Archives for April 2016

FBAR Traps for the Unwary

April 26, 2016 by Frank

If you used a tax professional to prepare your personal income tax return, you were undoubtedly asked the question if you own any foreign accounts or have control over any such accounts. This is a question that should not be taken lightly as there are some very harsh penalties for those who are found not to be in compliance with the Report of Foreign Bank and Financial Accounts (FBAR).

If you have immigrated to the U.S. and have maintained foreign bank accounts or cash value life insurance policies, or hold such accounts jointly with a parent or other relative, or have a retirement account being held for you in a foreign country, you may find yourself in non-compliance with U.S. tax law. A law designed to catch tax cheats is now encompassing those who work in the U.S. as a permanent resident or who become a U.S. citizen.

It can get real ugly! Imagine [Read more…] about FBAR Traps for the Unwary

Scammers Fake Social Security Email

April 19, 2016 by Frank

The subject line says “Get Protected,” and the email talks about new features from the Social Security Administration (SSA) that can help taxpayers monitor their credit reports, and know about unauthorized use of their Social Security number. It even cites the IRS and the official-sounding “S.A.F.E Act 2015.” It sounds real, but it’s all made up according to Amy Herbert, Consumer Education Specialist with the Federal Trade Commission.

Ms Herbert says “It’s a phishing email to get you to click on a scammer’s link. If you do, a scammer can install malware— like viruses and spyware — on your computer. Or, the link might send you to a spoof site — a lookalike website set up by a scammer to trick you into entering your personal information.

Not sure if an email is really from the government? Here are a couple of clues. [Read more…] about Scammers Fake Social Security Email

States Doing Their Best to Extend Their Tax Reach

April 12, 2016 by Frank

In prior blogs, we have shared that states like to audit and tax businesses that are outside of their borders rather than in-state businesses. In-state business owners complain when a state increases its tax rates or audit compliance. However, if the state taxes a business created in another state, it’s a win-win for all in-state parties.

Bloomberg BNA releases a state tax survey every year. We would like to share with you some items in its 2015 survey as it provides business owners with a better perspective as to how aggressive state taxing authorities are. Bloomberg contacted all 50 states (and the District of Columbia and NYC) and questioned them about how they determine nexus. “Nexus” is the minimum amount of contact a company can have in a state to become subject to the state’s taxes.

The “old” rules were that a state would tax businesses [Read more…] about States Doing Their Best to Extend Their Tax Reach

IRS Clarifies Rules for POAs Submitted by LLCs & Partnerships

April 5, 2016 by Frank

If you own a partnership or a limited liability company (LLC), you should consider if you need to amend your operating agreement.

IRS Chief Counsel has added to the discussion as to who can sign Form 2848, the IRS Power-of-Attorney form, for a partnership or LLC. Under proposed IRS Reg. §601.503(c), only someone duly authorized by state law to act for and bind an entity can execute the IRS POA in the entity’s name. The IRS is recommending that its employees look to the entity’s operating agreement to determine who is authorized to sign a Form 2848, Power of Attorney and Declaration of Representative. In addition, IRS employees may look to state law, which may contain default provisions that apply if the entity’s operating agreement does not address the matter. With respect to the latter option of the IRS looking at state law for default provisions, I would imagine the likelihood of that happening is VERY remote.

How does this impact you? If your partnership or LLC has an urgent tax matter [Read more…] about IRS Clarifies Rules for POAs Submitted by LLCs & Partnerships