Tag Archive for Tax Blog

Evolution of Taxation Principles – Jurisdiction And Nexus of Electronic Commerce

Introduction

In order to engage cross-border taxation issues of electronic commerce, an underlying foundation of the principles that govern basic judicial in personam jurisdiction, as generally applied in a domestic context, provides the foundation and the international pathway. These basic principles that established precedent to the electronic communications phenomenon were the content of a previous writing. (1) Cross border taxation of international enterprise incorporates two basic themes, one of which is the interpretation of the United States Commerce Clause and the Due Process distinction from jurisdictional analysis. Read More

Written by | Posted in International

Tips For Surviving The Dreaded Eggshell Audit – Tip #4

Tip # 4: Control and Advise The Client

In an eggshell audit, controlling the client is of paramount importance and can mean the difference between whether the audit remains civil or is referred to CI. However, I would be naïve if I didn’t acknowledge that this is easier said than done.

a. During the audit, the practitioner should limit the contact between the agent and the client.

As a general rule, your client should not speak with the revenue agent. This is good practice even if there is no criminal potential. In the event that your client is contacted by the revenue agent, he should be instructed to tell the revenue agent that he has Read More

Written by | Posted in Audit • Tax Tips

Taxpayers Rights When Audited By Tax Authorities In South Africa (Chapter 4 – 4.1)

Posted in sections, this is my Doctoral Thesis on taxpayers rights when audited by the tax authorities in South Africa – equally applicable to many English-based law systems in Africa and abroad (eg. India). This will be of particular use to any tax practitioners doing work in Africa and in other English-based legal systems around the world.

Analysis Of Challenging The Commissioner’s Discretionary Powers In Auditing Taxpayers under The Constitution Of The Republic of South Africa

CHAPTER 4 – SECTION 195(1) OF THE CONSTITUTION AND PUBLIC ADMINISTRATION DUTIES WITH REFERENCE TO SECTIONS 74A AND 74B

4.1 Introduction to Section 195(1), PAJA And The Principle of Legality Read More

Written by | Posted in Africa • Audit

The Unknown Tax Comic – Part 4

♦ Tax Accountant after reading a nursery rhyme to his child: “No, son. It wouldn’t be tax deductible when Little Bo Peep loses her sheep. But I like your thinking.”

♦ Excellence is a good habit. But do not strive for perfection – it will prevent you from ever finishing anything. – Eva Rosenberg

♦ Did you ever notice that when you put the words “The” and IRS” together, it spells “THEIRS” – Unknown

♦ A tax accountant and a lawyer were laying on a beach in Hawaii sipping mai tai’s. The lawyer started telling the tax accountant how he came to be there. “I had this downtown property in Memphis that caught fire and after the insurance paid off, I came here. “The tax Read More

Written by | Posted in Tax Humor • TaxConnections

Colorado “Amazon Tax” Case To Be Heard By Supreme Court

It is hard to believe we are more than halfway through 2014. What is not surprising is that states continue to battle with online companies, such as Amazon, as to whether it should be required to collect and remit sales tax. States continue with aggressive tactics and continue to look to distribution centers, affiliates, or even hard drives as a hook to establish nexus, which would require the company to collect and remit tax in that state.

In 1992, the Supreme Court of the United States heard a case called Quill v. North Dakota. In announcing the supreme law of the land, the Supreme Court ruled that a company has to have some physical presence in a state to have sales tax nexus. In other words, in order for a state to force a company to charge, collect, and remit its tax then the company has to have a warm body (an employee or independent contractor), or property (inventory) Read More

Written by | Posted in State And Local Tax (SALT)

A Clash of Mammoth Proportions: In One Corner, Switzerland’s Tradition of Bank Secrecy… The Other, FATCA

While the Swiss banking system’s reputation for hiding numbered bank accounts under a cloak of anonymity was once considered sacrosanct, the seal was broken on its banking secrecy back in 2013 when it signed an international agreement with the OECD (Organization for Economic Cooperation and Development) to fight tax evasion. Since then, other international agreements, such as the FATCA, have continued to chip away at the remaining vestiges of bank secrecy deeply ingrained within Swiss culture.

