Author: Elf
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The Applicability of the Administrative Procedure Act to Federal Tax Litigation
When Congress made the Administrative Procedure Act (APA) in 1946, it was meant to balance the power of government agencies with individual rights. The APA allows people to challenge agency actions in court. However, it doesn’t apply if there’s already a way to challenge the action. The U.S. Tax Court, for example, doesn’t follow the…
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Disastrous Tax Consequences to Avoid When Liquidating an S Corporation
An S corporation is a small business corporation that can be advantageous for small businesses because the business itself is not subject to federal taxation, only the shareholders are. When an S corporation liquidates, the tax consequences for the corporation and its sole shareholder depend on the fair market values and basis of its assets.…
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New Partnership Audit Regime: Opt-Out, Push-Out, or Pay-Up?
In 2015, Congress passed a new law that changes how partnerships are audited by the IRS. It makes the partnership responsible for any extra taxes owed after an audit, instead of the individual partners. The Treasury and IRS had to create regulations for this new law, but there were a lot of problems with the…
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Using Income Tax Treaties to Convert Taxable Income Into Nontaxable Distributions
The United States taxes its citizens on their income, no matter where they live in the world. Top-earning taxpayers are taxed at a rate of 39.6 percent. However, there are some exceptions to this rule, such as the I.R.C. §911 earned-income exclusion and the exclusion available under I.R.C. §933 for certain âbona-fide residents of Puerto…
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An Introduction to the Complexities of Taxing Cross-Border Transfers of Digital Goods and Services
Many companies now sell digital products and services online, like clothes and movies. People use their smartphones to shop and store their data in the cloud. But this has made it hard for governments to figure out how to tax these transactions across different countries. The U.S. has its own tax issues to deal with…
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Post-Mortem Considerations with Foreign Grantor Trusts After H.R. 1, Tax Cuts and Jobs Acts
For a long time, tax experts have helped families with one parent from another country and the kids in the U.S. set up trusts with a foreign corporation to save on taxes. But a new law called the Tax Cuts and Jobs Act changed the rules, and now everyone has to rethink their trust plans.…
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Bursting Bubbles: Evidentiary Presumptions in Personal Liability Assessments
If a business owner in Florida receives a Notice of Assessment: Personal Liability from the Florida Department of Revenue, it means the department believes they are personally responsible for the company’s tax debt. The penalty can be twice the amount of the tax owed, and the department is assumed to be correct unless proven otherwise.…
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The Tax Cuts and Jobs Act: Still Waiting for That Postcard
President Donald Trump signed the Tax Cuts and Jobs Act into law in December 2017. It made changes to the tax system, with the goal of making it simpler. Some parts of the tax code are easier, but others, especially for businesses, are more complicated. Many of the changes will expire in 2026. So, filing…
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Get Your 20 Percent Deduction by Calling 1-800-888-199A
The Tax Cuts and Jobs Act was passed in 2017 and will affect how lawyers and law firms in Florida plan their income taxes in 2018. The new laws will provide tax benefits for many lawyers, but they may need to restructure their finances to take full advantage of these benefits. The article explains important…
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International Tax and Estate Planning: Use of Check-the-Box Election in the Foreign Corporate-Trust Context
The check-the-box election is really important for international tax and estate planning. One common strategy is to use a foreign corporation owned by a trust to avoid U.S. estate tax on the death of the grantor. But with recent tax law changes, this strategy needs to be adjusted to avoid other tax issues. One way…
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Reasonable Answer Done the Wrong Way: Supreme Court Overturns Quill in South Dakota v. Wayfair, Inc.
