Archive for Tax Policy

Australian Taxation Office Plans To Outsource “Tax Audits” To Big 4 Accounting Firms

The Australian Financial Review’s Fleur Anderson reported today on an internal ATO memo to staff. The memo said “We are currently exploring a new initiative for undertaking assurance work through the External Compliance Assurance Process (ECAP) project…This approach will look at how we might use the capabilities of accounting professionals, who are registered company auditors, to conduct certain assurance reviews on our behalf.”

This is an interesting development, but the report does not indicate whether the ATO would engage and pay the external auditor, or that corporate taxpayers would be expected to do so as part of their tax risk mitigation processes.

If the ATO was to engage the corporation’s existing auditor, that would raise ethical Read More

Written by | Posted in Australia/Oceania • Corporate • Federal • International • Tax Controversy • Tax Policy • Tax Provision/Tax Reporting

How to Pass the EA Exam the First Time

Here are some tips and tricks on how to pass the EA Exam, or any government type test, the first time. I will cover three important sections for success; 1) Pre-Test Studying Tips and Tricks; 2) Tips and Tricks for test Day; and 3) How to Break Down the Questions.

Tips and Tricks for Pre-test Studying

Have a study plan! This test is one of the hardest ones I’ve ever taken.  But, with the possible exception of Part 2, there is nothing on here that a Tax pro with some experience under their belts can’t handle.  So don’t freak out about the difficulty of the test. It’s hard, but you can do this!

Use the study material available at the IRS Enrolled Agent website and Candidate Read More

Written by | Posted in Federal • IRS • North America • Tax Education • Tax Policy

Proposed (Again) A Tax On Driving

TaxConnections Picture - Blue CarIs driving an “option” for you? Me neither. You take the kids to school and after-school activities. You drive to work or your job requires you to drive for sales calls. Maybe you are a farmer living in a rural area and need to go into town frequently to take care of business.

Unless you are a city-dwelling sort who uses a bicycle to get around, you are about to see your freedom to travel about this country infringed upon.

The government is coming to tax every mile you drive.

We told you earlier this year that Rep. Earl Blumenauer (D-OR) introduced a bill (H.R. 6662) that would require the Treasury Department to tax cars for each mile they drive.

Thankfully, it died in committee. Still, we can’t rest on this issue.

Prior to this, in March 2011, the Congressional Budget Office released a report saying a Vehicle Miles Traveled (VMT) program was a “practical option” for raising funds. The CBO helpfully suggested that devices could be put on cars that read mileage, and that information could be read electronically at gas stations.

Read More

Written by | Posted in Tax Policy • United States

Ireland Post – Finance (No. 2) Bill 2013 – Part III

TaxConnections Blog PostFor the beginning of the Post, please see Part I.

There were a number of other budget changes which will have a huge impact on our economy:

One Parent Family Tax Credit

• The One Parent Family Tax Credit was replace by a new Single Person Child Carer Tax Credit.

• This takes effect from 1st January 2014.

• There is no change to the value of the credit or the additional standard rate band.

• The new credit will only be available to the principal carer of the child.

Medical Insurance Tax Relief

• The Bill restricted the Medical Insurance Tax Relief.

• The maximum amount of the Medical Insurance Premium which can qualify for relief at the standard tax rate will be €1,000 for an adult and €500 per child. Read More

Written by | Posted in Europe, Middle East • Tax Policy

Ireland Post – Finance (No. 2) Bill 2013 – Part II

TaxConnections Blog PostFor the beginning of the Post, please see Part I.

The construction and building sectors saw the introduction of welcome changes:

I LIVING CITY INITIATIVE – The urban regeneration initiative has been extended to include residential properties constructed up to and including 1914 and covers the cities of Cork, Dublin, Galway and Kilkenny.

The aim is to stimulate regeneration of retail and commercial districts as well as to encourage families to return to historic buildings in Irish city centres.

