Category: Taxes

IRS Continues to Overpay Billions on the EITC

In accordance with Executive Order 13520, Reducing Improper Payments and Eliminating Waste in Federal Programs, Federal agencies are accountable for reducing improper payments while still providing access to beneficiaries.  The IRS estimates that the participation rate under the Earned Income Tax Credit (EITC) was nearly 80 percent, but this comes at a high cost.  A recent …

Continue reading

Permanent link to this article: http://betweenthenumbers.net/2015/01/irs-continues-to-overpay-billions-on-the-eitc/

SEC Wins with Tax Avoidance Approach to Disgorgement

The Securities and Exchange Commission (“SEC”) has been awarded a substantial win in its civil enforcement action against Samuel Wyly and Donald R. Miller, Jr. as the Independent Executor of the Will and Estate of Charles J. Wyly Jr. (the “Wylys”). The Court ordered the Wylys to pay a total of $188 million plus pre-judgment …

Continue reading

Permanent link to this article: http://betweenthenumbers.net/2014/10/sec-wins-with-tax-avoidance-approach-to-disgorgement/

$2.3 Billion of Taxable Income Disappears Via Alimony Reporting

Tax reporting for alimony payments is a relatively straightforward process.  Those who pay alimony deduct the amount on their tax return when calculating their taxable income.  Those who receive alimony must report the amount received as taxable income.  These requirements should result in a shifting of taxable income without changing the total amount.  In order …

Continue reading

Permanent link to this article: http://betweenthenumbers.net/2014/05/2-3-billion-of-taxable-income-disappears-via-alimony-reporting/

IRS Audits Heavily Target Corporations Over Partnerships

The Government Accountability Office recently released a study on the subject of “Large Partnerships: Characteristics of Population and IRS Audits”.  This study tracked IRS activity related to such “large partnerships”, which the IRS defined as those that reported having 100 or more direct partners and $100 million or more in assets. The number of large partnerships …

Continue reading

Permanent link to this article: http://betweenthenumbers.net/2014/04/irs-audits-heavily-target-corporations-over-partnerships/

Severance payments remain FICA taxable

On March 25, the U.S Supreme Court ruled in favor of the IRS over whether certain severance compensation is subject to payroll taxes. My prior blog post on this Sixth Circuit case is here. The Supreme Court ruled 8-0 to overturn the Sixth Circuit decision. This case would have had huge tax impact had the …

Continue reading

Permanent link to this article: http://betweenthenumbers.net/2014/03/severance-payments-remain-fica-taxable/

Estate tax penalty occurs because of a lack of a professional appraisal

In Estate of Helen P. Richmond et al. vs. vs. Commissioner T.C. Memo. 2014-26, February 11, 2014, the Tax Court addressed reasonably straightforward estate tax valuation questions in a reasonably predictable manner. The additional tax imposed because of a higher valuation was not particularly surprising to me, and probably not to others who regularly practice …

Continue reading

Permanent link to this article: http://betweenthenumbers.net/2014/03/estate-tax-penalty-occurs-because-of-a-lack-of-a-professional-appraisal/

The Big Marriage Benefit in Estate Planning

The tragic news of Philip Seymour Hoffman’s death also came with an expensive reminder of how estate tax law favors marriage.  It has been reported that most of Mr. Hoffman’s $35 million estate will go to Mimi O’Donnell, his longtime love and mother of his three children.  Unfortunately, the fact that this couple wasn’t married …

Continue reading

Permanent link to this article: http://betweenthenumbers.net/2014/02/the-big-marriage-benefit-in-estate-planning/

IRS Reports its Investigative Wins

The IRS has released its Annual Business Report for 2013, detailing its investigative priorities and accomplishments during the year.  In terms of priorities, the focus has been on the following areas: Identity Theft Fraud Return Preparer Fraud & Questionable Refund Fraud International Tax Fraud Fraud Referral Program Political/Public Corruption Organized Crime Drug Enforcement Task Force …

Continue reading

Permanent link to this article: http://betweenthenumbers.net/2014/02/irs-reports-its-investigative-wins/

How Much is Michael Worth?

The IRS is taking serious issue with Michael Jackson’s estate over the value of various assets upon which taxes are due.  According to a recent article in the Los Angeles Times (“LAT”), there is over a billion dollar discrepancy between the value reported by his estate after his 2009 death and the amount concluded by …

Continue reading

Permanent link to this article: http://betweenthenumbers.net/2014/02/how-much-is-michael-worth/

Is Uber a Connectivity App or an Employer?

Uber identifies itself as a tech company which developed an app to connect livery car drivers with a network of registered users in need of rides.  Whenever a connection is made and a service is provided, Uber collects a 20% fee. However, some fail to see the difference between Uber and a cab company in …

Continue reading

Permanent link to this article: http://betweenthenumbers.net/2014/02/is-uber-a-connectivity-app-or-an-employer/