Tag Archive for Find A Tax Attorney

Are the Psychological Benefits of U.S. Citizenship An Adequate Justification For The Worldwide Taxation of Nonresident U.S. Citizens?

I recently wrote a two-part series about the inadequate justification for the United States’ worldwide taxation of its nonresident citizens (Part I is available here; Part II is available here). Professor Michael S. Kirsch offers a different perspective in defense of this system. Instead of assessing the propriety of U.S. worldwide taxation on the basis of the legal benefits associated with U.S. citizenship, which lies at the heart of the “benefits rationale,” Professor Kirsch argues that, “it is reasonable to conclude that the retention of U.S. citizenship reflects a self-identification with the population of the United States (or the belief that the benefits of citizenship are worth the tax cost).”[i]

In justifying the worldwide taxation of U.S. citizens, Professor Kirsch relies on the psychological benefits of U.S. citizenship, namely, the ability of nonresident citizens to Read More

Written by | Posted in FATCA • International

Don’t Mistake Gin For “GIIN,” Or You May Suffer From More Than Just a Hangover!

In a recent blog entitled, “FATCA GIIN January 2015 FFI Registration Analysis … by the numbers,” Professor William Byrnes provides a brilliant commentary on the IRS’s publication of its first FATCA GIIN list of the new year (published on New Years Day!). The FATCA GIIN list is a list of “approved FFIs (Foreign Financial Institutions)” that have registered on the IRS FATCA portal by December 23, 2014.

For those who have never heard of a “GIIN” and who may have initially confused it with a certain type of drink that mixes exceptionally well with tonic, GIIN stands for “Global Intermediary Identification Number.” A Foreign Financial Institution (FFI) that registers on the “FATCA Registration Website,” upon approval, receives a Global Intermediary Identification Number (GIIN) from the IRS (unless the FFI is treated as a Limited FFI). The GIIN is a Read More

Written by | Posted in FATCA • IRS

2015 Is The Year of The Tax Professional – Learn Why

2015 is the “Year of The Tax Professional” for many reasons you will discover as you become more familiar with TaxConnections. As a leading tax media network, TaxConnections is focused on building a media strategy for tax professionals. With more than 4000 members from 75 countries, what has emerged is a community of tax professionals working together to gain higher visibility and leverage on the web as a community banding together. In our case, aggregating tax professionals with a wide range of expertise in cooperation, communication, cross education is better for tax professionals and the taxpayers who want to find them. Taxpayers looking for tax expertise no longer have to research cluttered websites to find the tax expertise they need.  Likewise, tax professionals do not have to pay expensive advertising fees to get noticed as they can now remove themselves from all the Read More

Written by | Posted in TaxConnections

Application of Foreign Earned Income Exclusion to Civilian Contractors Working In Combat Zones – Part II

This is Part II of a two-part blog series. After establishing that they have a tax home in a foreign country, taxpayers must still establish that they satisfy the 330 day physical presence test or the bona fide residence test. See IRC section 911(d)(1).

I. 330 Day Physical Presence Test

The 330 day physical presence test is the epitome of a “hard and fast rule.” To satisfy the test, the taxpayer must establish the following (there are “no ifs, ands, or buts about it”):

(1) That he is a U.S. citizen or resident of the United States, and

(2) That he was physically present in a foreign country or countries for at least 330 full days Read More

Written by | Posted in Individual • International

Application of Foreign Earned Income Exclusion to Civilian Contractors Working In Combat Zones – Part I

This blog addresses the foreign earned income exclusion rules as they apply to civilian contractors, and other civilian employees, who work in foreign country combat zones. By “civilian,” I am specifically referring to individuals who are not employees of the United States or any agency of the United States.

I. IRC Section 911 Foreign Earned Income Exclusion

Let’s start with some basics. IRC section 911(a)(1) allows a “qualified individual” to exclude his foreign earned income and housing costs from gross income. In the same way that the foreign tax credit limitation limits the foreign tax credit to the amount of U.S. tax attributable to foreign-source income, IRC section 911(b)(2)(D) limits the amount of foreign earned income that may be excluded to an amount adjusted annually for inflation. Read More

Written by | Posted in Individual • International

What Does The Raoul Weil Case Mean To You?

Iconic mobster Al Capone died in prison after he was convicted of tax evasion. More recently, after the notorious Lufthansa robbery that was immortalized in 1990’s Goodfellas, Jimmy the Gent went to prison not for his alleged role in the robbery but for a point-shaving scandal involving the Boston College basketball team. It could be that crime syndicate figures portrayed by actor Robert De Niro have a certain susceptibility to financial crimes prosecutions, or there could be something else at work.

