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Denial Of $33M Deduction That Yielded $2M To University Of Michigan Upheld On Appeal
The Tax Court went with zero deduction, but not based on the sham theory. On its own, the Tax Court came up with failure to substantiate based on that missing number on Form 8283. There is something really satisfying with that result. All these smart people with complicated math stuff planning the deal and attacking it and the Tax Court blows it up with what would be a review comment that a senior accountant with three years experience would have given an associate. RTI. (Read the instructions).
Don’t Try To Create Tax Basis With Journal Entries
The lesson is a discouraging one for accountants. I went digging in PACER and found the schedule that Meruelo’s accountant prepared and they are really good work. A good bit of effort must have gone into them. But they end up meaning nothing.
Those of us who think in double entry might believe that Meruelo should have gotten his basis and been allowed the loss. Throughout most of my career, I would have thought there was no problem. But years of reading decisions like this have caused me to conclude that the only people impressed by an accountant’s entries are other accountants .
Reilly’s Fourth Law of Tax Planning – Execution isn’t everything, but it’s a lot. Here we have an exception. Execution actually was everything. If the money that Meruelo purportedly loaned to Merco had actually passed through his hands and been recorded as a loan or a distribution to him, he would have had his basis and his loss
Reflections On Technology – By Michael Schaffner
One of the great benefits of the Civil War Sesquicentennial was some of the people I met. One of them was Michael Schaffner whom I met at the penultimate event the...
Malware Attack Paralyzes Tax Businesses Throughout The Country
On a more serious note, I think we should reflect a little on how vulnerable we have made ourselves from overreliance on technology. When I was a hotel night auditor, the monstrous bookkeeping machine I wrestled with had a hand crank back-up so I could work it without electricity. It never came up, but with a flashlight, I would be able to have the bills ready at checkout time during a power failure.
The military is taking this problem very seriously. Naval officers are now being trained in how to do celestial navigation. It had become passe in the nineties, but fears about the vulnerability of GPS to either hacking or actually shooting down the satellites now makes it a thing. Having a carrier battle group not be able to figure out where it is is much scarier than having a bunch of tax accountants not able to do returns. Even if it means somebody will not make his charge hour bonus.
Tax Court Judge Considers Passing On Deductions Unbusinesslike
And it was quite a yacht. The Triumphant Lady was purchased in 2001 for $4,950,000. In 2006 a refit was started which ended up costing $10,839,000 by the time it was finished in 2009. The Lady had a full-time crew under the command of Captain Bryan Pridgeon. It was used personally by the Steiners until 2009.
Warren’s 7% Solution: Privatization Of Corporate Tax Measurement
There is a very interesting proposal kind of buried in the Real Corporate Profits Tax. The notion is that at least with respect to RCPT, the definition of income would be significantly insulated from the political process. I did not see anything in the Warren material that indicated that it is FASB that should determine the measure of taxable income, but that is the effect.
I actually think that a case might be made for a system that worked like that. It could shrink the Internal Revenue Code substantially. It would preclude using the Tax Code as an instrument of social policy, which I think many of us think would be a good thing.
Cautionary Tax Tale For Consultants With Long Term Gigs
It does make me reflect on how he might have done better. Overall, I think he should have boosted the substance of his overall business. In principle, it should not matter, but I suspect he would have done better as an S corporation. Saving some money on the SE tax, might have offset any additional cost. The 1120S would have been small potatoes and his individual return would have been more mundane.
Filing three Schedule Cs was probably a bad idea, as I noted. And he should have made a stronger case that his home near Atlanta was actually the hub of his business. Since his agreement with AFR was terminable on short notice, it is hard to see what purpose it served him, but it might have been meant to address concerns about him being treated as an employee.
National Accounting Firm Launches Cannabis Practice
He also indicated that there is a bit of a feel of the dot.com boom about the excitement that is being generated. The difference he sees is that the companies have real products and revenue models. I remember that before they called it the dot.com boom, it was called the New Economy, where things like profits and cash flow no longer mattered. Apparently, that is not what is going on in the cannabis boom. Just watch out that they don’t start growing tulips.
Searching For The Perfect Steak With An Imperfect Tax Plan
Originally published on Forbes.com. Traveling the world going from one fine restaurant to the next searching for the perfect steak. It just doesn't get any...
Selling Your Business – Watch Out For Effect On 199A Pass-Through Deduction
The provision of the Tax Cuts and Jobs Act that right now is giving the most stress to tax preparers is probably Section 199A also known as the pass-through deduction. Sitting in an RV in a state park in Georgia, I once again am grateful that I retired from doing compliance work. Not having any current returns to crank out gives me time to think about the effect that 199A might have on deal structuring.