Tag Archive for Tax Blog

Section 482 Enforcement – Primary and Correlative Adjustments

Introduction

In making use of Offshore Financial Centers taxpayers will invariably have a structure of entities that are related taxpayers by virtue of common ownership. Because these related taxpayers engage in transactions among themselves, they present opportunities to shift items of income, deductions, and credits through the process of allocations in accounting for deductible items and income. (See TaxConnections, Introduction to Section 482 and International Financial Centers, April 24, 2014) These types of transactions between related parties are to be regulated to prevent what may be perceived to be abuse and avoidance of tax; Section 482 of the Code is designed to implement that regulation. Read More

Written by | Posted in Corporate • International

Analysis of Notice 2014-33

Treasury released Notice 2014-33 on May 2.  Notice 2014-33 provides aspects of temporary relief for five areas of FATCA compliance:

1. 6 month extension (from July 1, 2014 until December 31, 2014) for characterizing as “pre-existing” the obligations (including accounts) held by an entity
2. soft-enforcement transition period 2014 and 2015 for good-faith actors
3. modification to the “standards of knowledge” for withholding agents under §1.1441-7(b)[1] for accounts documented before July 1, 2014
4. revision to the definition of a “reasonable explanation” of foreign status in §1.1471-3(e)(4)(viii)[2]
5. additional guidance for an FFI (or a branch of an FFI, including a disregarded entity owned Read More

Written by | Posted in FATCA

Taxpayers Rights When Audited By Tax Authorities In South Africa (Chapter 2 – 2.3.2)

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

2.3 A CONSTITUTIONAL BALANCE OF SARS’ POWERS AND THE ‘ADMINISTRATIVE ACTION’ DEBATE

2.3.2 Administrative action Read More

Written by | Posted in Africa • Audit

Tax Professionals Wanted – TaxConnections Pays You For Your Tax Expertise

TaxConnections is growing globally with tax professionals from more than 75 countries who have already joined our site. Our members benefit from the improved visibility of their tax reputation and services online. We have another exciting feature to be released this month that generates revenue for our tax professional members. This month we will release our very first video series on tax provision preparation and our member will be paid 30% in real time whenever someone downloads these videos. (View Intro Video, Full Series Available By May 30th 2014 – Click Here And Then Click On View My Courses And Click On Video)

TaxConnections benefits our tax professional members through the promotion of tax expertise, publications and tax education videos. Our site visitors are willing to pay for immediate access to your tax knowledge and that is precisely why we have created a video Read More

Written by | Posted in TaxConnections

47 Countries Declare GATCA Adoption

GATCA Declaration

47 countries and major financial centers on May 6, 2014 declared am automatic exchange of information between their jurisdictions, announced the OECD.  All 34 OECD member countries, as well as Argentina, Brazil, China, Colombia, Costa Rica, India, Indonesia, Latvia, Lithuania, Malaysia, Saudi Arabia, Singapore and South Africa endorsed the Declaration on Automatic Exchange of Information in Tax Matters that was released at the May 6-7, 2014 Meeting of the OECD at a Ministerial Level.

The Declaration commits countries to implement a new single global standard on automatic exchange of information (“GATCA”).  The OECD stated that it will deliver a Read More

Written by | Posted in FATCA • International • OECD

US Citizens And Permanent Residents Living Abroad

It is quite easy for U.S. Citizens and permanent residents (green card holders) who reside in a country other than the U.S. to either forget or not be aware of their U.S. tax obligations. The rules for filing income, estate and gift tax returns and for paying estimated tax are generally the same even if you do not live in the U.S. Citizens and permanent residents of the US are taxed on their worldwide income. Your income is reportable even if you did not receive a form W-2 or Form 1099. (See Publication 525, Taxable and Nontaxable Income for more information.)

The increased attention by the US government on its overseas citizens might have caught your attention especially with the introduction of the Foreign Accounts Tax Compliance Act (FATCA) in 2010, which targets tax non-compliance by US taxpayers with foreign accounts. Read More

Written by | Posted in FATCA • FBAR • International • OVDP

U.S. Persons And Their Investments In Foreign Corporations

It’s like the popular song from Disney, “It’s a Small World After All”! And it’s getting smaller as we speak! The global entrepreneur is a common phenom. Of course this leads to more tax compliance issues. The tax compliance issues can be solved by hiring a knowledgeable tax professional. To give you an overview of the requirements, here’s some information:

What is Form 5471?: If you are a U.S. person or a resident, and are an officer/ director or shareholder in certain foreign corporations, you have reporting requirements to satisfy Sections 6038 and 6046, and the related regulations. This is done via Form 5471.

Generally all U.S. persons or residents falling under the requirements of the Categories of Filers as specified in the instructions have to file Form 5471. The form has to be attached Read More

Written by | Posted in Corporate • Individual

Taxpayers Rights When Audited By Tax Authorities In South Africa (Chapter 2 – 2.3)

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

2.3 A CONSTITUTIONAL BALANCE OF SARS’ POWERS AND THE ‘ADMINISTRATIVE ACTION’ DEBATE

2.3.1 Introduction Read More

Written by | Posted in Africa • Audit

Should I Stay or Should I Go? – Part 4

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)

V. What years are included in the OVDP disclosure period?

(1) For calendar-year taxpayers: Read More

Written by | Posted in FBAR • OVDP

Will I Owe an “Individual Shared Responsibility Payment” for 2014?

The IRS addressed in its Health Care Tax Tip 2014-04 the question of whether a taxpayer owes an “Individual Shared Responsibility Payment” to be paid with the 2014 tax return filed by April 15, 2015.

Do I owe it? And if so, how much do I owe?

The short answer is that for any month in 2014 that a taxpayer or any of a taxpayer’s dependents do not maintain health care coverage and do not qualify for an exemption from having health care coverage, then the taxpayer will owe an “individual shared responsibility payment” with your 2014 tax return filed in 2015.

What is the “less than three-month gap” exemption/exception?

Read More

Written by | Posted in Affordable Healthcare Act • Income Tax • Individual

Form 5500 Pension Plan Penalty Filing Relief

For those of you like me presently wrestling with this issue the IRS recently came out with the following:

Revenue Procedure 2014-32 establishes a one-year pilot program to provide relief to plan administrators who fail to timely file Form 5500 EZ.

Revenue Procedure 2014-32 will be published in Internal Revenue Bulletin 2014-23 on June 2, 2014.

Notice 2014-35 applies administrative relief to late filers of Form 5500 who satisfy the requirements of this notice and the Delinquent Filer Voluntary Compliance (“DFVC”) Program administered by the Department of Labor (“DOL”) Employee Benefits Security Read More

Written by | Posted in IRS

House Votes To Reinstate The Research And Experimentation Tax Credit

On Friday, May 9th The U.S. House of Representatives voted 274-131 to reinstate the Research and Experimentation Tax Credit (hereinafter “RTC”) under § 41 of the Code which recently expired on December 31, 2013.

As a background, the RTC was first enacted in 1981 into the Code as a temporary provision at a time when research and development based jobs were alarmingly declining throughout the United States (hereinafter “U.S.”) due to U.S. based companies moving these jobs overseas. Lawmakers stated the lapse-and-revive cycle of the past 33 years has prevented companies from relying on it and thwarted its incentive effect. “Businesses can’t grow and invest when the tax code is riddled with instability and uncertainty,” Ways and Means Committee Chairman Dave Camp, a Michigan Republican, proclaimed on the House floor Read More

Written by | Posted in Federal • R&D Credit Services
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