|
One of the real hair-pulling changes in the 2004 Jobs Act for practitioners has become the new Uniform Definition of a Child. This attempt at simplification has left many practitioners struggling and caused some taxpayers to face larger tax bills for the 2005 tax year as they lost the ability to gain the deduction that was available under the former definition. In a recent issue of TAXES—The Tax Magazine, three Southeastern Oklahoma State University accounting professors tackle the sticky parts of the new definition and explain how it applies across all areas where it is now used in filing a return. All of the various issues of dependency are examined under the new definition and the problem areas are pointed out. In another article from TAXES, CCH’s Principal Analyst for Federal Tax Mark Luscombe looks at just how hard simplification really is to achieve. The new definition of a child is the perfect example of how complexity is often in the code for a reason and efforts to reduce it can have unintended consequences. And that is the case here, Luscombe notes. Fixing it, however, will have to wait for the 2007 tax year, meaning practitioners will have at least one more year to deal with this confusion.
|
| Related publications of interest include: |
|
|
Was this article useful?
Send us your comments: CCH-FocusOnTax@cch.com |
|
|
The October 1, 2005 effective date for the Streamlined Sales Tax Project was a surprising achievement, according to state tax experts John Healy and Bruce Nelson in a recent article in CCH’s Journal of State Taxation. The ability of the states to reach the level of agreement they have so far on definitions, sourcing of sales and other ways to reduced sales tax complexity was beyond what many thought was possible when the SSTP first began. But the hardest part lies ahead, Healy and Nelson note, as the states try to bring in more of the highly populated states needed to convince Congress that enough progress has been made to overturn the U.S. Supreme Court’s decision in Quill. That 1992 decision held that states cannot force remote sellers to collect sales and use tax unless they have actual physical presence in the state in question. In their article, Healy and Nelson analyze the recent developments and look ahead to the hurdles that could still trip up the streamlined sales tax.
|
Related publications of interest include: |
|
|
Was this article useful?
Send us your comments: CCH-FocusOnTax@cch.com |
|
|
Time and again the IRS and Congress have expressed concern over the potential for abuse in the area of Tax-Exempt Organizations (TEOs). IRS enforcement and congressional activity have been constant when it comes to seeking out ways taxpayers are using TEOs to lower their tax bills. And yet, TEOs remain a popular tax-planning tool in some instances, requiring tax practitioners to be aware of both the potential opportunities as well as the pitfalls of using TEOs to reduce taxable income in select circumstances. Patrick C. Gallagher takes a close look at the tensions, hotspots and pitfalls of TEOs in the recently published University of Chicago special issue of TAXES—The Tax Magazine. His in-depth article looks at how investments by TEOs are examined by the IRS as well as what exactly are the rules for making such investments remain tax-exempt.
|
|
Related publications of interest include: |
|
|
|
|
For businesses of all sizes, the decision to offer health and accident benefits is critical. But it is also the first in a series of decisions that must be made in this area that can affect the taxes of both the business and its employees. In Chapter 9 of CCH’s recently published Business Tax Answer Book, authors Terrence M. Myers and Dorinda D. DeScherer give practitioners an exhaustive overview of the critical questions and answers that arise when businesses offer health and accident benefits to their employees. Topics covered include:
- Group health coverage
- Self-insured health plans
- Archer Medical Savings Accounts
- Health savings accounts
- Flexible spending accounts
- COBRA
- Legal requirements for health plans
- Retiree health coverage
- Health benefit plan procedures.
|
|
Related publications of interest include: |
|
|
|
|
As the IRS has increased pressure on family limited partnerships and LLCs in recent years, that focus has widened to boost estate and gift tax audits. What practitioners must understand is that those audits are where any legal case is fully developed, according to John W. Porter, an experienced tax litigator. Porter writes in a recent issue of the Journal of Practical Estate Planning that it has become necessary to consult with a trial lawyer early in the estate-planning process to ensure that the non-tax reasons for creating an entity are properly documented in a way that will withstand examination in court. The early documentation steps will be critical, as is any information provided to IRS field agents during the audit examination, Porter notes.
|
|
Related publications of interest include: |
|
|
|
|
|
|
|
|
|