II HOME RENOVATION INCENTIVE – This is a new incentive for home owners who:

1. carry out repair, renovation or improvement work on their principal private residence

2. from 25th October 2013 to 31st December 2015.

3. Qualifying expenditure carried between 1st January 2016 and 31st March 2016 can be treated as having been incurred in 2015 if planning permission was granted before 31st December 2015. Read More

Written by | Posted in Europe, Middle East • Tax Policy

Ireland Post – Finance (No. 2) Bill 2013 – Part I

TaxConnections Blog PostOn 24th October 2013 the Finance (No. 2) Bill 2013 was published which confirmed the measures introduced by the Budget.

As the main priorities in Ireland at the moment are job creation and enterprise growth the following tax packages were introduced:

I. ENTERPRISE RELIEF – This is a new Capital Gains Tax relief which is aimed at entrepreneurs investing in assets used in new productive trading activities. The purpose is to encourage individuals to reinvest the sales proceeds from the sale/disposal of a previous asset into new productive trading or a new company. The main aspects of the relief are as follows:

(a) It applies to an individual

(b) who has paid Capital Gains Tax on the sale/disposal of an asset and

(c) invests in a new business

(d) at a cost of at least €10,000 Read More

Written by | Posted in Europe, Middle East • Tax Policy • VAT

CPAs: Review California Clients Today for Enterprise Zone Credits (Up to $50,000 Per Qualified Employee)

TaxConnections Blogger PostsOn June 27, 2013, the California State Assembly passed AB 93, which eliminates the current Enterprise Zone (EZ) program, replacing it with a new set of incentives, which will be statewide in application. This change requires businesses to take action now to get the most out of existing credits while also preparing to take advantage of the new credits that will be effective January 1, 2014.

The EZ program was first established in 1986 and has been used to attract business to depressed areas in California and to support new and existing businesses located in depressed areas of the state. The program has allowed qualified businesses to claim hiring credits on qualified employees and sales tax credits on qualified purchases.

Do your clients need help understanding the immediate steps they must take? If your clients (CPAs: review your California clients) are in one of California’s 42 EZs, pay California income tax, and have employees, they are a prime candidate to review the various credits that remain available. These credits and refunds can be reviewed for the last four (4) open tax years. The time to act is now. After December 31, 2013 — your clients will have forfeited up to $50,000 per qualified employee. Read More

Written by | Posted in Corporate • Individual • North America • Sales/Use Tax • Specialty Tax Incentives • State And Local Tax (SALT) • Tax Controversy • Tax Policy • Tax Provision/Tax Reporting

IRS and Effect of Government Shutdown

government-closedIRS developed a plan for the government shutdown. And as you can imagine it is not good for tax payers. The Treasury Department released its 63-page long “FY2014 Shutdown Contingency Plan (Non-Filing Season)” for IRS on September 27.

Impact on filing- Yes you are required to file on time and pay taxes as usual. Tax payers with extensions are required to file by Oct 15 to be considered timely filed return. Electric filing is supported. Paper returns will not be processed until the shutdown ends.

No in-person or live phone assistance. No live telephone customer service assistance will be available during the shutdown. However, most automated toll-free telephone applications will remain operational. IRS walk-in taxpayer assistance centers will also be closed. IRS’s website will remain available, although some of its interactive features may not be available.

Certain appointments presumed cancelled. While the government is closed, people with appointments related to examinations (audits), collection, Appeals or Taxpayer Advocate cases should assume their meetings are cancelled. IRS personnel will reschedule those meetings at a later date. Read More

Written by | Posted in Tax Policy • United States

Tax Relief For Business Mileage In Your Private Car

This weeks video discusses the best tax relief for business mileage in the United Kingdom.

