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Should You “86” the BBA?

In Partnership Tax by Zach MontgomeryLeave a Comment

Should You “86” the BBA? 2018 marks a shift in the partnership audit rules. Based on the Bipartisan Budget Act of 2015 (BBA), Congress established a new partnership audit regime, which replaced, among other things, the previous partnership audit rules under the Tax Equity and Fiscal Responsibility Act of 1982 (TEFRA). Under the BBA, the new audit regime took effect …

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Texas Tax Return Preparer Sentenced To Prison For Preparation of False Tax Returns

In Criminal, Tax Fraud by Jason FreemanLeave a Comment

The Department of Justice Tax Division recently announced its conviction and sentencings of a Texas-based tax return preparer to 42 months in prison.  The preparer was convicted of aiding and assisting in the preparation and filing of a false tax return and aggravated identity theft.     Court documents provide the following description of the scheme at issue: Shermin Marshall …

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The IRS Announces New “Compliance Campaigns:” Unreported Virtual Currency, S-Corporation Compliance, and International Tax Enforcement Are Top Priorities

In International Tax, S Corporations, Tax Reform by Jason FreemanLeave a Comment

The IRS recently announced five new “compliance campaigns”—areas where it intends to focus additional resources and enforcement efforts.  It comes as no surprise that unreported virtual currency, S-corporation dividends, and international tax are at the core of its focus.  The five compliance campaigns are:   S-corporation Distributions Virtual Currency Restoration of AMT Credit Carryforwards Repatriation through Foreign Triangular Reorganizations Section …

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Third Time’s A Charm: South Dakota v. Wayfair

In State and Local by Zach MontgomeryLeave a Comment

On June 21, 2018, the Supreme Court issued a monumental 5-4 decision in South Dakota v. Wayfair. The Court’s decision overturned decades of precedent, holding that the physical presence rule established by Quill Corp. v. North Dakotais “unsound and incorrect.”[1]What does this mean? Essentially, states are now permitted to require out-of-state sellers to collect sales tax from customers within their …

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Choice of Entity After Tax Reform

In Choice of Entity by Jason FreemanLeave a Comment

The choice of entity is a fundamental decision in structuring a trade or business.  Tax considerations and state-law principles affecting owner liability, control, and continuity play a role in the choice-of-entity analysis.  A litany of other factors are important as well, including the capitalization structure and the necessity of accessing equity markets, debt requirements, employee compensation, the impact of foreign …

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The Colliot Decision: The Government Loses an FBAR Case that May Change International Reporting Penalties

In FBAR, International Tax by Jason FreemanLeave a Comment

A recent federal court decision may stand existing FBAR litigation on its head. The Colliot decision—issued out of the District Court for the Western District of Texas—offers a new take on “willful” FBAR penalties.  And the government doesn’t like it.   The defendant, Colliot, argued that the IRS acted “arbitrary and capriciously” in assessing penalties against him that exceeded those allowed under …

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From Worldwide to Territorial, What Does It All Mean?

In International Tax, Tax Reform by Vu LeLeave a Comment

To understand the implications of the recent tax legislation and its reform of the international tax system, one first needs a grounding in basic U.S. international tax policies before delving into the major code changes. By understanding the origins of the system, we can see the policy behind the new provisions—and hopefully make them easier to digest.   Citizenship – …

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20/22 Vision – Tax Consequences for Puerto Rico

In International Tax, Offshore Tax by Zach MontgomeryLeave a Comment

In 2012, Puerto Rico enacted two pieces of legislation to encourage and attract an infusion of foreign capital—Act 20 and Act 22. These two acts provide tax incentives for both individuals and businesses depending on their circumstances. Taxpayers looking for tax-saving opportunities should consider the benefits of these two acts, especially in relation to the U.S. tax system and recent …