Oct 242011
 
IRS To Require Accounting Software Data Files

The IRS has recently announced its intent to seek data records maintained by small businesses that utilize accounting software programs, such as QuickBooks or Peachtree, when the business is the subject of an audit.  IRS examiners will be requesting these files in the majority of cases where the taxpayer already uses electronic accounting software to maintain its books and records.  The IRS will not accept reports exported to Excel, “condensed” data, or any other data submission other than the accounting software’s backup file, which provides an exact copy of the original books of entry as well as a record on More…

Oct 142011
 
Large Corporations Lobby For Tax Holiday

Yesterday, we posted a blog describing a recent IRS investigation into Google’s method of reducing their tax bill by transferring intellectual property assets into overseas entities where the income from those assets are taxed at rates which are more favorable.  One of the obvious problems with this strategy is that, in order to avoid paying United States taxes on this income, the money must be left in those entities and outside of the United States.  Which is exactly  where companies such as Google would like to put all that money to use.  Unfortunately, if these funds are brought back to More…

Oct 132011
 
IRS Scrutinizes Google For Offshore Transactions

It appears that the IRS attack on offshore tax havens may claim another “victim.”  The IRS is now examining how Google was able to avoid federal income taxes by shifting profits into offshore subsidies.  It seems that Google transferred certain software rights and other intellectual property, including their $1.6 billion investment YouTube, into overseas foreign units.  This enabled Google to attribute earnings generated by these holdings to the offshore entities, which pay lower income taxes. Moving profit abroad is an especially common method of slashing the tax bills of technology companies.  This is primarily because of their valuable, and easily More…

Oct 112011
 
Federal Government Prevails Against Tax Shelters

The Justice Department recently declared victory in three different tax shelter cases.  “These three significant decisions are further evidence that the courts will not countenance abusive tax shelters, no matter who designs them or how complicated they are,” said John A. DiCicco, Principal Deputy Assistant Attorney General of the Justice Department’s Tax Division.  “Large corporations and wealthy individuals should think twice before pouring money into these sham arrangements.” As described by the Justice Department, details for the three cases were as follows: In Southgate Master Fund LLC v. United States, the U.S. Court of Appeals for the Fifth Circuit, based More…

Oct 102011
 
IRS Extends Filing Deadline For Victims Of Natural Disasters

In an effort to provide relief to those impacted by natural disasters last summer, the IRS has announced that taxpayers who submitted extensions to file their income tax returns by April 18 now have until October 31 to file their tax returns if they were affected by Hurricane Irene, Tropical Storm Lee (New York and Pennsylvania), or the Texas wildfires.  The postponed deadline and IRS e-filing access through October 31 is only for those taxpayers who were impacted by these disasters and e-File and Free File will remain available to accept their returns through the end of the month.  For More…

Oct 072011
 
It Seems The Federal Government Has Had Enough Of Medical Marijuana

On Wednesday we posted a blog discussing the recent IRS ruling against medical marijuana dispensaries’ ability to take deductions for payroll, expenses, etc.  Now it appears that the DOJ has begun cracking down on these facilities as well.  Federal prosecutors have begun warning pot dispensaries in California that they must shut down in 45 days or face criminal charges and confiscation of their property, even if they are operating legally under the state’s medical marijuana laws.  According to U.S. Attorney Laura Duffy of San Diego, “under United States law, a dispensary’s operations involving sales and distribution of marijuana are illegal and More…

Oct 052011
 
IRS Rules Against Medical Marijuana Dispensaries

The IRS has ruled that dispensaries of medicinal marijuana cannot deduct standard business expenses such as payroll, security, or rent.  In a ruling against Harborside Health Center of Oakland California, one of the nation’s largest medical marijuana dispensaries and one that is considered a model for the industry, the IRS held that the company owed $2.5 million in back taxes for the years 2007 and 2008. The basis for the IRS ruling was Section 280E of the Internal Revenue Code, which was originally enacted to target drug kingpins and cartels, and bans any tax deductions related to “trafficking in controlled More…