TaxConnections


 

Tax Havens And The IRS

The term “tax haven” is a bit of a misnomer, for the places that are considered tax havens don’t just offer an escape from taxes. They also offer secrecy and a place for U.S. citizens and corporations to keep their money far from the government’s grasp.  What is a tax haven, and how does the IRS think of them?

The IRS actively fights against tax havens via their The Abusive Tax Scheme Program, which actively attempts to prevent abusive behavior by would-be taxpayers. Avoiding paying taxes via hiding money in tax havens is a white-collar crime.

What Is A Tax Haven?

A tax haven is any country, state, or territory that offers foreign individuals and businesses with little or no tax liability. It usually refers only to countries that are politically and economically stable. Tax havens fall into one of three categories:

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Vice President of Taxation, Reports To CFO (Connecticut)

VP Tax Job

We are currently seeking a Vice President Tax with the experience and vision to lead and develop a strong global tax team. This key role will oversee the global tax function of our clients global finance organization and executive team. We are looking for a leader who can successfully head the tax function of a public listed company leading cross-functional teams that support domestic and international operations. The successful candidate must be financially savvy, detail-oriented and organized, with good business judgment and strong communication & leadership skills, as well as the ability to build trustworthy relationships with staff, business partners and employees at all levels globally.

Vice President Tax Responsibilities:

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Has Tax Reform Taken Away Your Home Mortgage Interest Deduction?

Charles Woodson, Home Mortgage Deduction, Tax Reform, Tax Advisor, San Diego, CA

The Tax Cuts and Jobs Act of 2017, more commonly referred to as tax reform, substantially altered the itemized deduction for home mortgage interest and affects just about everyone who has been deducting their home mortgage interest as an itemized deduction on their tax returns.

Background: To fully understand the impact of the law changes, we need to compare the prior tax law to the new tax reform. Under prior law, a taxpayer could deduct the interest he or she paid on up to $1 million of acquisition debt and $100,000 of equity debt secured by the taxpayer’s primary home and/or designated second home.

Qualified home acquisition debt is debt incurred to purchase, construct, or substantially improve a taxpayer’s primary home or second home and is secured by the home. The interest paid on up to $1 million of acquisition debt has been deductible as part of itemized deductions on Schedule A.

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Tax Professionals – Tax Question Of The Week

Tax Question, Clergy Taxes, TaxConnections

Every Friday we post one question from our Ask Tax Question feature and invite our tax professional audience to help our visitor. The Tax Question this week is as follows:

Thank you for the article about who is considered a minister for tax purposes. I am a female whose current church does not ordain women as ministers or deacons. I am a missionary to Jamaica and just created my own ministry after serving almost a year with another ministry. My ministry’s focus is street evangelism and church planting.

If a church in Jamaica ordains me, would that count for IRS purposes or would I have to be ordained by an organization in the U.S.? I realize that we are talking case-by-case. Is there a group within the IRS that would receive a submission of review regarding ordination or status? Thank you so much for your help with this!!!

I appreciate it greatly!!

 

 

Want To Find A Tax Job? – View Abraham Lincoln’s Resume

Kat Jennings, Find Tax Job, Tax Recruiter

Three types of tax professionals have their Professional Profiles in TaxConnections Worldwide Directory of Tax Professionals:

1) Tax Professionals Creating Higher Visibility/Authority
2) Tax Professionals Developing New Business
3) Tax Professionals In Transition

When a tax professional is looking for a new tax opportunity and registers to Find Tax Jobs, the first thing they receive is a series of messages that coaches members through the process of attracting key decision-makers to them.

Everything has changed about finding a tax job and if you do not know how to navigate the process you are at a huge disadvantage. Having personally placed thousands of tax professionals throughout my tax search career, I know how it works more than anyone. I see every mistake people make and want to reach out and help all of you through what is often a heartfelt process. I genuinely want every tax professional to succeed as my life work has been about helping you. Never give up-follow us and we will show you the way.

