Archive for April 30, 2014

TaxConnections – Referral Business Is Thriving For Our Members

We get to see a lot of activity behind the scenes and one of them is the referral business to our members. What we have created is an innovative platform that offers a wide range of tax expertise that is not easy to find anywhere else but through TaxConnections Worldwide Directory of Tax Professionals. TaxConnections has brought together tax professionals from more than 75 countries with a wide range of tax knowledge and that range grows daily. Although the primary areas of expertise on our site include corporate, partnership and individual tax professionals, we also have some really unique areas of tax expertise on our site that even surprised us. We have members on our site who are tax advisors in adult entertainment, clergy, captive insurance companies, tax credits and incentives, FATCA, military and so much more. This makes us unique and a one-of-a-kind resource to locate tax Read More

Written by | Posted in TaxConnections

House Ways And Means Committee Approves Permanent Extension of Research & Experimentation Tax Credit Amongst Other Expired Business Tax Provisions

On April 29th, The House Ways and Means Committee approved six separate bills to permanently extend certain expired business tax provisions. These bills specifically address the research and experimentation tax credit (H.R. 4438); ‘look-through’ treatment for controlled foreign corporations (CFCs) (H.R. 4464); the subpart F exceptions for active financing income (H.R. 4429); increased section 179 ‘small business’ expensing limits (H.R. 4457); a reduced recognition period for S corporation built-in gains (H.R. 4453); and basis adjustments to stock of S corporations making charitable contributions of property (H.R. 4454).

These permanent ‘tax extender’ bills, approved by the Ways and Means Committee without revenue offsets, are estimated by Joint Committee on Taxation (JCT) staff to reduce federal Read More

Written by | Posted in Federal • R&D Credit Services • Tax Policy • Tax Provision/Tax Reporting

Am I A Candidate To Form A Captive Insurance Company?

In conjunction with the great people at TaxConnections, we’ve published a new eBook on captive insurance titled “Who Should Form a Captive Insurance Company?”. You can buy a copy HERE. Cost: $4.98.

One of the most frequent questions people ask about captives is simple: am I a candidate? There are several ways to answer this question. The first is to simply look at a company’s financials. Captives begin to become a viable proposition when gross revenue is at least $1 million. Another way to look at this is from a free cash flow perspective. I define free cash flow as net income plus depreciation. If this number has been at least $250,000 for the last few years, the company has adequate cash flow to consider forming a captive. Read More

Written by | Posted in Tax Risk Management • TaxConnections

10 Ways To Avoid Becoming A Guest of “Club Fed” For Tax Evasion

Contrary to popular belief, the IRS doesn’t want to throw you in jail. Criminal investigations consume a lot of resources, take time, and are expensive. For most taxpayers, a criminal investigation isn’t a first step, but rather the last step in a lengthy process to get you to resolve your tax debt. In other words, it’s rare that an agent will show up on your doorstep one day with cuffs in hand.

Additionally, while tax evasion and related charges are an important piece of the IRS Criminal Investigation (CI) charges, they’re not the whole kit and kaboodle. Often, criminal investigations are linked to other criminal activities like fraud, drug offenses, and money laundering. Need you forget Al Capone? When it comes to criminal activities, other federal agencies – like the Federal Bureau of Investigation and FINCEN – can pursue these Read More

Written by | Posted in Tax Fraud/Evasion/Crimes

Taxpayers Rights When Audited By Tax Authorities In South Africa (Chapter 2 – 2.2)

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

2.2 THE RELEVANT CONSTITUTIONAL PROVISIONS
2.2.1 Foundational values

Section 1 of the Constitution, dealing with the foundational values of the Constitution, Read More

Written by | Posted in Africa • Audit

Australia Signs FATCA Accord

Australia’s Treasurer Joe Hockey announced on Tuesday that Australia and the United States “…signed an intergovernmental agreement (IGA) to reduce the burden on Australian financial institutions in complying with the United States’ Foreign Account Tax Compliance Act (FATCA).”

The treasurer commented that the agreement would assist Australian financial institutions to comply with FATCA and minimise the costs of doing so. He also mentioned that “…it broadens arrangements between the Australian Taxation Office and the US Internal Revenue Service” and that it “…will also improve existing tax information-sharing arrangements between Australia and the United States, for the purpose of presenting tax evasion.” Read More

Written by | Posted in Australia/Oceania • Expatriate • FATCA • Individual • International

Late Lateef: The Story of Filing Late Returns And Penaltiies!

