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Taxpayers Rights When Audited By Tax Authorities In South Africa (Chapter 5.5.6 – 5.5.6.1)

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 5 – JUDICIAL REVIEW WITH REFERENCE TO SS 74A AND 74B –

5.5.6 The grounds of review 5.5.6.1 Introduction conclusions drawn above that sufficient opportunity exists for 178 Read more

Who Decides Whether To Authorize A Taxpayer’s Certification For Transitional Treatment To The Streamlined Procedures?

Earlier this week, I spoke to an IRS Revenue Agent who shed some light on how the decision regarding transitional treatment is made for those taxpayers seeking to transition to the Streamlined Procedures from OVDP. Under the current procedures, the agent and his or her supervisor make the decision regarding transitional treatment, with involvement as necessary by the technical adviser. Practically speaking, the technical adviser does nothing more than “rubber stamp” the decision made by the examiner and the examiner’s manager.

While the process might seem straight-forward, it is not always seamless. That is where Streamlined Transition FAQ 8 comes into play. It provides some role for a central committee in those cases designated for central committee review. Unfortunately, no Read more

Electronic Commerce Taxation and United States Bi-Lateral Treaties

Taxation of electronic commerce from offshore has two main aspects, the United States tax regime from an international perspective and the effect of bi-lateral treaties upon that regime.  A previous writing addressed the first consideration, the general dynamics of the United States tax regime for entry taxation of a non-resident alien or foreign corporation. (1)  The United States is engaged in more than fifty bi-lateral income tax treaties with other sovereigns.  In a general statement, those treaties are designed to mitigate the effects of double taxation.

Income that is generated by a foreign party from activity in the United States can be taxed from the source country, the United States in that case, and the residence foreign country, creating risks of multiple taxation.  Treaties are designed to alleviate that conflict.  The Read more

Cancellation of Debt, Foreclosures, and Bankruptcy – Part 15 (Final)

Your State Income Tax return and CODI

The Commonwealth of Massachusetts complies with all of the federal rules on CODI, deemed sales, and bankruptcy dealing with CODI except the IRC §108(i) Reacquisition of Business Debt Deferral.

For purposes of the corporate excise and the personal income tax, a taxpayer that makes the federal election allowed by IRC § 108(i) is required to add back to gross income any CODI that is deferred under IRC § 108(i). In future years when the deferred CODI is recognized for federal purposes, the taxpayer is allowed to make a corresponding subtraction, since the recognition event will have already taken place for Massachusetts Read more

Taxpayers Rights When Audited By Tax Authorities In South Africa (Chapter 5.5 – 5.5.4 and 5.5.5)

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 5 – JUDICIAL REVIEW WITH REFERENCE TO SS 74A AND 74B –

5.5.4 Save where any law otherwise provides and 5.5.5 Show cause Read more

Disparity In Treatment of Taxpayers Who Qualify For Transitional Relief Is Casting A Shadow On The New Streamlined Procedures

Many tax practitioners have become disenchanted with the IRS’s treatment of those who are transitioning from OVDP to the Streamlined Procedures. What is the source of this disenchantment? Very simply, the IRS is denying the nonwillful certification in a disproportionately high number of cases.

To make matters worse, the process of denial is somewhat of an enigma. In OVDP cases, the IRS has more than just the certification. It also has the Offshore Voluntary Disclosure Letter and the accompanying documents that make up the final submission. According to many tax practitioners, if the certification causes the IRS to doubt the taxpayer’s claim that he was nonwillful, then its default position is to deny transitional relief. Read more

Foreign Persons As S Corporation Shareholders: Risky Business – Part I

Often, a small business or start-up will utilize an S corporation election for their business. An S corporation is a corporation formed under a particular State’s incorporation laws (or an organization that has elected to be treated as a corporation for US income tax purposes). The corporation must be eligible to elect S corporation status and its shareholders must consent in writing on Form 2553 to have the corporation elect S corporation status. The Form 2553 must be filed with the Internal Revenue Service (IRS) on or before the 15th day of the 3rd month of the corporation’s tax year in order for the election to be effective as of the beginning of that tax year. If the corporation is on a calendar tax year, the Form 2553 must be filed on or before March 15th in order for the election to be effective for that tax year. Read more

10 Key “Taxpayer Bill of Rights” – Outlined In Publication #1

The Internal Revenue Service announced August 12, 2014 that its cornerstone “Taxpayer Bill of Rights“ document is now available in six languages.

Newly-revised versions of Publication 1, “Your Rights as a Taxpayer,” are now posted on IRS.gov in English, Spanish, Chinese, Korean, Russian and Vietnamese. By making this important publication available in multiple languages, the IRS hopes to increase the number of Americans who know and understand their rights under the tax law.

The Taxpayer Bill of Rights takes the multiple existing rights embedded in the tax code and groups them into 10 broad categories, making them easier to find and understand.

“We believe that these rights are critically important for people to know and understand, Read more

Australian “Significant Investor” Residence Visa Applicants Need To Consider Tax And Estate Planning Issues.

Australia’s 2012 “significant investor” residence visa scheme has attracted some 1,000 applicants who have committed to invest AUD4 billion in businesses or other complying investments. To date, the vast majority of applicants have been from Chinese nationals.

The scheme might have been expected to attract some interest from Russian entrepreneurs and investors. However, Australia’s personal tax rates may be a distraction (an effective maximum marginal rate of 49% currently applies to income in excess of AUD180,000 pa). Furthermore, the current geopolitical situation around Ukraine and the flight MH17 atrocity may now deter potential applicants who might be regarded as associates of the Russian leadership. Read more

What To Do If You Get A Notice From The IRS

Each year the IRS mails millions of notices. Here’s what you should do if you receive a notice from the IRS:

1. Don’t ignore it. You can respond to most IRS notices quickly and easily. And it’s important that you reply promptly.

2. IRS notices usually deal with a specific issue about your tax return or tax account. For example, it may say the IRS has corrected an error on your tax return. Or it may ask you for more information.

3. Read it carefully and follow the instructions about what you need to do. Read more

Cancellation of Debt, Foreclosures, And Bankruptcy – Part 14

Tax Entities and CODI

CODI in Partnerships

Exclusion at partner level – The exclusions apply at the partner level, not at the partnership level. The insolvency of the partnership does not affect the pass-through of the CODI. Each partner may use whichever exclusions they qualify for on their individual returns.

Real Property Business Debt Exclusion – The determination of whether debt is qualified as real property business indebtedness is made at the partnership level. Then, the election to apply the provision is made on a partner-by-partner basis. Read more

Get Your Whistles Ready – IRS Issues Final Regs. on How To Get Your Reward!

IRS has issued final regs that provide comprehensive guidance for IRS’ Code Sec. 7623 award program (i.e., whistle blower awards).

Summary. These regulations provide comprehensive guidance for the award program authorized under Internal Revenue Code (Code) section 7623. The regulations provide guidance on:

1. Submitting information regarding underpayments of tax or violations of the internal revenue laws and filing claims for award,
2. The administrative proceedings applicable to claims for award under section 7623.
3. The regulations also provide guidance on the determination and payment of awards, Read more

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