Have these agreements marked the end of bank secrecy in Switzerland? Not necessarily, according to a recent article appearing in the New York Times. The article, entitled Swiss Banks’ Tradition of Secrecy Clashes With Quests Abroad for Disclosure, here, examines the fallout to Swiss bankers who have implemented these anti-tax evasion policies. Read More

Written by | Posted in FATCA • International • Tax Fraud/Evasion/Crimes

The Smart Attorneys Best Friend: A Tax Professional – Part 5

Criminal Investigations (CI)

IRS CI case preparation is an expanding field with the IRS mounting more cases all the time. Tax Professionals should always be under Kovel letter protection when dealing with any type of possible criminal case. (see sample in the appendix) We can assist in the reconstruction of tax records for clients, testimony at a trial on the examination and preparation/amendment of questionable returns, be called as an expert witness, or just do consultations. Any of these will likely result in referral work in the future.

Identity Theft

Tax Professionals can be a great help to the Attorney involved in an Identity theft case. Read More

Written by | Posted in Tax Tips

Taxpayers Rights When Audited By Tax Authorities In South Africa (Chapter 3 – 3.8)

Posted in sections, this is my Doctoral Thesis on taxpayers rights when audited by the tax authorities in South Africa – equally applicable to many English-based law systems in Africa and abroad (eg. India). This will be of particular use to any tax practitioners doing work in Africa and in other English-based legal systems around the world.

Analysis Of Challenging The Commissioner’s Discretionary Powers In Auditing Taxpayers under The Constitution Of The Republic of South Africa

CHAPTER 3 – LIMITATIONS TO INVOKING SECTIONS 74A AND 74B OF THE INCOME TAX ACT

3.8 ‘JUST CAUSE’ DEFENCE Read More

Written by | Posted in Africa • Audit

How To Become A Million Dollar Tax Professional

TaxConnections is the leading tax media site promoting tax professionals online. TaxConnections 3000 tax professional members currently reside in over 75 countries. Last year, 3 Million visitors from 210 countries arrived to www.taxconnections.com to find a tax professional on the site. If you want to attract new clients and reduce your marketing costs to less than two hundred dollars a year, you should move fast and sign up on the site! Tax professionals listed in TaxConnections Worldwide Directory of Tax Professionals are leading in this exciting marketing technology. Founder and CEO, Kat Jennings, believes the site sets the stage for many million dollar a year tax professionals and here is why. Tax professionals now have access to a platform they can upload tax education videos and be paid for their tax expertise for the very first time in history! Read More

Written by | Posted in Tax Education • TaxConnections

OVDP or Streamlined: What Is My Best (Or Only) Option?

Recently, the IRS announced Streamlined Filing Compliance Procedures in order to encourage U.S. taxpayers to come into compliance with reporting their offshore financial accounts and assets.

For eligible U.S. taxpayers residing outside the United States, all penalties are waived under the streamlined procedures. For eligible U.S. taxpayers residing within the United States, the only penalty under the streamlined procedures is a miscellaneous offshore penalty equal to 5 percent of the highest aggregate balance of the taxpayer’s foreign financial assets that are subject to the miscellaneous offshore penalty during the years in the covered tax return period and the covered FBAR period. Read More

Written by | Posted in FBAR • OVDP

Disproportionate Distributions In An S Corporation

Owners of an S Corporation needs to carefully monitor distributions to shareholders to be certain that there are no disproportionate distributions. Failure to make distributions in proportion to ownership interests can void the S Corporation election.

Distributions to shareholders must be made in proportion to the ownership interests of the shareholders or a disproportionate distribution has occurred. For example, if an S Corporation has three shareholders owning 50%, 35% and 15% of the corporate stock, all distributions to shareholders should be in this ratio. These are distributions of profits, if the shareholders are also employees, amounts paid to them in salary are not distributions for this purpose. Read More

Written by | Posted in Corporate

The Smart Attorneys Best Friend: A Tax Professional – Part 4

Other Situations

Bankruptcy

Taxpayer must be compliant with IRS and state by having all back tax returns filed before bankruptcy can be contemplated. Should taxes be included in the bankruptcy is always a question. Can the taxes be included in the bankruptcy is the another question. Timing issues are paramount.

Alternatives to bankruptcy that we can offer include an Offer In Compromise, an Installment Agreement or a Currently Not Collectible request. For non-Tax Specialist Read More

Written by | Posted in Tax Tips
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