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19 Jan 2024

Taxpayers Are Paying For This In A Big Way

According to the research team at Infowars and investigative journalist James O’Keefe, Taxpayers Are Paying For The Invasion At The Border.

Journalist James O’Keefe uncovered a “shadowy network of secretive nonprofits” (some of which are funded by taxpayers) that are facilitating the invasion of illegals on the southern border.

O’Keefe said “Alita’s Angels” is a “brand-new nonprofit with no tax records on file” that operates inside an old Bank Building in the Arizona border town of Nogales.

We just followed the trail of the migrant vans right to the source, visiting the Arizona border town of Nogales, where we encountered some rude and suspicious “Alita’s Angels” NGO (@alitasangels) workers who once again called the police on us.

A volunteer with the American Red Cross, who wouldn’t give us his name, tried to prevent us from filming outside a migrant facility and kept sticking his hand over our cameras. Then, when we questioned a volunteer with the NGO, she said “I am your father” and stormed off.

Nogales Police officers showed up and questioned us after Alitas and Red Cross workers falsely accused us of using racial slurs and inhibiting their movement. We tried to get the officer’s first name but he refused to give it. When we FOIAed the bodycam footage, we were told Nogales police don’t use them.

A group called “Alita’s Angels” runs the facility, but they’re a brand-new nonprofit with no tax records on file. (We requested the documents, with no luck.) -O’Keefe

After Alitas, the migrants are crammed into busses like cattle to a processing facility an hour away in Tucson.

Once the migrants were boarded on the bus, we got a head start to meet them at a processing facility an hour away in Tucson, but once again, we couldn’t get anywhere near the building. The staff of the facility, run by Casa Alitas, threatened to call the cops again, but we managed to interview a local driver who does business at the facility and he gave us even more information. -O’Keefe

O’Keefe said, “A WORKER with Casa Alitas CONFIRMED TO OUR UNDERCOVER journalist that Casa Alitas was getting federal money.”

“These “Alitas” (http://alitasangels.com) groups are part of a shadowy network of secretive nonprofits funding the mass migration of millions of people into the country, without truly vetting asylum seekers’ claims and determining if they are eligible for refugee status,” the journalist continued.

Then Elon Musk chimed in on the X thread, asking: “Is the Red Cross supporting illegal immigration?”

Read More

Written by TaxConnections Admin

19 Jan 2024

Sports Fans And Taxpayer Funded Stadiums

This post is from the Citizens Against Government Waste site https://www.cagw.org/reporting/fields-of-failure and it has special meaning to me since I was at the home of friends hosting a fundraiser for a Congressional candidate many years ago in San Diego, CA. During the Question and Answer session, I ask the candidate why he was focused on getting a new stadium built for the San Diego Chargers versus the care of our much needed improved water supply infrastructure. The candidate was very upset with me for asking this question but I wanted to know as I had recently read an article in the Wall Street Journal in 1998 about how the taxpayers always had to pay more in taxes for these sports projects. This article by Citizens Against Government Waste was particularly interesting to me and thus I want to share this with all the sports fans who read our site. Keep in mind at the time, we already had a beautiful sports stadium but they wanted something more.

Professional sports provide benefits by building community spirit and pride, but unfortunately, they often have a negative impact on taxpayers. Since 2000, states and localities across the country have spent $43.1 billion to build professional sports stadiums. Elected officials at the local, state, and federal levels of government should take steps to rein in stadium subsidies that hurt taxpayers and leave fans subject to the whims of the owners of their favorite teams. Download this special report on the subject matter titled Fields of Failure: The Scandal of Taxpayer Funded Statiums https://www.cagw.org/sites/default/files/pdf/FieldsofFailure.pdf

According to the www.cagw.org site…

“Unfortunately, aside from instilling civic pride, sports teams have become a detriment to taxpayers in many places. Recognizing the power they have over local communities, team owners and league leaders have sought to use their positions to force local residents to finance the construction of the stadiums in which their teams play. According to a December 22, 2022, CNBC report, since 2000, publicly constructed facilities have cost taxpayers more than $43.1 billion.¹ Stadium subsidies are so pervasive that a blog, “Field of Schemes,” was created in 1998 to examine and publicize how approximately $2 billion annually is provided in public subsidies for new professional sports facilities.² Team owners and elected officials have long justified this substantial use of the taxpayer’s money with claims that they would lead to increased economic growth and development. Many studies, however, show that publicly funded stadium projects provide little to no economic benefits to local communities.

