Archive for Tax Policy

How “Moving On In Life” Can Be Tax Deductible

It was Walt Disney who said, “We keep moving forward, opening new doors, and doing new things, because we are curious and curiosity keeps leading us down new paths.” The world is shrinking and this quote has never been truer for us. Our professional lives no longer have the same boundaries as before. And we move for work and yes, the Internal Revenue Service (IRS) recognizes that and lo and behold lets us deduct moving expenses on our tax returns.

Read on… this truly gets more exciting (in a very tax nerdy way, if you know me!)

Requirements to Deduct Moving Expenses?:

Let me not get you too excited! Not everyone can deduct moving expenses. There are Read More

Written by | Posted in Individual • Tax Policy

Australian Tax Office Information Gathering Guide

The Australian Tax Office (ATO) recently released a guide on their approach to information gathering. The quite comprehensive 53 page guide provides an insight to both the principles adopted by the ATO in exercising their powers and the considerable extent of those powers.

Australia’s Income Tax Assessment Act 1936 (ITAA 36) confers many of the relevant information gathering powers. These powers include both the power to give formal notices requiring information to be provided and formal access powers.

For example, §263 of ITAA 36 allows an authorized ATO officer to “…at all times have full and free access to all buildings, places, books, documents and other papers” and to Read More

Written by | Posted in Australia/Oceania • Tax Policy

A Weapon In The IRS’s Criminal Arsenal – Section 6050I – Part III

Because of the complexity of Internal Revenue Service Code Section 6050I, this article is broken down into five parts: (1) Enactment of Section 6050I, (2) Operation of Section 6050I, (3) Use of Section 6050I in Law Enforcement, (4) Form 8300 Disclosures, and (5) Tax Policy. So hold onto your seats as we peel off the layers of Section 6050I to expose its true purpose.

C. Use of Section 6050I in Law Enforcement

Why is Form 8300 of interest to federal authorities? Primarily for its use in combating money laundering. The government devotes vast resources to identifying and locating income derived from criminal activity. While precise figures are not available, federal law Read More

Written by | Posted in IRS • Tax Fraud/Evasion/Crimes • Tax Policy

Taxation of Compensation And Damages

Over the years I’ve been asked many times how court settlements should be taxed. I’m still surprised by the number of people who are under the impression that a special tax for compensation and damages exists – it doesn’t.

In order to determine the correct tax treatment of damages and compensation it is essential to establish what the payment relates to.

There are several possibilities, the main ones being:

1. Personal Injury

2. Compensation for Revenue Loss Read More

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

A Weapon In The IRS’s Criminal Arsenal – Section 6050I – Part II

Because of the complexity of Internal Revenue Service Code Section 6050I, this article is broken down into five parts: (1) Enactment of Section 6050I, (2) Operation of Section 6050I, (3) Use of Section 6050I in Law Enforcement, (4) Form 8300 Disclosures, and (5) Tax Policy. So hold onto your seats as we peel off the layers of Section 6050I to expose its true purpose.

B. Operation of Section 6050I

Under Section 6050I, any person engaged in a trade or business must report any cash transaction that exceeds $ 10,000 to the IRS. This is called the “Form 8300” requirement. It has four parts. Part I requires the filer to identify the person from whom the cash was received. Part II requires information about the person or persons on whose behalf the Read More

Written by | Posted in IRS • Tax Fraud/Evasion/Crimes • Tax Policy

A Weapon In The IRS’s Criminal Arsenal – Section 6050I – Part I

Because of the complexity of Internal Revenue Service Code Section 6050I, this article is broken down into five parts: (1) Enactment of Section 6050I, (2) Operation of Section 6050I, (3) Use of Section 6050I in Law Enforcement, (4) Form 8300 Disclosures, and (5) Tax Policy. So hold onto your seats as we peel off the layers of Section 6050I to expose its true purpose.

A. Enactment of Section 6050I

Congress enacted section 6050I to attack and unearth the underground economy. As enforced, however, section 6050I has been used as a weapon in the IRS’s criminal arsenal. The underground economy is comprised of “those persons outside the tax system who deal in currency.” While money launderers are certainly participants in the Read More

Written by | Posted in IRS • Tax Fraud/Evasion/Crimes • Tax Policy

IRS Announcement on Tax Filing Season

The 2014 filing season will begin January 31, 2014. The Internal Revenue Service will begin accepting and processing returns and refunds on that date. There is no advantage to filing on paper before the opening date and you will receive your refund much faster by using e-file with direct deposit. Once the filing season begins, the Internal Revenue Service expects to issue more than nine out of ten refunds in less than twenty one days.

