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Tag Archive for Tax Blog

The Unknown Tax Comic – Part 12

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♦ “People who complain about taxes can be divided into two classes: men and women.”  — Anonymous

♦ When your ship comes in, it’s always docked by the Government.

♦ Income tax is Uncle Sam’s version of “Truth or Consequences.”

♦ It’s hard to believe America was founded to avoid high taxation.

♦ Suggested simplified tax form: How much money did you make last year? Mail it in. — Stanton Delaplane

♦ “Worried about an IRS audit? Avoid what’s called a red flag. That’s something the IRS Read more

Premium Tax Credit Saga – New Developments And Dilemmas

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On Friday (11/7/14), the US Supreme Court granted cert in King v. Burwell, 759 F.3d 358, No. 14-1158 (4th Cir., 7/22/14). This is the case where the court found the IRS regulations allowing individuals to claim a premium tax credit (PTC), even if they obtain coverage on a federal exchange rather than a state exchange. In contrast, in Halbig v. Burwell, 758 F.3d 390, No. 14-5018 (DC Cir., 7/22/14), a divided court found the IRS regulation invalid. The King and Halbig decisions were issued on the same day in July.

In September 2014, the Eastern District Court of Oklahoma issued a decision, State of Oklahoma v. Burwell, No. CIV-11-30-RAW (ED Ok, 9/30/14), finding the regulations invalid.

The DC Court of Appeals vacated its July decision, agreeing to hear the case en banc. Read more

Tax Professionals Happy With Powerful Technology Driving Client Acquisition

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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

What Offshore Delinquent U.S. Individual Filers Need To Know! – Part 1

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I am a U.S. citizen and have resided in Canada for years and have not filed U.S. Returns. What can I do or what could happen if I do nothing?

Answer

U.S. persons including U.S. citizens or green card holders residing in Canada who are not up to date with their U.S. filing obligations should consider the available programs in an effort to become tax-compliant.

The updated streamlined procedures announced on June 18, 2014 modified changes to the 2012 streamlined program, now known as the Streamlined Foreign Offshore Program (“SFOP”) requiring the filing of 3 years of past-due returns (with required disclosures and Read more

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

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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

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

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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

Tax Planning For Expatriation From The United States

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The taxation of Americans and long term green card holders (permanent residents) who expatriate from the United States has gone through many changes over the years. The latest version of these changes with tax expatriating Americans on their accumulated un-taxed wealth prior to their leaving the United States, along with their earned income that has not been paid and will be paid in the future.

In addition, the United States tax laws will tax expatriating Americans at draconian rates, for Americans that die owning United States wealth (the “Estate Tax”) and that make significant gifts (the “Gift Tax”) after they have given up their United States citizenship.

Read more

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

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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

Damages: Deductible?

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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

The Smart Choice! Durable Power of Attorney

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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

Bonus Depreciation Allowance Legislation And The CRS Report: Labor Resource Allocation And Tax Policy Issues

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Introduction

Controversies surrounding depreciation allowance legislation pending in the 113th Congress involve labor resource allocation control decentralization tax policy issues. The Obama administration’s current section 530 attacks, vindicated through state unemployment agencies, manifest its policy focus on the labor resource reallocation control centralization controversy. Those states that have entered into a “Memorandum of Understanding” involving worker misclassification with the IRS and Department of Labor have inherently sided with the Obama administration in favoring labor resource allocation control centralization. Such control centralization, which now turns its focus to depreciation allowances, coalesces important factors underpinning success of the Affordable Care Act. Read more

Bank Leumi Faces $300 Million Settlement Option To Close Investigation Regarding Aiding Americans To Evade Taxes

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We previously posted “IRS Continues Cracks Down on Undeclared Israeli Bank Accounts!” where we discussed our prior posts about US taxpayers with undeclared income from Israeli Bank Accounts.

Now according to bloomberg.com’s article entitled Bank Leumi Said to Face $300 Million Demand in Tax Case, the New York’s banking regulator will ask for more than $300 million to settle an investigation into whether Bank Leumi Le-Israel (LUMI) BM helped Americans evade taxes, a person familiar with the matter said.

Benjamin Lawsky, head of the state’s Department of Financial Services, is seeking more than what the bank set aside to resolve a separate criminal investigation by the U.S. Read more

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