Written by TaxConnections Admin

19 Jan 2024

2024 Tax Year Planning For State And Local Taxes: A Guide For CPAs, CFOs, And Business Owners

Mastering State and Local Tax Planning

Tax year planning for state and local taxes is a critical aspect of financial management for individuals and businesses alike. By mastering the complexities of state and local tax regulations, CPAs, CFOs, and business owners can optimize their tax strategies and minimize their tax liabilities.

When it comes to tax year planning, there are several key considerations to keep in mind:

Stay Updated with Tax Law Changes
These laws can vary significantly from one jurisdiction to another, and staying informed is essential.
Timing is Everything
Be aware of specific due dates for each jurisdiction.
Deductions, Exemptions, and Credits
Utilizing all eligible deductions and credits can significantly reduce your overall tax burden.
Avoid Common Pitfalls
Overlooking the impact of taxes on business decisions can lead to unexpected costs.

Strategies to Maximize State and Local Tax Deductions

When it comes to tax year planning for state and local taxes, understanding the available deductions is crucial. By exploring these deductions, CPAs, CFOs, and business owners can effectively reduce their tax liability and maximize their savings.

Here are some key deductions and strategies you should consider:

Understanding available deductions for state and local taxes:

State and local tax deductions can include income taxes, property taxes, and sales taxes. It’s important to research and understand the specific deductions available in your jurisdiction. Some states may offer additional deductions for certain expenses, such as education or healthcare.

Implementing strategies to maximize deductions for state and local taxes:

One strategy is to bunch your deductions. This involves timing your expenses so that you can maximize the deduction in a single tax year. If you have the flexibility to pay property taxes early or make an additional estimated tax payment, it may be beneficial to do so in order to increase your deduction for that year.

Understanding the limitations and restrictions on deductions:

It’s important to be aware of the limitations and restrictions that apply to state and local tax deductions. The Tax Cuts and Jobs Act of 2017 introduced a cap on the deduction for state and local taxes at $10,000 for married couples filing jointly. Additionally, some deductions may be subject to income limitations or phase-outs.

List of Key Deductions:

Income taxes
Property taxes
Sales taxes
Education expenses (where applicable)
Healthcare expenses (where applicable)

Written by Chris Vignone

18 Jan 2024

Joint Committee On Taxation New Tax Proposals: Tax Relief For American Families And Workers Act 2024

While everyone appears distracted with many tasks during January 2024, our government is busy proposing new tax bills. It is important for our tax professional community to take a close look at what is happening as the US taxpayer never seems to come out ahead with ongoing proposed new tax legislation and a 33 BILLION dollar US debt. Therefore, we ask the tax experts in our tax community to identify and figure out who is making out with tax savings and who are the taxpayers feeling a tax increase. TaxConnections welcomes your commentary below.

It is in the markup stage now where many things often change.

The House Committee on Ways and Means has scheduled a committee markup for
January 19, 2024, a markup of H.R. 7024, the “Tax Relief for American Families and Workers
Act of 2024.” This document,1 prepared by the Staff of the Joint Committee on Taxation,
provides a description of this bill.

INTRODUCTION…………………………………………………………………………………………………….1
I. TAX RELIEF FOR WORKING FAMILIES……………………………………………………….. 2
II. AMERICAN INNOVATION AND GROWTH……………………………………………………. 9
1. Deduction for domestic research and experimental expenditures………………………… 9
2. Extension of allowance for depreciation, amortization, or depletion in determining
the limitation on business interest ………………………………………………………………. 15
3. Extension of 100 percent bonus depreciation………………………………………………… 19
4. Increase in limitations on expensing of depreciable business assets…………………… 26

Written by TaxConnections Admin

18 Jan 2024

IRS Selects 12 New IRSAC Members For 2024

WASHINGTON — The Internal Revenue Service announced the appointment of 12 new members to the Internal Revenue Service Advisory Council.

The IRSAC, established in 1953, is an organized public forum for IRS officials and representatives of the public to discuss a broad range of issues in tax administration. The Council provides the IRS and agency leaders with relevant feedback, observations and recommendations. It will submit its annual report to the agency at a public meeting in November 2024.

The IRS strives to appoint members to the IRSAC who represent the taxpaying public, the tax professional community, small and large businesses, tax exempt and government entities and information reporting interests.