Today, I give you a bit of inspiration that I must credit to the smcsafetyfoundation.org. They were kind enough to send it to me and now I share this with each and every one of you.

ABRAHAM LINCOLN’S RESUME

1831 – Failed in business

1833 – Defeat for Legislature

1833 – Second failure in business

1836 – Suffered nervous breakdown

1838 – Defeated for Speaker

1840 – Defeated for Elector

1843 – Defeated for Congress

1848 – Defeated for Congress

1855 – Defeated for Senate

1856 – Defeated for Vice President

1858 – Defeated for Senate

1860 – ELECTED PRESIDENT

My path was worn and slippery. My foot slipped from

under me, knocking the other out of the way. But I

recovered and said to myself, it’s a slip and not a fall.

~ Abraham Lincoln, 16th U.S. President

 

 

Tax Reforms Impact On Business Entities: C- Corps, Pass-Throughs

Haik Chilingaryan, C- Corps, S-Corps, Tax Lawyer

Prior to tax reform, the C-corporation tax rates ranged from 15 to 35 percent. Under the new law, there is a 21% flat rate. Also under the new law, there is this new deduction known as the Qualified Business Income deduction that is available for Pass-Through Businesses.

Synopsis

The Tax Cuts and Jobs Act of 2017, otherwise known as the GOP tax reform bill, largely went into effect on January 1, 2018. If utilized properly, the new law can be significantly beneficial for business owners. To understand how the new laws can be beneficial for business owners, it’s important to be familiar with the two types of businesses that can have an impact on the taxation of a business entity.

Taxation Of A Business Entity

One way is for the entity to be structured as a C-corporation, in which case the income generated from the business may be taxed twice. For example, the corporation gets taxed at the corporate level upon earning a profit, then after the corporation makes a distribution to the shareholders, the shareholders also pay taxes on their individual tax returns. This concept is known as double-taxation. Under the new law, all the C-corporations will pay a 21% tax on their corporate profits.

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Transfer Pricing And BEPS – Important Announcement From President Of The Council Of The European Union

The Council Of The European Union came to a political agreement to the mandatory automatic exchange of information in the field of taxation in relation to reportable cross-border arrangements. All delegations in the Commission “agree on the principle that disclosure of potentially aggressive tax planning arrangements of a cross-border dimension can contribute effectively to an environment of fair taxation in the internal market and that tax authorities share the disclosed information with their peers in other Member States.”

“The Commission presented the legislative proposal with the main purpose of this initiative is to strengthen tax transparency and fight against aggressive tax planning by including into the existing Council Directive on administrative cooperation in the field of taxation (DAC) new provisions, which would require Member States to:

– lay down rules for mandatory disclosure to national competent authorities of potentially aggressive tax planning schemes with a cross-border element (“arrangements”) by the “intermediaries”    (e. g. tax advisers or other actors that are usually involved in designing, marketing, organizing or managing the implementation of such “arrangements”); and ensure that national tax authorities automatically exchange this information with the tax authorities of other Member States by using the mechanism provided for in DAC.

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Big Changes For Vehicle Tax Deductions

Charles Woodson, Estate Planning, Vehicle Deductions, San Diego Tax Advisor

In the past, the business use of a vehicle was determined either by using the standard mileage rate for business or using actual expenses plus vehicle depreciation limited by the luxury auto caps. That continues to be the case, except the luxury auto depreciation limit has been substantially increased. In addition, there are other changes as detailed below.

Standard Mileage Rates – The standard mileage rates for the business use of a car (or a van, pickup, or panel truck) are:

STANDARD MILEAGE RATES FOR BUSINESS
2017
2018
53.5 Cents Per Mile
54.5 Cents Per Mile

However, the standard mileage rates cannot be used if you have used the actual expense method (using Sec. 179, bonus depreciation and/or MACRS depreciation) in previous years. This rule is applied on a vehicle-by-vehicle basis. In addition, the business standard mileage rate cannot be used for any vehicle used for hire or for more than four vehicles simultaneously.

