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Entire Tax Firms Going To TaxConnections Virtual Offices

TaxConnections Virtual Tax Offices

TaxConnections has been developing our Virtual Offices platform for several years and tax professionals and tax services firms are the real beneficiaries. The best way to describe TaxConnections Virtual Office technology is it is a cloud address that ensures everyone can find and connect with a tax professional easily and for free. If you are already a TaxConnections Member, you know your professional profile appears right under LinkedIn on an organic web search.The difference is that visitors connect with TaxConnections Members easily and for free.

While other sites are blocking access to your tax expertise by requiring people to pay to find and connect with you, TaxConnections gives tax professionals control back over their online professional profiles. You have a choice to make…do you take control back over your online profile or do you rely on other sites to control who sees you?

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Freeman Law: The Tax Court in Brief

Freeman Law: The Tax Court in Brief

Freeman Law’s “The Tax Court in Brief” covers every substantive Tax Court opinion, providing a weekly brief of its decisions in clear, concise prose.

For a link to our podcast covering the Tax Court in Brief, download here or check out other episodes of The Freeman Law Project.

The Week of September 12 – September 18, 2020

Deckard v. Comm’r, 155 T.C. No. 8  | September 17, 2020 | Thornton, J. | Dkt. No. 11859-17

Short Summary:  Waterfront Fashion Week, Inc. (Waterfront) was organized under Kentucky law as a nonstock, nonprofit corporation in 2012.  Mr. Deckard was Waterfront’s president and one of its three directors.  Waterfront never applied for recognition of tax-exempt status with the IRS.

On October 28, 2014, Waterfront mailed to the IRS Form 2553, Election by a Small Business Corporation.  In the Form 2553, Waterfront sought to elect to be an S corporation retroactively as of the date of its incorporation in 2012.  Mr. Deckard signed the Form 2553 in his capacity as Waterfront’s president.  In addition, Mr. Deckard signed the Form 2553 shareholder’s consent statement, indicating that he owned 100% of Waterfront.

In 2015, Waterfront filed Forms 1120S, U.S. Income Tax Return for an S Corporation, for its taxable years 2012 and 2013, reporting operating losses.  Mr. Deckard reported these flow-through losses on his 2012 and 2013 returns.

The IRS disallowed the losses on the ground that Waterfront filed to make a valid S corporation election and alternatively that Mr. Deckard was not a shareholder of Waterfront.  Mr. Deckard filed a timely petition with the United States Tax Court.

Key Issue:  Whether Mr. Deckard can claim the losses from Waterfront on his 2012 and 2013 tax returns?

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How To Select A Financial Advisor: The Least You Should Know (Part 9 In eBook Series)

How To Select A Financial Advisor: The Least You Should Know (Part 9 In eBook Series)

Chapter 8: Hidden Ongoing Commissions

When I was growing up, I spent summers working on the family farm, which grew cotton, soybeans and rice. There were many snakes in the rice fields. I learned quickly that the snake you can see is not the one that bites you. It is the same way with hidden commissions, also known as 12(b)-1 fees. If you own a mutual fund or variable annuity, you are most likely paying a 12(b)-1 fee, whether you realize it or not. A 12(b)-1 fee is an ongoing commission often amounting to 1.0 percent of the value of your investment annually.

Named after the 1980 legislation that created them, 12(b)-1 fees were intended as one-year relief for struggling mutual funds. Today, over 70 percent of mutual funds and many variable annuities charge these onerous fees, which cost investors well over $10 billion each year. They are collected by the mutual fund directly from fund assets, and paid to the brokerage firm that holds the fund. Also known as trailing commissions or “trails,” these fees can be charged for many years for mutual funds, variable annuities, or other products that impose them.