The following individuals were appointed to serve three-year terms on the council beginning this month:

Robert Barr – vice president of business engineering, CGI Federal, Dallas, Texas. Barr has led digital transformations for both public and private sector organizations, including the South Carolina Department of Revenue, Intuit, Dell, Blockbuster and USAA. He also served as the Internal Revenue Service Assistant Commissioner for Electronic Tax Administration where he branded IRS e-file and the Electronic Federal Tax Payment System (EFTPS), established the National Accounts Program, enabled credit card payment of taxes and digital signing and other initiatives. Barr formerly served on the Commissioner’s Advisory Group, the Information Reporting Program Advisory Committee and the Electronic Tax Administration Advisory Committee.

Andrew Bloom – head of tax strategy, Golub Capital, based in Northern Virginia. Bloom advises on tax issues for investors, general partners, large partnerships, foreign corporations and business development companies as a Securities and Exchange Commission (SEC) registered investment advisor and international asset manager. He also manages substantive tax issues, including investment fund structuring, financial product planning, international tax planning, Fixed, Determinable, Annual, Periodical (FDAP) and Foreign Account Tax Compliance Act (FATCA) withholding and tax treaty planning and compliance. Previously, he was a partner at Dechert LLP in New York.

Written by TaxConnections Admin

18 Jan 2024

Introduction To Citizenship Based Taxation

You will also learn alot from this YouTube Video: https://www.youtube.com/watch?v=DWYnIGgG0Ak

Part A: Introduction – About Citizenship-based Taxation
Part B: How the Internal Revenue Code is designed to mitigate the effects of double taxation in certain circumstances
Part C: Determining what is “foreign source” income
Part D: The problem of international waters …
Part E: The effect of sourcing to the US income earned in international waters by dual tax residents
Part F: Deducting “foreign taxes” paid – although income from international waters may not be foreign, it is still subject to the payment of “foreign taxes”
Part G: Can a US citizen living abroad be saved by a tax treaty? Maybe if he/she lives in Canada****
Part H: Conclusion and the need for “Pure Residence-Based Taxation”

Part A: Introduction – About Citizenship-based Taxation

Whether they live in Mexico, France, Canada, Brazil or even on a yacht, US citizens are taxable on their worldwide income. Worldwide income means income of all kinds, from all sources and wherever earned. US citizens are taxable an ALL income sources. It doesn’t matter whether the income has a source in Mexico, France, Canada, Brazil or even on a yacht. For example, a US citizen living in France who has ONLY French source income is required to treat that income as taxable in the United States. The fact that the income is also taxable in France is irrelevant!

The Internal Revenue Code is based on a presumption of double taxation. The presumption of “double taxation” is reinforced by the “saving clause” in US tax treaties where the treaty partner country agrees that the US retains the right to tax US citizens regardless of the tax treaty. The treaties themselves typically contain a small number of specified exceptions that mitigate against the effects of double taxation in certain narrow circumstances.

Relief from double taxation is available either domestically under the Internal Revenue Code or through provisions in international tax treaties (or possibly both). Each avenue of mitigation will be considered separately.

Written by John Richardson

17 Jan 2024

Congressional And Government Waste of Taxpayer Money – Porker Awards

Recently, we discovered this gem of a site on government waste of taxpayer money. Since it is an election year and we all need to vote, there will be a series of articles on our Congressional and Government Representatives. The Council for Citizens on Government Waste is a great site to watch and support on what is actually happening and how Congress and Government Officials are spending taxpayer money. All thanks go to them for their research and written content on identifying these special deals. Now let’s take a look at what the Council for Citizens on Government Waste identifies as previous Porker Awards:

Citizens Against Government Waste (CAGW) named Sen. Dick Durbin (D-Ill.) its November 2023 Porker of the Month for trying to take away everyone’s credit card benefits.

In 2010, Sen. Durbin led the effort to pass the Durbin Amendment, which set a limit on fees that banks charge retailers for debit card transactions. This caused banks and card issuers to lose billions of dollars and forced them to eliminate popular and widely used rewards programs for debit cards. Now, Sen. Durbin is at it again by proposing legislation that would expand the Durbin Amendment to credit cards. Sen. Durbin’s bill will take away benefits used by tens of millions of consumers across the country, including travel and loyalty reward programs. The 84 percent of Americans who have a credit card with a rewards program use them to pay for groceries and gas, family vacations and holiday travel. Airline credit card benefits alone paid for 15 million flights and generated $23 billion in economic activity in 2022.

CAGW President Tom Schatz said, “Sen. Durbin’s legislation would significantly increase the government’s control over a competitive and popular marketplace. If enacted into law, it would double down on harmful policies, damage the economy, and be a disaster for consumers. For trying to take away credit card benefits and rewards, Sen. Durbin was an easy choice for a Porker award.”

