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Flashes/Alerts 2016

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Tax Flash

The IRS has issued final regulations re-defining marriage to be inclusive of same-sex spouses, following the 2015 Supreme Court decision legalizing same-sex marriage in all 50 states.


Tax Flash

The Florida Supreme Court upheld the constitutionality of the recent decision and related statutes pertaining to sales tax origin sourcing within the American Business USA Corp case which stated: "Florists located in this state are liable for sales tax on sales to retail customers regardless of where or by whom the items sold are to be delivered.

 


Tax Flash

Conditions in the real estate markets can have a major impact on real estate assessments, and ultimately the tax bills property owners must pay. Commercial properties, vacant land, apartment buildings, marinas, office buildings, and even newly purchased residences and newly constructed residences are impacted by the current economic climate.

 


Tax Flash

The European Union's ("EU") antitrust regulator, the European Commission ("Commission"), has changed the way the world looks at transfer pricing and tax favored regimes. Asserting that certain Member States of the European Union have gained an unfair competitive advantage because of government help, the Commission recently demanded large tax assessments against Apple, Fiat Chrysler, Starbucks, AB InBev, among others.

 


Tax Compliance

The IRS has issued a final regulation that eliminates the requirement for an 83(b) election to be attached to an individual's tax return for property transferred on or after January 1, 2016.

 


Tax Credits & Incentives

The IRS recently announced guidance regarding filing, claiming and reporting requirements related to the refundable Payroll Tax Credit provisions of the Research and Development (R&D) tax credit for Qualified Start-up Businesses.

 


International Taxation

The IRS released Notice 2016-42, outlining the proposed new Qualified Intermediary (QI) agreement under FATCA rules, in July 2016. The draft agreement highlights significant updates to recent revenue procedures, including a revision to the QI compliance review and certification procedures, the authorization of primary withholding responsibilities of the QI, and the establishment of Qualified Derivatives Dealer (QDD) rules.

 


Tax Return Compliance

This rule is popularly known as the “self-rental rule. This rule converts passive income into non-passive income. A passive activity is any activity that involves the conduct of any trade or business in which the taxpayer does not materially participate.

 


Tax Flash

The Treasury and IRS recently issued proposed regulations intended to affect the valuation of closely held business interests transferred to family members.

 


Tax Return Compliance

Under current IRS rules, taxpayers must include income from the cancellation of debt ("COD"), also referred to as "discharge of indebtedness," in gross income. There are certain exceptions to the inclusion of such income, two of which are bankruptcy and insolvency.

 


Tax Flash

The IRS announced today that it will "acquiesce" to the Court of Appeals for the Ninth Circuit decision that the Federal income tax home mortgage interest deduction limitations apply individually to each co-owner of a qualified residence if they are not married to each other, and not to the residence itself.

 


Business Advisory

A personal service corporation ("PSC"), as the name implies, is a corporation whose main activity is the performance of personal services. The term should not be confused with professional corporations, which are corporations formed for the purpose of conducting business in a licensed profession.

 


Tax Flash

The Internal Revenue Service ("IRS") released finalized regulations on Wednesday, June 29, that require certain companies to annually report information relating to income and taxes on a Country-by-Country ("CbC") basis.

 


Tax Flash

Rhode Island Governor Gina Raimondo signed the State's 2017 fiscal year budget bill on June 14, 2016. The bill includes a number of updates for both businesses and individuals. All changes are effective for tax year beginning on or after January 1, 2017 unless otherwise stated.

 


Tax Flash

In recent weeks, many Marcum clients and other NYC taxpayers have been in receipt of unsolicited tax refund checks.

 


Tax Flash

On June 2, 2016, Connecticut ("CT") Governor Daniel Malloy signed the state's budget for the 2016-17 fiscal year into law. The legislation contained several noteworthy changes for corporate income tax, personal income tax, and sales tax purposes.

 


Tax Credits & Incentives

IRS issued Notice 2016-40 on Friday, which provides additional transition relief for employers claiming the Work Opportunity Credit, as extended by the Protecting Americans from Tax Hikes Act of 2015 (PATH).

 


Tax Flash

New York City Appeals Tribunal - Appeals Division released on May 19, 2016, that a non-nexus banking affiliate does not have to be included in the combined tax return.

