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IRS Announces Sweeping Changes To Its Offshore Voluntary Disclosure Programs New Rules Effective July 1, 2014

Errata The original article dated June 24, 2014 contained an error regarding the determination of “nonresidents” for purposes of the Streamlined Compliance Procedures. To qualify as “nonresidents,” individuals who are not citizens or green card holders must be outside the United States for at least 183 full days under the weighted ...

Defending Federal and State Tax Audits For High-Income Taxpayers

In 2013 the IRS audited slightly over one taxpayer in nine[1] with an income of $1 million or more.[2]  This audit rate represents a sharp 69 percent increase from the 6.42 percent audit rate that similar high-income taxpayers enjoyed as late as 2009. The purposes

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The New Massachusetts Income Sourcing Rules For Corporate Services: Massachusetts DOR Issues Working Draft of Implementing Regulations

Introduction

On July 24, 2013 the Massachusetts General Court enacted an $800 million transportation bill. This bill, inter alia, revised the Massachusetts corporate sourcing rules for the sale of services.[1] The bill became effective as of January 1, 2014[2] for corporations with nexu

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U.S. Courts of Appeals Strikes Down New IRS Regulation to Register Paid Tax Return Preparers

On Tuesday, February 11, 2014, the U.S. Court of Appeals for the District of Columbia struck down the Internal Revenue Service’s new licensing requirements for all paid tax return preparers. In 2011 the Department of Treasury issued new regulations regarding the registration and licensing of paid tax return preparers.  Under Treasury ...

Commissioner Amy Pitter Announces Impressive Mediation Goal: One-Third of All Disputes Involving $250,000 or More To Be Mediated

Boston, February 10, 2014 - In her remarks before the Annual State Tax Conference of the Massachusetts Society of CPAs at the Sheraton Framingham on Thursday, January 23, 2014, Commissioner Pitter announced an impressive goal – that one-third of all appropriate cases be mediated. She listed the following ...

IRS Announces Expansion of Fast Track Settlement Program for Businesses Nationwide

 On November 6, 2013, the IRS announced the nationwide expansion of the Fast Track Settlement (FTS) program to small businesses and self-employed individuals.[1] Prior to this announcement, FTS was only available to (1) large and mid-size businesses with more than $10 million in asset

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Family Mortgages Come Under IRS Scrutiny

The IRS insists that i’s must be dotted and t’s crossed before the IRS will allow taxpayers to deduct mortgage interest on a “qualified residence.”  If the formalities are not observed, the debtor may be denied a deduction while the creditor must nonetheless report the interest payments

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Beanie Baby Creator Avoids Jail Time, Pays Steep Penalties for Undisclosed Offshore Accounts

On January 14, 2014, Beanie Baby creator H. Ty Warner was sentenced to two years of probation and 500 hours of community service resulting from his guilty plea for tax evasion.  In addition, Warner was required to pay approximately $16 million in back taxes and interest and

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Appraiser’s Error Results in Severe Penalties For Taxpayers who Convey Conservation Easement

In November 2013, the United States Tax Court upheld the charitable deduction for a conservation easement claimed on the taxpayers’ income tax return but reduced its value and upheld the 40 percent gross valuation misstatement penalty.

In 2006, taxpayers George Gorra, a real estate professional, and Leila Gorra, ...

A Common Estate Planning Technique Saves Taxpayers Money but has Cost the United States Billions

In 2000, the United States Tax Court in Walton v. Commission of Revenue, 115 T.C. 589 (U.S. Tax Ct. 2000) gave approval to the Grantor Retained Annuity Trust (“GRAT”), and since that time, the GRAT has saved taxpayers millions but has cost the United States

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