Written by TaxConnections Admin

17 Jan 2024

Treasury And IRS Announce That Businesses Do Not Have To Report Certain Transactions Involving Digital Assets Until Regulations Are Issued

WASHINGTON — The Treasury Department and Internal Revenue Service today issued an announcement informing businesses that they do not have to report the receipt of digital assets the same way as they must report the receipt of cash until Treasury and IRS issue regulations.

The Infrastructure Investment and Jobs Act revised the rules that require taxpayers that are engaged in a trade or business to report receiving cash of more than $10,000 by considering digital assets to be cash. Announcement 2024-4PDF provides transitional guidance as Treasury and the IRS implement the new provisions. This particular provision requires Treasury and the IRS to issue regulations before it goes into effect.

The announcement does not affect the rules in effect before the Infrastructure Investment and Jobs Act for cash received in the course of a trade or business, which must be reported on Form 8300, Report of Cash Payments over $10,000 Received in a Trade or Business, within 15 days of receiving the cash.

Treasury and the IRS intend to issue proposed regulations to provide additional information and procedures for reporting the receipt of digital assets, giving the public an opportunity to comment both in writing and, if requested, at a public hearing.

IR-2024-12

Written by TaxConnections Admin

17 Jan 2024

Fewer Clean Vehicles Qualify For Federal Tax Credit In 2024

The §30D Clean Vehicle Credit that was greatly modified for 2023 through 2032 by the Inflation Reduction Act of 2022 has increasingly strict qualifications each year. Per the IRS and Dept. of Energy list of qualifying vehicles, there is a drop for 2024. For clean vehicles purchased from April 18, 2023 through December 31, 2023, 27 vehicles qualified an eligible buyer for a $7,500 credit and 16 for a $3,750 credit.

As of today (1/1/24), the list for 2024 includes just 10 vehicles for the $7,500 credit and 9 for the $3,750 credit. The drop is due to a combination of no longer meeting the higher critical minerals or battery component requirement or involving parts of assembly by a “foreign entity of concern” such as China.

I suspect that more vehicles will be added during the year, but this drop will likely continue annually for the next several years. If you’re looking for a good deal on a clean vehicle, likely that happens the last week or so of the year when dealers are eager to sell eligible vehicles that won’t be eligible the next year.

And new starting in 2024 is the ability of buyers to transfer their credit to the dealer (if registered) so the customer/taxpayer can get the value up front rather than waiting to when they file their return.

There is more information at:

Written by Annette Nellen

16 Jan 2024

Understanding The R&D Tax Credit And How To Claim It

The R&D tax credit is a valuable incentive provided by the government to encourage businesses to invest in research and development activities. It is a tax break that rewards companies for their innovation and technological advancements.

So, how does the R&D tax credit work? Essentially, it allows eligible businesses to claim a tax credit against their qualified research expenses. These expenses can include wages, supplies, and even contract research costs. By claiming the credit, businesses can reduce their overall tax liability, freeing up funds that can be reinvested back into their R&D efforts.

Now, let’s explore the benefits of claiming the R&D tax credit. Firstly, it provides a significant financial boost for businesses, particularly those engaged in innovative activities. The credit can result in substantial tax savings, allowing companies to allocate more resources towards research and development.

In addition to the financial advantages, the R&D tax credit also enables businesses to enhance their competitiveness. By investing in research and development, companies can develop new products, improve existing ones, and gain a competitive edge in the market. This credit encourages businesses to stay at the forefront of technological advancements, fostering growth and innovation.

Furthermore, the R&D tax credit can positively impact your business by stimulating job creation. As companies invest in R&D activities, they often need to hire skilled professionals to support their research efforts. This leads to job growth and contributes to the overall economic development of the business and the community.

Step-by-Step Guide to Claiming the R&D Tax Credit

Understanding the process of claiming the R&D tax credit is essential to ensure you receive the maximum benefit. Here is a step-by-step guide to help you navigate through the claiming process:

Evaluate your eligibility:
Determine if your business activities qualify for the R&D tax credit by reviewing the IRS guidelines and criteria.
Identify qualifying activities and expenses:
Identify the specific research and development activities and related expenses that qualify for the tax credit. This may include wages, supplies, and contract research expenses.
Document your R&D activities:
Maintain detailed records of your R&D activities, including project descriptions, timelines, and documentation of technological uncertainties and experiments conducted.
Calculate the credit:
Calculate the R&D tax credit using the appropriate method, either the Regular Credit or the Alternative Simplified Credit (ASC), based on your business size and financials.
Prepare and file your tax return:
Complete the necessary tax forms, such as Form 6765, and include the R&D tax credit calculations and supporting documentation with your tax return.
Engage in an audit defense strategy:
Prepare for potential audits by ensuring your documentation is thorough and accurate. Seek guidance from R&D tax credit experts to minimize any potential risks.