 


Tax Credits & Incentives

The Tax Court recently ruled that a widow could not use her deceased husband's alternative minimum tax (AMT) credit which arose from his exercise of employee stock options prior to their marriage.

 


Corporate Taxation

On April 4, 2016, The US Treasury and the IRS proposed new regulations pursuant to IRSr Section 385. Although announced as part of the ongoing effort to curb corporate inversions, the proposed regulations focus on related-party corporate indebtedness and, if made effective without significant changes, will have far-ranging impact on corporate ownership and capital structures well beyond the inversion-focused motivation.

 


International Taxation

The deadline for filing the 2015 Report of Foreign Bank and Financial Accounts (FinCEN Form 114) (the FBAR) is quickly approaching. Since it was first introduced in the 1970s, each year's FBAR has been due on or before June 30th of the following year, with no extension available. The IRS now requires that all FBARs be electronically filed.

 


Tax Flash

As of June 30, 2016, entities conducting business in the state of Nevada will be obligated to file a Commerce Tax Return for the first time. Signed into law in June 2015 by Governor Sandoval, Nevada's Commerce Tax became effective July 1, 2015, and is imposed on certain entities doing business in the state, whether or not they have a physical presence.

 


Tax Flash

In December 2015, the Protecting Americans from Tax Hikes Act of 2015 ("Tax Extenders Bill") was signed into Law. The law includes an expansion of the rules related to the Federal Research and Development (R&D) Credit effective as of January 2016, as well as making the R&D Credit permanent.

 


Tax Return Compliance

Many of our clients serve as trustees or executors and should be aware of certain elections that may be available to them. This is especially true now, as there are distributions and elections that need to be made within the first week of March.

 


Tax Flash

The Internal Revenue Service has issued new temporary regulations and proposed regulations providing that where a partnership owns 100% of the interests of a disregarded entity, a partner of the partnership cannot be treated as an employee of the disregarded entity. The Service believes that this is a clarification of the current rules.

 


Tax Return Compliance

In case taxpayers didn't already have enough reasons to keep current with their tax obligations, the Fixing America's Surface Transportation Act (FAST Act), signed into law in December, has added one more.

 


Tax Flash

New York State's political leadership, led by Governor Andrew Cuomo, proudly announced at the end of March that for the sixth straight year, they have reached a budget agreement on time. As is usual, the budget includes landmark policies and provisions that will strengthen working and middle class families and the business community, while improving the lives of all New York State citizens.

 


Tax Return Compliance

The Indiana Department of Revenue (INDOR) has updated its regulations, effective for tax years beginning January 1, 2015, providing for changes to the composite and withholding compliance requirements for trusts, partnerships and corporations.

 


Tax Return Compliance

The Tax Court recently supported the IRS' decision to deny taxpayers a charitable contribution deduction for a conservation easement that was greater than $5,000. The deduction was denied after the taxpayers failed to attach an appraisal for the easement with their return. The IRS also imposed accuracy-related penalties and interest that the Tax Court also upheld.

 


Tax Return Compliance

The IRS has issued an alert advising all taxpayers to be aware of fraudulent email schemes during tax filing season. The IRS has seen a surge in email scams designed to trick taxpayers into thinking these are official communications.

 


Corporate Taxation

Under IRC Section 754, a partnership may elect to adjust the basis of partnership property to fair market value when it distributes property or when a partnership interest is transferred.

 


Tax Flash

The Internal Revenue Service has issued its final draft of Form 8971, Information Regarding Beneficiaries' Acquired Property from a Decedent, and instructions. This is in response to new section 6035 of the Internal Revenue Code, which was added by the Highway Funding Bill of 2015, imposing on certain executors the responsibility of providing information statements to IRS and to any person acquiring an interest in property from estates.

 


Tax-Exempt Business

For many nonprofit organizations, a robust fundraising function is an important part of any long-term plan for success. A nonprofit's executive leadership team must, however, recognize that there are some significant risks that come with fundraising, and those risks and any related exposure for the organization must be properly managed.

 


Tax-Exempt Business

For nonprofit organizations that receive contributions from private donors, there can be a variety of risks, including tracking and expending contributions as well as accounting and reporting for such funds.

 


Tax Credits & Incentives

As more and more companies use technology to improve products and increase efficiencies, the relevance and importance of reviewing expenditures for eligibility for the Research and Development Tax Credit becomes more critical. One industry where there has been tremendous growth in the research and development sector is the food and beverage industry.

