Tag Archive for Tax Blog

What Is A Church?

Churches occupy a distinct place in the tax code of the United States. They are tax exempt, but that is not where the uniqueness lies. Many types of charitable organizations are considered tax-exempt non-profit organizations. Most organizations wishing to obtain tax exempt status must first file Form 1023 (or the new Form 1023EZ) with the IRS, seeking approval as an IRS-qualified tax exempt organization. The unique aspect of a church is that qualifying as tax exempt is automatic if it meets the IRS definition of a 501(c)(3) organization:

1. The organization must be organized and operated exclusively for religious, charitable, scientific, or other charitable purpose.
2. Net earnings may not inure to the benefit of any private individual or shareholder. Read More

Written by | Posted in Clergy • Religion

Minister’s Housing Allowance Subject of Court Battles

The housing allowance is a significant tax benefit for a minister. It can result in thousands of dollars in tax savings annually. The law currently allows a minister to occupy a church-owned parsonage without paying income tax on the value of the accommodations. Alternatively, the church may designate an amount to be paid to the minister as housing allowance. This amount, when used for housing costs, is not subject to income tax. Both a parsonage and a housing allowance are subject to self-employment taxes.

Only One Home Subject to Housing Allowance

Several court cases have recently been brought, seeking to limit or abolish this tax benefit for ministers.

Read More

Written by | Posted in Clergy • IRS • Religion • Tax Controversy • Tax Provision/Tax Reporting

2015 Budget Announced Today In Ireland

Here is a brief Summary of some of the Taxation Measures for introduction in Ireland in 2015.

Income Tax

There will be an increase in the standard rate band of income tax by €1,000 from €32,800 to €33,800 for single individuals and from €41,800 to €42,800 for married one earner couples.

There will also be a reduction in the higher rate of income tax from 41% to 40%.

Artists’ Exemption

The threshold for the artists’ exemption will be increased by €10,000 to €50,000. Read More

Written by | Posted in Capital Gains • Income Tax • Tax Deductions • Tax Policy • Tax Tips

How Do I Set Up My New Business For Tax Purposes?

New business owners often ask, “How do I set up my business For Tax Purposes?” One of the choices you make when starting a business is the type of legal organization you select. This decision can affect how much you pay in taxes, the amount of bookkeeping and paperwork required, the personal liability you might be responsibility for, and your ability of borrow money.

For-profit businesses fall under one of four structures for tax purposes:

1. Sole Proprietor – An individual who owns an unincorporated business by themselves. Most small and home based businesses are sole proprietorships. For tax purposes, the business activity of a sole proprietor is reported on Schedule C of Form 1040. This is Read More

Written by | Posted in Corporate • Partnership • Small Business • Tax Tips

Compliance 2014 – Capital Acquisitions Tax – Ireland

The 2010 Finance Act introduced a fixed pay and file date for all gifts and inheritances with a “valuation date” after 14th June 2010. As a result, the Capital Acquisitions Tax year runs from 1st September to 31st August in the following year.

C.A.T. arising on gifts/inheritances, where the “valuation date” falls within the twelve month period ending on 31st August in a particular tax year, must be paid and filed with Revenue by the 31st October of that year.

What do we mean by “Valuation Date”?

The “valuation date” is the date on which the property making up the gift or inheritance is valued. The “valuation date” for a gift is the date the individual receives the gift but Read More

Written by | Posted in Estate Planning Tax • Gift Tax

When Should You “Lawyer Up” When Dealing With The IRS?

If you receive a notice from the IRS regarding small mistakes and omissions with your income tax return, you can probably deal with the IRS directly or by giving your tax preparer a quick call. However, if there is any chance your case could go sour, you need to call a qualified and experienced tax attorney, and pronto. A good rule of thumb is that if you’re asking yourself whether it’s serious enough to merit calling a tax attorney, it probably is.

Maybe these two true life stories will help:

In January 2014, Beanie Beans founder Ty Werner was convicted of evading $5.5 million in taxes owed on the $27 million in interest accrued from millions of dollars stashed away in a Swiss bank account. The sentence? Two years on probation and some hefty fines, which were small change for a billionaire like Werner. Read More

Written by | Posted in Tax Fraud/Evasion/Crimes

Compliance 2014 – Capital Gains Tax – Ireland

If you’ve already made or about to make a disposal of a capital asset (e.g. certain shares, an investment property, a business, etc.) anytime between 1st January and 30th November 2014 you will be obliged to pay your Capital Gains Tax by 15th December 2014.

