Archive for June, 2012

PA Sales and Use Tax: What are the sales and use tax consequences of accessing taxable canned software on remote servers, also known as “cloud computing”?

June 26th, 2012 No comments

Pennsylvania (PA) imposes a sales and use (S&U) tax on the retail sale of tangible personal property and certain services. For S&U tax purposes, the sale, including a license to use, canned computer software is subject to tax, even if delivered electronically.

“Cloud computing” and “digital content” refer to a variety of software products and services that use a server infrastructure and are accessed and used by end users using computer devices. Those end users could be customers or employees. For example, an IT company Taxpayer installs software on servers that can be accessed by its customers. In order to access the software, the customers either pay a subscription fee to the IT company or pay the IT company on a per-use basis. A company could also purchase and install software on servers that can be accessed by its employees. The employees can access their office computers and can perform work-related tasks from remote locations, within and outside of PA. The employer company pays for the software and employees can access the software through the cloud free of charge. In both cases, the employees and customers may collectively be referred to as “end users” of the licenses to use the software.

Is cloud computing subject to PA’s S&U tax? Read more…

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Foreign Bank Account Reporting (FBAR): Are you in compliance?

June 21st, 2012 No comments

Are you in compliance with the IRS rules regarding FBAR? The IRS amended the questions on the 2011 Schedule B of Form 1040. The 2011 form not only asks whether the taxpayer has a foreign trust or account, it asks whether the taxpayer has an obligation to file a foreign bank account report (FBAR). This new question is designed to Read more…


How To Get Your Hands on $1 Billion

June 18th, 2012 No comments

The IRS estimated that it had $1 billion in unclaimed tax refunds waiting for you Read more…


Hazards of Not Following IRS Rules & Regulations

June 5th, 2012 No comments

A very successful California entrepreneur was denied an $18.5 million tax deduction for his charitable donations because he failed to follow the IRS substantiation rules when filing his self-prepared individual income tax return. We found the Tax Court decision (T.C. Memo. 2012-152) of interest because while there was no question that the taxpayer made some very generous charitable contributions, the IRS prevailed in denying the tax deduction not based on the valuation of the donations, but because the taxpayer Read more…

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