is available to delinquent, deficient, and non-filer taxpayers. If an amnesty application is filed along with the payment of tax and interest during the amnesty period, the Department will not seek criminal prosecution or collect any civil penalties.

Under the Program, the Department will calculate interest at 1% per month on tax that is past due. However, taxpayers that make payment of all outstanding taxes and interest during the amnesty period will have the interest reduced to one-quarter of what is due. Taxpayers that have not filed a return for the period for which amnesty is sought are subject to a 25% penalty in addition to tax and interest.

Amnesty applications that are granted will serve as an express and absolute waiver of any judicial or administrative rights of appeal for the taxpayer. Further, no payment made by a taxpayer under the Program is eligible to be refunded or credited to the taxpayer.

Amnesty is not available for: Read More

Written by | Posted in Specialty Tax Incentives

California’s Computer Software Exemption Remains In Jeopardy

TaxConnections Picture - Computer SoftwareIn the aftermath of a 2011 court defeat involving software taxation, California revenue officials appear poised to seek legislative assistance in undoing the court’s ruling and imposing sales and use taxes—retroactively—on a wide variety of computer software programs. California broadly levies taxes on the sale or use of tangible personal property in the state. However, there is a statutory carve out from these taxes for computer software provided to a user under the so-called Technology Transfer Agreements (TTAs). In recognition of the notion that software is intangible property, these taxes apply in the case of a TTA only to the value of any tangible medium, such as a disk or magnetic tape, on which the licensed program may be transferred to the software user.

The State Board of Equalization (BOE), which administers these taxes, had, by rule, limited the favorable treatment for TTAs to transfers of custom software, not pre-written, or “canned” software programs. In Nortel Networks, Inc. v. Board of Equalization, 191 Cal. App. 4th 1259, 119 Cal. Rptr. 3d 905 (2011), the California Court of Appeals invalidated these rules and awarded the telecommunications equipment maker a multimillion dollar refund.

The California Supreme Court declined to review the decision, leaving taxpayers with a clear victory. But, for two years, the BOE has refused to give up the fight. The agency acknowledged that it is holding back millions of dollars of refund claims filed by other taxpayers. All the while, the BOE appears to be searching for ways to eliminate taxpayer rights to recover or to dramatically reduce the amounts they are entitled to receive:

• It has mounted a collateral challenge—this time against Lucent Technologies, Inc. — in a Los Angeles courtroom in an attempt to re-litigate the Nortel issues. Read More

Written by | Posted in Specialty Tax Incentives • State And Local Tax (SALT)

Louisiana Changes Hiring Requirements For Enterprise Zone Program

iStock_Louisiana flagXSmallLouisiana Governor Bobby Jindal has signed into law a bill that disqualifies many retailers from participating in the state’s Enterprise Zone Program (“Program”) and makes other changes to the Program’s required employment criteria. House Bill 571 (“H.B. 571”) became effective immediately when Governor Jindal signed it on Friday, June 21, 2013. The bill makes several significant changes to the Program.

•  It increases the percentage of new jobs that a participant must hire from targeted groups to qualify for the Program from the current 35% to 50%. Under the bill, companies must hire 50% of their new jobs from at least one of the three targeted groups: enterprise zone residents, persons receiving some type of public assistance during the six-month period prior to employment, and persons who lack basic skills and are unemployable by traditional standards. Read More

Written by | Posted in Sales/Use Tax • Specialty Tax Incentives • State And Local Tax (SALT) • United States
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