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Monthly Archives: November 2019

Increased Surge in Expats has Increased the Need for International Tax Advice

According to International Investment, the number of expats hits a record high of 258 million, this increasing global movement of people is driving significant demand for international tax advice. 

Quoting the International Organization of Migration, one in every 30 (about 258 million people) were living outside their country of origin in 2017. 

That is both a record high and a number that has beaten all expectations. A 2003 projection anticipated that by 2050, there would be around 230 million based outside their birth nation. But the latest projection has been dramatically revised upwards, there will be more than 405 million living away from their country of birth by 2050.

The demand for international tax advice is set to grow further still as the world becomes increasingly globalized and as the cross-border regulatory landscapes continue to evolve at a faster pace.
 
This can be attributed, we believe, to three key factors: 
  1. First, is the increasing movement of people. Whether driven by geopolitical, work or lifestyle reasons, more and more individuals are on the move around the world.  In addition - and despite the rhetoric of some populist politicians - globalization in the world of trade and commerce is here to stay and is, if anything, gaining momentum as it encourages economic growth, creates jobs, makes firms more competitive, and lowers prices for consumers," he added.
  2. Second, since the global financial crisis both individuals and companies have become more financially literate and aware of the importance of specialist financial advice, especially when it comes to cross-border affairs. and
  3. Third, the reporting and tax filing requirements are increasing in most jurisdictions.  For instance - and this is just one example - in the US where the Foreign Account Tax Compliance Act, or FATCA, is almost universally recognized as being burdensome, onerous and complex."
"The enquiries are coming from both internationally-mobile individuals and firms who are seeking advice on compliant and up-to-date tax filing, residency issues, inheritance tax, self-assessment, property tax structuring and disclosures, national insurance contributions, trusts and wills," director of deVere Tax Consultancy, Mitch Young, said.
 
Need International Tax Advice?
 
Contact the Tax Lawyers at
Marini & Associates, P.A.
 
 for a FREE Tax Consultation Contact US at
or Toll Free at 888-8TaxAid (888 882-9243).

 
 
 


 
 
 
 

Read more at: Tax Times blog

Tax Court Decision May Create Challenges To Deduction Denials for Legal Marijuana Businesses!

According to Law360, a recent U.S. Tax Court decision may open up a new avenue to challenge a tax code provision that prohibits deductions and credits for marijuana businesses, as several court judges said the provision may amount to an unconstitutional excessive penalty.

Earlier this month, the Tax Court in an opinion with multiple partial dissents, upheld a $1.2 million tax deficiency for a California medical marijuana company, rejecting its arguments that Internal Revenue Code Section 280E is a penalty and an unconstitutional excessive fine that violated the Eighth Amendment.

Section 280E, which forbids a business to take credits or deductions when trafficking in a controlled substances, was enacted under Congress’ “unquestionable authority” pursuant to the 16th Amendment , which grants Congress the power to collect taxes on income, the majority opinion said. Section 280E does not violate the Eighth Amendment , which prohibits excessive fines, because the disallowance of deductions is a matter of “legislative grace,” not a penalty, the opinion said.

However, in an opinion dissenting in part, Judge David Gustafson said he would have held Section 280E unconstitutional because the 16th Amendment authorizes Congress to tax “income,” which is a gain or profit, but the disallowance of all deductions under Section 280E results in a tax on something that is different from someone's “income” within the meaning of the 16th Amendment.

 
“Even if it’s not an excessive fine, the fact that it’s a fine means it’s effectively a penalty for crime,” he said.
“That puts 280E in a whole new light.
It’s no longer a tax; it’s a penalty."
 
Judge Gustafson also said in his dissent that the Tax Court's reliance on the Tenth Circuit’s decision in Alpenglow Botanicals LLC v. United States , which upheld the IRS’ disallowance of $50,000 in business expenses for a Colorado marijuana dispensary under Section 280E, was not persuasive because the Tenth Circuit did not perform an Eighth Amendment constitutional analysis.

