There is a disconnect between the statute and the regulation that impose penalties for violating FBAR filing requirements. Our International Tax Group covers the bases of the three court cases that have the IRS batting just 1 for 3. The 2004 statute can impose a penalty greater than $100,000 The regulation, which wasn’t updated, limits penalties to $100,000 Two courts favor the regulation; one the statute Read the full advisory here. [...]Read more
Our Federal Tax Group highlights Section 199A and the IRS’s new proposed regulations that allow pass-through businesses to deduct up to 20% of their qualified business income.
- Certain banks qualify for the deduction
- LLCs, partnerships, and S corporations can benefit
- Only productive businesses can take advantage
- Anti-abuse rules are built in
Read full advisory here.
What is the practical risk that states attempt to apply Wayfair retroactively? And should taxpayers rush to limit exposure for historical periods by entering into voluntary disclosure agreements with states that might assess tax retroactively under Wayfair? In an article originally published in Bloomberg BNA’s Weekly State Tax Report, Zach Gladney and Charles Wakefield explain why applying Wayfair retroactively would be misguided and unsuccessful. To read the full article, click here. [...]Read more
Our Federal Tax Group explains why Section 163(j)’s small business exception is useful, but may not be quite the exemption taxpayers think it should be. “Small business” is a difficult definition Thwarted by the aggregation rule Can you apply the real estate exemption? Read the full advisory here. [...]Read more
The IRS has announced its intent to beef up enforcement efforts against tax noncompliance relating to transactions in cryptocurrencies. Despite this effort, various tax aspects of cryptocurrency transactions remain uncertain. Our International Tax and Blockchain & Distributed Ledger groups team up to explain how this uncertainty affects cryptocurrency funds. Cryptocurrencies are treated as property, not currency, for tax purposes (but the certainty largely ends there) Can cryptocurrencies and their derivatives qualify as commodities for tax purposes? Read the full advisory here. [...]Read more
The U.S. Supreme Court’s Wayfair decision overturns decades-old precedent and fundamentally changes the use tax collection landscape while leaving a number of questions unanswered. Our State & Local Tax Group explains how this decision has huge implications for online retailers, states’ coffers, and consumers’ wallets. The physical-presence standard under Quill is no more What is the new standard? Retroactivity and a host of other unresolved issues Read the full advisory here. [...]Read more
Our International Tax Group discusses a recent case that offers a cautionary tale on statutory limitations periods and shows how even seemingly straightforward provisions are open to interpretation. 10 years vs. three years vs. two years? When is a refund “attributable to” foreign taxes? What does it mean to “pay” taxes? Read the full advisory here. [...]Read more
Many states have begun to treat IRAs as unclaimed property even before the owner can take a tax-free distribution. But now the IRS has ruled that escheatment is equivalent to a distribution and subject to federal income tax withholding and reporting requirements. Our Unclaimed Property Group dives into this dilemma for holders, owners, and states alike. Revenue Ruling 2018-17 concludes that escheatment of an IRA is a designated distribution Holders must honor federal tax withholding and reporting rules upon escheat States are aggressively auditing IRAs Potential negative impact on [...]Read more