Most Recent Posts
TIGTA Report On IRS Exempt Process – End Of The Beginning?
Treasury is still revising draft guidance on how to measure the “primary activity” of social welfare organizations. Until the guidance is finalized the IRS does not have a clearly defined test for determining whether an application of a social welfare organization should be approved. This issue has been the focus of something called The Bright Line Project sponsored by Public Citizen.
IRS Partnership Adjustments In Millions May Produce No Tax
On occasion, the IRS has been faced with the challenge of securing a settlement agreement at the partnership level because the millions of dollars in adjustments would have resulted in zero taxes after applying the assessment tolerance for taxable partners.
Tax-free Roth Conversions – From The Boston Tax Institute
Lu Gauthier of the Boston Tax Institute has given me permission to reproduce his email blasts. BTI is a great value for live tax continuing professional education....
Two NFL Entities Dropping Exempt Status – Details Maybe Never
The other thing that has been troubling me about this is precisely how it is accomplished. I know how to revoke an S election, but it is not clear to me how to revoke your exempt status. I was thinking some sort of dissolution. The wording of the press release seemed to imply that they are just going to file an 1120 this year instead of a 990 and that is all there is to it, but my inquiring tax mind is deeply unsatisfied.
What happens with that $300 excess of liabilities over assets? The league will need after tax dollars to pay them, if it has carryover basis in the assets from its exempt days. It is better to have loved and lost than never to have loved at all. Here though, at least at first blush, it is worse to have been exempt and dropped it than to have never been exempt at all. If the NFL had been taxable all along it might have a $300 million net operating loss to carry forward.
Is IRS Targeting Drunkards?
In my mind, if you are going to have a social club or a fraternal organization (501(c)(8)) or a trade organization (501(c)(6) that is not being run to make a profit, then run it to roughly break-even and if there is a small profit, pay some taxes. It won’t kill you. Limit the exemption process to the 501(c)(3) organizations.
No Exclusion For Income Earned Over International Waters
While this regulation does not speak directly to the treatment of income earned over international waters, a separate regulation defines the term “foreign country” to mean “any territory under the sovereignty of a government other than that of the United States,” including, among other things, “the territorial waters of the foreign country” and “the air space over the foreign country.”
The regulation thus makes explicit that income earned over waters not subject to any foreign country’s jurisdiction would not be income earned “in a foreign country or countries” for purposes of Section 1.911-3(a). In sum, it is clear that Appellants’ position in this case is completely at odds with IRS’s regulations.
Could Rand Paul Back Kent Hovind?
The big news in Hovindology this week is an inroad into the Rand Paul campaign. First some background for those who have not been following along Hovindication...
IRS Forced To Release Names Of Targeted Groups
The paper identifies the ill-conceived massive 1998 structural reorganization and division (like salami-slicing) of field operations as a major cause of the IRS’s current legal battles and “downward slide.” In its 1998 aftermath, we were all left with an overly centralized Washington IRS National Office and an undermanaged array of field operations. That’s where the Tea Party scandal started; and, even more importantly, it need never be repeated. Indeed, such events must stop!
“With that recognition, change-makers can travel a 2015 bipartisan pathway to addressing a wrong-headed 1998 “solution” to a 1998 non-existent structural problem by introducing a 2015 proposal for a National Office consolidation (slimming down) coupled with a field operations decentralization (closer to customers and ending the practice of absentee senior management without local accountability).
Minority Shareholders Liable For Part Of Corporate Income Tax
The corporate veil exists to protect shareholders from actions taken against the corporation. However, as is seen in Kardash, this protection is not unlimited. Proper capitalization and record keeping, segregation of corporate and personal assets, and following corporate formalities are all requirements necessary to protect the veil. Where significant undercapitalization is present, specifically undercapitalization caused by fraud, the protections afforded by the veil are pierced exposing the shareholders to liability. Taxpayers should take note of the decision in Kardash as it serves as a reminder to respect the separate and distinct nature of the corporate entity.
Detective’s Vacation And Sick Time Not Excluded From Taxable Income
Petitioners similarly cannot demonstrate that any of the 541 hours of unused vacation leave were accrued during his leaves of absence. Officers are limited to banking 200 hours of vacation leave per year and a total of 400. Mr. Speer had 541 hours of vacation leave at retirement because he had not yet lost vacation leave accrued during 2009. Just as with the sick leave, we would need to know Mr. Speer’s vacation history in order to determine whether any of the unused leave was accrued during his leaves of absence. Again, the record does not contain this information.