Tag Archive for Tax Blog

State Income Tax Filing Post-Windsor

The United States Supreme Court’s June 2013 ruling in Windsor held that Section 3 of the Defense of Marriage Act (DOMA) was unconstitutional. The Internal Revenue Service soon thereafter, issued Revenue Ruling 2013-17 holding that a couple married in any jurisdiction allowed to confer marriage status would be considered married even if they live in a state that does not view them as married (that is, it would interpret marriage using a state of celebration approach rather than a state of domicile approach). That makes sense in that otherwise, the federal government would continue to treat some marriages as unequal to others.

So, how do same-sex married couples file their state tax return if they live in a state that doesn’t treat them as married? It depends. Read More

Written by | Posted in Income Tax • Same Sex Couples

Changes Affecting 2013 Income Tax Returns

1. Standard deduction.

a. regular: $6,100 single and married filing separate; $8,950 head of household; $12,200 married filing joint and qualifying widow(er) [can use married joint tax rates for two years after year of spouse’s death but-must have dependent child living with you]. Taxpayer on their own return if claimed as a dependent by another taxpayer: greater of $1,000 or $350 plus earned income.

b. Additional (age 65 or over or blind): $1,500 single, married filing separate, and head of household; $1,200 married filing joint and qualifying widow(er).

2. Personal (taxpayer and spouse) and dependency exemptions: $3,900 each but Read More

Written by | Posted in Income Tax

OECD Releases New Global Common Reporting Standard for Exchange of Tax Info!

The Organization for Economic Cooperation and Development released a new single global common reporting standard for the automatic exchange of information between tax authorities worldwide, intended to help fight cross-border tax evasion.

This document was approved and declassified by the Committee on Fiscal Affairs (“CFA”) on 17 January, 2014 and contains the global standard for automatic exchange of financial account information. It has been developed by the OECD, working with G20 countries, and in close co-operation with the EU.

• Part I contains the introduction to the standard and

• Part II contains the text of the Model Competent Authority Agreement (CAA) and the Read More

Written by | Posted in OECD

Contemporaneous Charitable Contribution Documentation

It’s tax time again and as you are gathering your receipts and documentation I feel compelled to mention Contemporaneous Charitable Contribution Documentation.  That is quite a mouthful, but if you want to survive your Internal Revenue Service audit, you should keep reading.  The IRS requires you to keep documentation of the things you claim on your tax return – the income and the expenses. That part generally makes sense, but the rules can get very specific for charitable contributions.

For cash contributions of more than $250 you need to follow the rules exactly and they are different than the rules for contributions of less than $250. For that $50 donation to United Way, a copy of the check will be just fine. But if you give a $500 check to the United Way, a copy of the check is not going to cut it. That’s where the contemporaneous charitable Read More

Written by | Posted in Individual

US Signed 22 FATCA Agreements – Unimpeded By Republicans!

The United States Treasury Department announced February 5, 2014 that Canada and Hungary will implement the Foreign Account Tax Compliance Act (FATCA), in an effort to discourage offshore tax evasion.

The Republican National Committee recently voted to call for the repeal of FATCA and plans to make it a campaign issue this year (see FATCA Implementation Unimpeded by Republicans!)

In an effort to alleviate the concerns of foreign governments about their own bank secrecy laws, the Treasury Department has been negotiating a series of intergovernmental agreements under which it also agrees to share information about their citizens and Read More

Written by | Posted in FATCA

New Reporting Obligations For Trustee And/Or Beneficiaries Related To Italians

The Milan law firm of Belluzo & Partners explain the new rule requiring Italian tax residents to disclose all assets held by a foreign trust of which they are a beneficial owner, regardless of the trust’s place of residence.

The rule, announced in Circular 38/E of 23 December 2013, takes effect in the 2013 tax year, and the deadline for reporting is 30 September 2014.

