Archive for the ‘IRS and state tax collections’ Category
Thursday, July 9th, 2009 by Moore McLaughlin
In Rhode Island’s state budget bill for fiscal year 2010, signed by Governor Donald L. Carcieri on June 30, 2009, the lower capital gains rate is eliminated for personal income tax 
purposes. For tax years beginning on or after January 1, 2010 capital gains will be treated as ordinary income. As a result, some capital gains in Rhode Island that could have been taxed at rates as low as 1.67% will now be taxed at rates up to 9.9%.
Click here for Providence Journal article.
At the new higher rates, 1031 exchanges and other tax-deferral techniques will see a rebound in popularity. For more information on 1031 exchanges, visit the All States 1031 Exchange Facilitator, LLC website by clicking here.
Tags: 1031 exchange real estate investment, Capital gains tax, mclaughlin & quinn, Moore McLaughlin, Providence, Rhode Island, state taxes, tax, Tax planning
Posted in 1031 Exchanges, IRS and state tax collections, Tax Current Events and News, Tax planning
Tuesday, June 30th, 2009 by Moore McLaughlin
The Rhode Island Legislature has done it again. They have managed to find a way to not only drive more Rhode Island small businesses out of business or out of state, but at the same time they have managed to reduce tax revenues in the state. To top it all off, their actions are likely unconstitutional. This does not seem like the way to get Rhode Island back on its economic feet.
What I’m referring to is the recent passage of a law that requires Amazon.com to collect Rhode Island sales tax on sales made through Rhode Island-based associates. Click here for the entire article from the Providence Business News. Not surprisingly, Amazon.com immediately severed all relationships with Rhode Island-based associates.
Since book buyers can go directly to Amazon.com to buy their books, with no Rhode Island intermediary, Amazon does not have an obligation to collect the Rhode Island sales tax. So, now the state will still not receive any sales tax, and no income taxes, property taxes, employment taxes, etc., from the Rhode Island-based associate that may now go out of business, or move to another state. Absolutely brilliant! (more…)
Tags: Amazon.com, Blue Nile, BNA Tax & Accounting, business tax, California, corporate tax, Hawaii, mclaughlin & quinn, Moore McLaughlin, Overstock.com, Providence, Providence Business News, Rhode Island, sales tax, state taxes
Posted in IRS and state tax collections, Tax Current Events and News, Tax planning
Tuesday, June 16th, 2009 by Moore McLaughlin
The IRS says it is looking to make it easier for taxpayers to comply with recordkeeping requirements for employer-provided cell phones. Others see this as another attack on small business. A new notice from the IRS confirms several IRS proposals to simplify the procedures under which employers substantiate an employee’s business use of employer-provided cellphones. The notice also requests suggestions for alternative approaches.
In 2008, two identical bills-H.R. 5450 and S. 2668, both entitled “Modernize Our Bookkeeping In the Law for Employee’s Cell Phone Act of 2008″-were introduced in the House and Senate to remove cell phones and similar telecommunications equipment from the category of listed property. These measures, which had bipartisan support, and were backed by a number of companies and business associations, were never enacted. Perhaps that is why IRS is taking the matter into its own hands.
Under Internal Revenue Code Section 132, an employee may exclude from gross income the business use of an employer-provided cell phone as a working condition fringe benefit. However, because cell phones are listed property in Code Section 280F, strict substantiation requirements must be satisfied for business cell phone usage to qualify for the code Section 132 exclusion. Moreover, any personal usage of an employer-provided cell phone is a taxable fringe benefit. Thus, the current rules require documentation of the business and personal use of the cell phone.
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Tags: business tax, cell phone tax, cellphone tax, corporate tax, internal revenue code, IRS, IRS Notice, mclaughlin & quinn, Moore McLaughlin, Tax planning
Posted in IRS and state tax collections, Tax Current Events and News, Tax planning
Monday, June 8th, 2009 by Moore McLaughlin
Tom Quinn and I work with clients every day in matters before the IRS, the Rhode Island Division of Taxation and the Massachusetts Department of Revenue. Our representation is focused on audits, appeals, court cases, and collections. Somewhere along the way, each one of the clients has filed tax returns. Sometimes, though, not until they have engaged our firm.
Tom and I have reviewed hundreds, if not thousands, of tax returns throughout our respective careers. We have seen some that are properly and accurately prepared. We have seen others that are complete disasters. What is interesting is that no license is required to become a paid tax return preparer. Tax return preparers do not have to be licensed by the federal government or any state agency in order to prepare tax returns for a fee.
This may change soon. The IRS is working on rules that will require tax return preparers to be licensed. This licensing requirement is being brought about by the IRS in an attempt to reduce fraud and improve compliance. A proposal is said to be forthcoming before the end of the year. Most analysts feel that this change will be for the good and will mostly impact the small mom-and-pop tax return preparers, and that the national firms and CPAs won’t feel much impact at all.
