Tag Archive for tax blogs

The Unknown Tax Comic – Halloween Edition

♦ It’s Halloween and when the man answers his door, there’s a well-dressed young boy there wearing a suit and matching tie, who says “Trick or treat”. The man’s a bit confused so he asks the boy what he’s dressed up as. “I’m an IRS agent”, says the boy, and with that, he snatches 40% of the candy, and leaves without saying thank you.

♦ Tax Accountant to his trick or treating child:

“If I’m going to take you all over the neighborhood begging for candy, then yes, I’m going to take half… it’s called a “Candy Tax”.

♦ Tax Payer to the Grim Reaper: Read More

Written by | Posted in Tax Humor • TaxConnections

Swiss Banks Unite And Fire Back At The Department of Justice

Neutrality is Switzerland’s unwritten motto. This devotion to conflict avoidance kept the Swiss out of two World Wars. The Swiss are known for their diplomacy, hospitality, and the ability to keep a secret. So, it came as a shock when 73 Swiss banks joined ranks to inform the U.S. Department of Justice and the IRS, politely but firmly, that they would not be signing a proposed amnesty deal under FATCA.

The Basic Facts of FATCA

In March of 2010, the Department of Justice and the IRS were given a new enforcement weapon. The Foreign Account Tax Compliance Act (FATCA) has three primary objectives regarding foreign financial institutions: Read More

Written by | Posted in FATCA

What Is The Best Business Structure To Form? If Any…

What I love most about Colorado, more than the 300+ days of sun every year and the glorious rocky mountains, are the people. For the most Coloradans are risk taking job creators, starting new businesses from scratch out of their garages and turning passions for a hobby into a business with a profit motive.

Of course I surround myself with these people that live and play outside their comfort zone and quite often I am asked about the nuanced tax law implications of starting a new business. Specifically what might be the most appropriate business structure to form, if any, so I’ve decided to draft a post about this topic for general edification. Hopefully you find these words helpful. Read More

Written by | Posted in Small Business • Tax Planning

Wake Up And Smell The Coffee! More Taxes – Time After Time

Wake up and smell the coffee! Its political season again and unfortunately it appears most candidates for State Governors and Congress are advocating a “tax the other guy” approach.

• “We need more money for the schools!”-Tax the Rich.
• “We need more money for the poor!” – Tax the oil companies.
• “We need more money for the seniors!”-Increase sales tax.
• “We need to fight Ebola!”-Tax the pharmaceutical companies.

We need money for good causes so therefore we need to increase taxes? Does that really makes sense? When a politician advocates increasing taxes they always try to Read More

Written by | Posted in Income Tax • Sales/Use Tax • Tax Tips

Starting And Maintaining A Non-Profit Organization

Each year, more than 50,000 organizations apply to the IRS for tax exempt status. There are several steps involved in becoming tax exempt. Many do not realize that there is a difference in a non-profit organization and one that is tax exempt. Not all non-profit organizations hold tax-exempt status. According to IRS statistics, there were slightly over 189,000 returns filed in 2011 by tax-exempt organizations. However, the National Center for Charitable Statistics lists a total of 1,427,807 non-profit organizations. Obviously, many non-profits are not tax exempt, or at least, are failing to file a return.

Forming a Non-Profit Organization

The first step in forming a non-profit organization is to form a non-profit corporation. This involves filing an application with an appropriate official in the state in which the Read More

Written by | Posted in Non-Profit Tax • Religion

IRS Increases Contribution Amounts for Retirement Plans

The IRS announced in IR 2014-99 increases to retirement plan contributions.

Highlights include the following:

• The elective deferral (contribution) limit for employees who participate in 401(k), 403(b), most 457 plans, and the federal government’s Thrift Savings Plan is increased from $17,500 to $18,000.

