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?
Category: Federal Income Tax
Federal income tax advice, articles, tips, & more.
The Federal income tax is the largest expenditure for most individuals and businesses. It dwarfs the costs for insurance and basic necessities. This is only going to increase in the future. Tax planning is needed.
This page provides timely and thorough coverage of various Federal income tax law questions, court cases, and rulings.
If you need help with a Federal income tax matter, we can probably help. We help clients minimize their Federal income tax liabilities. Please call our tax attorneys to see how we can help.
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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
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
Tax on Military Benefits for Disabled Soldiers
Few would argue that soldiers and military personnel, especially veterans, should be afforded certain privileges. In American society as of late these benefits have included free or reduced cost education, health benefits, and in some cases, retirement benefits. Yet, the courts, and ultimately Congress, have been less giving with regard to the tax treatment of… Continue reading Tax on Military Benefits for Disabled Soldiers
Tax Treatment of Settlement Agreements (Again)
The classification of settlement payments for purposes of federal income taxes continues to be a problem for taxpayers and for their legal advisers. The Ninth Circuit, in Rivera v. Baker West, Inc., recently upheld a lower court’s determination that an employer correctly withheld federal taxes from a settlement agreement paid to a former employee. FACTS… Continue reading Tax Treatment of Settlement Agreements (Again)
Entrepreneur Rollover Stock Purchase Plans
Financing a business start-up can be a challenge. Most traditional lenders require that a business be operational for at least a year before they will provide small business loans. Moreover, venture capitalists are quick to reject most start-up proposals and if the venture capitalist is willing to fund the start-up they typically demand a significant… Continue reading Entrepreneur Rollover Stock Purchase Plans
Sometimes It is Best Not to NIMCRUT
The best laid tax plans often go awry as tax laws and life circumstances change. In other cases tax plans go awry because they were improperly conceived. I have been encountering a number of NIMCRUTs that should not have been undertaken. The NIMCRUT, otherwise known as the net income with makeup charitable remainder unitrust, is… Continue reading Sometimes It is Best Not to NIMCRUT
Taxes & Gay and Lesbian Marital Rights
Various states have enacted laws to stop recent attempts by gay and lesbian groups to achieve full marital equality. While these laws address marital rights, they do not address rights when it comes to fair treatment for Federal income tax purposes. The Dispute: Filing Status What would a challenge to fair treatment for Federal income… Continue reading Taxes & Gay and Lesbian Marital Rights