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| Warm fuzzy feelings and a good tax deduction are no longer enough in charity fundraising. Charities go to great lengths to court donors, often offering much in return for the dollars contributed. These perks are exactly what Congress worried about when it created charitable contribution deductions and both legislators and the IRS have turned a suspicious eye on contributions that seem to garner as much booty for the donor as cash for the charity. Rutgers University professors Leonard Goodman and Jay A. Soled take a close look at the laws governing charitable contributions in the most recent issue of TAXES: The Tax Magazine. They note that many taxpayers either don't know the rules or are willing to ignore them and “play the audit lottery” while taking large deductions that would be disallowed once the IRS found out about the gifts or services offered in return for their gifts. Fines and penalties can be assessed against the taxpayer, the return preparer, and the charity involved in many instances, Goodman and Soled note. Click here to get a full copy of this 6-page article and learn how to make sure quid pro quo contributions are correctly noted on returns you prepare. |
| To order TAXES: The Tax Magazine, click here. |
| Related publications of interest include: |
Charitable Giving Answer Book
Investments and Taxes
Forming the Exempt Organization |
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| Current laws on gifts and estate taxes couple with historic low interest rates and depressed asset values to allow unheard of ways to pass wealth to heirs. Two Miami attorneys, Richard M. Goldstein and Derek P. Richman, provide insightful discussions of transferring wealth in a low-interest-rate environment through grantor retained annuity trusts (GRATs); charitable lead annuity trusts (CLATs); intentionally defective grantor trusts; and family limited partnerships. Each of these strategies has pluses and minuses as detailed in this article in the Journal of Practical Estate Planning. Some strategies raise issues with generation skipping transfer tax issues, but the current interest rate environment can create tax-advantaged transfers of wealth when the economy rebounds. Get all the pros and cons of estate planning in a low-interest environment in this 6-page article by clicking here. |
| To order the Journal of Practical Estate Planning, click here. |
| Related publications of interest include: |
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| Many U.S. companies use foreign source income rules as part of their tax planning strategies. The credit for offsetting foreign taxes paid can reduce U.S. tax liabilities and protect the profits earned in foreign operations. But many questions must be answered when determining where income is sourced for tax purposes. The statutory category of income is sometimes ambiguous and a careful look at the rules and the specifics of the transaction are a must. For example, computer software sales could be classified as a simple transfer of inventory or as a lease. Determining the exact nature of the transaction will drive which sourcing rules are used. Sourcing decisions are the building block of determining international transaction tax planning. For access to the full 24-page chapter on sourcing rules from the Practical Guide to U.S. Taxation of International Transactions by Robert Meldman, J.D., LL.M., Michael Schadewald, Ph.D., CPA, and Robert Misey, J.D., LL.M., M.B.A., click here. |
To order the Practical Guide to U.S. Taxation of International Transactions, click here.
For a full detailed Table of Contents from the Guide, click here. |
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| Taxpayers can use a wide variety of accounting techniques to keep their books. Cash and accrual methods along with hybrids of the two are used by various taxpayers to best show the flow of income to their businesses. The IRS also wants a system that clearly shows income, but how the IRS wants the income tracked and how taxpayers would like to see it done could diverge. Susan Flax Posner, J.D., LL.M, looks at how accounting decisions affect tax compliance in the 2004 Federal Tax Course. This 62-page chapter looks at all the angles, and it helps tax professionals look at the accounting decisions that are made with an eye toward how that will be reflected on a tax return. For the free copy of this chapter, click here. |
To order the Federal Tax Course, click here.
For a full detailed Table of Contents from the Federal Tax Course, click here. |
| Related publications of interest include: |
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| Corporate tax planning in the 1990s became a high stakes game where more and more consultants were selling “packages” to large companies that often used multiple sections of the Internal Revenue Code and complex transactions to achieve massive tax savings. IRS strategies to deal with these transactions, which were growing more and more complicated, soon begin to fall behind. Litigation, legislation and regulations were just not enough. Now the IRS is focusing on disclosure and transparency to lead the way in finding what it has determined to be “abusive transactions.” More and more companies are being caught in the IRS net and the enforcement efforts are likely to speed up following some successful court cases on the part of the government. Learn more about the most recent developments in tax shelter enforcement by clicking here for a chronology of tax shelter policy from Tax Shelter Alert. |
| To order Tax Shelter Alert, click here. |
| Related publications of interest include: |
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| CCH has again been chosen to provide the tax research content and tools that IRS personnel use to examine returns, plan audits and challenge tax returns. When field agents are on the job, they use CCH publications and resources to answer their questions and formulate their questions to taxpayers and practitioners. These agents will have access to many of the same materials that we highlight for you in Focus on Tax each month, as well as the vast array of content CCH editors produce on taxes. Click here to read more about how the IRS will use CCH tax research content. |
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