Tag Archive for Tax Blog

Employment Taxes And The Self-Employed Global Worker – So “Un”Happy Together – Part I (1)

Domestic Administration of Social Security Taxation and the Scope of International Coordination –

The United States social security program consists of benefits collected from taxes on employers, employees, and the self-employed, and distributions paid out to retired workers and their dependents and survivors. There are three aspects of the United States social security program. First, social security contributions are collected from current workers based on their current earnings. Second, social security benefits are calculated based on past contributions and paid to currently retired or disabled workers out of the funds contributed by current workers. And third, social security benefits received may be subject to income taxation, depending on the taxpayer’s status. Read More

Written by | Posted in International

7 Habitual Mistakes Companies Make – Chapter 6 (2)

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

CHAPTERS 1 TO 5 have taken the tax risk management process from a proactive one through a tax team creating a Tax Risk Management strategy and then ensuring that the tax manager gets outside input and more facts.

Chapter 6 deals with Tax Risk Management Step 6.

Financial accounting supplies the numbers on which tax compliance is based. Simply relying on these numbers, as is usually the case with most tax managers, is not enough by a long shot. Internal audit procedures must be expanded to self-audit the higher tax risk Read More

Written by | Posted in Tax Risk Management

IRS Issues Criminal Investigation Report

Investigations, Prosecutions and Convictions are up, while Agent Resources were Cut

The Internal Revenue Service released its annual Criminal Investigation report today concerning fiscal year 2013. The Criminal Investigation Division initiated over 5,000 cases and recommended over 4,300 for prosecution; the conviction rate of those cases prosecuted was 93 percent. This is particularly impressive since the Internal Revenue Service agent resources decreased by over five percent. Identity theft was a key area of focus for the Criminal Investigation Division.

For more information, view the IRS Press Release. Read More

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

Senate Finance Committee Blank Slate Project 2013 – Senator Rockefeller’s Suggestions

Evaluation of Senator Suggestions for the Blank Slate Project

As noted in my 9/9/13 post, I’m going to summarize and analyze proposals senators offered to the Senate Finance Committee, and that the senator made public. Despite falling behind on my project, as tax reform likely heats up in 2014, I’m back at it as I’d like to look at and share what might be a broader array of proposals and issues. In no particular order, the second set of suggestions I’m commenting on are from Senator Rockefeller (D-WV) (7/26/13 letter). Senator Rockefeller is a member of the Senate Finance Committee.

Read More

Written by | Posted in Capital Gains • Federal • Gift Tax • Income Tax • OECD

Who Should Form A Captive Insurance Company? Part II

In conjunction with the great people at the TaxConnections website, 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.

Part II – A captive insurance company is often a key piece of a larger puzzle assembled for clients. For example, not only is a captive a great way to limit the impact of “stochastic risk” or provide more effective asset protection (see last week’s post), it can also be incorporated into an estate plan. Therefore, one of the key questions to ask when looking at forming a captive insurance company is, “have I started to put together an estate plan?”

Estate planning is the process by which an attorney and his client: Read More

Written by | Posted in Tax Risk Management

Is it Finally Time to Cost Segregate?

Cost Segregation studies have been around as long as there has been depreciation.  Admittedly, I have no idea if that is true or not, but as long as I have been doing taxes there have been cost segregation studies.  A cost segregation study looks at a building or piece of property and breaks it down into the different parts of that building so you can make sure you are claiming the right amount of depreciation.  There are a bunch of engineering firms around that will help with this.  You as a business owner and me as your accountant don’t have any expertise in determining which percentage of the building costs are allocated to movable fixtures; that’s why you hire an engineer.

Depending on what type of building it is, the results from a cost segregation study can vary.  Generally you will find that some of the building should be 5 year property, some Read More

Written by | Posted in Corporate • Real Estate

PFICs – A Fairytale Definition; Lives Happily Ever After

What is a PFIC?

A PFIC is a so-called “Passive Foreign Investment Company” which is defined to include any foreign (non-US) corporation if 75% or more of its gross income for the year consists of “passive income” (“income test”), or (2) at least 50% of the average fair market value of its assets during the year are assets that produce or are held for the production of passive income (“asset test”). Passive income generally includes dividends, interest, rents, royalties, most foreign currency and commodity gains, and capital gains from assets that produce such income. As pointed out in my earlier tax blog post just about all of the income of a foreign fund will usually qualify as passive and so, nearly all foreign funds will qualify as PFICs. Read More

Written by | Posted in Corporate • Income Tax • Tax Provision/Tax Reporting

7 Habitual Mistakes Companies Make – Chapter 6 (1)

TaxConnections Blog Post
Internal Audits Fix Financial Accounting Problems –
Executive Summary –

MANY BUSINESSES PUT their blind faith in reactive reporting by their auditors or accountants and expect that their tax manager through the route of normal tax compliance will resolve all tax risks. In the difficult regulatory environment that taxpayers operate in, this is not a prudent tax risk management strategy. Businesses need to have their own internal control and check mechanisms. The tax team that has been formed will also assist in performing internal audits associated with tax risk management. They must be privy to all information, subject to legal privilege, in order to identify, analyze, and solve tax risks effectively, such as accounting provisions, for instance. The tax team, with internal Read More

Written by | Posted in Tax Risk Management

Additional FATCA Guidance Submitted For Publication

Regulations revising and further clarifying the final FATCA (Foreign Account Tax Compliance Act) regulations under Chapter 4 have been submitted to the Office of the Federal Register for publication.

Regulations to coordinate the FATCA regulations under Chapter 4 with the withholding and information reporting rules under Chapters 3 and 61, and Section 3406 have also been submitted to the Office of the Federal Register for publication.

DISCLAIMER: This guidance has been submitted to the Office of the Federal Register (OFR) for publication and is currently pending placement on public display at the OFR and publication in the Federal Register. The version of the regulations released today Read More

Written by | Posted in FATCA

IRS Releases Transfer Pricing Audit Roadmap

Transfer pricing audit is getting a momentum and is being perceived as a big weapon in the hands of the Internal Revenue Service for the adjustments. IRC 482 gives immense powers to the IRS for adjusting income, credits and deductions of a taxpayer where it finds that a revenue is lost due to the related party transactions that were not conducted on arm’s length standard.

The IRS’s Large Business and International division has released a roadmap providing detailed guidance on transfer audits, including audit techniques and tools to assist with transfer pricing exams, as well as an estimated timeline for the exam, insights as to how the exams will be conducted, and tips for upfront planning. Read More

Written by | Posted in Audit • IRS • Transfer Pricing

The United States Knows Where Offshore Tax Evaders Live And Bank!

The United States is tracking down hidden offshore accounts, and the latest news is a report that shows which states have the most taxpayers disclosing such accounts (California is No. 1), and where they are located (Switzerland is tops).

Taxpayers in at least 45 states and the District of Columbia reported accounts in 68 countries and territories.

The new U.S. Government Accountability Office report: “IRS’s Offshore Voluntary Disclosure Program (OVDP): 2009 Participation by State and Location of Foreign Bank Accounts,” is a supplement to its March 2013 report, “Offshore Tax Evasion: IRS Has Collected Billions of Dollars, but May be Missing Continued Evasion.” Read More

Written by | Posted in International • IRS • OVDP • Tax Fraud/Evasion/Crimes
« Older Entries   Recent Entries »