The accounting industry is changing rapidly. Today’s accountant has become more of a business consultant than the mathematical tool of the past, but recent changes are affecting the profession further. Automation and new technology keep changing the accounting industry in specific ways, and the American Institute of Certified Public Accountants recently launched a new version of the Uniform CPA Exam in 2017 to meet these new demands.
If you owe the IRS taxes and have a substantial outstanding balance, there are several legal means the government uses to get those past due taxes paid. Continue reading to find out how this may impact you and your future travel plans.
The IRS and State Department have begun implementing a law passed back in 2015 that requires the State Department to deny passports to taxpayers who owe the IRS more than $51,000 in back taxes, penalties, and interest. Taxpayers who owe this much won’t be issued a new passport or get old passports renewed if the IRS has filed a Notice of Federal Tax Lien and the period to challenge it has expired or the IRS has issued a levy. Read More
In last week’s blog, we discussed how broad amnesties can blunt economic deterrence, but narrow amnesties or amnesty alternatives (e.g., amnesties that forgive only penalties before noncompliance is detected) do not necessarily have the same negative effects. We also cited research suggesting that those who participate in amnesties also tend to be people who made inadvertent errors (i.e., “benign” actors, rather than bad actors). Furthermore, without an amnesty, a sudden increase in penalties or enforcement is more likely to be viewed as unfair and erode trust for the government – a view that can erode voluntary compliance. Read More
The Tax Manager role requires partnership, S corp and individual tax consulting experience and the skills to effectively diagnose clients’ needs in order to develop and implement solutions. Primary responsibilities involve providing tax compliance, tax accounting, tax research and planning on partnerships, s corps and individual tax return for sophisticated clientele. We will build upon your technical strengths in order to expand your expertise in partnership, s corp and individual taxation. Read More
For those of us inclined to the proverbial ‘head-bury’ strategy with Big Brother, it is best to understand the civil penalties assessed when IRS systems catch up – as measured in tangible $$ out the pocket. For the brave of heart, navigating the shoals of IRS Penalties can be intimidating to comprehend but it is far from rocket science.
Understanding IRS civil penalties starts with picking up Part 20.1 of the Internal Revenue Manual (IRM). Here you will find guidance on all areas of civil penalties imposed by the Internal Revenue Code (IRC).
Criminal penalty provisions are contained in IRM 9.1.3 and beyond the scope of this post. Read More
On March 13, 2018, the IRS announced that on September 28, 2018, it would end the offshore voluntary disclosure program (OVDP), as it had only attracted 600 applicants in 2017. So now is a good time to take a step back to review the program in the broader context of the research on tax amnesties.
Settlement programs and other voluntary disclosure or correction programs generally offer some form of amnesty. Offering broad tax amnesties on a regular basis, as many states do, can erode voluntary compliance. Read More
Earlier this year we shared the U.S. Supreme Court would hear a case related to online sales tax: Wayfair v. South Dakota. This ruling could settle how online purchases are taxed, potentially overturning the 1992 Quill Corp v. North Dakota ruling currently preventing states from collecting sales tax from sellers without a physical presence (or nexus) in the state.
Why is it worth it for the Supreme Court to consider this case rather than fall back on the previous Quill ruling? The world has changed a lot since 1992. As The Wall Street Journal reports, “In 1992, the justices ‘did not and could not anticipate the development of modern e-commerce,’ Solicitor General Noel Francisco wrote in a friend-of the-court brief.” Read More
Cryptocurrencies such as Bitcoin are becoming more popular as a form of payment and as investment. However, there has been little attention paid to how this virtual currency will be treated by the IRS until now. In fact, the IRS is taking a much closer look and has established some tax guidelines.
According to an article published in accountingtoday.com, “For federal tax purposes, virtual currency is treated as property and not currency.” They add, “The fair market value of the virtual currency on the date of receipt determines the taxpayer’s basis.”
Some businesses are actually paying employee wages in virtual currency instead of U.S. dollars. Read More
This past week, the IRS offered guidance on its website on the new restrictions placed by the Tax Cuts and Jobs Act (“TCJA”) on the home mortgage interest deduction.
The guidance is noteworthy for the U.S. expat community, because when it comes to the home mortgage interest deduction, the tax code does not distinguish between a home in the U.S. and a home abroad. In appropriate circumstances, the mortgage interest deduction can be an important tax saving method for citizens living abroad.
The Home Mortgage Interest Deduction Read More
Can a simple educational letter to taxpayers who appear to have erroneously claimed the earned income tax credit (EITC) actually avert future noncompliance? Based on recent TAS research studies, the answer appears to be yes.
As readers of this blog already know, the EITC is a refundable credit designed to provide financial support to low income working taxpayers, especially those with children in the household. Because it focuses on household composition, the administration of the credit is very complex. While the IRS can generally establish the age of the child from various government databases, and sometimes the parent-child relationship, it cannot easily establish other relationships nor can it independently determine with whom the child lived for over half the year, as the law requires. Read More
The Tax Cuts and Jobs Act[1] (“TCJA”) made various changes to the deductibility of certain entertainment, amusement, recreation, meals, and fringe benefit expenditures[2]. The central theme of the items below was to close the gap where items were previously deductible by an employer and not includible in the income of the employee (i.e., permanent differences with the Treasury losing on both ends). Rather than attempt to tax the recipient, Treasury appears to have generally chosen to deny deductibility to the employer (while retaining non-inclusion by the recipient).
Below is a summary of the relevant provisions impacted by TCJA: Read More
TaxConnections Executive Search Services Division has been retained to conduct a search for a Head of Tax with a very successful San Francisco Bay area company.
Head Of Tax And Treasury (San Francisco Bay Area)
The Head of Tax will work closely with management in reviewing global corporate tax compliance, the global tax provision, transfer pricing and treasury strategy. Responsibilities include managing global outside tax consultants and reviewing processes and procedures. The Head of Tax will partner with internal business leaders to effectively manage exposure. Read More
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