The Republican promise of tax reform in 2017 took a huge step forward yesterday when Republican lawmakers released a framework for tax reform, announcing that their goals are to cut tax rates, simplify the Internal Revenue Code, and provide a more competitive environment for business. The framework generally reiterates proposals made by President Donald Trump in April. (more…)
The U.S. District Court for the Eastern District of Pennsylvania denied summary judgment to both the IRS and a taxpayer with regard to his Swiss bank account. In the case, the IRS slapped the maximum penalty on the taxpayer for willfully failing to file a Report of Foreign Bank and Financial Accounts (FBAR).
The Court concluded that whether the taxpayer willfully failed to submit an accurate FBAR was an inherently factual question and that genuine disputes existed as to what the taxpayer knew about his reporting requirements and when he knew it.
A common misconception is that once you have a will and a living trust in place, nothing else needs to be done in order for your assets to be distributed at your death according to your wishes. The mere listing of an asset in the trust agreement does not make it a trust asset. Actually, assets have to be held in the name of the trustee, (i.e. the title of the asset has to be transferred to the trustee of the trust,) in order for the asset to be subject to the terms of the trust agreement. At the same time, certain types of assets pass by other means, irrespective of whether or not a will or trust is in place. You will want to understand these differences in order to appropriately title your assets to make sure they are transferred as you intend at death.
The issue of roof repairs and replacement presents an age-old dilemma for tax professionals and our clients. Generally (and most often optimally), one hopes that such repair, or even replacement costs, can be expensed in the year incurred. But the analysis required to determine what should be done is not so simple, especially with the recent issuance of the Tangible Property Regulations by the IRS.
To get to the best outcome, we need to raise insightful questions with our clients regarding their roofing system.
Started in 1997, Center for Resource Solution’s (CRS) Green-e Energy Program has become one of the nation’s largest certification programs for the Green Power market today. The Program is governed by two documents: the Green-e Energy National Standard, which provides the requirements for the types of resources that are eligible to generate certified Renewable Energy Certificates (RECs); and the Green-e Code of Conduct, which dictates how program participants (Participant) can market their certified REC products.
Generally, summer months are busy for most nonprofit organizations, with the year-end financial close and preparation for the annual audit process. Through this process, the Organization’s finance and accounting teams are working to demonstrate to external parties their compliance with internal processes and controls and laws and regulations. To better ensure the Organization’s compliance, the Audit Committee provides assistance to the Board of Directors in the oversight of these activities.
By Franceen Borrillo, Principal
We want to make our clients aware that on June 13, 2017, the U.S. Internal Revenue Service and the Department of the Treasury re-released proposed regulations (REG 136118-15) that provide guidance on the new centralized partnership audit regime. The proposed regulations implement the new centralized partnership audit regime enacted as part of the Bipartisan Budget Act of 2015 (BBA).
The BBA rules assess and collect tax at the partnership level, replacing the audit procedures that were enacted by the Tax Equity and Fiscal Responsibility Act of 1982 (“TEFRA”) and the electing large partnership rules. Under the TEFRA rules, audit adjustments related to partnership items were determined at the partnership level, but enforced at the partner level while adjustment related to partner-level items were determined and enforced at the partner level. On the other hand, the BBA rules provide that tax on any adjustment in a partnership audit that results in additional partnership income is assessed and collected at the partnership level. The partnership can elect under the BBA rules to “push out” the adjustment to its partners. The BBA rules replace the tax matters partners under TEFRA for a “partnership representative,” who will serve as the only point of contact between the partnership and the IRS.
The new partnership audit rules apply to partnership tax years beginning after December 31, 2017, though partnerships have the option to elect early application. The new rules’ effective date is based on the partnership’s reporting year that is under audit regardless of when the audit itself is conducted. The BBA rules did not include significant details but it provided the Secretary of Treasury with deference as to how some provisions would be implemented; therefore taxpayers have been awaiting Treasury regulations.
During the final days of the Obama administration in January 2017, the IRS and the Treasury issued proposed regulations for the BBA rules. However, those proposed regulations were withdrawn after the incoming Trump administration issued an executive order on January 20, 2017, ordering all executive departments and agencies to freeze new and pending regulations.
As expected, the new proposed regulations issued in June 2017 are substantially identical to the withdrawn proposed regulations. The proposed regulations include guidance on the scope of the new partnership audit regime; procedural rules on electing out of the regime; the requirement that a partner’s treatment of items on its tax return must be consistent with the treatment of such items on the partnership’s return; details regarding the partnership representative; and details regarding the imputed underpayment, among other things. A public hearing on the proposed rules will be held in Washington, DC on September 18, 2017.
The change in the partnership audit regime may warrant a revisit of partnership agreements. If you would like to discuss the impact of the change to your partnership’s situation, please don’t hesitate to contact us.
With all that has been happening, both within the US and internationally, Tax Reform legislation seems to have faded somewhat into the background. While it is still alive and well, the prospects for passage of major tax reform in 2017 have dimmed a bit. Most analysts are predicting passage of a modest tax reform measure in 2017, without the dramatic changes the Trump administration has proposed. (more…)
The Congressional Budget Office (CBO) updated its report comparing the corporate income tax rates of the U.S. and other G20 countries.
The report examines not only the statutory top rates, of which the U.S. has the highest, but also provides information on the average and effective corporate tax rates, including insight as to how certain corporate decision-making is influenced by each. (more…)