Summary: A legal firm is representing a person in a court case. The person is accused of stealing trade secrets from their former employer. The legal firm is trying to defend them in court. The U.S. Supreme Court ruled that states can now force online retailers to collect and remit sales tax, even if they…
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It’s in Your Interest: New §163(j)s Limitations on Business Interest Deductions
The Tax Cut and Jobs Act of 2017 changed how businesses can deduct their interest expenses. This has a big impact on how businesses use debt in their finances. In the past, businesses could deduct the interest they paid on their debt from their taxes, which made using debt a popular choice for financing. But…
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Moving from New York to Florida: Perfecting Domicile
People in New York are thinking about moving to Florida for tax reasons. But just buying a house there isn’t enough to avoid New York taxes. They have to prove they’re really living in Florida now. This article explains what that means and what they have to do to make it official. Domicile is where…
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South Dakota v. Wayfair: The Case That Changes Everything
Before, online retailers didn’t have to charge tax because of a court case from 1992. This gave them an advantage over regular stores. States had a hard time making people pay the tax themselves. But now, a new court decision means that online retailers might have to charge tax, just like regular stores do. In…
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Allocation of the Purchase Price in Sales Transactions
As a lawyer, I deal with a lot of important tax and non-tax issues for my clients in business transactions. Some of these issues include things like warranties, indemnification, and restrictive covenants. One important issue that often gets overlooked is the allocation of the purchase price in a transaction, which is required by the tax…
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Passport Revocation for Seriously Delinquent Tax Debt
The IRS can tell the government to take away or limit your passport if you owe a lot of taxes. This law was passed in 2015 but didn’t start being enforced until 2018. This can affect anyone, not just lawyers, so it’s important to know about it. If you owe more than $50,000 in federal…
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Redefining Retirement in the 21st Century for the Small Employer and America
People are living longer, so we need to save more for retirement. The trend has been to save less, which could cause problems for social programs like Medicaid. Longevity also affects alimony laws, which may need to change. In the past, people had to rely on their kids for support in old age, but after…
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IRA Accounts and Possible Stretch Reduction
In 1974, Congress created IRAs to help people save for retirement without having to pay immediate taxes on their contributions and investment gains. This is known as a traditional IRA. You can get a tax deduction for the money you put into your IRA, but only until you turn 70 and a half. You can…
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Estate Planning During an Election Year: Will It Be 2012 All Over Again?
2020 might be a very busy year for estate planning attorneys because the current laws that give people a big tax break on what they can leave to their family and friends when they die could change soon. The laws are set to expire in 2025, but some people think they might change even sooner,…
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Charitable Giving in a Global Environment
In recent years, there has been a big increase in charitable giving across borders, with people in the United States donating a lot of money to help people in other countries. This has made it important for professionals like lawyers and accountants to understand the complicated laws around giving money internationally. It’s not just about…
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Records, Estimates, and Sampling, Oh My! Understanding the Limits of Statutory Authority for Florida Tax Audit Estimates and Sampling
A tax audit by the Florida Department of Revenue can be scary. They have the power to estimate how much tax you owe, even if it’s not accurate, and they can sample your records instead of looking at all of them. It’s important that they use these powers correctly so you don’t get stuck with…
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Creating a Florida Irrevocable Homestead Trust for Ad Valorem, Income, and Transfer Tax Purposes
Parents can help their kids buy a home by transferring the home or money to an irrevocable trust. This can help the child avoid taxes and protect the home in case of divorce. The trust needs to be set up in a certain way to work properly. Here are some sample provisions for the trust.…
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Expatriation from the United States: The Exit Tax
If you give up your U.S. citizenship or green card, you may have to pay a special tax. This tax has two parts: an “exit tax” and an “inheritance tax.” U.S. citizens can give up their citizenship at a U.S. embassy, while long-term residents can give up their green card. The tax rules are in…
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Tax Planning for Inbound Licenses of IP: What Is Left After Tax Reform?
In simple terms, intellectual property (IP) rights include things like patents, copyrights, trademarks, and trade secrets. Sometimes, the owner of these rights may want to let someone else use them in exchange for money. However, recent changes in U.S. tax laws have made it more difficult to do this in a tax-efficient way. Non-U.S. taxpayers…