Each year during tax season I forward some of my favorite tax quotes and tax humor.

♦ “Nobody likes taxes, but they’ve been around forever. Taxes date all the way back to the year one, when baby Jesus was visited by two wise men and an IRS agent, who demanded half the family’s frankincense.” -Jimmy Kimmel

♦ “The U.S. Senate is considering a bill that would tax Botox. When Botox users heard this, they were horrified. Well, I think they were horrified. It’s difficult to tell.” –Craig Ferguson

♦ Why does Santa have an accountant in the USA? So he can avoid Gift Taxes.

♦ NASA astronomers, using the Hubble space telescope, have discovered a giant black Read More

On September 30, 2013, FinCEN posted on their internet site, a notice announcing FinCEN Form 114, Report of Foreign Bank and Financial Accounts (the current FBAR form). FinCEN Form 114 supersedes TD F 90-22.1 (the FBAR form that was used in prior years) and is only available online through the BSA E-Filing System website.

On July 29, 2013, FinCEN posted a notice on their internet site that introduced a new form to filers who submit FBARs jointly with spouses or who wish to have a third party preparer file their FBARs on their behalf. The new FinCEN Form 114a, Record of Authorization to Electronically File FBARs, is not submitted with the filing but, instead, is maintained with the FBAR records by the filer and the account owner, and made available to FinCEN or IRS on request. Read More

I. Domestic Administration of Social Security Taxation and the Scope of International Coordination – continued
b. The Second Aspect: Benefits Eligibility

In general, any individual is eligible to receive United States social security benefits at the age of sixty-two if he is considered “fully insured” and has filed the necessary paperwork. An individual is generally considered fully insured when he accumulates coverage, by earning wages or self-employment income that has been subject to social security contribution requirements, for a total of forty quarters.

Several sections of the Social Security Act provide for increases and decreases in benefit Read More

TaxConnections Blog Post
Internal Audits Fix Financial Accounting Problems –
Have You Read the Rest of This Special Report?

IF YOU FIND yourself at this point not knowing what the answer is, you have either turned directly to this page without reading the rest of the special report, or you have missed the point of this special report—be proactive, get internal audit to double-check the main tax risk areas, get help through a tax team to identify the tax risk areas, work according to a tax strategy document which is continuously revisited, avoid being insular and get out of the ivory tower, go and chase down all the facts to get an accurate picture of any tax problems around any major transaction. Communicate, communicate, and communicate again, get to know the business and all its facets, get internal audit involved to check again, and Read More

Introduction –

Offshore Financial Centers are an integral part of our global economy. The international community has often not understood their function. It has had an unfounded apprehension of their participation in the erosion of the developed economies tax base.

The global competitive marketplace has emphasized the craving for cost reduction and Offshore Financial Centers have attempted to accommodate this appetite through deregulated business environment and attractive tax regimes. The world’s Offshore Financial Centers and Tax Havens have tailored their legislation to suit all of these marketplace demands. Read More

It seems more and more taxpayers are finding themselves compelled to engage in a structured installment sale of closely held business assets or rental real estate and I couldn’t help but notice that there are some common misconceptions about the associated tax implications, particularly if ‘related parties’ are involved in a transaction. So this is what I am telling people:

• Report installment sales on IRS Form 6252
• Report interest from installment sales on Schedule B
• Report capital gains from installment sales on Schedule D
• For more details refer to IRS Publication 537 or IRC 453 Read More

I. Domestic Administration of Social Security Taxation and the Scope of International Coordination – continued
a. The First Aspect: Contributions

Social security contributions are imposed as a tax via the Internal Revenue Code (Code) and collected by the Department of Treasury through the Service. Two statutes apply. With respect to employers and their employees, the Federal Insurance Contributions Act (FICA) applies. With respect to self-employed persons, the Self Employment Contributions Act (SECA) applies. Under FICA, employers and employees contribute to social security based on wages paid. Under SECA, contributions are based on self-employment income received. Read More

Permanent Subcommittee on Investigations (PSI) of the United States Senate held a hearing, “Offshore Tax Evasion: The Effort to Collect Unpaid Taxes on Billions in Hidden Offshore Accounts,” on Wednesday, February 26, 2014, in Room G-50 of the Dirksen Senate Office Building.

The PSI hearing on February 26 is for the stated purpose of continuing the PSI’s examination of tax haven bank facilitation of U.S. tax evasion, focusing on the status of efforts to hold Swiss banks and their U.S. clients accountable for unpaid taxes on billions of dollars in hidden assets. Witnesses include representatives from Credit Suisse and the U.S. Department of Justice. Read More

Foreign direct investments have been increasing for the past few decades.

According to Baker & McKenzie for multinational companies venturing into China through Mergers and Acquisitions there are eight essentials that these companies need to be aware of in order to succeed.  They are as follows:

1. Knowing your China counter-party
2. Conducting deep due diligence
3. Structuring the deal
4. Navigating government approvals
5. Satisfying valuation requirements Read More

TaxConnections Blog Post
Internal Audits Fix Financial Accounting Problems –
Internal Auditors

QUESTION: “WHAT ARE they doing, and what are they focusing on?” Tax is usually not high on the agenda. “Why not?” Because this area of risk is not being emphasized enough. “Why not?” The board of directors has not given it priority. The audit committee is not pushing for tax transparency, and so the BO/CFO does not have a pressure point to deal with and will cover it when it becomes a priority, usually as part of crisis management. The tax problems are what they are. If they are serious enough, they will emerge in good time, and the business can deal with the consequences at that point in time. Other priorities have been placed on the internal auditors ‘ plates such as fraud in its Read More

TaxConnections Tax Blog Post - Statute of Limitations on Tax Evasion

The Internal Revenue Service is once again allowing a one-time opportunity to examine and modify your grouping elections. This has happened a few times now, but this time there is a compelling reason. One of the new tax laws is a 3.8% tax on investment income which also applies to passive income. One of the key ways to manage your passive income is through grouping elections. So now taxpayers have a motivation to avoid passive income, where in the past it was often times advantageous to be generating passive income.

This one-time opportunity is available either in 2013 or 2014, but it is the 2013 tax filing season so people should definitely take a look at it now. The active and passive rules are very complicated and nuanced, but at a basic level you need to prove you spent enough Read More