New York City Comptroller Posts Benefits Of Immigrants To Taxpayers: What Do You Think? Fact Or Fiction?

New York City Comptroller Posts Benefits Of Immigrants To Taxpayers: What Do You Think?

On January 4, 2024 the New York City Comptroller posts online the many benefits to New York City taxpayers the immigrants bring to the city. In case you have not read or viewed this public statement, you may want to take a closer look and comment on your experience of the use of New York State/City taxes. With one of the highest, if not the highest tax rates in the country, taxpayers should know how their tax money is spent. This message below comes straight out of the New York Government website with the direct link at the bottom of this article as proof. Just in case you cannot believe it. We would love to hear from New Yorkers or those taxpayers who left New York in our commentary section below. We would love for you to educate taxpayers, too!

Background: Busting Myths About Immigration

As New York City welcomes over 100,000 new arrivals seeking asylum, it is critical to ground conversations on immigration in facts, not fear. This fact sheet seeks to provide accurate information on key questions.


FACT: Immigrants Benefit Our Economy, Irrespective Of Their Status

Immigrants strengthen our economy as workers, entrepreneurs, taxpayers, and consumers:

Welcoming Asylum Seekers Is A Net Positive To The Economy
  • Conservative estimates have found that a 10% reduction in asylum seekers in one year would be a $8.9 billion loss[9] to the U.S. economy and over $1.5 billion in lost tax revenue over five years.

Undocumented immigrants[10] support economic growth, pay taxes, and keep our city and economy running as essential workers.

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The Macroeconomic Effects Of A Proposal To Reform The Internal Revenue Code (“Code”)

Macroeconomic Analysis Of HR 7024

A Macroeconomic Analysis Of HR 7024 ” The Tax Relief For American Families And Workers Act of 2024″ As Ordered Reported By The Committee On Ways And Means, January 2024.

Prepared By The Staff Of The Committee on Taxation.

Pursuant to House Rule XIII(8)(b), this document, 1 prepared by the staff of the Joint Committee on Taxation (“Joint Committee staff”), provides an analysis of the macroeconomic effects of H.R. 7024, the “Tax Relief for American Families and Workers Act of 2024,” as ordered reported by the Committee on Ways and Means on January 19, 2024. The basis for this analysis is the projected change in tax revenues as estimated by the Joint Committee staff.(2)

MACROECONOMIC ANALYSIS OF H.R. 7024
This report provides an analysis of the macroeconomic effects of a proposal to reform the Internal Revenue Code (“Code”). Specifically, the proposal analyzed here is summarized in JCX-2-24, Description of H.R. 7024, The “Tax Relief for American Families and Workers Act of 2024,” as ordered reported by the Committee on Ways and Means on January 19, 2024. 3 The Joint Committee staff finds that it is impracticable to report changes to Gross Domestic Product (“GDP”) from this proposal because they are estimated to be so small relative to the size of the economy and the degree of uncertainty associated with the estimate as to be negligible over the 10-year budget window. As a result, the revenue feedback resulting from this proposal is also estimated to be negligible.

The following discussion describes the proposal and explains why the macroeconomic effects and revenue feedback that would result are estimated to be negligible. The Joint Committee Staff used three macroeconomic simulation models to analyze the effects of the proposal: (1) the Joint Committee staff’s Macroeconomic Equilibrium Growth Model (“MEG”);4 (2) The Joint Committee staff’s Overlapping Generations Model (“OLG”);5 and (3) the Joint Committee staff’s Dynamic Stochastic General Equilibrium Model (“DSGE”).6 A brief description of the models appears in the Appendix to this document.

The Joint Committee staff estimates that H.R. 7024 will reduce Federal revenues by about $399 million over the budget window on a conventional basis, and that macroeconomic effects do not additionally increase or decrease this estimate.

