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Corporate Executive Compensation Compliance: Fringe Benefits (Part V)

Tom Kerester, Tax Ambassador, Tax Blog, Washington D.C, USA, TaxConnections

Issue Description

Corporate executives often receive extraordinary fringe benefits that are not provided to other corporate employees. Any property or service that an executive receives in lieu of or in addition to regular taxable wages is a fringe benefit that may be subject to taxation. In 1984, the Internal Revenue Code (“Code”) was amended to include the term “fringe benefits” i n the definition of gross income found in §61. A fringe benefit provided in connection with the performance of services, regardless of its form, must be treated as compensation includible in income under §61.

Whether a particular fringe benefit is taxable depends on whether there is a specific statutory exclusion that applies to the benefit. For example, when §61 was amended to include the term “fringe benefits”, §132 was added to provide exclusions for certain commonly provided fringe benefits that had previously not been addressed in the Code. Read more

5 Common Tax Mistakes US Expats Make

Olivier Wagner, Tax Traveler, Tax Blog, Vancouver, Canada, TaxConnections

How is May treating you all so far? Are you sorting out all the papers and receipts to file your annual US expat taxes? If you haven’t started yet, hurry up. This year’s US expat deadline to file your federal tax return is June 15th and it is just around the corner!

What Are The Most Common Tax Mistakes By Americans Overseas?

Wednesday is a day of our weekly tax infographic and today we want to share the top 5 tax mistakes by Americans living abroad. You might be surprised to learn what your fellow US expats don’t do or do wrong when it comes to fulfilling US tax obligations: Read more

Are Virtual Currencies Taxable?

Dannylle Milford, Tax Advisor, Tax Blog, Glendale, California, USA, TaxConnections

With virtual currencies like Bitcoin becoming more mainstream in recent years, we often get asked if revenue from the sale or exchange of these digital dollars is taxable. The simple answer is, YES – income (or profit) from virtual currency transactions is reportable on your income tax return. However, because this is still a relatively new phenomenon, there are a few things you should be aware of to make sure you don’t get caught with a huge tax bill!

Virtual currency, as generally defined, is a digital representation of value that functions in the same manner as a country’s traditional currency. Bitcoin is one example of a convertible virtual currency which can be digitally traded between users and purchased for, or exchanged into, U.S. dollars, Euros and other real or virtual currencies. There are currently more than 1,500 known virtual currencies. Because transactions in virtual currencies can be difficult to trace and have an inherently anonymous aspect, some taxpayers could be tempted to hide taxable income from the IRS. Read more

Canada Tax: Capital Cost Allowance For Real Estate And What It Means

Grant Gilmour, Tax Advisor, Tax Blog, Vancouver, Canada, TaxConnections

Capital cost allowance (CCA) is the tax term in Canada for the deduction of amortization on capital assets. There are separate classes of CCA for property, plant and equipment and different rates that apply to each class. There are some specific rules for claiming capital cost allowance related to real estate.

Once construction is complete, a building can be sold as inventory and earn business income, used to earn property income, or used to operate an active business. If the building is not being sold, then it will generally become depreciable property for the corporation. In order to be classified as depreciable property, the building must meet the following conditions: Read more

How Long Should Tax Records Be Kept?

Paul Mueller, Tax Blog, Tax Advisor, Loveland, Colorado, USA, TaxConnections

A frequent question we get throughout the year is: How long should I keep records and tax returns?

Here is a helpful guide to follow:

1 Year
Monthly statements of investments until an annual statement recapping the year’s activity is available, bank statements, copies of checks used for tax deductible expenses and payroll statements until your W-2 arrives and you confirm the information matches.  Read more

Corporate Tax Executives Exclusive – Costly Corporate Software Mistakes

Kat Jennings, CEO, Tax Blog, TaxConnections

You are invited to a private conference call on Friday, May 11, 2018 at 9:00AM PDT/10:00AM MT/11:00AM CT / 12:00NOON EST. This one of a kind conference call exposes an underworld of costly software mistakes that are affecting corporate tax departments worldwide.

