Tag Archive for Tax Blog

7 Habitual Mistakes Companies Make – Chapter 5 (23)

TaxConnections Blog Post
More Facts Resolve Tax Risks –
Report to the Audit Committee and a Provision Recommendation –

A TAX EXPOSURE is typically a combination of capital, penalties, and interest. A determination must be made, based on the information available, as to whether there is a tax exposure or whether circumstances exist to mitigate or eliminate the exposure. Based on this determination the amount is either provided for, raised as a contingent liability, or excluded as an exposure.

In reporting to the audit committee , the tax exposure is dependent on the facts of the matter which in turn will dictate the risk. The risk could be classified into three categories, Read More

Written by | Posted in Tax Provision/Tax Reporting • Tax Risk Management

“Dirty Dozen” Tax Scams 2014 – List Released By IRS

The IRS issued its annual “DirtyDozen” list of tax scams, reminding taxpayers to use caution during tax season to protect themselves against a wide range of schemes ranging from identity theft to return preparer fraud.

The Dirty Dozen listing, compiled by the Internal Revenue Service each year, lists a variety of common scams taxpayers can encounter at any point during the year. But many of these schemes peak during filing season as people prepare their tax returns.

“Taxpayers should be on the lookout for tax scams using the IRS name,” said IRS Commissioner John Koskinen. “These schemes jump every year at tax time. Scams can be sophisticated and take many different forms. We urge people to protect themselves Read More

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

North Carolina Department of Revenue Launches Trust Tax Recovery Program

On February 5, 2014, the North Carolina Department of Revenue (the “Department”) began its Trust Tax Recovery Program, which offers amnesty to qualifying companies owing collected but unpaid trust taxes. The Department describes trust taxes as those taxes paid by a customer to a seller or withheld from an employee, and held in trust by the business until filed and paid to the Department. This broad definition encompasses taxes owed on motor vehicle leases and rentals, sales and use taxes, scrap tire and white goods disposal taxes, and certain other withholdings. Also included are use taxes collected on a remote sale to an individual in North Carolina. Use tax liability for certain transactions where tax was not paid to a seller at the time of purchase is not within the definition of trust taxes, as the tax is not the possession of the seller. Read More

Written by | Posted in North America • Sales/Use Tax • Specialty Tax Incentives

Beneficial Ownership Registry for the Cayman Islands is Imminent!

On November 4, 2013, Wayne Panton, the Minister for Financial Services, Commented on the Commencement of Cayman’s Consultation on its G8 Action Plan.

On 31 October, the United Kingdom announced a proposal for a public register of beneficial ownership information, following the results of its public consultation. If implemented, the register conceivably would allow a citizen of any country to access information on the beneficial owners of UK-registered entities.

In the Cayman Islands, we also are assessing our regime on beneficial ownership. In our action plan on the misuse of companies and other legal structures, published immediately following the June G8 Summit, we committed to assess whether a central Read More

Written by | Posted in Caribbean • Europe, Middle East • OECD

Israeli Bank Client Pleads Guilty to Filing False Tax Return

The Latest in a Series of Defendants to be charged on Monday, January 14, 2013 with Concealing Accounts at Israeli Banks was a Beverly Hills resident. We originally posted The Long Arm of the IRS Reaches Israeli Shores – Oy Vey! which discussed that recent Articles about the IRS, FATCA and Israel, are proof that the IRS’ Probe into Secret Offshore Bank Accounts is not just limited to Switzerland.

Now Monajem Hakimijoo, also known as Manny Hakimi, of Beverly Hills, Calif., pleaded guilty on Feb. 13, 2014, in the U.S. District Court for the Central District of California to filing a false federal income tax return for tax year 2007, the Justice Department and Internal Revenue Service (IRS) announced Monday, February 17, 2014. Read More

Written by | Posted in Europe, Middle East • FATCA • FBAR • North America • Tax Fraud/Evasion/Crimes

Who Should Form A Captive Insurance Company?

I’m pleased to announce that, in conjunction with the great people at the TaxConnections website, we’ve published a new book 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 and professionals determine if forming a captive is the right decision for them, I’ve written the “10 questions” one of which is, “Have I started an asset protection plan?”