Since then, 10 states have legalized marijuana, Illinois is slated to legalize cannabis beginning Jan. 1, 2020, and 33 other states and Washington, D.C., have permitted the use of medical marijuana. As marijuana use becomes more mainstream, Section 280E is effectively penalizing businesses trying to legally operate at the state level, according to Rachel K. Gillette, who is chair of the cannabis law group at Greenspoon Marder LLP.

Have a Tax Problem?
 
 
Contact the Tax Lawyers at
Marini & Associates, P.A.
 
 for a FREE Tax Consultation Contact US at
or Toll Free at 888-8TaxAid (888 882-9243).

 
 
 
 
 


 

Read more at: Tax Times blog

2nd Circ Orders Trump's Accountant To Hand Over Tax Returns

According to Law360, President Donald Trump and his accounting firm must comply with a subpoena from the Manhattan district attorney and hand over tax returns, the Second Circuit ruled on November 4, 2019, in a decision that will likely be appealed to the U.S. Supreme Court.

The Second Circuit disagreed with U.S. District Judge Victor Marrero of the Southern District of New York that the federal court should abstain from the case under the U.S. Supreme Court's 1971 case Younger v. Harris, which bars federal courts from interfering in matters a state court can handle.

The Second Circuit said that even though the Younger case does not apply, presidential immunity from the state criminal process does not extend to investigations such as grand jury subpoenas at issue in the case.

Manhattan District Attorney Cy Vance is seeking Trump's personal tax returns and other records from Mazars USA LLP as part of an investigation into hush-money payments to two women alleged to have had affairs with Trump, Stephanie Clifford, also known as Stormy Daniels, and Karen McDougal, and how those payments were recorded in the Trump organization's records, the district attorney's office has said. The case is Trump v. Vance Jr., case number 19-3204, in the U.S. Court of Appeals for the Second.

Being Audited by the IRS?
 

Contact the Tax Lawyers at
Marini & Associates, P.A.
 
 for a FREE Tax Consultation Contact US at
or Toll Free at 888-8TaxAid (888 882-9243).

 

 
 
 

Read more at: Tax Times blog

IRS Auditors Set to Audit Companies that Owe Repatriation Tax

The Internal Revenue Service said on November 4, 2019 that it would begin examinations of U.S.-based multinational companies’ 2017 and 2018 returns to ensure they comply with the repatriation tax provision of the tax overhaul enacted two years ago.

To promote compliance with Internal Revenue Code Section 965 , the IRS said it would start scrutinizing affected multinationals’ returns as part of its campaign announced in July 2018 on that facet of the Tax Cuts and Jobs Act .

The agency said its focus will start with examining 2017 returns and “generally require” looking at companies’ 2017 and 2018 filings. In addition to examinations, the campaign will provide technical assistance to IRS teams working on Section 965 matters, with a focus on identifying and addressing taxpayer populations with potential material compliance risk, according to the agency’s announcement.

The agency also said the audit could expand beyond reviewing taxes paid on offshore profits, it could trigger an examination of other changes companies made to their tax strategies after the 2017 law, which cut the corporate rate to 21% and overhauled the international tax rules.

“It is anticipated that returns selected as part of the 965 campaign will also be risked and, if appropriate,
examined for other material issues,
especially issues related to”
corporate planning
in response to the tax law,
the IRS said on its website, referring to the code section 965.

Affected companies were given the option of paying the tax interest-free over eight years, though as November 4, 2019's notice said, the “vast majority” of Section 965 liability has been expected to arise on corporate returns for 2017 and 2018.

The LB&I division currently has 53 active compliance campaigns listed on the IRS website.

 
Being Audited by the IRS?
 
 
Contact the Tax Lawyers at
Marini & Associates, P.A.
 
 for a FREE Tax Consultation Contact US at
or Toll Free at 888-8TaxAid (888 882-9243).

 

 
 
 
 
 
 
 
 
 
Sources:
 
 
 
 
 
 

Read more at: Tax Times blog