Oct 082012
 

Last week, the Florida Supreme Court unanimously ruled that foreigners and out-of-state residents may qualify for the homestead exemption from property taxes found in the Florida Constitution when their home is the permanent residence of a dependent who is eligible for the homestead exemption. The case involved David and Ana Andonie, who migrated to Florida from Honduras on investment visas, and were denied a 2006 homestead exemption on their $1 million home despite the fact that their three minor children were born in Miami, were U.S. citizens, and had never resided outside the State of Florida.  The Miami-Dade Property Appraiser More…

Sep 202012
 
IRS Treatment Of Forgiven Student Loan Debt Causing Concerns

In the wake of the housing market collapse, many people have become familiar with the concept of cancellation of debt (COD) income.  The basis for COD income is found in IRC § 61(a)(12) which states that gross income includes “income from the discharge of indebtedness.”  Understanding the logic of this provision can be tricky.  When a loan is given, neither the lender nor the borrower have any gain or loss.  The lender has no loss because it expects to be repaid and the borrower has no gain because it expects to have to repay loan.  Thus, at this point, there More…

Sep 122012
 
IRS $104 Million Whistleblower Payment Should Make Foreign Account Holders Nervous

Bradley Birkenfeld, a former UBS AG bank executive, was instrumental in helping U.S. authorities expose tax evasion facilitated by the Swiss banking giant.  The information Birkenfeld provided led to an investigation that ultimately resulted in a 2009 settlement between the United States and UBS, with the latter agreeing to pay $780 million in fines and to turn over the names of thousands of Americans suspected of using Swiss bank accounts to evade taxes.  This settlement would be the precursor to the breaking of the backbone of the Swiss banking industry as a haven for tax-dodgers.  On Tuesday, Birkenfeld got his More…

Sep 072012
 
Church May Have Violated IRC By Endorsing Romney For President

St. Raphael Catholic Church of El Paso Texas appears to have violated the IRC by endorsing Mitt Romney in its bulletin.  “I am asking all of you to go to the polls and be united in replacing our present president with a president that will respect the Catholic Church in this country,” the entry in the church’s August 5 bulletin says. “Please pass this on to all of your Catholic friends.” 501(c)(3) organizations are strictly prohibited for engaging in political activity under several provisions of the IRC.  The rules that apply with respect to lobbying activities are set forth in More…

Sep 042012
 
What Qualifies As “Compensation” For The Purposes Of Florida’s Documentary Stamp Tax In Real Estate Transactions?

Section 201.02 of the Florida Statutes imposes an excise tax at the rate of $.70 per $100 (or portion thereof) on documents that transfer an interest in real property, such as warranty deeds, quit-claim deeds, easements, and deeds in lieu of foreclosure.  The tax is reduced for transfers in Miami-Dade County, where the rate is $.60 per $100 (or portion thereof), when the property is a single-family residence.  This documentary stamp tax is calculated based on the amount of “consideration” that passes between the buyer and the seller. So what qualifies as “consideration” for these purposes?  According to the above-referenced More…

Aug 312012
 

A Florida Miccosukee Indian tribe is learning that not even sovereign Indian nations can escape the long arm of the IRS.  An attorney for the tribe appeared in front of a three-judge panel of the 11th U.S. Circuit Court of Appeals on Thursday to argue that the IRS has no explicit authority to subpoena banks for tribal records.  The judges did not seem to be impressed with the tribe attorney’s argument that, “”when it comes to Indian tribes there has to be specific mention in the statute that applies to them,” pointing out that Indian tribes are included in broad More…

Aug 292012
 
What To Do If You Are A Victim Of Tax-Related Identity Theft

Tax-related identity theft is on the rise, especially in Florida.  According to a July, 2012 report by the Treasury Inspector General for Tax Administration (TIGTA), an analysis of tax returns processed during the 2011 filing season identified approximately 1.5 million returns with characteristics of identity theft, which caused the IRS to issue refunds in excess of $5.2 billion.  Based on this analysis, TIGTA conservatively estimated that the IRS could issue approximately $21 billion in fraudulent tax refunds resulting from identity theft over the next five years.  Obviously, this type of crime is paying, and so it is reasonable to expect More…

Aug 272012
 
Employers: What To Do If You Receive A Notice Of Wage Levy

When a taxpayer fails to satisfy their tax liabilities, the IRS has an wide variety of collection tools that it may call upon in order to force the taxpayer’s compliance. One (infamous) method is that of a wage levy, which requires employers to assist the IRS in its tax collection efforts by seizing the taxpayer’s income at the source. When the employer receives a Form 688-W, Notice of Levy of Wages, Salary, and Other Income, they have little option but to follow the IRS’ instructions.  The IRC requires that the employer deduct a certain amount of the employee’s pay and More…

Aug 232012
 
New Mexico Man Convicted For Retaliation Against IRS

A man in Albuquerque New Mexico has been convicted of retaliating against two IRS workers who were attempting to collect taxes from him and his wife.  Sixty-eight-year-old John Williamson faces up to 15 years in prison and a fine of up to $255,000 for felony charges of retaliation and interference with the IRS agents’ official duties.  Williamson and his wife, Nancy, were indicted last year on charges that they filed false liens against the IRS agent and his supervisor’s homes, vehicles and personal property, claiming the IRS workers owed them nearly a billion dollars.  Nancy previously pled guilty in May More…

Aug 172012
 
Swiss Banks Begins Turning Over Their Own Employees To The IRS

A frequent topic of conversation on this blog is the issue of foreign tax havens and the trouble they can cause with the IRS.  Usually, these articles discuss the consequences to taxpayers who have maintained foreign accounts in banks which are now working with the IRS in an effort to save themselves from further prosecution. However, this time it appears that a number of Swiss banks are throwing their own employees under the bus. At least five Swiss banks, including HSBC Holdings Plc’s Swiss unit, Credit Suisse Group AG (CSGN) and Julius Baer Group Ltd. (BAER), have supplied e-mails and More…