Download All Pages Of This Macroeconomic Analysis here: file:///C:/Users/Kat/Downloads/x-6-24%20(1).pdf 

 

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Reasons Tax Professionals Leave Organizations: Reasons Tax Professionals Stay

Reasons Tax Professionals Leave Organizations: Reasons Tax Professionals Stay

After conducting more than one thousand tax professional searches over three decades with the support of our team, I have learned why tax professionals leave many organizations. Given the importance of hiring tax professionals, I thought it would be helpful to share information that will help you retain your tax team longer.  This article focuses on the reasons tax professionals shared about leaving and staying in tax organizations.

First, tax professionals are highly educated with many of the people we work with having earned a BS, BA, and/or MST, and/or MBA, and/or JD and/or LL.M and/or CPA. Tax professionals are smart, lifelong learners who often deal with technically sophisticated tax issues. Years ago, I spoke with a tax executive and asked him what he loved most, and he said he loved the transactions that were technically sexy. This was a tax executive who thrived on solving complex tax issues. The tax executives we have come to know over many years are smart and creative and the best of the tax profession.

What drives tax professionals to spend years and money on education, gain specialized training in a public accounting firm, a law firm, and/or a corporation? Why should tax management executives and CFOs plan for 15%-30% attrition annually? People’s lives are constantly changing; management must prepare for changes in their tax organization.  It is how management prepares that  will determine the successes and failures of an organization. I wrote this article to help you address these changes. There are reasons why tax experts move to other organizations and reasons tax professionals stay for many years.

Public Accounting

My advice to anyone entering the tax profession is to start with a public accounting firm to gain the training. What often occurs in public accounting is high turnover at the three-to-five-year level of experience. The reasons that tax professionals provide us most often for leaving are stated below.

Reasons Tax Professionals Leave Public Accounting

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U.S. Department Of The Treasury, IRS Announces Major Milestone In Implementation Of Key Provisions To Expand The Reach Of Clean Energy Tax Credits

U.S. Department of the Treasury, IRS Announce Major Milestone in Implementation of Key Provisions to Expand the Reach of Clean Energy Tax Credits

More than 1000 Projects Registered for New Direct Pay and Transferability Credit Monetization Provisions

WASHINGTON – Today the U.S. Department of the Treasury and Internal Revenue Service (IRS) announced reaching a major milestone in implementation of key provisions in the Inflation Reduction Act to expand the reach of the clean energy tax credits and help build projects more quickly and affordably, with more than 1,000 projects registered through the new IRS Energy Credits Online (ECO) portal and able to benefit from these new provisions.

The Inflation Reduction Act created two new credit delivery mechanisms—elective pay (otherwise known as “direct pay”) and transferability—that enable state, local, and Tribal governments; non-profit organizations, U.S. territories; and other entities to take advantage of clean energy tax credits. Until the Inflation Reduction Act introduced these new credit delivery mechanisms, governments, many types of tax-exempt organizations, and even many businesses could not fully benefit from tax credits like those that incentivize clean energy construction.

“Increased access to clean energy credits is acting as a force multiplier so that more clean energy projects are built quickly and affordably, and more communities benefit from the growth of the clean energy economy,” said Deputy Secretary of the Treasury Wally Adeyemo. “Making it easy to access these credits also underscores the connection between realizing the economic and climate goals of the Inflation Reduction Act and modernizing the IRS. The IRS has quickly delivered modern technology with IRS Energy Credits Online, making it easier for eligible companies who do business in the United States, and state and local governments, to take advantage of clean energy incentives.”

“The IRS is working hard to put in place tools that can help taxpayers and the wider tax community, and this important new online tool reflects our progress in this area. We have surpassed a major milestone with more than 1,000 facility registrations through the tool,” said IRS Commissioner Danny Werfel. This new tool helps key groups with these clean energy credits as well as improves communication and reduces compliance issues. This effort is part of our larger transformation effort underway across the IRS as our efforts continue to accelerate.”

