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Errors in Tax Cuts and Jobs Act of 2017

Friday, June 15, 2018

Two errors in the Tax Cuts and Jobs Act of 2017 have retailers and restaurant owners up in arms because they are inadvertently costing them money.  The bill was marred by typos and drafting errors, but passed in December.

One provision specifies that certain renovations to retail and restaurant space must be written off over a period of 39 years instead of one year. As a result, only 2.5% of the cost of renovation can be deducted in a single year, instead of all of it, as the law actually intended.

The other error imposes a retroactive tax increase on businesses that are losing money and already facing liquidity issues...

Read the full article here at www.bisnow.com...

Dirty Dozen 12 - Offshore Tax Cheating

Wednesday, March 21, 2018

The series of IRS "Dirty Dozen" for 2018 is complete:

#12:  IRS Committed to Stopping Offshore Tax Cheating
It was on last year's Dirty Dozen list of tax scams, also.  Follow this link to read up on this scam to avoid.

An Abusive Scheme Toolkit for External Stakeholders
Each toolkit provides an explanation of the scheme, background, facts and law, and talking points.
Follow this link for the Toolkit

 

Dirty Dozen 11 - Abusive Tax Shelters

Tuesday, March 20, 2018

The Internal Revenue Service warned taxpayers to be wary of abusive tax shelters, which remain on the "Dirty Dozen” tax scams.

Tax law generally allows businesses to create “captive” insurance companies to protect against certain risks. Traditional captive insurance typically allows a taxpayer to reduce insurance costs. The insured business claims deductions for premiums paid for insurance policies. Those amounts are paid, either as insurance premiums or reinsurance premiums, to a “captive” insurance company owned by the insured or parties related to the insured.

Be sure to avoid participating in schemes that lack the attributes of genuine insurance, e.g., coverage may insure implausible risks, fail to match genuine business needs, or duplicate the taxpayer’s commercial coverage.  Read more...

Dirty Dozen 10 - Frivolous Tax Arguments

Sunday, March 18, 2018

The Truth about Frivolous Tax Arguments

In “The Truth about Frivolous Tax Arguments,” the IRS outlines some of the more common frivolous arguments, explains why they’re wrong and cites relevant court decisions. Taxpayers have the right to contest their tax liabilities using IRS administrative appeals procedures or in court, but they are still obligated to follow the law.  Read more...

 

Dirty Dozen 9 - Fake Forms

Saturday, March 17, 2018

Falsified income, fake Forms 1099 part of IRS ‘Dirty Dozen’

A common tax scam the IRS sees each year involves falsifying income. The agency warns taxpayers to avoid related schemes to erroneously claim tax credits as well as more elaborate schemes that scam artists peddle.  These schemes include elaborate ruses involving bogus Forms 1099.

Much like falsely claiming an expense or deduction is improper, claiming income the taxpayer didn’t earn is also inappropriate.  Scammers provide fraudulent Form(s) 1099-MISC that appear to be issued by a large bank, loan service and/or mortgage company with which the taxpayer may have had a prior relationship.  Read more...