 

Written by | Posted in Europe, Middle East • Tax Policy

Claims for Refunds for Same-Sex Spouses – Part 1

TaxConnections Blogger Harold Goedde posts taxes and same sex spousesThe IRS recently issued Notice 2013-61 regarding the application of the Windsor decision and Rev. Rul. 2013-17 to Employment Taxes and Special Administrative Procedures for Employers to Make Adjustments or Claims for Refund or Credits or adjustments (referred to in this notice as corrections) of overpayments of Federal Insurance Contributions Act (FICA) taxes and Federal income tax withholding (employment taxes) with respect to certain benefits provided to same-sex spouses and remuneration paid to same-sex spouses resulting from the United States Supreme Court decision in United States v. Windsor, 570 U.S. 133 S.Ct. 2675 (2013) and the holdings of Rev. Rul. 2013-17, 2013-38 I.R.B. 201.

To reduce filing and reporting burdens associated with the optional retroactive application of the holdings of Rev. Rul. 2013-17, the IRS is providing special administrative procedures for employers to correct overpayments of employment taxes for 2013 and prior years with respect to certain same-sex spouse benefits and certain remuneration paid to same-sex spouses, including overpayments that result from a taxpayer’s retroactive application of the holdings of Rev. Rul. 2013-17. With respect to these overpayments for 2013, this notice provides two alternativespecial administrative procedures. The special administrative procedures provided in this notice are optional. Employers that prefer to use the regular procedures for correcting employment tax overpayments related to same-sex spouse benefits and remuneration paid to same-sex spouses, instead of the special administrative procedures, may do so. Read More

Written by | Posted in Corporate • Federal • IRS • Tax Policy • United States

An Interesting SARS Pension Taxation Ruling, Technically Correct But In Many Ways Inadequate

TaxConnections Blogger Hugo Van Zyl posts about a SARS RulingOn October 3rd, 2013 the South African Revenue Services (www.sars.gov.za) issued BPR 156 (binding private ruling) which ensure some clarity on the taxation of many expats’ pension funds stuck in South Africa.

An interesting ruling, which may be technically correct but in many ways inadequate, writer felt on first read. Perhaps incorrectly? Let’s consider the outcome and value of the ruling.

Like most SARS rulings, it brings clarity but adds several “however” warnings. Before we address them, allow me to summarize the ruling, with an extract:

SECTION: SECTION 1(1), DEFINITION OF “GROSS INCOME” PARAGRAPHS (a) AND (e)
SUBJECT: PENSION BENEFITS ACCRUING TO A NON-RESIDENT FROM A RESIDENT PENSION FUND

1. Summary
This ruling deals with the question as to whether and to what extent a pension annuity and a retirement fund lump sum benefit, received by or accrued to a person who is not a resident of South Africa from a pension fund registered in South Africa, will be taxable in South Africa. Read More

Written by | Posted in Africa • Expatriate • Individual • International • Tax Policy

Massachusetts Repeals Tax on the Modification of Pre-Written Software and Computer System Design Services

TaxConnections Picture - Computer SoftwareOn September 27, 2013, Governor Deval Patrick signed into law Massachusetts House Bill 3662 (“H.B. 3662”), which repeals the Commonwealth’s sales and use tax on computer system design services and the modification, integration, enhancement, installation, or configuration of pre-written software recently implemented by House Bill 3535 (“H.B. 3535”). H.B. 3535 became effective July 31, 2013, a mere 58 days ago. The repeal applies retroactively to July 31, 2013, with companies required to return to customers any sales tax collected for these services.

The Massachusetts Senate voted unanimously for the repeal, and the House of Representatives had only a lone dissenter. The Legislature originally passed the law by overriding the Governor’s veto of H.B. 3535 by a vote of 123-33 in the House and 35-5 in the Senate. The tax on computer system design services and the modification, integration, enhancement, installation, or configuration of pre-written software was expected to raise $160 million for the Commonwealth’s transportation systems and projects.

TECHNICAL INFORMATION CONTACT:
Jeremiah T. Lynch, Principal – Ryan

In accordance with Circular 230 Disclosure

Written by | Posted in State And Local Tax (SALT) • Tax Policy • United States
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