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Tag Archive for Tax Risk Management

§ 165(e) Loss Claimed On Theft of Money/Investment

Daniel Erasmus3

I am pleased to announce another successful settlement for a client.

IRS denied a big deduction based on a Ponzi type investment stating the taxpayer had claimed the deduction in the wrong year. It must be the year it came to his attention and only up to the amount lost especially if there is a chance to recover some in the future.

The matter was set to go to trial in Miami, but I reached agreement he would deduct 80% in the year the loss was claimed and 20% in the year in which there was certainty he had lost everything. That year is still open to claim the 20%. Protective filings were made by his accountant.

The turning point was making clear the evidence we would present to back-up the client’s claim. This convinced the Read more

Meet Dr. Daniel Erasmus – Managing Partner, Transfer Pricing Expert, Tax Risk Management

Daniel Erasmus2

TaxConnections would like to introduce Dr. Daniel Erasmus, Managing Partner and Transfer Pricing Expert at Tax Risk Management.

An Enrolled Agent and a member of the US Tax Court Bar in all 50 states, his experience as international attorney has led him and his team to represent clients all over the world in tax controversies, especially transfer pricing in Africa.

These clients include:

Various US clients;
A major German car manufacturing company;
The 2nd largest beer brewer in the world; Read more

7 Habitual Mistakes Companies Make – Chapter 8 (5 – Final)

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The Protectors for Big Business –
Remarks That Are Dynamic

“Strong lives are motivated by dynamic purposes.”

Source: Kenneth Hildebrand

DYNAMIC MEANS “CHANGING; action and in motion.” Dynamic is synonymous with lively, active, energetic, vigorous, and impelling.
In a blink, there is more change.
In another blink, there is additional action. Read more

7 Habitual Mistakes Companies Make – Chapter 8 (4)

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The Protectors for Big Business –
IFRS

THIS ACRONYM STANDS for the International Financial Reporting Standards being the standards and interpretations adopted by the International Accounting Standards Board (IASB).

During February 2006 the FASB and the IASB concluded a memorandum of understanding stating their intention to seek a convergence of their standards and interpretations by 2008. Remember FIN 48 is a FASB standard.

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7 Habitual Mistakes Companies Make – Chapter 8 (3)

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The Protectors for Big Business –
FIN 48

THE FINANCIAL ACCOUNTING Standards Board (FASB ) on July 13, 2006, issued the final interpretation amending FASB Statement of Financial Accounting Standards No. 109, “Accounting for Income Taxes.” Of great importance was FASB Interpretation No. 48, “Accounting for Uncertainty in Income Taxes” (FIN 48. The purpose behind publishing the interpretations was to address the uncertainty in accounting for income tax assets and liabilities. FASB No. 109, in the past, contained no guidance on accounting for income tax assets and liabilities, resulting in businesses taking inconsistent positions. According to Read more

7 Habitual Mistakes Companies Make – Chapter 8 (2)

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The Protectors for Big Business –
SOX 404

THE SARBANES-OXLEY ACT was promulgated in the USA on July 30, 2002, primarily in response to the major corporate and accounting scandals in the USA such as Enron , Tyco International , Peregrine Systems, and WorldCom . Sarbanes-Oxley (also known as SOX or Sarbox) was promulgated to restore investor confidence in the reliability of the information provided by companies trading their stocks on USA stock exchanges.

SOX 404, which is an acronym for Sarbanes-Oxley Act , 2002 section 404, states, Read more

7 Habitual Mistakes Companies Make – Chapter 8 (1)

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The Protectors for Big Business
Introducing the Protectors

THE TERMINOLOGY MAKES one think of these acronyms as famous sporting teams. But as famous sporting teams command attention, so do these regulations insofar as they impact on tax risk. What follows is a brief summary of these regulations, their impact on tax risk management, and why an orchestrated Tax Risk Management process will help with overall regulatory compliance.

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7 Habitual Mistakes Companies Make – Chapter 7 (11)

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Communication to Eliminate Tax Risk –
Communication and Beyond Tax Risk Management

IN AN ATTEMPT to address the occurrence of material weaknesses under SOX 404 (dealt with in chapter 8), and in an attempt to limit these exposures, Margaret S. Thomas CPA in her lecture notes on “Sarbanes-Oxley 404: Compliance and Beyond,” 2006 states that “an ethical cultural environment should be created in any business. Management should create policies that create a positive environment for employees, without fear of reprisal, to report unusual occurrences. All incidents of alleged fraud or discrepancies must be investigated promptly and action taken. Employees must be encouraged to come forward with any information that may have an impact on the business.” Read more

7 Habitual Mistakes Companies Make – Chapter 7 (10)

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Communication to Eliminate Tax Risk –
Tax Risk Management Web Interface System —V1.01 –

On-the-Radar Screen Issues

This is one of the key areas. This displays all tasks that have been identified by the tax team as risk areas within the organization and are known to the IRS. These risks have been quantified, and a total value of the overall tax risk exposure is displayed.

Off-the-Radar Screen Issues

This is another key area. This displays all tasks that have been identified by the tax team Read more

7 Habitual Mistakes Companies Make – Chapter 7 (9)

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Communication to Eliminate Tax Risk –
Tax Risk Management Web Interface System —V1.01

The Tax Risk Management Web Interface design should entail some of the following features:

– Interface customization according to each division in the business to be separately identifiable, with a consolidation option.

– Log on through a three-level log-on secure method:

– Username Read more

7 Habitual Mistakes Companies Make – Chapter 7 (8)

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Communication to Eliminate Tax Risk
Tax Risk Management Web Interface System —V1.01

The purpose of this IT specification of a Tax Risk Management Web Interface System (phew! a mouthful of IT jargon, but simply put as the “Tax Risk Management Web Interface”) is to determine an organization’s tax risk and from that point forward to help manage that tax risk. The Tax Risk Management Web Interface is one of the key Tax Risk Management tools used.

The following aspects are important in the execution of Tax Risk Management Web Interface: Read more

7 Habitual Mistakes Companies Make – Chapter 7 (7)

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Communication to Eliminate Tax Risk –
The Communication Questions

THE QUESTIONS PUT to the operations divisions in the business that will require regular review, as part of the Tax Risk Management strategy, will include the following:

• Do you know which perks or fringe benefits are subject to VAT?
• Have you accounted for VAT on any perks or fringe benefits?
• Have you exported any goods or services?
• Have you imported any software over the Internet and accounted for the VAT?
• Are your export documents 100% compliant with the tax regulations? Have you actually Read more

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