 


Tax Flash

On February 5, 2016, the IRS released an update to the Protecting Americans from Tax Hikes (PATH) Act of 2015, which was passed in December, citing new inflation adjustments effective for tax years beginning in 2016. The inflation adjustments focus on educator expenses, transportation fringe benefits, and the expensing of depreciable assets under Code Section 179.

 


Tax Return Compliance

The IRS has issued new guidance to expand non-taxable identity protection services to include those provided before a data breach occurs.

 


Tax Flash

On September 17, 2015, the Internal Revenue Service (the "IRS") issued final regulations under Code Section 871(m) relating to the imposition of U.S. withholding tax on "dividend equivalent" payments on certain U.S. equity swaps and other U.S. equity-linked instruments held by foreign persons. The regulations adopt, with some changes, the 2013 proposed regulations.

 


Tax Flash

The Delaware Competes Act (the "Act") was signed into law on January 27, 2016, changing the corporate income tax apportionment formula to a single sales factor apportionment formula by 2020 and making several changes to simplify the filing process for small businesses, thus providing protection against penalties for filing errors.

 


Tax Return Compliance

The Boston Bruins are center-ice in a battle with the IRS that could affect all major sports teams and many other businesses that move employees to so- called "offsite premises" to provide their services.

 


Family Wealth Services

Death is a subject that most people dread thinking about. When a loved one passes away, the pitfalls of an inherited IRA will most likely be the last thing on your mind. Yet, proper estate planning and knowing what steps to take after a loved one dies are essential to managing your finances.

 


Tax Flash

Massachusetts is in the planning phase of creating a plan to allow taxpayers to disclose uncertain tax positons to the state and obtain waiver of penalties. The plan is to complete the entire process from start to finish in four months.

 


Tax Flash

Effective for tax years beginning on or after January 1, 2016, Pennsylvania has eliminated the Capital Stock and Foreign Franchise tax for all taxpayers. The complete elimination of this tax had been delayed several times in the past, but was finally confirmed by Pennsylvania Governor Tom Wolf on January 4, 2016.

 


Tax Flash

Pursuant to new regulations signed by the New York State Commissioner of Taxation and Finance on December 31, 2015, and adopted on an emergency basis, the Metropolitan Transportation Business Tax Surcharge is to be computed at the rate of 28% for tax years beginning on or after January 1, 2016 and before January 1, 2017.

 


Tax Flash

With the passage of the PATH Tax Act in December of 2015, Congress retroactively increased the amount of the tax exclusion cap for mass transportation and transit pass benefits.

 


Tax Flash

As we have reported in previous Marcum Tax Flashes, identity theft by tax scammers has become an increasing problem. In these schemes, scammers either trick individuals into making false tax payments, or steal social security numbers in order to file fraudulent returns.

 


Tax Return Compliance

Generally, taxpayers pay tax on property they sell at a gain. A tax-deferred exchange under Section 1031 offers a great opportunity to delay capital gains taxes and build wealth. However, if not done correctly, taxpayers may be subject to tax, interest and penalties at the time of transaction. Following are some of the pitfalls and traps for the unwary.

 


Tax Return Compliance

The Illinois Department of Revenue has issued a press release announcing that the Department does not anticipate releasing individual tax refunds for the 2016 tax filing season until after March 1, 2016.

 


Tax Flash

As a general rule, the United States taxes its citizens and residents on their worldwide income and imposes annual information reporting on certain foreign assets. Failure to comply with these requisite tax information filings can potentially result in severe financial penalties, prosecution and, in some cases, jail time.

 


State & Local Taxation

Service providers in the State of Illinois who transfer items of tangible property incident to the services they sell are generally subject to the Service Occupation Tax Act (Act). The Act provides the framework for how sales and use taxes are applied to service providers who transfer property.

 


Tax Flash

The Internal Revenue Service ("IRS") released proposed regulations on December 21 that would require certain companies to annually report information relating to income and taxes on a country-by-country (CbC) basis.

 


Tax Flash

The U.S. Department of the Treasury and the Internal Revenue Service have announced a limited extension of time for the filing of the 2015 information reporting requirements for employers and insurers under the Affordable Care Act (ACA).

 

 
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