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US Citizens Living In Canada Will NOT Pay US Tax On $1200 US Cares Act Payment But Likely Will Pay US Tax On Canada’s CERB Payment

US Citizens Living In Canada Will NOT Pay US Tax On $1200 US Cares Act Payment But Likely Will Pay US Tax On Canada’s CERB Payment

Prologue – The Only Certainties Are Death And Taxes

The above tweet references an article in the Globe and Mail on May 7, 2020. The article contains interesting perspectives, but much has changed since that time.

COVID-19 And The Role Of Government Assistance

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IRS Finalizes Regulations For 100 percent Bonus Depreciation

IRS Finalizes Regulations For 100 percent Bonus Depreciation

The Treasury Department and the Internal Revenue Service released the last set of final regulations implementing the 100% additional first year depreciation deduction that allows businesses to write off the cost of most depreciable business assets in the year they are placed in service by the business.

The 100% additional first year depreciation deduction was created in 2017 by the Tax Cuts and Jobs Act and generally applies to depreciable business assets with a recovery period of 20 years or less and certain other property. Machinery, equipment, computers, appliances and furniture generally qualify.

The deduction applies to qualifying property (including used property) acquired and placed in service after Sept. 27, 2017. The final regulations provide clarifying guidance on the requirements that must be met for property to qualify for the deduction, including used property.

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Dear Ed: Financial Planning Questions And Answers

Dear Ed: Financial Planning Questions And Answers

Once I read Ed Mahaffy’s book titled “How To Select A Financial Advisor: The Least You Should Know”, interviewed him, reviewed his video library, I knew we had the right person for this special financial planning series. On Fridays, TaxConnections presents questions often asked of a Financial Planner.

Dear Ed: Financial Planning Questions  

Question: How much cash reserve should I maintain in the post-Covid environment?

Answer: Obviously, the answer varies depending upon the circumstances, but generally 1.5- 3.0 years of expenses.

Question: What is the best way to access these funds?

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TIGTA Finds IRS Faults In Trust Fund Recovery Penalty Appeals

TIGTA Finds IRS Faults In Trust Fund Recovery Penalty Appeals

Federal tax law requires employers to withhold and remit income and employment taxes to the IRS.  The obligation to pay these taxes – referred to as “trust fund taxes” – generally arises when payroll checks are disbursed to employees and is extinguished when the employer properly and timely deposits those taxes to the government.

If the employer fails to timely deposit the trust fund taxes, the IRS usually attempts to collect them directly from the employer.  But, the IRS also has other options.  Specifically, under I.R.C. § 6672, the IRS may go directly after any “responsible person” who “willfully” failed to collect, account for, and pay the taxes.  For these purposes, the trust fund recovery penalty (TFRP) represents the employee’s portion of any employment tax—that is, the withheld income tax and the employee’s portion of the Federal Insurance Contributions Act (FICA) tax.  This remedy is civil in nature, but it is important to note that the IRS may also refer TFRP cases for criminal prosecution, particularly in egregious cases.

To collect the TFRP against the taxpayer, the IRS must follow certain procedures.  First, the IRS must conduct an examination to determine who is a responsible person and whether that person acted willfully.  If the IRS determines the TFRP is appropriate, it is required to issue the taxpayer a Letter 1153, Proposed Trust Fund Recovery Penalty Notification.  After receipt of the Letter 1153, the taxpayer has 60 days to file a written protest with the IRS contesting the TFRP determination.  The IRS Independent Office of Appeals (Appeals) makes the final administrative determination as to whether the TFRP is appropriate.

On August 12, 2020, the Treasury Inspector General for Tax Administration (TIGTA) issued a report entitled “Existing Controls Did not Prevent Unauthorized Disclosures and Case Documentation Issues in Appeals Trust Fund Recovery Penalty Cases.”  As part of its report, TIGTA sampled 125 Appeals TFRP cases and concluded that the IRS failed to follow proper procedure in at least 31 of those cases.  This Insight provides a summary of the TIGTA report.