Personally, I think this is a great move. Of all the returns that I have reviewed, by far the worst ones are by the lesser-trained, unlicensed tax return preparers. Tax returns prepared by CPAs or enrolled agents tend to be more accurate and better reflect the tax laws. This is not to say that all CPAs and EAs are great and that all unlicensed tax return preparers are terrible. But, based on my experience over the last 16 or so years, the numbers speak for themselves.
Check back towards the end of the year for an update on the status of these new rules. Maybe they will be in place by the next filing season.
Tags: CPA, EA, enrolled agent, internal revenue code, IRS, IRS and state tax collections, Massachsuetts Department of Revenue, Massachusetts, mclaughlin & quinn, Moore McLaughlin, Rhode Island, Rhode Island Division of Taxation, tax return preparer, tax returns, Thomas P. Quinn
Posted in IRS and state tax collections, Tax Current Events and News, Tax planning
Tuesday, May 26th, 2009 by Moore McLaughlin
According to a recent report in the Boston Business Journal, the 87 new auditors and tax collectors hired by the Massachusetts Department of Revenue last year have paid tremendous dividends to the Commonwealth’s coffers. According to this report by Lisa Van Der Pool, the Massachusetts Department of Revenue invested about $6 million last year and collected about $72 million in additional taxes. Nice return on investment. This article also reports that, according to the Department of Revenue, Gov. Deval Patrick has proposed that the DOR take on 14 more collectors. Click here for the full article.
As more states struggle with budgetary and other fiscal constraints, expect to see more efforts to audit and collect taxes under the current system. Our attorneys at McLaughlin & Quinn, LLC have already felt this renewed effort in both Massachusetts and Rhode Island. The numbers of new cases is at an all-time high. These state efforts are focused not just on personal and corporate income taxes, but sales and use taxes, payroll taxes, and excise taxes, such as the cigarette tax, fuels taxes and others.
Ms. Van Der Pool’s article correctly points out that everyone should pay their taxes according to the law. But, as a tax attorney I can attest that there can certainly be differing opinions as to the proper interpretation of the law. However, merely not paying any taxes, or not filing tax returns, is not the appropriate method to challenge an interpretation of the tax law.
If you have been selected for audit, if you know you owe taxes, or if you have not filed all required tax returns, and if you want to get these matters settled and behind you, you need to seek competant tax advice immediately.
Tags: Boston Business Journal, Deval Patrick, DOR, IRS and state tax collections, Massachusetts, Massachusetts Department of Revenue, Massachusetts DOR, mclaughlin & quinn, Moore McLaughlin, Rhode Island, sales tax, Thomas P. Quinn
Posted in IRS and state tax collections, Tax Current Events and News, Uncategorized
Monday, May 18th, 2009 by Moore McLaughlin
When it comes to IRS audits, not many people find them humorous or even mildly amusing. Tom Quinn and I deal with the IRS on a daily basis in audits and collections cases and while we find most IRS personnel to be extremely professional, our clients are generally not pleased to have to engage us. Since its inception, the IRS has been thought to be the tool of the politically powerful, whether true or not. Click here for an editorial in the Wall Street Journal that discusses President Obama’s recent joke about using the IRS audit against a state university.
Tags: audit, Internal Revenue Service, IRS, Massachusetts, mclaughlin & quinn, Moore McLaughlin, Providence, Rhode Island, Tom Quinn, Wall Street Journal
Posted in IRS and state tax collections, Tax Current Events and News, Tax planning
Monday, April 27th, 2009 by Moore McLaughlin
Not a day goes by when I don’t hear a radio or TV ad for a company that will “help you settle your back taxes for pennies on the dollar.” Not a week goes by where Tom and I don’t get a new client who was taken by one of these companies. These companies profit from instilling fear and by creating unrealistic expectations. Tom Quinn and I continue to hear stories of $5,000 up front fees that result in submitting an unrealistic offer in compromise that is not accepted. Once the offer is rejected, the client is told that additional fees are required for further representation.
Tom’s background in IRS collections and both of our years in private practice representing clients in IRS collections has taught us the realities of negotiating and dealing with the IRS. We understand what is and what is not possible. We go the extra mile to ensure that our clients have appropriate expectations, even if we contradict the radio ads.
I would like to see more attorneys general of the various states go after these companies. The Massachusetts Attorney General and the attorneys general of 17 other states entered into a consent agreement with one of the leading tax relief companies last summer and forced them to pay a substantial amount in restitution to consumers that were misled. Read full article here. The New York City Department of Consumer Affairs won a settlement against another noted tax relief company in 2006, finding that she deceived consumers. Read full article here. Perhaps the Federal Trade Commission or the IRS should take action. It brings me and Tom no pleasure to have to charge additional fees to a client who has already paid substantial fees to one of these companies, and who still owes the taxes, penalties and interest.
Contact your CPA or us if you owe back taxes and we can steer you in the right direction.
Tags: asset protection, collection, debt, debt relief, installment agreement, IRS, IRS and state tax collections, IRS levy, IRS lien, levy, lien, Massachusetts, offer in compromise, Providence, Rhode Island, tax lien, Thomas P. Quinn, wage levy
Posted in Asset Protection Planning, Financial workout, IRS and state tax collections, Tax planning