The value-added tax (VAT) has been adopted by every developed country and most developing countries in the world. There is, however, one exception –The United States. That may be changing as there is currently discussion regarding its adoption in the U. S.
The value-added tax is a tax on goods and services and is collected at every step in the production chain. This is unlike the sales tax, which is paid only on retail sales. In a sense it is similar to sales taxes that are currently in place in 45 states as it is a consumption tax. VAT rates, obviously, vary from country, but in a survey of Organisation for Economic Co-operation and Development (OECD) countries, the rate varies from a low of five percent to a high of 24.5 percent. Read More
The inflexibility of the IRS in the offshore area is starting to get some professionals down. I am one of them, but there are some others voicing similar frustration.
Taxpayers and professionals alike, were very pleased when the IRS announced the new Streamlined procedures in mid-June. You can learn more about the new Procedures here.
It seemed that sensibility and reason were beginning to prevail over at the IRS! Finally, “benign actor” (as opposed to “bad actor”) taxpayers with undisclosed offshore assets, could obtain relief and come into tax compliance without driving themselves into both fiscal and physical bankruptcy. Read More
In the past year there have been numerous reports of fraud and embezzlement, mostly involving small businesses. These can be prevented by a few low cost controls.
One of the most important is separation of responsibilities of asset custody and record keeping for these assets. For example, someone other than the person who receives and disburses cash and writes checks should record these in the accounting records.
Other essential controls include, but are not limited to:
(1) approval of payments by the owner or other responsible person who does not write the checks, or authorize credit card payments and maintain the accounting records. Read More
Payments to Independent Contractors can be a very grey area within the tax law. Often times I am asked the question, “Should my employees be given a W-2 or Form 1099-MISC for there pay?” There’s really no clear-cut answer to this question. It’s important to answer other questions to even begin to get some clear direction on the proper way to classify a worker as an employee or an independent contractor.
There are two types of business relationships which may exist between an employer/owner and a employee/worker. They are 1. Independent contractor and 2. Employee (common-law employee).
These business relationships are established based on common-law rules: Read More
Congressman Camp’s discussion draft of the Tax Reform Act of 2014, released in February 2014 aims to broaden the income tax base and lower tax rates. Broadening the tax base means that some special deductions and credits could be eliminated. It also means that some deductions could be stretched out over longer periods. In the long run, that doesn’t raise revenue as it is just timing. But when you only measure the effects out 10 years, it raises revenue.
One stretched out deduction would be advertising expenses of large companies. Under Camp’s proposal, 50% would be deducted in the year incurred and the balance would be deducted over ten years. That might sound simple, but you need to dig deeper. This proposal will require a definition of advertising. Camp’s is fairly complex. Also, the small Read More
Canadians earning income from US rental property can be fraught with unexpected tax problems, which could severely hurt their after-tax return on investment. It is important to consult a cross-border tax professional before the purchase to understand all the US and Canadian tax implications of owning US rental property and to make the best decision for their situation on the right structure to own and finance the purchase of US rental property.
This is the first of a series of articles on the cross-border tax considerations of investing in US rental property. If you are planning to purchase US rental property, you need to have some basic understanding of the following US and Canadian tax law before you can make a sound decision on how you should own and finance the purchase of US rental property. Read More
I had put it on some time ago. I kept it on everywhere I had a presence. I was submissive and had a desire to be obedient. The ramifications of not doing as the master said weren’t nearly as pleasurable as complying with my master’s commands.
Having become a creature of habit, and not wanting to displease my master, I had put it on everywhere. Having quite the presence online, I had it on in lots of places. You could see on me in my blog posts, my web page, my social media posts. Everywhere I was, I had it on.
Now, after months of making sure I’d covered my a**, I’m told to TAKE IT OFF!
Yep. In a webinar presented by the Office of Professional Responsibility, Karen Hawkins Read More
Bankruptcy and CODI
All bankruptcy falls under USC Title 11. There is also a bankruptcy Chapter 11. This similarity causes a lot of confusion. Since we are mainly dealing with personal tax returns, we will not deal with the Chapter 11 bankruptcy in this course. We will be talking about Chapter 7 and Chapter 13 of the Title 11 Code.
Chapter 7 is the “discharge” chapter. In a Chapter 7 bankruptcy all included debts are theoretically discharged. If there are assets secured by those debts the assets are usually forfeit. The Deemed Sales and CODI rules apply in those cases. Read More
Suppose that you have an undisclosed offshore account with XYZ Bank, a Swiss bank. You received a declaration of consent from XYZ Bank requesting your consent to disclose your account information to the IRS directly. You refused.
Because you did not consent, your account became subject to aggregate reporting by XYZ Bank. Pursuant to the Swiss-U.S. FATCA Agreement, Swiss banks must report the number of accounts they hold for which the account holders have not given their consent, as well as the total value of such accounts, without disclosing the names of the account holders. This aggregate reporting procedure is complemented by an exchange of information upon request based on the Swiss-U.S. double taxation treaty. Read More
In the weeks ahead, after nearly four years of development, you will experience a very exciting shift in accessing tax education and information. Our 3000 tax advisor members from more than 75 countries are now starting to upload their tax education videos for pay per view online. We have aggregated to one platform hundreds of videos that educate tax professionals and consumers. If you are a tax professional and want to become a member of TaxConnections join us now and participate in this stunning shift in online tax education. You will be able to generate revenue with your tax expertise through an innovative video platform that took us four years to create and complete. We are very excited about the advances we have made for the tax profession to videotape themselves and upload their tax expertise on the TaxConnections platform and be paid. Next week we Read More