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12 Complimentary eBook Downloads For Tax Professionals

Complimentary eBook Downloads For Tax Professionals

TaxConnections has compiled 12 complimentary eBook publications for tax professionals to download. These eBooks include topics such as: United States Tax Treaties, Global tax Authority Country Representatives, Verify Law Licenses, Verify CPA Licenses, Interview Guide For Management Executives, Preparing For An Interview, 250+ Tax Jokes, Quotes And Fun Tax Forms, 250 Motivational And Inspirational Quotes, Presidential Executive Orders, Opportunity Zones, Automobile Depreciation Charts, Federal Individual Income Tax Rates.

You can request any or all of these ebooks at this link:
https://www.taxconnections.com/complimentary-eBooks 

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IRS Releases State-By-State Breakdown Of Nearly 9 Million Non-Filers Who Will Be Mailed Letters About Economic Impact Payments

IRS Releases State-By-State Breakdown Of Nearly 9 Million Non-Filers Who Will Be Mailed Letters About Economic Impact Payments

The Internal Revenue Service today released a state-by-state breakdown of the roughly nine million people receiving a special mailing this month encouraging them to see if they’re eligible to claim an Economic Impact Payment.

The IRS will mail the letters to people who typically aren’t required to file federal income tax returns but may qualify for an Economic Impact Payment. The letter urges recipients to visit the special Non-Filers: Enter Payment Info Here tool on IRS.gov before the October 15 deadline to register for an Economic Impact Payment.

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Looking For A Tax Job In Current Market? Do This First

Looking For A Tax Job In Current Market? Do This First

There are many tax professionals who are wondering what the job market really looks like for the tax profession. Based on local, state, national and international revenue authorities need to raise revenue, you can easily see tax professionals are going to be in high demand. What do tax professionals who want to find a new job or consulting clients do to increase their chance of success?

As an expert connecting tax professionals with people and organizations searching for tax expertise, we encounter the following situations most often:

  1. Tax Professionals hidden and no one can find them easily.
  2. Tax Professionals with profiles blocked behind paywalls.
  3. Tax Professionals unaware of affordable professional branding.
  4. Tax Professionals who need help to navigate a career online.

As an internationally known expert in search for tax executives, I have spent three decades finding the best talent in the tax profession for multinational corporations, public accounting firms, law firms and software companies. The disconnect of tax professional talent with the companies who need them is a growing problem. What TaxConnections is doing is growing a global community of tax professionals and making it easier to find them online.

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The Trouble With Home Rule Jurisdictions

The Trouble With Home Rule Jurisdictions

Over the past two years following the 2018 Wayfair decision, which has allowed more than 40 states to implement economic nexus legislation, we’ve seen these laws affect retailers in sometimes unexpected ways.

Take, for example, home rule jurisdictions. In a post-Wayfair world, the tax burden they create can come as a rude awakening for retailers and legislators alike.

In an already complex online sales tax environment, where every state has its own economic nexus thresholds and requirements, home rule jurisdictions add yet another layer of complication.

What Is Home Rule Jurisdiction?

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Recent IRS Cryptocurrency Memorandum: Surprise, Surprise, It’s Still Taxable

Recent IRS Cryptocurrency Memorandum: Surprise, Surprise, It’s Still Taxable

As tax time approaches for many, taxpayers and tax professionals alike are engaging in the annual ritual of gathering their cryptocurrency transactions and seeking out the latest and greatest guidance from the IRS on the subject.  As luck would have it, the IRS recently released an internal memorandum fleshing out its stance on the taxation of virtual currency received in exchange for providing services.  The memorandum describes the taxation of virtual currency received in the “crowdsourcing labor market”—for example, for performing microtasks or other projects—but its principles are applicable much more broadly.

The IRS memorandum was quietly made public on August 28.  It is a reminder that the IRS continues to receive requests for additional cryptocurrency tax guidance.  In the memorandum, the IRS lays out its view that convertible virtual currency is “property” for federal tax purposes, and that its receipt in exchange for performing services gives rise to gross income.  But let’s look a little deeper at the IRS’s reasoning.  For starters, the IRS memorandum poses the following question:

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