Archives for October 2018

New Jersey Shore Rental Transient Tax

October 30, 2018 by Frank

New Jersey Shore Rental Transient Tax

NJ Imposes Taxes on Transient Accommodations

NJ enacted new legislation on July 1, 2018 that imposes a fee on transient accommodations on or after October 1, 2018. The new law imposes Sales Tax, the State Occupancy Fee, and the Meadowlands Regional Hotel Use Assessment on charges associated with the rental of transient accommodations.

Transient accommodation is defined as a room, group of rooms, or other living or sleeping space for the lodging of occupants, including but not limited to residences or buildings used as residences. The definition includes rentals made through “transient space marketplaces” and rentals that are made directly by the homeowner through classified listing sites, local newspaper ads, referrals from friends and family, or placing a sign on the lawn. Transient space marketplaces (e.g., Airbnb, VRBO, etc.) are online marketplaces through which a person may offer transient accommodations or hotel rooms to individuals.

Excluded from the definition of taxable transient accommodations are [Read more…] about New Jersey Shore Rental Transient Tax

PA Aggressive Sales Tax Approach on Used Car Sales

October 23, 2018 by Frank

PA Aggressive Sales Tax Approach on Private Used Car Sales

Motor Vehicle Understated Value Program (MVUVP)

It has come to our attention that individuals who are purchasing a vehicle in PA via a private sale may receive a notice in the mail that they are being assessed PA sales tax in an amount greater than six per cent (6%) of the purchase price.

A tax practitioner shared the following story with us: I had a client who purchased a car from a former employer for the blue book value with adjustment for the high mileage (over 200,000). The PADOR sent the individual an assessment for what the DOR felt the car was worth. In response, the taxpayer sent PA documentation to support the purchase price. The documentation included Kelly’s Blue Book Value, an appraisal from a car dealership, photos of the odometer and the inside and outside of the vehicle. Despite the documentation sent to the DOR, the DOR sent monthly deficiency notices to the taxpayer.

The MVUVP allows the PA DOR to assess additional sales tax [Read more…] about PA Aggressive Sales Tax Approach on Used Car Sales

What Type of Tax Preparer Are You Using?

October 16, 2018 by Frank

What Type of Tax Preparer Are You Using?

Tax professionals generally interact with the IRS in two ways. There are those who prepare tax returns, and those who represent the taxpayer before the IRS. It is important that a taxpayer understand the differences when choosing a tax preparer.

As a representative of the taxpayer, the tax pro has direct contact with the IRS and can negotiate on behalf of the taxpayer with the IRS. These representatives often prepare tax returns. However, not all tax preparers are qualified to represent a taxpayer before the IRS. These tax preparers are considered to be “unenrolled” tax return preparers. Unenrolled tax preparers are generally limited to represent taxpayers for returns prepared by the unenrolled preparer which are under IRS audit examination, and before certain IRS employees, such as revenue agents and customer service representatives.

On the other hand, enrolled representatives (attorneys, CPAs, and Enrolled Agents), in addition to the aforementioned services, can also represent taxpayers in the Appeals Office, before Revenue Officers, and similar employees of the IRS and U.S. Treasury. In addition, these representatives can execute waivers, claims for refunds, and sign any document on behalf of an employee. More importantly, these individuals are licensed professionals who are subject to oversight by the IRS’s Office of Professional Responsibility (OPR). Attorneys and CPAs are required to pass their state and/or national regulatory exams and must abide by their state licensing board. Enrolled agents must pass a rigorous IRS exam to prove their tax proficiency and are regulated by the IRS. All these tax professionals are required to take annual continuing education credits to maintain their enrolled status with the IRS.

The Loving v. Commissioner case makes for interesting reading. The IRS, as one of its objectives, wanting to limit the filing of fraudulent tax returns prepared by unscrupulous tax preparers, passed rules to regulate tax preparers. Loving, a tax preparer, sued the IRS claiming that the IRS did not have the authority to license tax preparers. A District Court ruled that Congress never gave the IRS the power to license tax preparers and the IRS cannot give itself that authority. Thus, taxpayers be aware. You should ascertain whether your tax preparer is subject to IRS Circular 230 and OPR jurisdiction. Remember that you are the person signing your tax return under penalties of perjury that the return is true and correct to the best of your knowledge. If the tax return preparer is not signing the return, does not have an IRS required PTIN number, or is using estimates rather than actual numbers, run, don’t walk out of that office.

Tax Planning Tip: When choosing your tax preparer, be sure that you understand the differences between an unenrolled tax preparer and those who are authorized to represent taxpayers before the IRS who are bound to abide by very strict rules.

If you would like to discuss your business or personal tax planning, tax preparation and other financial concerns with an experienced tax professional, we invite you to call 610-594-2601 today to make an appointment at our Exton PA CPA office to discuss your situation. You can also schedule a consultation at Click Here.

Copyright © 2018 Keystone Financial Solutions, P.C. All rights reserved. BE SURE TO READ THE DISCLAIMER PAGE: Content in this blog is for educational purposes only and should not be considered as the rendering of tax, legal or investment advice. The publisher of this blog makes no representations as to the accuracy or completeness of any information herein, will not be liable for any errors or omissions, and shall not assume liability for any losses, injuries, or damages from the display or use of this information.

About F. Bryan Haarlander, EA, CTRS:

Bryan Haarlander is an IRS licensed Enrolled Agent and who owns and operates a specialized tax services firm serving clients in the western suburbs of Philadelphia, PA, which includes the cities of Chester Springs, Coatesville, Collegeville, Devon, Downingtown, Exton, Frazer, King of Prussia, Paoli, Philadelphia, Phoenixville, Pottstown, Radnor, Reading, Wayne, West Chester in Berks, Chester, Delaware, Montgomery and Philadelphia Counties, as well as clients in Delaware, New Jersey, New York and throughout the continental USA.

A Certified Tax Resolution Specialist, Bryan is well-known for his IRS tax resolution expertise and his book How to Resolve Your IRS Tax Debt Problems.

Intent Is Not The Same As Being Engaged – What Constitutes a Trade or Business?

October 4, 2018 by Frank

Intent Is Not The Same As Being Engaged

What Constitutes a Trade or Business?

A group of friends decided to start a business of flipping homes. Generally, the business model is to find a property in need of TLC in a neighborhood of more expensive homes, immediately begin to make repairs and improvements to the home so that its amenities are attractive to buyers, and then sell (flip) the property at a gain.

To that end, Mr. Samadi became a licensed real estate agent and the group decided that he would manage any investment properties that were purchased. He identified properties that he believed his group would be interested in purchasing and drove the members of the group in his vehicle to inspect these properties.

On his personal tax return, Samadi deducted [Read more…] about Intent Is Not The Same As Being Engaged – What Constitutes a Trade or Business?