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Tax News

A wealth of information from TaxOps

We want to share our knowledge and tools to help you achieve greater business success. For the latest tax developments and insights into leading practices, we invite you to:

Disclaimer: Before relying on information provided on this site, contact a tax professional to discuss the implications to your particular tax situation as it is not possible to provide comprehensive tax advice over the internet.

The Senate Finance Committee's Health Reform Bill

We usually defer the dissemination of proposed legislation until passed by Congress and signed by the President. We're getting lots of questions about what Congress is considering in its proposed Health Reform Bill, so here are a few key highlights coming out of the Senate Finance Committee which passed earlier this week:

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Unreported offshore income deadline extended

Have you ever had income from a foreign bank account that wasn't reported on your U.S. income tax return? That income is subject to U.S. tax and the Internal Revenue Service is stepping up enforcement by going directly to the source, foreign banks, to obtain names of U.S. citizens that hold these accounts to cross check the reporting of the income.

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"Those People"

I had lunch with a colleague recently who is a partner at a national accounting firm. The conversation turned to staff and he communicated how frustrated he was with his.

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Tax Accrual Workpapers Update (Textron)

On August 13, 2009, the U.S. Court of Appeals for the First Circuit ("Court of Appeals") ruled 3-2 to overturn the U.S. District Court for the District of Rhode Island's ("District Court") decision in United States of America vs. Textron, Inc. and Subsidiaries. As a result, Textron's income tax accrual workpapers are subject to an IRS summons.

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Tax Court decision affects active LLC/LLP members

A recent Tax Court decision has ruled that investors in LLC's and LLP's are not limited partners for passive activity loss limitation purposes, thereby allowing an offset of��losses against certain other income. The IRS has long contended that losses incurred by LLCs and LLPs are not deductible by the member, as they are considered passive investors.

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TaxOps and a Triple Bypass

While the work environment in most CPA firms leads to bypass surgery, our environment recently allowed for a much different bypass experience. On July 11th, I rode an organized bike ride called The Triple Bypass, a personal goal that I've had for some time.

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Misclassification of employees as independent contractors

Let's face it, hiring employees can be expensive; not just the cost of the services provided, but all of the administration that surrounds it, like payroll taxes and unemployment taxes. Now, at least in Colorado, add to that a state assessed fine beginning July 1, 2009 for all situations where the Division of Employment finds that an employer "with willful disregard of the law, misclassified employees" as independent contractors.

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Foreign subsidiary tax filings (Form 5471): avoid the $10,000 penalty

Effective January 1, 2009, the IRS has started to automatically assess a $10,000 penalty for each late filed Form 5471, Information Return of U.S. Persons With Respect to Certain Foreign Corporations. The penalty has been on the books for years, but has rarely been enforced. Now, in order to encourage greater compliance, the IRS is automatically assessing a $10,000 penalty for each Form 5471 that is filed late.

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