“Late Lateef” is a term very often used in the Indian sub-continent for those who are habitually late! When thinking of this post, I was curious if Google.com would oblige me with a story or two about how this term originated. Sure enough, as soon as I hit the “I am feeling lucky” button, I had various versions on hand; if you feel curious, do check out one version here!

But, we are not here to talk about folklore and its origins, although it is more interesting any day than penalties for late filing and/or failure to file. Today is April 29th 2014, tax deadline was two weeks back and if you are one of those like Late Lateef and did not file your tax return, then you need to read this post!! If late Lateef was due a refund, he would not be penalized for late filing BUT would only have three years from the due date of the Read More

Written by | Posted in Federal • Income Tax • Individual • IRS

Taxpayers Rights When Audited By Tax Authorities In South Africa (Chapter 2 – 2.1)

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

INTRODUCTION – 2.1 ADVENT OF THE CONSTITUTION

Prior to the advent of the Constitution1 and the start of a new democracy in South Africa, judicial reviews, and the grounds for judicial review, in respect of discretionary decisions, Read More

Written by | Posted in Africa • Audit

Dividends From Foreign Corporations – Understand Your Investment! Part 1

Not all dividends are treated the same and the nuances can make a big difference to your ultimate investment return.

“Regular Dividends” and “Qualified Dividends”

In general, there are two different types of dividends – “regular dividends” and “qualified dividends”. One is taxed far more favorably than the other.  A so-called “qualified” dividend is given beneficial tax treatment because it is taxed at a lower more beneficial long-term capital gains tax rate.  For most individuals this rate is currently at 15%, but the rate can be lower or higher for very low or very high income earners.

For individuals whose income tax rate is in the 10% or 15% brackets, then the dividend Read More

Written by | Posted in Corporate • International

10 Pointers Regarding IRS Bills, Penalties And Interest Charges

Many people have been reaching out to me to learn specifically about what they are up against for failing to hit the tax deadline of April 15th. To help those of you in this situation I’ve highlighted below what I believe to be the top 10 most valid points in regards to IRS bills, penalties and interest charges as detailed in IRS Publication 594 The IRS Collection Process.

1. Federal income tax returns are systematically checked for mathematical accuracy. If there is any money owed, you will be sent a bill. So don’t worry so much about math errors on the federal tax return as it will be caught. Generally speaking if you catch a math error after the tax return was submitted it can make sense in many instances to wait for the IRS to contact you with the changes before going through the brain damage of filing an Read More

Written by | Posted in Audit • Federal • IRS • Tax Tips

Liens And Levies Make The IRS A Collection Agency On Steroids

Sometimes the problem with “food for thought” is that it can almost choke you with its stark simplicity. Take our tax system, for example. The federal government prints our money, regulates the places where we keep it and has vast powers to take it away from us if we don’t give them their cut.

The aforementioned powers are the statutory means at their disposal to enforce collection, far beyond the capabilities of the most relentless collection agency. The IRS does not have to resort to harassing telephone calls, threats or intimidation. They need only to determine you have an unpaid tax debt and set in motion the process of notification and enforcement. Read More

Written by | Posted in Federal • Individual

Comparison of Holding Regimes: Latvia vs. Ireland – 4:4!

What is common to Facebook, LinkedIn, EA, Apple and PayPal? Most of you already know or suspect – first, these businesses work in e-commerce; but what is the key? They use companies in Ireland; the first two have even established their group headquarters in Ireland. A respected Irish tax consulting company highlighted the 10 most significant advantages of this globally popular holding-company jurisdiction in a recent article. In considering these 10 Irish advantages, using sports terminology I challenge you to a game: which holding regime scores more (is better) – the Latvian one or the Irish one?

1. CAPITAL GAINS TAX EXEMPTION – LATVIA 1:0 IRELAND

This exemption has been implemented in both countries, but in Ireland it has been limited by several preconditions. For example, only EU or residents in Ireland of tax treaty Read More

Written by | Posted in Europe, Middle East • R&D Credit Services • Transfer Pricing
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