With just six more weeks to go until 2015 is rung in, small business owners and managers can take simple steps now to minimize their tax bill next April, according to business advisory services firm Skoda Minotti. Below are five ideas small business owners and managers can consider from now until December 31: Make those needed office or plant repairs. For the most part, expenses for minor business pr ...

  With all it does to prevent fraudulent tax returns, the IRS still paid out $5.2 billion in identity theft refunds in 2013. As if that wasn’t a big enough headache, imagine all the bureaucratic backtracking tens of millions of Americans who had their identity and cash stolen had to go through. Actually, that sum is just an estimate because the General Accounting Office (GAO) says that it’s impossible ...

Key Issues For all of Mr. Koons’ careful estate planning, involving a significant sale and redemption transaction of business operations to provide liquidity and flexibility in his later years, the planning was disrupted by an untimely death—Mr. Koons’. The disruption here highlights the importance of starting early with business valuation input to help avoid a complex confluence of strategic transactions w ...

The Trouble for the Innocent Spouse with the IRS and State Tax Authorities Spouses that unwittingly sign a state or federal tax return may be held joint and severably liable for underpaid taxes. The expanded innocent spouse relief provides potential relief, but that relief takes time and requires extensive documentation. ...

  On September 18, 2014, the Internal Revenue Service (IRS) issued two new notices—one proposing changes for when a taxpayer can revoke healthcare coverage in a cafeteria plan and enroll in a plan on the health insurance marketplace exchanges; the second notice proposes an approach for how to measure the lookback period for determining who is a fulltime employee when an employee changes positions withi ...

  Two CPAs in Washington D.C. have filed a class action lawsuit against the IRS for requiring a yearly registration and related fee in order to maintain a preparer tax identification number (PTIN). The suit, which involves 700,000 practitioners, seeks to recover $150 million in fees that the IRS has collected since the regulation passed in 2010. Four years ago, the IRS put the new rule into effect as a ...

  Among many legal challenges to the validity of the Affordable Care Act (ACA), is Halbig vs. Burwell. The challenge concerns a passage in the statute, when literally read as worded, makes federal tax credits for insurance programs available only to those enrollees in states that have created a state-designed and operated healthcare exchange. Read as it currently exists, the statute does not allow for ...

  The American Institute of CPAs (AICPA) recently sent a letter to the IRS calling a proposed “voluntary” certification program for unenrolled tax return preparers “unlawful and improper”. In a recent ruling, Loving, No. 13-5061 (D.C. Cir. 2/11/14), it was held that the IRS does not have the statutory authority to regulate tax return preparers. In the aftermath, IRS Commissioner, John Koskinen, stated ...

  In a windfall for the IRS, 77,000 foreign banks have turned over data on American account holders as part of the Foreign Account Tax Compliance Act (FATCA). The U.S. devised tax law with global reach requires all foreign banks to submit full data on all American accounts with a balance of $50,000 or more. Financial institutions that are non-compliant risk being frozen out of U.S. markets and a 30 per ...

Where the IRS stands on the classification of Bitcoin and the purchases made with it has been ambiguous. There are a lot of questions surrounding the virtual currency, not the least of which is how it factors in tax matters. While Bitcoin operates like real currency in some situations, the fact still stands that it has no legal recognition as currency in any jurisdiction. In spite of this contradiction, the ...

You could call it UBS, Part II.  Back in 2009, the U.S. Department of Justice (DOJ) uncovered 4,700 names of American citizens avoiding taxes with the help of Switzerland’s largest bank, UBS.  Most notably, Beanie Babies creator and billionaire, Ty Warner, was caught in the sting that cost UBS $780 million in fines and netted the IRS $6 billion in taxes and fines from a voluntary disclosure program for petr ...

The days of applying Mandelbaum and referencing a few IPO and restricted stock studies are over. This article addresses what is often omitted from most asset holding entity valuation reports. By failing to include issues like the ones outlined, the resulting adjustments are less empirical and more a "guesstimate". Valuation practitioners and their advisory clients have a duty to the users of our reports to ...

It’s not as simple as it seems This article explores the fact that the valuation of a simple debt instrument, such as a promissory note, can be anything but simple. It is observed that the sum of unpaid debt, as well as accrued interest, may well overstate the value of the promissory note. Also covered is whether assets tied to notes need to be valued separately. ...

While CPAs and tax attorneys must currently meet professional standards for tax preparation and other services, a recent decision by the U.S. Court of Appeals for the District of Columbia has ruled that the IRS has no authority to force continuing education or similar standards on tax preparers.  The case stems from a 2011 IRS proposal of a system that would have established tax preparer registration and re ...

Historical perspective and current recommendations The Internal Revenue Service published Discount for Lack of Marketability: Job Aid for IRS Professionals (Job Aid) in August of 2013.  Now, two new books provide  advice on how to prepare a DLOM and which methods valuators  should consider and why.  These will help any business valuation practice, whether working on a DLOM for the IRS or any other purpose. ...

Because of increased IRS audit procedures, multi-national corporations face great risk when it comes to transfer pricing from both a compliance and tax planning perspective.  The familiar multi-nationals like Amazon or Microsoft have made headlines regarding transfer pricing disputes and adjustments that run into the billions.  In an excellent article by the Journal of Accountancy, small, closely-held compa ...

The Tax Court recently denied an IRS motion for summary judgment in an estate and gift tax case where an elderly mother made gifts to her daughters, while requiring them to pay all tax liabilities due if she happened to die within three years of making the gifts.  In the calculation for gift tax purposes, the mother reduced the value of the gifts by the estimated tax liability.  This reduction was denied by ...

In the first installment of a two-part series, the AICPA reviews the most important developments affecting estate, gift and generation-skipping transfer (GST) tax and trust income tax over the last 12 months.  In the period from June 2012 through May 2013, the analysis covers legislative developments, rulings, pending cases, the American Taxpayer Relief Act of 2012 and inflation adjustments for 2013.  The s ...

Giving holders of concentrated risk in public company stock a tax break This article establishes there is recognition by the IRS and the courts that a well-supported proof of impairment based on the sale of a large number of shares necessitates an investor concession. It provides the rationale and methodology to capture the existence and the level of impairment. ...

In early 2009, Carl Pohlad, investor and principle owner of the Minnesota Twins, passed away, leaving controlling ownership of the team to his sons.  In settling the estate, the new owners now find themselves embroiled in a tax tangle with the IRS.  The primary point of contention exists with what Pohlad’s share in the team was actually worth at the time of death.  According to the IRS, Pohlad’s ownership i ...