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Complimentary eBook: 250+Motivational Inspirations For Corporate, Public Accounting And Tax Legal Teams

Complimentary eBook: 250+Motivational Inspirations For Tax Teams

Motivating your team is important because it affects the overall performance of your organization. An employee’s motivation is direct result of the sum of interactions with those who lead them. Great leaders and coaches consistently work on motivating their team to increase their commitment, efficiency, satisfaction and professional development. This starts with positive communication that motivates team members to excel. As a leader, you must invest the time to increase team motivation to gain optimal results.

TaxConnections offers a complimentary eBook of ideas and phrases you can use to message your team members daily. We have spoken to tax leaders and receivers of these phrases who look forward to receiving daily positive and inspirational quotes to guide them through their work days. When is the last time you sent your team members an inspirational quote as you lead your organization throughout the day? You can start today using this complimentary leadership tool!

TaxConnections complimentary eBook 250+ Motivational Quotes And Inspirations helps you build positive communication with team members which improves overall performance.

REQUEST COMPLIMENTARY EBOOK 

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How To Make Sure You Are Using Sales Tax Compliance Best Practices

How To Make Sure You Are Using Sales Tax Compliance Best Practices

There are a few different ways you can “do” sales tax compliance. Here are the four main ways we recommend, as well as which option is generally best depending on your company’s size and nexus:

  1. Someone in-house does returns manually, which usually means filing each tax return individually via each state’s online portal. This is often a good option for small companies that file in five or fewer states. But companies usually need a better solution.
  2. An outside bookkeeper or firm files returns manually. This also requires them filing returns through each state’s online portal, so it may be a good option for small businesses that file in 10 or fewer states, but much beyond that and it gets cumbersome very quickly to try to keep up with manual filing.
  3. Rely on a completely automated software solution, with very little human interaction. There are multiple software solutions out there that calculate how much sales tax to collect and remit, and automatically file the returns for you. This maybe a good option for middle market companies that file in 10 or more states with relatively simple transactions (e.g. they sell online, high volume, tangible property where most items are subject to sales tax). However, we always courage our clients to consider all the ramifications of automation and then also consider the human element. Sometimes the biggest hurdle is the software implementation!
  4. Work with a compliance provider, which uses the software but also offers more interaction with a real person on the team. This is usually a good option for or larger companies filing in 10 or more states with more complicated transactions (e.g. they sell more technology products, software or SaaS that are subject to interpretation about taxability), higher end products with a larger cost per product and lower volume. Again- a well thought out combination of software and human intelligence is often the best strategy. In addition to picking the option that will lead to most effective sales tax compliance, you’ll want to weigh the cost involved with each of the above options.

Miles Consulting Group can help you evaluate the best compliance solution as there are more factors than the ones included above—there can be a wide variety of factors to consider.

CONTACT US TODAY to determine the best sales tax compliance solution for your business! Monika Miles Consulting.

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The Substantial Presence Test: How To Calculate It With Examples

The Substantial Presence Test: How To Calculate It With Examples

Navigating the complex landscape of U.S. tax regulations can be a daunting task, especially for individuals who split their time between the United States and other countries. One crucial concept that frequently comes into play is the Substantial Presence Test (SPT). This test is a critical determinant used by the Internal Revenue Service (IRS) to assess tax liability for individuals who are not U.S. citizens or green card holders but spend significant time in the U.S.

This article aims to provide a clear and detailed guide on the Substantial Presence Test, elucidating its criteria, implications, and how it applies to non-resident aliens. Our goal is to offer valuable insights that aid in achieving compliance with U.S. tax obligations, ensuring a thorough understanding of your tax residency status.

WHAT IS THE SUBSTANTIAL PRESENCE TEST?

The Substantial Presence Test is a criterion set by the United States Internal Revenue Service (IRS) to determine an individual’s tax residency status in the U.S. It applies to non-U.S. citizens and assesses whether they have spent a sufficient amount of time in the United States to be treated as a resident for tax purposes. This test is pivotal as it affects how and to what extent individuals are subject to U.S. income taxes.

