Tag Archive for worldwide tax blogs

FATCA Lawsuit Filed On Behalf of 8.7 Million Americans Overseas

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TaxConnections will post on Worldwide Tax Blogs all documents over a series of weeks leading up to the Internet Tax Summit.

On 14 July 2015 the FATCA Lawsuit in US Federal Court in Southern Ohio on behalf of 8.7 million Americans overseas as well as a large segment of the 12.6 million foreign passport-holding U.S. residents by Republicans Overseas Action, a 501(c)(4) organization which does not intervene in any political campaign by corporate policy. The lawsuit cites eight constitutional violations and requests a preliminary injunction that will protect Americans overseas from FATCA and FBAR until a trial can be held by the court.

Keith Redmond, an American living in Paris, France for the past 20 years, works globally Read more

What If…

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What if Adam and Eve had admitted that they ate from the Tree of Knowledge of Good and Evil, instead of pointing the finger at anyone else, and anything else, that happened to be there at the time? Would they still be lounging in the Garden of Eden today, munching on pomegranates instead of apples and perusing through YouTube videos on their iPads?

What if a small team of British commandos had been unable to disable Nazi Germany’s deuterium oxide factory in Vermork in 1943, after several prior attempts had failed? Would Hitler have gained the final component he needed for an atomic bomb, and attached these weapons to the V-2 rockets falling from the sky onto London?

What if that Star Destroyer captain had blown R2-D2’s escape pod to smithereens in the Read more

Everything You Wanted To Know About An Offer In Compromise

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Offer in Compromise


Please use the most current revision of Form 656-B in preparing and submitting your Offer in Compromise. Use of outdated forms and instructions may cause a delay in the processing of your offer application.

An offer in compromise allows you to settle your tax debt for less than the full amount you owe. It may be a legitimate option if you can’t pay your full tax liability, or doing so creates a financial hardship. We consider your unique set of facts and circumstances: Read more

FTB Issues Letters to Over 1 Million California Tax Payers Seeking Tax Returns

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More than one million people who did not file a 2012 state income tax return are receiving letters seeking those returns or to verify that they do not have a tax filing requirement, according to the Franchise Tax Board (FTB).

Since the 1950s, FTB has contacted people who have California income, but did not file a tax return. Last year, FTB collected more than $727 million through these efforts.

Each year FTB receives more than 400 million income records from third parties such as banks, employers, state departments, the IRS, and other sources. FTB matches these income records against its records of tax returns filed. While this program mainly identifies wage earners and self-employed individuals who have not filed, it also detects Read more

Basis and Depreciation: A Review for Tax Professionals Part II

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Once you have determined the type of property/asset you are dealing with you must determine use. There are four use classifications of property:

1. Personal-use property (not the same as personal type) is owned for personal use and enjoyment or living purposes. Items such as a primary residence, vehicle, clothing, household goods, recreational items, pets, etc, all are considered personal use property.

2. Investment-use property is property owned with a primary objective of increasing in value even though some current income may be generated. This classification includes things like land, collectibles like art or coins, capital stocks, bonds, and buildings not used in active rental. Read more

United States Corporations With Foreign Shareholders? Form 5472 – Part II


Part I of the topic exploring Form 5472, was posted last week and covered the situation when Form 5472 must be filed by a US corporation that is at least 25% owned by a foreign shareholder. Today’s post covers the other type of case requiring the filing of this form – when a foreign corporation that is engaged in a US trade or business (USTB) has a “reportable transaction” with either a US or a foreign related party.

Generally, the purpose of the form is to disclose the nature and amount of foreign and domestic transactions that occur with related-parties, since these types of transactions can give rise to abuse (for example, in transfer-pricing or in attempts to siphon off taxable earnings and profits in disguised non-taxable forms). Read more

IRS Released “Get Transcript” Application for Real Time Downloading of Information on Your Tax Account

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My friend Bill Nemeth from Georgia informed me this morning of the IRS’ new application roll out that allows any individual taxpayer to view, print or download their own transcripts on-line in Real-Time using a computer or Smartphone. You simply go to and enter GET TRANSCRIPT in the site search bar, or go here!

This is a giant leap forward for those of us working with the IRS. Once in their system a user creates a user profile by identifying himself (SSN and DOB) and answering a number of security questions (standard public database questions like what what year did you purchase your home, how much did you pay for your home, etc). Read more

Basis And Depreciation: A Review For Tax Professionals – Part I

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Depreciation is one of the standards of tax preparation that every tax professional must have a firm grip on to do right by their client. In order to understand depreciation you must first understand basis. Over the next several posts in this series we will review basis and depreciation, discuss the relationships of them to each other, and review old, new and expiring depreciation provisions.

Basis is generally defined as the taxpayer’s investment in the asset and depreciation is defined as the allocation of an asset’s cost over a period of time that is in line with the useful life of the asset. This allows the recovery of normal wear and tear on an asset throughout it’s useful life. Read more

Tax Advisors Marketing For Tax Clients – Learn How These Tax Professionals Attracted The Attention of 1000s

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Congratulations to Peter Scalise of Prager Metis CPAs, LLP who received the highest number of searches to his tax professional profile page on TaxConnections during 2013. With more than 7125 views in the year, everyone would like to know how Peter had so many prospective clients paying attention to his tax services. The answer is he utilized every feature available on to build visibility and trust for his tax services and expertise. Marketing experts know that you need to build familiarity with clients first, familiarity builds trust, and trust is why people come to you for tax services. There are many of our gold annual members who made it to the top of the search results in TaxConnections including: Brian Mahany, Hugo van Zyl, Kathryn Morgan, Howard Liebman, Larry Langdon, Steven Potts and so many others who took the lead in marketing their tax reputations online Read more

Foreign Corporate Acquisitive Reorganizations

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As a general proposition, when a United States person makes a transfer of property to a foreign corporation to which Sections 354, 356, and 361 of the Internal Revenue Code, hereinafter the Code, would be applicable the transferee foreign corporation is not considered a corporation for statutory purposes. (1) It is this general rule that provides domestic corporations’ nonrecognition treatment by virtue of Section 354, 356, and 361 of the Code and requires a foreign corporation to recognize gain when it would otherwise be accorded a tax-free reorganization.

Reorganizations are only those transactions constructed in Section 368 of the Code. (2) It is Read more

7 Habitual Mistakes Companies Make – Chapter 3 (15)

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ABS Ltd. Case Study Report Generated after the Tax Risk Management Strategy Workshop

ABS LTD. HAS exposure on tax in numerous areas. Tax issues have been identified as significant with an estimated worst-case exposure in excess of $300m (determined after assessing and quantifying the tax risk in the areas set out below) and if not speedily rectified will have both financial and reputational implications for ABS Ltd.

It is clear that the following key tax risk areas exist: Read more

OECD vs. Tax Havens, Part I: What Is A Tax Haven?

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Recently, the OECD ramped up its conflict with tax havens by issuing a report titled, Action Plan on Base Erosion and Profit Sharing. Obviously, the purpose of this report is to provide a set of options that OECD countries can enact to counter the negative impact of tax base erosion, or the shifting of tax revenue away from developed/higher tax countries to lower tax/tax havens. But before I get to the report, a bit of background is necessary to provide some context to the conflict.

First, how did tax havens develop? As I noted in a post I wrote on my economic blog about the Cyprus situation:

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