Working with R&D Tax Credit Experts

Claiming the R&D tax credit can be complex, especially if you are unfamiliar with the intricacies of tax regulations. Collaborating with R&D tax credit experts can streamline the process and maximize your benefits. These professionals have the expertise and experience to:

Identify eligible activities and expenses: R&D tax credit experts can help you identify all qualifying activities and expenses, ensuring you don’t miss out on any potential credits.
Optimize credit calculations: By leveraging their knowledge of tax laws and regulations, experts can help you accurately calculate the R&D tax credit to maximize your benefits.
Prepare and defend your claim: R&D tax credit experts can assist in preparing your tax return and supporting documentation to withstand any potential audits or inquiries.

By partnering with R&D tax credit experts, you can navigate the complexities of the claiming process with confidence, ensuring you receive the full benefits you deserve.

Have a question? Would you like an introduction to Rachel Bishop?

Contact Eric Larson for an immediate introduction or make a request at this link: https://sourceadvisors.com/tax-connections-contact/

Written by Rachel Bishop

16 Jan 2024

National Taxpayer Advocate Objectives Report To Congress: Fiscal Year 2024

National Taxpayer Report Objectives Report To Congress For 2024

The Internal Revenue Code requires the National Taxpayer Advocate to submit two annual reports to the House Committee on Ways and Means and the Senate Committee on Finance. The National Taxpayer Advocate is required to submit these reports directly to the Committees without any prior review or comment from the Commissioner of Internal Revenue, the Secretary of the Treasury, or the Office of Management and Budget. The first report, due by June 30 of each year, must identify the objectives of the Office of the Taxpayer Advocate for the fiscal year beginning in that calendar year.

FY 2024 Objectives Report To Congress

PREFACE: The National Taxpayer Advocate’s Introductory Remarks

REVIEW OF THE 2023 FILING SEASON

TAS SYSTEMIC ADVOCACY OBJECTIVES
Introduction

TAS CASE ADVOCACY AND OTHER BUSINESS OBJECTIVES

Written by National Taxpayer Advocate

16 Jan 2024

IRS New Initiatives Using Inflation Reduction Act Funding To Ensure Complex Partnerships, Large Corporations Pay Taxes Owed

IRS ramps up new initiatives using Inflation Reduction Act funding to ensure complex partnerships, large corporations pay taxes owed, continues to close millionaire tax debt cases.

More than $482 million recovered from 1,600 millionaires who have not paid tax debts

WASHINGTON — The Internal Revenue Service announce continued progress to expand enforcement efforts related to high-income individuals, large corporations and complex partnerships as part of wider efforts to transform the agency.

IRS Commissioner Danny Werfel noted Inflation Reduction Act resources continue to help in a variety of areas. In addition to earlier announcements focusing on further improving taxpayer service during the upcoming 2024 filing season, the IRS has focused IRA resources on strengthening enforcement to pursue complex partnerships, large corporations and high-income, high-wealth individuals who do not pay overdue tax bills.

The IRS shared today progress in its focus on people using partnerships to avoid paying self-employment taxes as well as new details on current enforcement priorities. The IRS is also continuing to pursue millionaires that have not paid hundreds of millions of dollars in tax debt, with an additional $360 million collected on top of the $122 million reported in late October. The IRS has now collected $482 million in ongoing efforts to recoup taxes owed by 1,600 millionaires with work continuing in this area.

“The IRS continues to increase scrutiny on high-income taxpayers as we work to reverse the historic low audit rates and limited focus that the wealthiest individuals and organizations faced in the years that predated the Inflation Reduction Act. We are adding staff and technology to ensure that the taxpayers with the highest income, including partnerships, large corporations and millionaires and billionaires, pay what is legally owed under federal law,” Werfel said. “At the same time, we are focused on improving our taxpayer service for hard-working taxpayers, offering them more in-person and online resources as part of our effort to deliver another successful tax season in 2024. The additional resources the IRS has received is making a difference for taxpayers, and we plan to build on these improvements in the months ahead.”

Written by TaxConnections Admin