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Tag Archive for tax laws

Virtual Currency – Recent Tax Matters And Concerns

Annette Nellen

First – On 11/8/21, the Treasury Inspector General for Tax Administration (TIGTA) released a report (dated 9/21/16) – Rising Use of Virtual Currencies Requires IRS to Take Additional Actions to Ensure Taxpayer Compliance. Per the release:

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Mistakes Religious Organizations Make When Filing a Tax Return

John Stancil

When it comes to the IRS and religious organizations, these organizations fall into two categories – churches and other religious organizations. Due to the First Amendment, the IRS is extremely reluctant to tread in the area of church organizations. This is not to say that churches have carte blanche to ignore the tax laws, but that the IRS grants them a great deal of leeway in regulating them. All religious organizations are subject to the law in regard to taxation. However, many operate as if the laws do not apply to them. Some of the most common mistakes made by religious organizations are the subject of this article.

At the outset, it should be noted that churches do not have to apply for 501(c)(3) status. They may choose to do so, and there are some very good reasons that they might wish to make such an application. All other religious organizations must apply for this status by completing and filing Form 1023 or Form 1023EZ. A church is automatically treated as though it has 501(c)(3) status.

Filing a return. Churches do not have to file a Form 990. However, some churches file these returns. This is unnecessary and may cause the IRS to take a closer look at the organization. If you don’t have to file, don’t file. Read more

“Abolish The IRS” Distracts From Needed Reforms

Annette Nellen8

Republican presidential candidates Senators Ted Cruz and Mike Huckabee would like to abolish the IRS. They are not saying they want to abolish taxes, just the agency that collects them. Even if either is able to simplify taxes to the point that no taxpayers have questions or need guidance, we still need a tax collector, as well as an auditor to ensure compliance.

A call to abolish the IRS is a distraction. That’s too bad because there are significant improvements needed to our federal tax system – a system that includes not only the income tax, but also employment, excise and estate and gift taxes. Tax reform must be the focal point, not termination of the entity that collects revenues to fund schools and roads, provide national defense, and much more.

The IRS is an easy scapegoat for complaints about our tax laws. But those laws come from Congress. Yes, the Read more

IRS Gives Good News on Passive Foreign Investment Companies

TaxConnections Picture - IRS Magnifying Glass - square

Creeping up to the New Year, the Internal Revenue Service (“IRS”) showed an uncharacteristic sign of holiday goodwill. On December 30, 2013 the IRS issued Temporary Treasury Regulations providing guidance with regard to so-called “passive foreign investment companies” (“PFIC”). The areas covered in the Regulations include guidance in determining ownership of a PFIC (specifically, attributing ownership of PFIC stock through partnerships, estates and trusts), the annual filing requirements for shareholders of PFICs and guidance on the exception to the requirement for certain shareholders of foreign corporations to file Form 5471, “Information Return of U.S. Persons with Respect to Certain Foreign Corporations.’

Broadly speaking, the US tax laws impose a special tax and interest charge on a US person that is a shareholder of a PFIC when the investor receives an “excess distribution” from the Read more

No, We Can’t. Yes, We Can!

A while back Seth Godin did a blog post online titled, “On Behalf of Yes”

It struck a cord with me on how many times, inside public accounting firms, partners, managers and even team members lean towards thinking, “No, we can’t.”

While it comes to understanding complex tax laws and changing to comply with those demands and performing audit services with the utmost perfection, CPAs think – “Yes we can, this is our profession and we love this stuff.”

Yet when it comes to taking care of their own business, keeping pace with the times and what is going on in the management world, CPAs think, “No way, I like things just the way they are. It’s worked well for us all these years.”

What have the most successful firms embraced? They have embraced a YES attitude.

– Nearly 30 years ago, most CPAs did not believe an administrative person could plan CPE, select the right people to hire, lead the marketing efforts and help bring the newest technology into the firm. Then they discovered the power of hiring a firm administrator.
– We cannot advertise. It’s not professional and we don’t know how. Yes, we did.
– I remember one of my first “No, we can’t” situations. We can’t possibly do away with our legal size files and move to letter size. Yes, we did.
– No, we cannot let someone work a flexible schedule. Yes, we did.
– No, we simply cannot put a computer on everyone’s desk. Yes, we did.
– No, we cannot go paperless. Yes, we did.
– No, we cannot allow our people access to the internet. Yes, we did.
– No, we cannot get into all of this social media stuff. Yes, we did.

You might not even be aware you are displaying a “No” attitude and demeanor. Become aware! Stop thinking and saying “No” and identifying all the reasons why something cannot be done.

Think of the kid’s show “Bob the Builder“. His motto:

Can we fix it? Yes, we can!

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