The phrase “asset protection” is bandied about a great deal. There are websites that claim to provide “asset protection” advice and services, various companies who continually tell us about the importance of asset protection and numerous books that help Read More

Written by | Posted in Tax Risk Management

To Roth Or Not To Roth… That Is The Question

Are you wondering what Hamlet has to do with Individual Retirement Accounts (IRA)? I have an answer for that!! Recently revisiting the Shakespeare play ‘Hamlet’ and listening to the opening of the soliloquy in the “Nunnery Scene”, “To be, or not to be, that is the question–” etc., I wondered how many times we face the same questions albeit in not such dire straits as Hamlet!

The question I get asked most of the time in my practice, is whether to pick a Traditional IRA or a Roth IRA! Let’s quickly touch upon the basics:

Who Can Open A Traditional IRA: According to the IRS’ Pub 590, “You can open and make contributions to a traditional IRA if: Read More

Written by | Posted in Individual • Tax Policy

IRS Warns of Heavy Call Volume and Offers Tips for Faster Answers

The IRS reminded taxpayers the Presidents Day holiday period typically marks one of the busiest weeks of the tax filing season for its phone lines. There are other alternatives to help taxpayers find answers to commonly asked tax questions.  TaxConnections has an “Ask Tax Questions” area of the site where Tax Professional Members reply to anonymous consumer’s tax questions.

The Internal Revenue Service has several easy-to-use, online tools on IRS.gov. Taxpayers can check the status of their refund, request a copy of their tax transcript or get an answer to their tax questions around the clock.

“The entire week of the Presidents Day holiday marks a peak time in the number of calls Read More

Written by | Posted in Income Tax • Individual • IRS

Allowable Nontaxable IRA Rollovers

Contributions Interpreted To Mean One Per Taxpayer Per Tax Year in US Tax Court Case – Bobrow v. Commissioner –

In Bobrow v. Comm’r, T.C. Memo. 2014-21, the Tax Court relied on IRC 408(d)(3)(B) regarding the limits and frequency of nontaxable rollover contributions elected by the taxpayer noting that the one-year limitation addressed in this section of the United States Tax Code applies to all IRAs maintained by the individual taxpayer.

So there you have it, as a result going forward I am now advising United States Taxpayers to engage only one IRA rollover per tax year and to be the absolute safest one rollover every 366 days.

Read More

Written by | Posted in Individual • North America • Specialty Tax Incentives

7 Habitual Mistakes Companies Make – Chapter 5 (22)

TaxConnections Blog Post
More Facts Resolve Tax Risks –
Legal Privilege –

ANY OPINIONS OBTAINED from the outset, before and pursuant to an IRS query, must be protected by legal privilege . This will ensure they do not have to be disclosed to the IRS at all, even if the matter eventually goes to court.

Opinions may contain qualifications or provisos. For example, counsel may arrive at a finding on the assumption of something. If this gets into the IRS’s hands, they could focus on that qualification and misinterpret it entirely.

Taxpayers must make sure to furnish counsel with every last detail in order to avoid such Read More

Written by | Posted in Tax Risk Management

Are Shifts in Business Trends “Sales Tax” Driven?

In mid-January 2014, I came across an article in the Wall Street Journal discussing shopping trends over the holiday season. According to the Journal’s article, As Shoppers Skip the Mall, Stores Search for Fresh Lures, the shift to online shopping and away from the traditional brick-and-mortar was heavily price driven. Of course, other factors contributed such as convenience of shopping online and having a more defined mission when going to the store due to online research. However, the article suggested a “permanent” shift away from store showrooms and more to that of an online marketplace. Is it possible that a perceived sales tax savings is also contributing?

Irrespective of the rationale, the results of this year’s shopping trends analysis was staggering. Courtesy of ShopperTrak, a data firm, stores can monitor foot traffic by the use Read More

Written by | Posted in Sales/Use Tax

Help, I Want to Expatriate, But They Won’t Let Me… Part II

This is a two-part blog post with Part I available HERE.

Renouncing US Citizenship if the Individual is a Minor

“Jus soli” (the law of the soil) is a rule of common law followed by the United States, under which the place of a person’s birth determines his citizenship. In addition to common law, this principle is embodied in the 14th Amendment to the US Constitution which states, in part, that: “All persons born in the United States, and subject to the jurisdiction thereof, are citizens of the United States and of the State wherein they reside.” Citizenship is also determined under various US citizenship and nationality statutes, such as the Immigration and Nationality Act (INA). Read More

Written by | Posted in FATCA • IRS
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