The test calculates this by counting the total days of physical presence in the U.S. over a 3-year period. If the sum equals or exceeds 183 days, the individual is considered a U.S. resident for tax purposes for that year. This determination has significant implications for an individual’s tax liabilities, as it dictates whether they are subject to U.S. tax on their worldwide income.

WHAT ARE THE DAYS OF PRESENCE IN THE UNITED STATES?

Days of presence in the United States refer to the number of days an individual spends physically present in the country. This can include days spent for work, vacation, or any other purpose. For non-residents and foreigners, days of presence are often closely monitored to determine their tax liabilities and immigration status. For US citizens and residents, it can also impact their taxation and eligibility for certain benefits.

HOW TO CALCULATE THE SUBSTANTIAL PRESENCE TEST?

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Joint Committee On Taxation: General Explanation Of Tax Legislation Enacted In The 117th Congress

General Explanation Of Tax Legislation Enacted In The 117th Congress

The staff of the Joint Committee on Taxation- (“Joint Committee staff”) releases its Bluebook for the 117th Congress.  Known formally as the General Explanation of Tax Legislation Enacted in the 117th Congress, JCS-1-23 provides explanations of over 170 tax provisions across eight different Acts, starting with the American Rescue Plan Act of 2021 (Public Law 117-2) and ending with the Consolidated Appropriations Act, 2023 (Public Law 117-328).

For each provision, the Bluebook includes a description of present law, an explanation of the provision, and the effective date.  For a bill with a Committee report (or, in the absence of one, a contemporaneous technical explanation prepared and published by the Joint Committee staff), the document is based on the language of the report (or explanation).

Included as an appendix is a table providing the estimated budget effects of the tax legislation in the Bluebook.

Hard copies of this document are only available through the Government Publishing Office.

DOWNLOAD REPORT AT THIS LINK: file:///C:/Users/Kat/Downloads/JCS-1-23%20(2).pdf

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Uptick In Cost Segregation Audits (Complimentary Webinar With CPE Credit): Register For January 31st Webinar

Uptick In Cost Segregation Audits
January 31st, 2024
8:00AM PST I 10:00 A.M. CST | 11:00 A.M. EST
After registering, you will receive a confirmation email containing information about joining the webinar.
Learning Objectives Include:

After this course, the practitioner will:

  • Understand the impact of Inflation Reduction Act funding on IRS staffing
  • Comprehend the procedural and substantive changes in how the IRS approaches cost segregation audits
Prerequisites:
  • Two years prior experience preparing business federal income tax returns. No advance preparation is required.
Recommended Credit:
  • 1.0 hours CPE in the field of Taxes delivered by Group Internet

SPEAKERS:

Brian Coddington

Senior Director of Tax Accounting Methods

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How Far Back Can The IRS Audit?

How Far Back Can The IRS Audit?

Navigating the labyrinthine world of U.S. taxes, including federal tax returns and individual tax returns, is challenging enough when you’re stateside. For U.S. expatriates, the complexity can multiply. One question that often looms large is, “How far back can the IRS audit?” Understanding the rules, statute of limitations, and exceptions surrounding IRS audits is crucial for maintaining compliance and peace of mind. Generally, the IRS has a three-year window to audit your tax returns, but as you’ll see, there are exceptions.

If you don’t file your tax returns, the statute of limitations never starts, allowing the IRS to audit the return at any time in the future. This is particularly important for U.S. expats who might assume they’re exempt from filing because they’re living abroad.

Related: Common Mistakes To Avoid When Claiming Foreign Earned Income Exclusion

What Is The Statue Of Limitations?