Tax executives rarely know about the big mistakes made in purchases and implementation. I have asked these experts to share what really goes on. In order to get the real truth out we are providing anonymity to these folks and invite only those individuals currently employed in a corporate tax department. Read more

Corporate Executive Compensation Compliance: Audit Techniques Guide (Part IV)

Tom Kerester, Tax Ambassador, Tax Blog, Washington D.C., USA, TaxConnections

Every publicly held corporation maintains its executive compensation records differently. Likewise, every publicly held corporation maintains different methods for compensating its executives. As the examining agent, you must first learn the identity of the individual(s) within the corporation who are most familiar with how the executive compensation records are maintained. You will need to have a general discussion with that person regarding the record maintenance and retention practices of the corporation with regard to executive compensation. This discussion will help you narrow the focus of your IDRs and will also familiarize you with in-house terminology that is utilized by the corporation when discussing and researching records concerning executive compensation. Read more

Australian Tax: New Tax Incentive To Drive The Minerals Exploration Industry

Gary Olsen, Tax Advisor, Tax Blog, Adelaide, Australia, TaxConnections

Applications open on the 16th of April 2018 for the Junior Minerals Exploration Incentive (JMEI).

Back in September 2017, the government announced it will look to provide a tax incentive for junior exploration companies to encourage investment and risk taking. The Junior Mining Exploration Incentive (JMEI) builds upon the Exploration Development Incentive (EDI) which ceased on the 30th of June 2017.

The Australian Bureau of Statistics released Australia’s mineral exploration statistics for the December 2017 quarter. The report found that overall there continues to be an imbalance between greenfields and brownfields exploration, with 67% of drilling happening in already explored brownfield locations. Read more

6 Property Tax Protest Tips For Texas 2018 Deadline

Mishkin Santa, Tax Advisor, Tax Blog, Austin, Texas, USA, TaxConnections

Deadlines for property tax protests are quickly approaching, and if you want to lower your appraised value – and subsequently your annual tax burden – the time to act is now. To help you get started (and see success) we’ve pulled together some of our top property tax protest tips below. Use them to your advantage to lower your tax bill – both now and years down the line.

  1. Use a pro. When it comes to property tax protest tips, none is more important than this one. Using a professional to handle your tax protest comes with so many benefits. Most importantly, it gives you an expert, knowledgeable partner who can build your case and boost your chances of success. They know what it takes to win a protest, and they can make it happen. Using a pro also adds convenience for you. There’s no gathering of evidence or tedious forms, meetings or hearings. They do it all for you. It’s easy, simple and hassle-free.

Read more

IRS Audit Triggers: 10 Red Flags To Avoid

Robert Hartman, Tax Advisor, Tax Blog, Gambrills, Maryland, USA, TaxConnections

In 2017, the IRS received more than 152 million tax returns from individuals, married couples, and businesses. And these numbers are predicted to increase for 2018. With so many people filing, you’d think it’s highly unlikely to get audited. However, you should think again. Since the IRS began allowing e-filing, many people have been filing taxes themselves, which means they’re more likely to make mistakes.

This is one important reason why the IRS set up a filter system to pay specific attention to certain parts of your tax return and flag them if they seem suspicious or potentially inaccurate. You’ll have a much better chance of avoiding an audit if you keep these 10 IRS audit triggers in mind when you file your taxes. Read more

IRS Urges Small Businesses: Protect IT Systems From Identity Theft

Tom Kerester, Tax Ambassador, Tax Blog, Washington D.C., USA, TaxConnections

WASHINGTON – The IRS, state tax agencies and the nation’s tax industry are warning small businesses to be on-guard against a growing wave of identity theft attempts against employers.

Small business identity theft is big business for identity thieves. When businesses and their employees have their identities stolen, their sensitive information can be used to open credit card accounts or file fraudulent tax returns for bogus refunds. Read more

Corporate Executive Compensation Compliance: General Audit Steps (Part III)

Tom Kerester, Tax Ambassador, Tax Blog, Washington D.C., USA, TaxConnections

General Audit Steps

I. Examining Constructive Receipt and Economic Benefit Issues

Issues involving constructive receipt and economic benefit generally will present themselves in the administration of the plan, in actual plan documents, employment agreements, deferral election forms, or other communications (written or oral and formal or informal) between the employer and the employee. The issues may also be present in related insurance policies and annuity arrangements. Ask the following questions and request documentary substantiation where appropriate:

  • Does the employer maintain any qualified retirement plans?
  • Does the employer have any plans, agreements, or arrangements for employees that supplement or replace lost or restricted qualified retirement benefits?

Read more

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