One of the constant gripes employees have about stock grants and stock options, particularly in small and start-up companies, is the tax cost to receiving what are supposed to be incentives to help contribute to the company’s success and increase the value for everyone. They are usually forced with a choice to either sell some or all of the stock to pay the tax or come up with the cash from other sources, a heavy toll and a disincentive to participation. Introducing: the Qualified Equity Grant – a new kind of plan designed to alleviate this problem and at the same time create a level playing field to keep the benefits broadly available.
The 2017 Tax Cut and Jobs Act (TCJA) had many provisions, which we will be discussing over the next few months, and they include good, bad, and ugly. Some are two-faced, with aspects that at first seem bad but may actually turn out to be a blessing depending on your situation. One such provision is the GILTI regime, a new category of “Subpart F” income intended to prevent inappropriate deferral of foreign source income by U.S. taxpayers.
On March 13, 2018, The Internal Revenue Service (IRS) announced that the OVDP will be ending September 28, 2018, and that any submissions not fully completed by that date will be rejected from the program. This means that anyone who has started but not fully complied with the documentation requirements by then will not be able to take advantage of the program and will instead be required to use the standard voluntary disclosure submission rules, which are not as friendly.
Until September of 2014 only companies that were contacted by the U.S. Department of Commerce were required to file information regarding foreign direct investment (FDI) on the Form BE-13. Effective September 15, 2014 this form is required when the FDI falls under one of five different categories, with an exception for anyone that doesn't fit into one these five.
The IRS just released revised instructions for the Form 8938 that impact what and who is required to report certain foreign financial assets. The revised reporting generally only applies to tax years 2011 - 2014 and for tax years starting on or after 12/12/2014 it changes again. There are two changes, one for who is required to report and the second is for what is required to be reported - both of which are the result of the final regulations.
I get this question a lot from clients who want to transfer money between their bank accounts, especially once the amount they need to transfer exceeds USD $10,000. I think a lot of people know that transferring money in or our of an account in the U.S. over $10,000 is a reportable transaction, but what many people seem to misunderstand is that this is reported automatically by the bank.
Forbes magazine [said] it best, there was a massive collective sigh of relief yesterday from accountants preparing U.S. tax returns the world over. For background, the IRS issued final rules effective for tax years beginning on or after Januaray 1, 2014 dictating how taxpayers were allowed to treat purchases of fixed assets (things like computers and furniture or buildings) or materials and supplies.
IRS has issued additional guidance, in the form of frequently asked questions (FAQs), on the Code Sec. 3402(t) requirement for government entities to withhold 3% from nearly all contract payments made to persons providing them with property or services.
The Internal Revenue Code (IRC) imposes a tax on the transfer of property by gift. The gift tax applies to both direct and indirect transfers of real, tangible and intangible property. However, the tax does not apply to a nonresident taxpayer that is not a citizen of the U.S. unless the property being transferred is situated within the U.S. at the time of the transfer. The tax does not apply to the transfer of intangible property by a person who is neither a citizen nor a resident of the United States unless such person is an expatriate who lost his or her citizenship within 10 years of the date of the transfer.
Tax Relief Act of 2010 Extends Bush-Era Tax Cuts and Carries a Host of Other Tax Breaks
Late on December 9, Senate Majority Leader Harry Reid (D-NV) introduced H.R. 4853, the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 (the Tax Relief Act). The Tax Relief Act contains a two-year extension of the Bush-era tax cuts that was negotiated by the President and Republicans, and significant estate tax relief. However, it also contains a trove of other tax breaks for businesses and individuals, including enhanced first-year depreciation deductions for businesses, a payroll tax cut of two percentage points for 2011 for employees and self-employed individuals, and a two-year alternative minimum tax (AMT) “patch.”
Here’s an overview of what’s in the Tax Relief Act, based on information released late on December 9.
The recent IRS guidance in Chief Counsel Advice (CCA) 201030024 for U.S. S corporations earning dividends from foreign subsidiaries and those with Subpart F income, while not precedent, is welcome guidance and provides a good roadmap for those needing to analyze the issues surrounding passive investment income (too much of which is a big no-no) for S Corporations. For complete text see here: http://www.irs.gov/pub/irs-wd/1030024.pdf
The IRS announced yesterday that it will reorganize the current large and mid-sized business (LMSB) division into the Large Business & International (LB&I) division. For taxpayers with international activities, both individuals and businesses, this means increased resources focused on preventing tax evasion and more educated IRS agents conducting audits of international taxpayers. This reorganization also includes adding 875 new people to the division. This reorganization, renaming and addition of staff clearly show the IRS and Treasury mean business when it comes to international compliance activities, and taxpayers should be cognizant of this when conducting their affairs.