In a pivotal strategic effort to mitigate the exodus of filming to other states and countries, California lawmakers take aim to quadruple tax subsidies for location shooting to $400 million a year.

On Thursday, August 14th, Legislation was approved by the Senate Appropriations Committee with a 5-0 vote which would eliminate a controversial system in which film and television productions were awarded tax credits based upon a lottery system, regardless of the economic effect of the production. The bill, AB 1839, must still be approved by the full Senate and signed by Gov. Jerry Brown. However, legislative supporters indicate they are highly confident the measure will clear all remaining hurdles, saying there is widespread acknowledgment that California is quickly losing one of its signature Read More

We will be focusing on the difference between Audit Assistance and Audit Representation in the next series of blogs. Is there a difference? Where is the line? Do all taxpayers need actual representation? Does IRS Cir. 230 require representation as opposed to assistance? How does the newly upheld Loving ruling change the playing field?

We will explore and answer these questions and more. We will also review the need for a specific engagement letter for specific situations, how these decisions can affect your E&O coverage, and how they can affect the future of your practice.

The Basics

We will start with the basics of any client contact, no matter the topic of conversation. Read More

The IRS is aware that some U.S. taxpayers living abroad have failed to timely file U.S. federal income tax returns or Reports of Foreign Bank and Financial Accounts (FBARs). Some of these taxpayers have recently become aware of their filing obligations and now seek to come into compliance with the law. The Service is announcing a new procedure for current non-residents including, but not limited to, dual citizens who have not filed U.S. income tax and information returns to file their delinquent returns. This procedure will go into effect on Sept. 1, 2012.

Note: On September 30, 2013, FinCEN posted, on their internet site, a notice announcing FinCEN Report 114, Report of Foreign Bank and Financial Accounts (the current FBAR form). FinCEN Report 114 supersedes TD F 90-22.1 (the FBAR form that was used in Read More

Posted in sections, this is my Doctoral Thesis on taxpayers rights when audited by the tax authorities in South Africa – equally applicable to many English-based law systems in Africa and abroad (eg. India). This will be of particular use to any tax practitioners doing work in Africa and in other English-based legal systems around the world.

Analysis of Challenging The Commissioner’s Discretionary Powers In Auditing Taxpayers under The Constitution of The Republic of South Africa

CHAPTER 5 – JUDICIAL REVIEW WITH REFERENCE TO SS 74A AND 74B –

5.5.6 The grounds of review 5.5.6.1 Introduction conclusions drawn above that sufficient opportunity exists for 178 Read More

Earlier this week, I spoke to an IRS Revenue Agent who shed some light on how the decision regarding transitional treatment is made for those taxpayers seeking to transition to the Streamlined Procedures from OVDP. Under the current procedures, the agent and his or her supervisor make the decision regarding transitional treatment, with involvement as necessary by the technical adviser. Practically speaking, the technical adviser does nothing more than “rubber stamp” the decision made by the examiner and the examiner’s manager.

While the process might seem straight-forward, it is not always seamless. That is where Streamlined Transition FAQ 8 comes into play. It provides some role for a central committee in those cases designated for central committee review. Unfortunately, no Read More

Taxation of electronic commerce from offshore has two main aspects, the United States tax regime from an international perspective and the effect of bi-lateral treaties upon that regime.  A previous writing addressed the first consideration, the general dynamics of the United States tax regime for entry taxation of a non-resident alien or foreign corporation. (1)  The United States is engaged in more than fifty bi-lateral income tax treaties with other sovereigns.  In a general statement, those treaties are designed to mitigate the effects of double taxation.

Income that is generated by a foreign party from activity in the United States can be taxed from the source country, the United States in that case, and the residence foreign country, creating risks of multiple taxation.  Treaties are designed to alleviate that conflict.  The Read More

Your State Income Tax return and CODI

The Commonwealth of Massachusetts complies with all of the federal rules on CODI, deemed sales, and bankruptcy dealing with CODI except the IRC §108(i) Reacquisition of Business Debt Deferral.

For purposes of the corporate excise and the personal income tax, a taxpayer that makes the federal election allowed by IRC § 108(i) is required to add back to gross income any CODI that is deferred under IRC § 108(i). In future years when the deferred CODI is recognized for federal purposes, the taxpayer is allowed to make a corresponding subtraction, since the recognition event will have already taken place for Massachusetts Read More

Posted in sections, this is my Doctoral Thesis on taxpayers rights when audited by the tax authorities in South Africa – equally applicable to many English-based law systems in Africa and abroad (eg. India). This will be of particular use to any tax practitioners doing work in Africa and in other English-based legal systems around the world.

Analysis of Challenging The Commissioner’s Discretionary Powers In Auditing Taxpayers under The Constitution of The Republic of South Africa

CHAPTER 5 – JUDICIAL REVIEW WITH REFERENCE TO SS 74A AND 74B –

5.5.4 Save where any law otherwise provides and 5.5.5 Show cause Read More

Many tax practitioners have become disenchanted with the IRS’s treatment of those who are transitioning from OVDP to the Streamlined Procedures. What is the source of this disenchantment? Very simply, the IRS is denying the nonwillful certification in a disproportionately high number of cases.

To make matters worse, the process of denial is somewhat of an enigma. In OVDP cases, the IRS has more than just the certification. It also has the Offshore Voluntary Disclosure Letter and the accompanying documents that make up the final submission. According to many tax practitioners, if the certification causes the IRS to doubt the taxpayer’s claim that he was nonwillful, then its default position is to deny transitional relief. Read More

Often, a small business or start-up will utilize an S corporation election for their business. An S corporation is a corporation formed under a particular State’s incorporation laws (or an organization that has elected to be treated as a corporation for US income tax purposes). The corporation must be eligible to elect S corporation status and its shareholders must consent in writing on Form 2553 to have the corporation elect S corporation status. The Form 2553 must be filed with the Internal Revenue Service (IRS) on or before the 15th day of the 3rd month of the corporation’s tax year in order for the election to be effective as of the beginning of that tax year. If the corporation is on a calendar tax year, the Form 2553 must be filed on or before March 15th in order for the election to be effective for that tax year. Read More

Australia’s 2012 “significant investor” residence visa scheme has attracted some 1,000 applicants who have committed to invest AUD4 billion in businesses or other complying investments. To date, the vast majority of applicants have been from Chinese nationals.

The scheme might have been expected to attract some interest from Russian entrepreneurs and investors. However, Australia’s personal tax rates may be a distraction (an effective maximum marginal rate of 49% currently applies to income in excess of AUD180,000 pa). Furthermore, the current geopolitical situation around Ukraine and the flight MH17 atrocity may now deter potential applicants who might be regarded as associates of the Russian leadership. Read More

Each year the IRS mails millions of notices. Here’s what you should do if you receive a notice from the IRS:

1. Don’t ignore it. You can respond to most IRS notices quickly and easily. And it’s important that you reply promptly.

2. IRS notices usually deal with a specific issue about your tax return or tax account. For example, it may say the IRS has corrected an error on your tax return. Or it may ask you for more information.

3. Read it carefully and follow the instructions about what you need to do. Read More