The Section 44 small business disabled individuals tax credit provides a tax incentive to comply with the Americans With Disability Act of 1990 (“ADA”). There is very little guidance for the tax credit. The recent Arevalo v. Commissioner, No.?05-61129 (5th Cir. 2006), case provides an opportunity to consider this tax credit. Facts & Procedural History Arevalo “invested”… Continue reading The Section 44 Small Business Disabled Access Credit
Category: Tax
An Example of How Our Tax Laws Favor the Wealthy
In my tax practice, I have noticed that the tax laws for issues that face my wealthy clients are often much more friendly than the tax laws for issues that face my not so wealthy clients. The most recent Vines v. Commissioner case and the Cowan v. Commissioner cases provide examples. Facts & Procedural On… Continue reading An Example of How Our Tax Laws Favor the Wealthy
Part-Time Employee Not Entitled to Deduction for IRA Contribution
Taxpayers who participate in their employer’s retirement plan are not able to deduct contributions the taxpayer makes to their IRA retirement account. This is also true for taxpayers who are entitled to participate in their employer’s retirement plan, but choose not do so. In Colombell v. Commissioner, T.C. 2006-184, the court considered whether an employee… Continue reading Part-Time Employee Not Entitled to Deduction for IRA Contribution
French Exempt Low Wage Employees from Payroll Taxes: Could it Work in the US?
It is always interesting to hear about how other countries address tax issues. Like the United States, the French government collected higher than expected tax revenues last year. Where the United States government opted to keep the tax revenues, the French government has proposed to use the tax revenues to exempt minimum wage employees who… Continue reading French Exempt Low Wage Employees from Payroll Taxes: Could it Work in the US?
Deducting Investment Advisor Fees Paid by Trusts
There has been a split in the various circuit courts of appeals regarding the deductibility of investment advisor fees paid by trusts. The Second Circuit Court of Appeals, in William Rudkin Testamentary Trust v. Commissioner of Internal Revenue, recently held that investment advisor fees paid by trusts are limited by the Section 67 two percent… Continue reading Deducting Investment Advisor Fees Paid by Trusts
Ex-Spouse’s Defense for Tax Discharged in Bankruptcy
What if an ex-spouse who is jointly liable for the tax waits until after the other ex-spouse’s bankruptcy discharge and argues that the taxes were not discharged in bankruptcy as the tax return was invalid? The court addressed this in Kuhl v. United States, No.?05-6570-BK (2nd. Cir. 2006). Facts & Procedural History Ms. Kuhl owed the IRS… Continue reading Ex-Spouse’s Defense for Tax Discharged in Bankruptcy
Compensatory Damages May Not be Taxable: Let the Tax Refunds Begin
This is one of those fascinating cases. Despite the long line of case law, the US Court of Appeals for the District Circuit, in Murphy v. Internal Revenue Service, has held that Section 104(a)(2) is unconstitutional. Facts & Procedural In Muphy’s Case Murphy was awarded compensatory damages for emotional distress and loss of reputation. Murphy… Continue reading Compensatory Damages May Not be Taxable: Let the Tax Refunds Begin
Taxes & Limited Liability Companies
The Limited Liability Company or LLC is a legal entity formed with the state. Once formed, taxpayers have the ability to determine how the LLC is taxed for Federal income tax purposes. This presents a number of issues that have to be considered for LLC owners. Income Taxes & LLCs The IRS regards a single… Continue reading Taxes & Limited Liability Companies
Estate Tax Valuation vs. Income Tax Valuation
The question in Janis v. Commissioner is whether a taxpayer can claim that property has a low value for estate tax purposes and then turn around and claim that the property has a high value for income tax purposes. The Ninth Circuit said “no,” but the answer could have been different under slightly different facts.… Continue reading Estate Tax Valuation vs. Income Tax Valuation
More on IRA Beneficary Designation Planning Opportunities
It is probably safe to say that most IRA owners really don’t put much thought into who they designate as their IRA beneficiary, but even IRA owners who do may very well have not done their planning correctly. This is especially true in that the IRA beneficiary designation rules are so complex. With traditional IRAs… Continue reading More on IRA Beneficary Designation Planning Opportunities