If you decide to wait and dispose of your asset between 1st December and 31st December 2014 then your payment will be due by 31st January 2015.

What happens if you miss these deadlines?

Interest of 0.0219% per day will be applied to all late payments of Capital Gains Tax.

What happens if you make a gain in the first part of the year and a loss in the second part?

Read More

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

States Without An Income Tax – Good Idea?

California’s largest tax revenue source by far is its personal income tax. This tax generated 67% of total tax revenues for FY 2012-2013’s General Fund. As shown in the pie chart from the California State Controller’s Office, the corporate income tax only provided 8% of state tax revenues.

Seven states do not impose an income tax and two states impose it on only a portion of one’s income. How can they do that? A recent article in Cleveland.com answers that question. See “No-income-tax states use other taxes to pay the bills: Axing Ohio’s Income Tax,” by Robert Higgs, 10/2/14.

The seven states without an income tax are: Read More

Written by | Posted in Corporate • Income Tax

Virtual Currencies: The Modern-Day Equivalent of Your Father’s Offshore Bank Account?

In this high tech era of GPS trackers and unmanned drones, new concerns are emerging over the erosion of personal privacy space. A new federal law compels the Federal Aviation Administration to allow drones to be used for all sorts of commercial endeavors – from selling real estate to monitoring oil spills. That same law also makes it easier for local police to send up their own drones. This raises new concerns about how much detail the drones will capture about lives down below. Some advocacy-rights groups are quick to point out that this is nothing more than “routine aerial surveillance of American life.”

But as frightening as it might be to think that you could come face-to-face with a drone taking pictures outside of your third-floor fire escape, there is something even more Read More

Written by | Posted in International

Biggest Tax Fraud In History Ends In Sentencing of Ex-Lawyer To Fifteen Years In Prison

In a case dubbed “the biggest criminal tax fraud in history” by federal prosecutors, former lawyer Paul Daugardas was sentenced to 15 years in prison for helping wealthy clients dodge taxes. However, if you blinked, you might have missed it. Why? Mr. Daugedas was sentenced back on June 25, 2014, just a week after the IRS’s historic announcement that it had overhauled the voluntary disclosure program. Therefore, no matter how ground-breaking this story might have been, because it didn’t bear some relation to the major OVDP announcement, it was all but ignored by the media.

I’ve been following the Daugerdas saga ever since U.S. District Judge William Pauley threw out his earlier conviction and ordered a new trial. Right about now, you might be saying, “Wait. Back up. You’re telling me that Daugerdas had been previously convicted of Read More

Written by | Posted in Tax Fraud/Evasion/Crimes

Learn How To Get To The Top of The Tax Profession Faster Than Your Tax Colleagues

“The Best Tax Webinar of The Year” on Thursday, October 9th at 9:00AM (California).
 

There are a Limited Number of Seats. Register Now And Receive Two Valuable Gifts!

We noticed several tax professionals attended this webinar twice because they were thrilled with the information we shared during this presentation. We gave you a lot of secrets throughout the webinar and each of our attendees took away two gifts worth $997 and they are now enjoying all the benefits. We really appreciated so many of you came back for more and want to ask you all to send this invitation to a tax colleague so they Read More

Written by | Posted in TaxConnections

Logical Sales Tax Ruling On A Web-Based Business

Since the start of e-commerce and web-based businesses, uncertainties have existed about how sales tax applies to their operations. Often, the state eventually issued guidance for many types of transactions, particularly those involving software. Where there was no specific guidance, you just need to read the statute, understand the technical and legal nature of the business operations and what it provides to customers, and derive an answer. Some companies have also sought rulings from state agencies.

I think a recent ruling from the New York Department of Taxation and Finance reaches a logical conclusion. TSB-A-14(27)S (8/20/14) involves a business (B) that operates a website where people can place an order with a restaurant and pay. B’s website lists about 5,000 restaurants in 27 cities. Website visitors search for a restaurant, see the Read More

Written by | Posted in Sales/Use Tax
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