Under federal law, all tax payment and filing deadlines remain in effect. This includes the April 15, 2014 deadline for most taxpayers.

Read More

Written by | Posted in Individual • IRS • Tax Policy • United States

Israel/South Africa Expatriates Face Costly New Tax Rules

In terms of the Right of Aliyah doctrine (the right of every Jew to immigrate to Israel) every Jew going to or intending to go to Israel will be granted an Oleh’s visa. Oleh, for my colleagues not dealing with Israeli law (plural: olim) means a Jew immigrating into Israel. The Oleh Visa is granted by mere expression of the interest to “relocate” to Israel as a qualifying Jew (albeit born outside Israel after 1950).

A person shall not be registered as a Jew by ethnic affiliation or religion and will be denied Oleh Visa, despite being a Jew as defend, inter alia because of political status / activity (i.e. is engaged in an activity directed against the Jewish people or which is likely to endanger public health or the security of the state of Israel) or secondly, where a notification (issued under the Law of Return 5710-1950 as amended by Law of Return Read More

Written by | Posted in Africa • Europe, Middle East • Expatriate • Gift Tax • Individual • International • OECD • Specialty Tax Incentives • Tax Controversy • Tax Fraud/Evasion/Crimes • Tax Policy • Tax Provision/Tax Reporting

Marijuana And The Tax Law

It’s unlikely anyone missed the news stories about marijuana sales becoming legal on January 1, 2014 in Colorado. The Huffington Post reported on January 8, 2014 that sales in the first week were about $5 million. That also generated a lot of tax revenue for the state because Proposition AA* that Colorado voters passed in November 2013 allows for a 15% excise tax when unprocessed retail marijuana is sold by a cultivation facility to a retailer AND a 10% sales tax (on top of the normal Colorado sales tax of 2.9%) when the retailer sells the marijuana. That proposition suggested that $70 million would be generated annually with the first $40 million to be used for public school capital construction. Additional revenues would be used to enforce regulations on the retail marijuana industry and the balance for other needs (apparently at the discretion of the Read More

Written by | Posted in Individual • IRS • Marijuana Taxes • Sales/Use Tax • Tax Policy

California State Tax Filing Season Is Officially Open – Part V

The Franchise Tax Board (FTB) announced it is now accepting 2013 state tax returns. Also, the FTB provides the following updates on law changes and filing services brought to you in this blog series – Part V.

AB 93 replaces the G-TEDA tax incentives with the New Employment Credit (NEC), the California Competes Credit, and statewide partial sales and use tax exemption for certain manufacturing and research and development equipment.

The New Employment Credit (NEC) is a California income tax credit available to employers for taxable years beginning on or after January 1, 2014, and before January 1, 2021. To obtain a credit a qualified taxpayer must hire a qualified full-time employee on or after Read More

Written by | Posted in Individual • North America • Tax Policy

California State Tax Filing Season Is Officially Open – Part IV

The Franchise Tax Board (FTB) announced it is now accepting 2013 state tax returns. Also, the FTB provides the following updates on law changes and filing services brought to you in this blog series – Part IV.

Tax Tips

• Volunteer Income Tax Assistance – Starting in February, free tax help is available through the Volunteer Income Tax Assistance and Tax Counseling for the Elderly Programs (VITA/TCE). Trained volunteers at more than 1,000 sites throughout California provide free help to complete tax forms for low-income, senior, disabled, and non-English speaking persons who need to file simple federal and state tax returns. Read More

Written by | Posted in Individual • North America • Tax Policy

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

The United States market is a promising one for foreign investors and companies, but complicated issues must be addressed to avoid fines and penalties. One of these issues involves the completion of Form 5472.

US companies that are at least 25% owned by non-US shareholders and foreign companies that are engaged in a US trade or business must disclose information to the IRS on this somewhat confusing form. The IRS uses Form 5472 in developing information about the company and its related parties. Information provided on the form helps the IRS identify potential audit issues. Certain information on the Form 5472 might raise bright red flags for the IRS, too. Read More

Written by | Posted in FATCA • Tax Policy • Tax Provision/Tax Reporting
« Older Entries   Recent Entries »