Tag Archive for Tax Blog

OVDP — IRS Commissioner Offers Hope For The Minnow

On June 3, 2014 the new IRS Commissioner, John A. Koskinen indicated there may be hope for the numerous US persons who “non-wilfully” did not properly report their offshore assets and financial accounts. The relevant text of his remarks, is reproduced below. The full report can be accessed here. Maybe there is hope for the sea of minnows! Let’s stay tuned. I will be curious to know whether the contemplated “modifications” to the OVDP will address recompense for those taxpayers who have completed OVDP and paid the penalties now viewed as inappropriate.

“Now, while the 2012 OVDP and its predecessors have operated successfully, we are currently considering making further program modifications to accomplish even more. We are considering whether our voluntary programs have been too focused on those willfully Read More

Written by | Posted in FATCA • FBAR • OVDP

Taxpayers Rights When Audited By Tax Authorities In South Africa (Chapter 3 – 3.1)

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

3.1 THE STATUTORY PROVISIONS: SS 74A, 74B, 74 and 75 Read More

Written by | Posted in Africa • Audit

The Unknown Tax Comic – Part 1

♦ “65% of people say that cheating on your income tax is worse than cheating on your spouse. The other 35% were women.” (Jay Leno)

♦ When does a person decide to become a tax accountant?
When he realizes that he doesn’t have the charisma to become an undertaker.

♦ Why did the tax accountant cross the road?
To bore the people on the other side.

♦ What does a tax accountant use for birth control?
His personality. Read More

Written by | Posted in Tax Humor • TaxConnections

IRS Contemplates Reduced Penalties For Non-Willful Taxpayers With Unreported Offshore Accounts

After serving as IRS Commissioner for only a few months, John Koskinen offers hope for taxpayers with unreported offshore accounts. As the next phase of the Foreign Account Tax Compliance Act (FATCA) begins in July, in which foreign financial institutions will begin reporting information about their U.S. account holders, practitioners have questioned the fate of the IRS’ Offshore Voluntary Disclosure Program (OVDP). After all, once the banks start disclosing information, how can a taxpayer voluntarily disclose the same information and receive protections under OVDP?

One of the largest hurdles for many taxpayers is the harsh penalty structure of OVDP, particularly for those who were unaware of their reporting requirements, or in some cases, were unaware of accounts opened in their names. While most agree that true tax Read More

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

Should Schools And Students Pay Sales Tax (or VAT)?

It might seem odd for a state school or any government agency to pay taxes. Generally, they are exempt from income and property taxes, but likely pay sales tax (or VAT if outside the US) on purchases. Students of the state schools also pay sales tax on taxable items they purchase from the school bookstore or for their education (such as books).

Isn’t this just a roundabout way for the state to be paying tax to itself? Would it be more efficient to exempt purchases of state schools and agencies from sales tax?

What reminded me of this issue was an article about a bill (HB 4165) introduced in Singapore to create a VAT exemption for goods and services purchased from schools. [“Bill filed to exempt goods sold in schools from VAT,” by Miranda, Business World Online, Read More

Written by | Posted in Sales/Use Tax • VAT

11 Disclosure Issues To Consider When Selling Your Practice

Start With A Tight NDA

As many of you know who follow this blog I also currently serve in a voluntary capacity as the President of the Colorado Society of Enrolled Agents, a state affiliate chapter of the National Association of Enrolled Agents. In this capacity I have been blessed with the opportunity to connect with many different tax practitioners all over this amazing planet of ours and have grown to be quite intrigued by the professional life cycles of people motivated by this kind of work.

One particular person looking to sell her most valuable book of business asked whether she should go through the exercise of getting each existing client to sign an intent to Read More

Written by | Posted in Tax Tips

Distributions From Canadian Trusts Or Estates To Foreign Beneficiaries Can Entail Tax Notification And Clearance Requirements

In certain cases, a distribution of capital by a trust(1) to a non-resident beneficiary will bring into play certain notification and tax clearance requirements found in subsection 116.

As a general rule, a distribution of capital by a trust to a beneficiary is considered a “disposition” by that beneficiary of all or a portion of that beneficiary’s capital interest in the trust(2).