Such requirement holds for the “beneficial owner” of the assets located abroad and held directly or through companies, trusts and/or other arrangements (i.e. insurance wrappers).

The requirement refers to resident individuals and assimilated noncommercial entities Read More

Written by | Posted in Tax Provision/Tax Reporting

Department of Treasury Issues Final Treasury Regulations Governing Employee Health Care Coverage

The Department of Treasury recently issued final treasury regulations (T.D. 9655 (2/12/14)) governing the implementation of the shared responsibility provisions for employee health care coverage required under I.R.C. § 4980H, as enacted by the Affordable Care Act. Pursuant to the employer shared responsibility provisions, if employers to whom the rules apply do not offer affordable health coverage that provides a minimum level of coverage to their full-time employees and their dependents, the employer may be subject to an employer shared responsibility payment if at least one of its full-time employees receives a premium tax credit for purchasing individual coverage on one of the new Affordable Insurance Exchanges (e.g., Health Insurance Marketplace).

The employer shared responsibility provisions apply to employers that have 50 or more Read More

Written by | Posted in Affordable Healthcare Act • Federal • IRS

Video of IRS Commissioner Koskinen On The Filing Season

Want to meet the new Internal Revenue Service Commissioner, John Koskinen? He has a YouTube video about the filing season. He even tells people in advance that they might not be able to get to your phone call due to limited resources. That’s too bad, but good to be transparent about it all.

He also thanks us all for filing our taxes! I think that’s great!

See Video Below

 

Read More

Written by | Posted in IRS

IRS Argued Authority To Regulate Tax-Return Preparers

On February 11, 2014, the United States Court of Appeals for the District of Columbia Circuit (the “Court of Appeals”), in the case of Loving v. Internal Revenue Service, affirmed an order of the District Court enjoining the Internal Revenue Service (IRS) from enforcing regulations related to paid tax-return preparers. The subject regulations were issued by the IRS in 2011 and purported to require paid tax-return preparers to pass a qualifying exam, pay annual registration fees, and meet certain professional continuing education requirements.

The IRS argued it had authority to regulate tax-return preparers based on 31 U.S.C. § 330, which authorizes the IRS to “regulate the practice of representatives of persons before the Department of Treasury.” The Court of Appeals disagreed, describing the IRS’s Read More

Written by | Posted in IRS • Tax Provision/Tax Reporting

Miami “Hookah” Takes On Florida

Most Florida tobacco distributors are familiar with Micjo which was decided on February 1, 2012. Micjo would change the alcohol and beverage tax world in Florida forever. At issue was whether the taxpayer had to pay Florida tobacco tax on all of the invoice components, including shipping charges and federal excise tax or if the tax should only apply to the tobacco product itself, not the federal excise tax and transportation charges. For example, Micjo (or any tobacco distributor) gets an invoice from its supplier that says tobacco $100, federal excise tax $60, transportation charges $40, total invoice $200. Should the tobacco tax apply to the $200 or the $100? Of course, Florida’s Division of Alcoholic Beverages and Tobacco of the Florida Department of Business and Professional Regulation (“AB&T”) believed it was the $200 and Micjo believed it was the $100. Read More

Written by | Posted in North America • State And Local Tax (SALT) • Tax Provision/Tax Reporting

7 Habitual Mistakes Companies Make – Chapter 5 (21)

TaxConnections Blog Post
More Facts Resolve Tax Risks –
The Essence of a Transaction –

THE ENTIRE TRANSACTION, and its individual parts, must be carefully scrutinized to ensure that each component is legally and properly implemented. It may be that one of the transaction legs was not implemented properly by the financial institution and is therefore invalid. This flaw, if a fundamental pillar of the transaction, could shift the liability to the financial institution, or another party that failed to execute it properly.

In summary, the taxpayer must investigate the transaction from all angles as they will be held accountable. In recent times, it has become apparent that with the execution of a Read More

Written by | Posted in Tax Risk Management
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