Tax evasion and other financial crimes in New Jersey are often substitute prosecutions. Traditionally, tax evasion has been easy to prove: there are accurate and timely returns on file, or there are not. “You want to put a murderer in jail for not paying his taxes?” asked a befuddled Elliot Ness in the De Palma version of The Untouchables. Read More

Written by | Posted in Tax Fraud/Evasion/Crimes

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Tax professionals around the world are enjoying great success! They discovered the newest technology driving client acquisition. After spending years listening to tax professionals in public accounting firms, law firms, and independent tax consultants searching for improved client acquisition strategies, we decided to come up with a solution. Now with four years of development and plenty of proof, we want to share with you the SECRETS that are responsible for driving new business to tax professionals worldwide. With millions of visitors searching www.taxconnections.com with the sole purpose of finding a tax expert to help them, we have studied carefully and learned about their successes. Read More

Written by | Posted in TaxConnections

Portable Toilets – What’s The True Object of The Transaction?

It never ceases to amaze me, the wide variety of companies that state agencies attempt to extort money from. Most states impose a sales tax on the sale or rental of tangible personal property. But what happens when the sale is part tangible personal property, part service (“known to the sales and use tax attorney as a “mixed transaction”)? Is the entire transaction subject to tax? Many states take the incredibly helpful, “it depends” approach and look to an even more helpful “object of the transaction” test. In reality, it truly seems like state agencies and courts reach a conclusion and fill in the reasons later.

By way of brief background, since the mid-1900’s, when states enacted their first versions of a sales tax, many courts created this “object of the transaction” test. The test attempted to formulate what the customer was really buying, product vs service. If it was a service Read More

Written by | Posted in Sales/Use Tax

Prudence And Caution: The Antidote To The Hazards of Certifying Nonwillfulness Under The Streamlined Procedures

Back on August 13, 2014, the IRS issued an update of the Internal Revenue Manual that sheds some light on what type of submissions might be ripe for audit under the streamlined procedures. For those unfamiliar with the Internal Revenue Manual, it is the “official source of instructions to IRS personnel relating to the organization, administration, and operation of the IRS.”[i] It contains instructions that IRS employees rely upon to carry out their responsibilities, such as procedures for processing and examining tax returns.

The most critical aspect of the update is an instruction that requires submissions containing five or more foreign information returns to be referred for examination.

9. To complete adjustments on Form 1040X filed under the SDO: Read More

Written by | Posted in FBAR • OVDP

Play Ball With The Government Or Else: Marian Morgan Learns Her Lesson The Hard Way

Marian Morgan would not play ball with the U.S. government, and she paid dearly for that decision – a 405-month (almost 34-year) prison sentence. Her codefendants both wound up with very different fates.

Marian Morgan and her husband, John Morgan, ran a Ponzi scheme in Sarasota, Florida, called “Morgan European Holdings,” scamming people out of millions of dollars. They were indicted along with two others, but on more serious charges: one count of conspiracy to defraud the United States, seven counts of wire fraud, five counts of transfer of funds taken by fraud, six counts of money laundering, and three counts of falsifying income tax returns. Read More

Written by | Posted in Tax Fraud/Evasion/Crimes

Damages: Deductible?

It’s a fact of life that businesses get sued. Even if they win, there are legal and related fees. What if they lose and have to pay compensatory and perhaps also punitive damages? Perhaps also some fines to the government? What is deductible for tax purposes? A recent case from the First Circuit Court dealt with an action involving the False Claims Act with total damages of just over $486 million!

I had a blog post (9/02/14) about this case a few weeks ago, noting the challenging vocabulary used by the judge and a few quotes from Shakespeare he included.

This topic also raises an important consideration for tax reform purposes. Should any of these damages be tax deductible? Arguably, compensatory damages (for making the Read More

Written by | Posted in Tax Deductions

The Smart Choice! Durable Power of Attorney

Today I received a frantic telephone call from the adult daughter of a senior citizen client for whom I prepared an estate plan 10 years ago. Unfortunately, the man, who is a widower, had a serious stroke. He is alive but is not communicative. The daughter called and asked if I had prepared a Durable Power Of Attorney. Even though I had prepared a Will and a Living Will, the client had insisted that he did not want a Power Of Attorney.

Specifically, this client is a very private person and wanted to be in complete control of all of his assets. I had suggested that we establish a Trust, with him being the Trustee and having one of his children as a Co-Trustee who could take over if he came incapacitated. That was rejected. Read More

Written by | Posted in Estate Planning Tax
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