Tag Archive for Tax Blog

Your Swiss Bank Info Is Being Transferred To The US Government As We Speak! … This Is Not An April Fools Joke!

We originally posted Tuesday, January 28, 2014 “Offshore Swiss Bank Account? This May Be Your Last Chance To File A Voluntary Disclosure!,” where we discussed that The United States Justice Department has received 106 requests from Swiss entities to participate in a settlement program aimed at ending a long-running probe of tax-dodging by Americans using Swiss bank accounts according to a senior US official.

On August 29, 2013, we previously posted “Swiss Banks Agree to Plan to End Past US Tax Evasion Issues!“, where we discussed that Swiss banks were ready to pay hefty fines for sheltering United States tax fugitives under the terms of a new deal given the green light by the Swiss government. Read More

Written by | Posted in IRS • OVDP

Tax Professionals Gain Global Clients The Easy Way

There are tax professionals who work very hard and there are tax professionals who work very hard and smart! The ones who work very hard and smart are often those who are curious to discover efficient new ways of promoting tax services. What you are about to learn is what thousands of curious tax professionals have already discovered utilizing our innovative marketing technology! We are going to teach you how to catapult your tax reputation way out in front of 247,000 Million pages of tax professionals online. You will learn how to gain global clients in a way that was never possible before our innovative technology made it so!

An email came across my desk this week that I want to share because this what is happening daily in TaxConnections Worldwide Directory of Tax Professionals.
Claire McNamara, Principal, Dublin, Ireland sent us this message: Read More

Written by | Posted in TaxConnections

VAT Consequences For I.T. Companies In Ireland – Part III

From 1 January 2015, supplies of telecommunications, broadcasting and electronically supplied services made by EU suppliers to private, non-taxable individuals and non-business customers will be liable to VAT in the customer’s Member State.

The current place of supply/taxation is where the supplier is located, but from 1st January 2015 this will move to the place of consumption or the place where the consumer normally resides or is established.

Suppliers of such services will need to determine where their customers are established or where they usually reside. They will need to account for VAT at the rate applicable in that Member State. This is a requirement regardless of the E.U. state in which the Supplier is Read More

Written by | Posted in Europe, Middle East • VAT

Is Paying Sales Tax Online Avoidable?

It is difficult these days to read an article about sales tax without coming across issues with online companies such as Amazon. For those of you that do not spend most of your day hunting down interesting sales tax articles, please just take my word for it. In fact, before Congress right now is an attempt to nationalize sales tax collection by passing a law known as the Marketplace Fairness Act (MFA). This law would essentially cause most online retailers, like Amazon, to collect tax in every jurisdiction to which they sell. Not surprisingly, and despite the literally thousands of articles discussing the MFA and online sales tax collection, most consumers and many commentators still are not understanding how a sales tax works.

By way of background and for review for many of you, a sales and use tax work Read More

Written by | Posted in Sales/Use Tax

Retirement Plan Recharacterization – Part III

Lessons I’ve Learned

The following are some important lessons I’ve learned in defending (and preparing) tax returns for people who engaged this concept of recharacterization:

1. Generally, both the election to recharacterize and the transfer must take place on or before the due date for filing the tax return for the year for which the contribution or conversion was made to the first IRA.

2. To add even more salt to the water special procedures are available that allow someone who has already filed a timely tax return to recharacterize contributions for up to six months after his or her tax return’s due date exclusive of extensions. Read More

Written by | Posted in Retirement

IRS Targets Americans Living In Israel!

According to Jewish Daily Forward, this upcoming tax season could entail some unpleasant surprises for United States citizens who either live in Israel or who hold bank accounts there.

Filing requirements for these Americans have become more rigorous and the odds of being audited by the Internal Revenue Service are higher than they’ve ever been. In fact, tax accountants working in Israel estimate that almost every American expatriate living in Israel and filing for a child tax credit in their annual return can expect an audit.