• The catch-up contribution limit for employees aged 50 and over who participate in 401(k), 403(b), most 457 plans, and the federal government’s Thrift Savings Plan is increased from $5,500 to $6,000. Read More

Written by | Posted in IRS • Retirement

Chicago Lawyer with Portfolio of Celebrity Clients Indicted On Charges of Tax Fraud

Gary Stern is the latest professional to become ensnared in the coils of the criminal justice system. The once prominent lawyer who represented NFL players, doctors, lawyers, and other professionals has been charged with tax fraud. Federal prosecutors allege that Stern organized, operated, and promoted elaborate and bogus tax schemes, primarily to help his wealthy clients evade federal income taxes. For as complicated a strategy as these tax schemes might have been, they can be reduced to something so simple that even a caveman could do it: claiming millions of dollars in tax credits.

Specifically, the charges relate to preparing fraudulent tax returns and impeding the operation of the IRS. A federal indictment filed Tuesday in U.S. District Court in Chicago alleges that from 2006 to 2010, Gary J. Stern, “corruptly obstructed and impeded” the IRS Read More

Written by | Posted in Tax Fraud/Evasion/Crimes

Odujinrin v. IRS Commissioner – Reinforces The Significance of Engaging A Reputable Enrolled Agent

In Wole Odujinrin v. IRS Commissioner the petitioner, a hematology oncologist who represented himself, did not have adequate substantiation to support his petition and was not entitled to claim a net operating loss. He was also liable for an accuracy-related penalty under IRC 6662 – the expensive kick in the shorts.

This petitioner moronically showed up with little documentation in support of his claimed deductions and had inadequate evidence to show that he correctly assessed his 2009 tax liability. He testified that he relied on the advice of a tax practitioner but that person was not present to testify at trial nor provide an affidavit.

The Tax Court ultimately ruled in this case that the petitioner failed to establish a defense Read More

Written by | Posted in IRS

Ex-Seyfarth Shaw Attorney Case: The Latest in a Series of Department of Justice Prosecutions For Tax Shelter Fraud

Recently, tax shelters have become the target of much prosecution by the Department of Justice. In the largest criminal tax case ever filed, professional services company KMPG LLP admitted to engaging in fraud and generating at least $11 billion dollars in false tax losses. The multi-billion dollar criminal tax fraud conspiracy involved the elaborate design, marketing, and implementation of fraudulent tax shelters.

Since the 2005 KPMG indictment and subsequent guilty plea, the Department of Justice has continued in its quest to uncover instances of tax shelter fraud. The case of Chicago tax lawyer and former Seyfarth Shaw LLP partner, John E. Rogers, is among the latest in a series of tax shelter fraud criminal prosecutions. Starting in 2010, the U.S. Department of Justice targeted John E. Rogers, ex-Seyfarth Shaw LLP partner, with a civil suit alleging he Read More

Written by | Posted in Tax Fraud/Evasion/Crimes

Amazon Fulfillment – Customer Convenience or Sales Tax Disaster

Now more than ever Amazon has been a one stop shop for many consumers. Not only can you buy just about anything you can think of on the Amazon website, but you can also receive lightning fast delivery of whatever you buy. Over the past few years, Amazon has taken their company to the next level. Now, in addition to selling items, Amazon provides a fulfillment service to online retailers.

As Amazon puts it, their fulfillment business “helps you grow your online business by giving you access to Amazon’s world-class fulfillment resources and expertise.” Simply put, the online retailer sends their products to Amazon. Amazon stores the item at one of its distribution centers. Once the item is purchased, Amazon packs and ships your product to the customer. In addition, Amazon provides customer support. While it certainly Read More

Written by | Posted in State And Local Tax (SALT)

5 “Tricks” To Make Halloween Candy Tax Deductible

You can in fact deduct Halloween candy if you figure out a way to make it business related. The IRS doesn’t say a lot about this topic because they don’t want to give you “permission” to deduct these items, but they also have not specifically stated that you cannot deduct Halloween candy.

Here are five ways to deduct those over-priced bags of snack size chocolates:

1. Make a promotion out of it. Attach your business card or a promotional flyer to packets of M&M’s and voila! Deductible.

2. There are many companies who will print candy wrappers with your logo on it. An even better and more advanced way to promote your business and still have something for Read More

Written by | Posted in IRS • Tax Deductions
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