If the interest of the beneficiary is “taxable Canadian property” (“TCP”), the beneficiary will be required to send a notification of such disposition to the Canada Revenue Agency (“CRA”) within 10 days after the disposition(3). In addition, the CRA takes the position that the trust itself can be liable for tax, in such circumstances, if a tax clearance is not Read More

Written by | Posted in Estate Planning Tax • Income Tax • Individual

Should I Stay or Should I Go? – Part 13

Answers to the Most Frequently Asked Questions Regarding OVDP

As a tax attorney specializing in the Offshore Voluntary Disclosure Program (OVDP), nary a day goes by that I don’t get a call from a person inquiring about the OVDP. The questions asked are relatively the same. After a while, I began to make a list of the most frequently asked questions. Below are my answers to them: (continued)

XVII. If I transferred funds from one unreported foreign account to another during the voluntary disclosure period, will I have to pay a 27.5 percent offshore penalty on both accounts?

No. If you can establish that funds were transferred from one account to another, you will Read More

Written by | Posted in FBAR • OVDP

A Practical Guide To The Department of Treasury’s Amendment To Utilize The Alternative Simplified Credit Methodology On Amended Tax Returns

Introduction

On June 2, 2014, The Department of Treasury released for publication in the Federal Register both Temporary Treasury Regulations (T.D. 9666) and Proposed Treasury Regulations (REG-133495-13) in connection to the Alternative Simplified Credit (hereinafter “ASC”) methodology for purposes of the Research and Experimentation Tax Credit (hereinafter “RTC”). These revised Treasury Regulations represent a true paradigm shift from the previously issued set of Final Treasury Regulations which only allowed companies to take the RTC utilizing the ASC on originally filed tax returns.

Synopsis

Read More

Written by | Posted in Treasury Regulations

What Is A US Tax Court Practitioner?

Recently I had a discussion with an individual about US Tax Court Practitioners in order to learn about this designation. What I discovered was this category of Court Practitioner was created to allow special dispensation to Non-US Lawyers (such as Enrolled Agents, CPAs and International Tax Attorneys) to gain access to the US Tax Court to represent taxpayers. As a member of the US Tax Court, US Tax Court Practitioners have the ability to litigate matters before the US Tax Court on behalf of their taxpayer clients. In order to qualify as a US Tax Court Practitioner you must pass a very difficult US Tax Court Bar Exam set by the Judges of the US Tax Court which takes place once every second year. What is not generally known is that since its inception in 1942, less than 300 US Tax Court Practitioners have ever passed and qualified to be admitted as a US Tax Court Read More

Written by | Posted in TaxConnections • Treasury Regulations • United States

CPA Mindset of Prosperity Leads To Success

A prosperous mindset encourages day-to-day thoughts and actions that foster the attitude of financial success. We all aspire to be successful in our practices and live the good life! Practitioners who want to surround themselves with other positive-minded CPAs will be able to do so in Chicago, Illinois from June 20-22th, 2014 at the 5th Annual CPA Practice and Financial Freedom Super Conference. The Keynote Speaker at the Conference is Mark Victor Hansen who is best known as the co-author of Chicken Soup for the Soul series and over 500 Million books sold. The Conference is hosted by CPA Marketing Genius, Salim Omar, CPA who will teach attendees the “Anatomy of Scaling A Practice From Zero To Six Figures Per Month In Three Years”.

Also, learn from Dr. Steven Rasner who brings a fresh voice to the CPA industry on how he Read More

Written by | Posted in Tax Tips

Roth Contributions: Limits To Remember

Who was William Victor “Bill” Roth, Jr? He was the legislative sponsor of the Individual Retirement Account plan that now bears his name, he was also famous for his toupee, he supposedly had “the grace of a stick figure”, and most importantly, he had a succession of Saint Bernard dogs throughout his 34 years of politics and it sort of became his trademark.

Besides his obvious love of St. Bernards, he was a lawyer by profession and started his political career in the late 1960s in Delaware. He was elected to the United States House of Representatives and was known to be fiscally conservative. He was the co-author of the Kemp-Roth Tax Cut. The Roth IRA has been in existence since 1998. And the Roth 401(k) since 2006. Read More

Written by | Posted in Individual • Retirement
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