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Should Your Business Begin Collecting Out Of State Sales Tax?

William Rogers, Sales And Use Tax Collection

You’ve probably heard about the recent U.S. Supreme Court decision allowing state and local governments to impose sales taxes on more out-of-state online sales. The ruling in South Dakota v. Wayfair, Inc. is welcome news for brick-and-mortar retailers, who felt previous rulings gave an unfair advantage to their online competitors. And state and local governments are pleased to potentially be able to collect more sales tax.

But for businesses with out-of-state online sales that haven’t had to collect sales tax from out-of-state customers in the past, the decision brings many questions and concerns.

What The Requirements Used To Be

Even before Wayfair, a state could require an out-of-state business to collect sales tax from its residents on online sales if the business had a “substantial nexus” — or connection — with the state. The nexus requirement is part of the Commerce Clause of the U.S. Constitution.

Previous Supreme Court rulings had found that a physical presence in a state (such as retail outlets, employees or property) was necessary to establish substantial nexus. As a result, some online retailers have already been collecting tax from out-of-state customers, while others have not had to.

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July 4th – Independence Day In The United States

Independence Day, also known as the Fourth of July is a U.S. Federal Holiday commemorating the adoption of the Declaration of Independence on July 4, 1776. The Continental Congress declared that the thirteen American colonies at the time (Delaware, Pennsylvania, New Jersey, Georgia, Connecticut, Massachusetts Bay, Maryland, South Carolina, New Hampshire, Virginia, New York, North Carolina, Rhode Island and Providence Plantations) regarded themselves as a new nation, the United States of America, and were no longer part of the British Empire. John Hancock was the first person to sign the Declaration of Independence. Here is what John Hancock said:

“We must be unanimous; there must be no pulling different ways; we must hang together”. ~ John Hancock, July 4, 1776

We want to thank all of our independent author contributors and readers of TaxConnections Worldwide Tax Blogs platform for hanging together. You understand the value of having your tax reputations discovered by a stream of new business clientele. If you would like to be part of our tax blogger platform you can join us as a TaxConnections Member. We will post your tax blogs, too!

 

 

Another Blow Delivered To Business Owners By California, This Time On The Classification Of Independent Contractors

The Supreme Court of California issued a ruling on April 30, 2018, which is likely to have a significant adverse impact on business owners. The primary issue in the matter of Dynamex Operations West Inc. v. The Superior Court of Los Angeles County was whether an entity that hires an individual worker can classify such a person as an employee or an independent contractor.

The ruling now creates a rebuttable presumption that such individuals are considered employees. The ruling, however, is limited to only California’s wage orders. As such, it would not currently apply in other contexts such as for workers’ compensation or for tax purposes. Therefore, an entity may be able to classify a worker differently depending on the context.

Wage Orders

In 1913, the Industrial Welfare Commission (IWC) was established in California in order to regulate wages, working hours, and working conditions. In 2004, the legislature of California defunded IWC, however, the wage orders established by IWC are still enforced to this day by the California Department of Industrial Relations, Division of Labor Standards Enforcement.

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Canadian Corporate Director Residency Requirements

Grant Gilmour, Tax Advisor, Canada

Which provinces and territories allow Canadian corporations to have 100% foreign directors? And 100% foreign owners/shareholders?

In Canada a corporation must have at least one director (see International FAQ #27) but directors are not required to be shareholders. It must also have at least one shareholder. Therefore a company incorporated in Canada does not have to have Canadian resident shareholders, but may have to have Canadian resident directors depending on the province or territory they incorporate in.

The provinces and territories that require at least 25% to be Canadian resident directors. Which effectively limits foreign ownership and control. Canadian directorship is based on residency not citizenship.

  • Alberta
  • Ontario
  • Saskatchewan
  • Newfoundland and Labrador
  • Manitoba
  • Federal

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