Tag Archive for USA

Analysis Of Tax Settlement Programs As Amnesties (Part 1 of 3)

Nina Olson, National Taxpayer Advocate, Tax Blog, Washington D.C., USA, TaxConnections

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

Mortgage Insurance Premiums For Taxpayers

Nanda Kumar, Tax Advisor, Tax Blog, Sterling, Virginia, USA, TaxConnections

Mortgage insurance in the simplest of terms is the backup plan for a lender. In the unfortunate event that the borrower is unable to repay the loan, the lender can cash in the mortgage premium and recover the losses. However, there is more to it than what meets the eye. Here are some more details of this rather intriguing insurance and why you should opt for it.

What Is It?

Statistics reveal that most home buyers pay less than 20% of the entire property cost as up front or commonly known as down payment. Read more

Claiming Parents As Dependents On Income Taxes

Barry Fowler, Tax Advisor, Tax Blog, Houston, Texas, USA, Tax Blog, TaxConnections

As more and more Baby Boomers are caring for elderly parents, the question often arises: “Can I claim my parent(s) as dependents on my taxes?” The answer to that is, “It depends.”

The IRS does allow parents to be claimed as dependents if certain requirements are met. The IRS always has requirements.

To meet the support requirements necessary to claim your parent as a dependent on your tax return, you must cover 51% or more of their support costs. These costs include food, housing or lodging expenses, clothing, and medical services and/or equipment costs. Read more

IRS Issues FAQ’s Regarding How To Report Section 965 Transition Tax On 2017 Tax Returns

Ronald Marini, Tax Advisor, Tax Blog, Miami, Florida, USA, TaxConnections

On March 13, 2018, the IRS added Questions and Answers about Reporting Related to Section 965 on 2017 Tax Returns on its website.

This document provides answers to questions regarding return filing and tax payment obligations arising under Section 14103 of “An Act to provide for reconciliation pursuant to titles II and V of the concurrent resolution on the budget for fiscal year 2018,” P.L 115-97 (“the Act”), which was enacted on December 22, 2017. Read more

IRS Reminds Retirees Of April 1, 2018 Deadline To Take Required Retirement Plan Distributions

Thomas Kerester, Tax Ambassador, Tax Blog, Washington D.C., USA, TaxConnections

WASHINGTON — The Internal Revenue Service today reminded taxpayers who turned age 70½ during 2017 that, in most cases, they must start receiving required minimum distributions (RMDs) from Individual Retirement Accounts (IRAs) and workplace retirement plans by Sunday, April 1, 2018.

The April 1 deadline applies to all employer-sponsored retirement plans, including profit-sharing plans, 401(k) plans, 403(b) plans and 457(b) plans. The RMD rules also apply to traditional IRAs and IRA-based plans such as SEPs, SARSEPs, and SIMPLE IRAs, however, they do not apply to ROTH IRAs. Read more

Corporate Tax Cuts Mostly Going To Share Buybacks Not JOBS

Ronald Marini, Tax Advisor, Tax Blog, Miami, Florida, USA, TaxConnections
While the name of the 2017 Tax Act was “Tax Cuts and Jobs Act,” it doesn’t appear like the corporate tax cuts are creating many US Jobs.
The Tax Cuts and Jobs Act was supposed to spur hiring and investment at companies as the maximum corporate tax rate was slashed from 35 to 21 percent, according to Republican proponents. But Democrats point to evidence that many major corporations are instead using the savings to buy back their own stock.

Read more

Head of Tax And Treasury (South San Francisco)

Tax Connections has been retained by a very successful high technology company in the South San Francisco area. The Head of Tax will work closely with C – Suite Executives in managing and 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

1st Taxpayer Victory In A “Willful” FBAR Penalty Case

Ronald Marini, Tax Advisor, Tax Blog, Miami, Florida, USA, TaxConnections

On September 20, 2017, the Eastern District of Pennsylvania issued an important taxpayer friendly opinion regarding the willfulnessstandard in FBAR penalty matters.

In Bedrosian v. United States, Case No. 2:15-cv-05853-MMB (E.D. Pa., Sept. 20, 2017), the court held that the government had not met its burden in proving that Bedrosian had willfully violated FBAR reporting requirements.

This opinion could have a major effect on future IRS decisions in the offshore compliance arena and may cause some taxpayers, to seek a more aggressive approach in addressing prior non-compliance. Read more

Options Available For U.S. Taxpayers With Undisclosed Foreign Financial Assets

IRS, FATCA, Department Of Justice, U.S. Tax, Undisclosed Foreign Financial Assets, Tom Kerester, Tax Ambassador, Tax Blog, Washington D.C., USA, TaxConnections

The implementation of FATCA and the ongoing efforts of the IRS and the Department of Justice to ensure compliance by those with U.S. tax obligations have raised awareness of U.S. tax and information reporting obligations with respect to non-U.S. investments.  Because the circumstances of taxpayers with non-U.S. investments vary widely, the IRS offers the following options for addressing previous failures to comply with U.S. tax and information return obligations with respect to those investments:

  1. Offshore Voluntary Disclosure Program;
    Note: The Offshore Voluntary Disclosure Program (OVDP) is closing. Refer to the OVDP FAQs for an outline of the sunset provisions.
  2. Streamlined Filing Compliance Procedures;
  3. Delinquent FBAR submission procedures; and
  4. Delinquent international information return submission procedures.

Read more

Major New US Tax Reporting Requirement For Foreign-Owned LLCs

Vincenzo Villmena, Tax Advisor, Tax Blog, New York, USA, TaxConnections

Are you a non-US person with a US LLC? Then you need to be aware of the major new US reporting requirement for foreign-owned LLCs. The deadline is coming up soon.

Previously, foreign-owned single-member LLCs enjoyed an exemption from US tax reporting requirements. Starting with the 2017 tax year however LLCs that are wholly owned by foreign persons and did not elect to be treated as corporations for tax purposes, are subject to new IRS reporting requirements. Read more

Tax Reform And Cash Management Considerations For Clients

Kazim Qasim, Tax Advisor, Tax Blog, Orlando, Florida, USA, TaxConnections

A recent interview style Q and A session appeared in Accounting Today featuring the expertise of author Iralma Pozo. In this series of questions, Pozo tackles some important aspects of the most significant change to the U.S. tax code since 1986. With such historic changes underway, it’s critical that you understand how the Tax Cuts and Job Act will affect cash flow issues for clients.

What’s particularly insightful is Pozo’s advice regarding parents and what they need to know about 529 plans. Her observations about developing a new strategy for charitable deductions and nonprofit organizations are also highlights:

With So Many Changes And Factors, Where Do Advisors Start? Read more

Wayfair Vs. South Dakota: What Are The Possible Outcomes Of The Online Sales Tax Case?

Monika Miles, Tax Advisor, San Jose, California, USA, Tax Blog, TaxConnections

Earlier this year we shared the U.S. Supreme Court would hear a case related to online sales taxWayfair 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

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