The term “statute of limitations” refers to the time frame within which the IRS is legally allowed to audit your tax returns for potential errors, omissions, or fraud. This period is generally three years from the date you filed your return or the due date of the return, whichever is later. After the statute of limitations expires, the IRS generally can’t question the information you’ve reported on your individual income tax return, or your filing history, or request additional documentation.

Taxpayers generally have three years from the date they filed their original tax return to claim a refund.

What Happens When You Don’t File Your Tax Returns?

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How To Get An ITIN Through A Certifying Acceptance Agent

How To Get An ITIN Through A Certifying Acceptance Agent
Some Basics About ITINs

An individual taxpayer identification number (ITIN) is a tax processing number, issued by the Internal Revenue Service, for resident and nonresident aliens, their spouses and their dependents, if they are not eligible for a Social Security number. The ITIN is a nine digit number beginning with the number 9, has a range of numbers from 50 to 65, 70 to 88, 90 to 92 and 94 to 99 for the fourth and fifth digits, and is formatted like a Social Security number (like this: 9XX-7X-XXXX).

Only individuals who have a valid tax filing requirement or are filing a U.S. federal income tax return to claim a refund of over withheld tax are eligible to receive an ITIN. ITINs are used for tax purposes only, and are not intended to serve any other purpose. The ITIN does not authorize you to work in the U.S. or to receive Social Security benefits, is not valid for identification outside the tax system, and does not change your immigration status. To read more about ITINs, see our U.S. Tax Guide for Foreign Nationals.

Do You Need One?

If you do not have a U.S. Social Security number (SSN) and are not eligible to obtain an SSN, but you are required to file a U.S. federal income tax return, be claimed as a spouse or dependent on a U.S. tax return, or furnish a tax identification number for any other federal tax purpose, you need an ITIN. You must have a valid filing requirement and file an original valid U.S. federal income tax return with your ITIN application, unless you meet one of the exceptions listed below.

Even if you meet one of the exceptions to filing a tax return, you must still have a valid tax purpose. Here are some examples of who needs an ITIN:

  • A nonresident alien individual not eligible for an SSN who is eligible to obtain the benefit of a reduced tax withholding rate under an income tax treaty.
  • A nonresident alien individual not eligible for an SSN who is filing an application for reduced withholding on the sale of U.S. real property.
  • A nonresident alien individual not eligible for an SSN who is required to file a U.S. federal income tax return or who is filing a U.S. tax return only to claim a refund.
  • A nonresident/resident alien individual not eligible for an SSN who elects to file a joint U.S. federal income tax return with a spouse who is a U.S. citizen or resident.
  • A U.S. resident alien (based on the substantial presence test) who files a U.S. federal income tax return but who is not eligible for an SSN.
  • An alien individual eligible to be claimed as a dependent on a US federal income tax return but who is not eligible to obtain an SSN.*
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Which Activities Cause State Tax Nexus Issues?

Which Activities Cause State Tax Nexus Issues?

As states are becoming more aggressive with respect to tax collection, they are also broadening the activities that cause nexus, or taxable presence, for companies. This is important because once a company has nexus, they can be subject to sales tax collection, income tax reporting and other taxes as well.

Some activities that may cause nexus (and therefore state tax reporting issues) include:

  • The hiring of an employee
  • Contracting with an independent contractor
    Maintaining inventory in third party warehouses
  • Owning property or renting office space
  • Exceeding a certain threshold of sales or transactions in a given state (see the Wayfair case discussion)
  • Using fulfillment services like Fulfillment By Amazon (FBA) or similar services which place inventory in third party warehouses in different states

Once a company begins doing business in a state, we assist with procedures for filing necessary sales tax and income tax returns. We also help with apportionment reviews and general compliance.

On the income tax side, one hot topic is properly sourcing revenue for service-based companies. Many states have embraced a concept referred to as “market-based sourcing” for service revenues. That generally means that the revenue will be recognized in the state in which the value of the service was received. What that means can vary by state.

Have a question? Contact Monika Miles Consulting.

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