Tag Archive for Tax Blog

Offshore Financial Centers and Legal Risk of Arbitration Agreements

Introduction –

Offshore Financial Centers are an integral part of our global economy. The international community has often not understood their function. It has had an unfounded apprehension of their participation in the erosion of the developed economies tax base.

The global competitive marketplace has emphasized the craving for cost reduction and Offshore Financial Centers have attempted to accommodate this appetite through deregulated business environment and attractive tax regimes. The world’s Offshore Financial Centers and Tax Havens have tailored their legislation to suit all of these marketplace demands. Read More

Written by | Posted in Corporate • International

Tax Implications of Installment Sales

It seems more and more taxpayers are finding themselves compelled to engage in a structured installment sale of closely held business assets or rental real estate and I couldn’t help but notice that there are some common misconceptions about the associated tax implications, particularly if ‘related parties’ are involved in a transaction. So this is what I am telling people:

• Report installment sales on IRS Form 6252
• Report interest from installment sales on Schedule B
• Report capital gains from installment sales on Schedule D
• For more details refer to IRS Publication 537 or IRC 453 Read More

Written by | Posted in Property Tax • Real Estate

Employment Taxes And The Self-Employed Global Worker – So “Un”Happy Together – Part I (2)

I. Domestic Administration of Social Security Taxation and the Scope of International Coordination – continued
a. The First Aspect: Contributions

Social security contributions are imposed as a tax via the Internal Revenue Code (Code) and collected by the Department of Treasury through the Service. Two statutes apply. With respect to employers and their employees, the Federal Insurance Contributions Act (FICA) applies. With respect to self-employed persons, the Self Employment Contributions Act (SECA) applies. Under FICA, employers and employees contribute to social security based on wages paid. Under SECA, contributions are based on self-employment income received. Read More

Written by | Posted in International

Report to Congress: Credit Suisse Helps US Taxpayers Hide Billions in Offshore Accounts!

Permanent Subcommittee on Investigations (PSI) of the United States Senate held a hearing, “Offshore Tax Evasion: The Effort to Collect Unpaid Taxes on Billions in Hidden Offshore Accounts,” on Wednesday, February 26, 2014, in Room G-50 of the Dirksen Senate Office Building.

The PSI hearing on February 26 is for the stated purpose of continuing the PSI’s examination of tax haven bank facilitation of U.S. tax evasion, focusing on the status of efforts to hold Swiss banks and their U.S. clients accountable for unpaid taxes on billions of dollars in hidden assets. Witnesses include representatives from Credit Suisse and the U.S. Department of Justice. Read More

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

How To Succeed In Cross-Border Merger And Acquisition Deals In China

Foreign direct investments have been increasing for the past few decades.

According to Baker & McKenzie for multinational companies venturing into China through Mergers and Acquisitions there are eight essentials that these companies need to be aware of in order to succeed.  They are as follows:

1. Knowing your China counter-party
2. Conducting deep due diligence
3. Structuring the deal
4. Navigating government approvals
5. Satisfying valuation requirements Read More

Written by | Posted in Asia • Corporate • Mergers And Acquisitions

7 Habitual Mistakes Companies Make – Chapter 6 (3)

TaxConnections Blog Post
Internal Audits Fix Financial Accounting Problems –
Internal Auditors

QUESTION: “WHAT ARE they doing, and what are they focusing on?” Tax is usually not high on the agenda. “Why not?” Because this area of risk is not being emphasized enough. “Why not?” The board of directors has not given it priority. The audit committee is not pushing for tax transparency, and so the BO/CFO does not have a pressure point to deal with and will cover it when it becomes a priority, usually as part of crisis management. The tax problems are what they are. If they are serious enough, they will emerge in good time, and the business can deal with the consequences at that point in time. Other priorities have been placed on the internal auditors ‘ plates such as fraud in its Read More

Written by | Posted in Tax Risk Management

Grouping Elections – One Time Only, Again

TaxConnections Tax Blog Post - Statute of Limitations on Tax Evasion

The Internal Revenue Service is once again allowing a one-time opportunity to examine and modify your grouping elections. This has happened a few times now, but this time there is a compelling reason. One of the new tax laws is a 3.8% tax on investment income which also applies to passive income. One of the key ways to manage your passive income is through grouping elections. So now taxpayers have a motivation to avoid passive income, where in the past it was often times advantageous to be generating passive income.

This one-time opportunity is available either in 2013 or 2014, but it is the 2013 tax filing season so people should definitely take a look at it now. The active and passive rules are very complicated and nuanced, but at a basic level you need to prove you spent enough Read More

Written by | Posted in Income Tax • Individual • IRS

IRS Criminal Investigation Issues Annual Report

On Tuesday, February 25, 2014, the Internal Revenue Service announced the release of its IRS Criminal Investigation (CI) Annual Report for fiscal year 2013, reflecting significant increases in enforcement actions against tax criminals and a robust rise in convictions, including identity theft.

CI investigates potential criminal violations of the Internal Revenue Code and related financial crimes in a manner to foster confidence in the tax system and compliance with the law.

High points of fiscal year 2013 include:

• a 12.5 percent increase in investigations initiated compared to the prior year. Read More

Written by | Posted in IRS

TaxConnections Launches License Verification Toolkit For CPA, State Law and Enrolled Agent Licenses!

TaxConnections is pleased to announce the License Verification Toolkit, a FREE resource that allows users to look up CPA Licenses, State Law Licenses and Enrolled Agent Licenses. You no longer need to spend hours researching the credential verification of your CPA, EA or Tax Lawyer. TaxConnections has done the research for you to quickly and easily identify and verify your tax professionals licenses.

The “Verify a Certified Public Accountant (CPA) License Map” provides an interactive map of the United States with the specifics to check the CPA credentials of any Tax Advisor you retain. The “Verify a State Law License Map” enables you to verify the state tax law license of any Tax Lawyer. Last but not least, the “Verify an Enrolled Agent License” verifies the EA License of most tax professionals who have represented taxpayers by either passing a Read More

Written by | Posted in Individual • Tax Tips • TaxConnections

Staying With The Trend For The Tax Function

The “Buzz Words” these days for the in-house Tax Function are:

• Transformation
• Value Creation
• Tax/Business Strategic Alignment
• Business Partnering
• Risk Management/No Surprises

Transformation of the Tax Function – The Whys, What’s and How’s

Why does the Tax Function need transformation? Read More
Written by | Posted in Tax Provision/Tax Reporting • Tax Risk Management • Tax Tips

Casualties Involving Law Violations

This article is a follow-up to my previous article “Casualties” on casualty loss deductions in which I set forth the nature of a casualty, qualifying events, how to determine the amount of the loss, and the allowable deduction.

[This case was reported in J.K. Lasser’s Monthly Tax Letter, February, 2014].

Taxpayers built two homes but did not obtain the necessary building permits because they wanted to live without government interference. Several years later, the homes were destroyed by a fire and the taxpayers claimed a casualty loss in the year of destruction. [Note: the article did not say when this occurred].

The IRS disallowed the loss on the grounds that the taxpayers did not comply with state Read More

Written by | Posted in Real Estate • Tax Policy
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