“I’ve seen more audits in the past year or two than I’ve seen in the previous 30 years combined,” said Philip Stein, an American CPA working in Israel. “It created a difficult atmosphere both for honest tax preparers and for honest families filing their returns.” Read More

Written by | Posted in Europe, Middle East • Expatriate • IRS

Retirement Plan Recharacterization – Part II

Transfer of Allocable Earnings

One of the more difficult aspects of recharacterization for taxpayers to pick up on is the fact that if you recharacterizes a contribution or a Roth IRA conversion amount you must include in the transfer any earnings allocable to the contribution or conversion being recharacterized according to Reg. Sec. 1.408A-5.

If you recharacterize a contribution you must include in the transfer any earnings allocable to the contribution. If there was a loss, the amount transferred must be reduced by the amount of the loss. In most cases, the amount of the earnings that needs to be transferred is determined by the IRA trustee or custodian. Read More

Written by | Posted in Retirement

Own Your Own Insurance Company

In conjunction with the great people at TaxConnections, we’ve published a new eBook on captive insurance titled “Who Should Form a Captive Insurance Company?”. You can buy a copy HERE. Cost: $4.98.

To help potential captive owners determine if they should form a captive, I’ve written the “10 questions,” one of which is:

Am I able to actually negotiate the coverage terms with my current insurance carrier, or, do they hand me a policy to sign?

Read More

Written by | Posted in Tax Risk Management • TaxConnections

VAT Consequences For I.T. Companies In Ireland – Part II

When we talk about “electronically supplied services” we mean:

• Website supply, web hosting, distance programme and equipment maintenance.

• Software supply and upgrades.

• Supply of distance teaching.

• Supply of film, games and music.

• Supply of artistic, cultural, political, scientific and sporting as well as entertainment broadcasts and events. Read More

Written by | Posted in Europe, Middle East • VAT

Senate Misses The Boat – US High Taxes Force Businesses To Other Countries

Congress is focusing, once again, on businesses that have used smart planning in order to avoid the excessive United States corporate and personal tax rates as well as the extremely complex compliance costs. Instead of focusing on how to lower US taxes and make tax compliance easier and less expensive, the US Senate is now picking on Caterpillar as a so-called “tax dodge”.

The US has extremely high corporate tax rates of 35%. This means if a corporation makes a $100 profit, it pays $35 federal tax (plus State tax which could be 10% or higher). The remaining money when distributed to the shareholders gets taxed again at the shareholders rate which could be up to 39 1/2% plus State tax. So for example $100 of earnings would be $35 of federal tax, $10 of State tax leaving $55. The $55 would be taxed Read More

Written by | Posted in Corporate

7 Habitual Mistakes Companies Make – Chapter 8 (2)

TaxConnections Blog Post
The Protectors for Big Business –
SOX 404

THE SARBANES-OXLEY ACT was promulgated in the USA on July 30, 2002, primarily in response to the major corporate and accounting scandals in the USA such as Enron , Tyco International , Peregrine Systems, and WorldCom . Sarbanes-Oxley (also known as SOX or Sarbox) was promulgated to restore investor confidence in the reliability of the information provided by companies trading their stocks on USA stock exchanges.

SOX 404, which is an acronym for Sarbanes-Oxley Act , 2002 section 404, states, Read More

Written by | Posted in Tax Risk Management

Guidance On Taxation of Virtual Currency

There are tax consequences of mining Bitcoin, investing in it or using it to buy or sell goods or services. Prior to the Internal Revenue Service’s release of Notice 2014-21 this week (3/25/14), we didn’t know whether the IRS would treat a virtual currency as currency or property. The IRS has now said – treat it as property. [IRS Information Release IR-2014-36 and Notice 2014-21]

I think that is a good answer. After all, Bitcoin and other virtual currencies are not used as the currency of any government and generally, are convertible to a currency of a government. For example, you can buy Bitcoin with U.S. dollars and convert it back to U.S. dollars. Read More

Written by | Posted in International • Tax Tips
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