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Fort Worth Tax Law Blog

Mediate with the IRS? Updates to fast-track settlement options

Sometimes tax litigation can't be avoided. When the IRS is being unreasonable, you need to protect your interests.

In other situations, however, it may make sense for both sides to come to an agreement.

The IRS seems to realize this too and recently made changes to its mediation procedures.
More specifically, it has added a new procedure called Fast Track Mediation-Collection (FTMC).

Washington offered Boeing prohibited tax breaks, says EU panel

A multinational World Trade Organization panel recently found that Washington State offered aviation company Boeing nearly $9 billion in "prohibited" tax breaks, benefits and subsidies to keep production of the massive 777x aircraft within its borders. The WTO panel investigated the arrangement as part of an ongoing business dispute between Boeing and fellow aviation giant Airbus. The feud began back in 2004, and the home countries of these avionics pioneers have become embroiled in the fighting as well. Relations between the 28-country European Union and the U.S. are tense where these companies are concerned, and competition for manufacturing rights, jobs, tax subsidies, development and distribution is fierce.

The WTO panel investigated the arrangement offered by officials in Washington due to allegations that the subsidy and tax benefit plan, touted as an incentive to keep manufacturing jobs within the state, unfairly excluded foreign competition for aircraft production (and the subsequent economic benefits that come along with such manufacturing, including jobs, factory construction, infrastructure improvements and more). The WTO committee disallowed nearly $6 billion in proffered tax cuts, subsidies and credits that would have benefited Boeing between 2024 and 2040, giving the U.S. government only a few short months to address the situation.

Tax deductions: changes in the law are likely in new Congress

Many changes await Americans next month when a new presidential administration and a new Congress take office.

It's no secret that those changes are likely to include a tax cut. But it's also important to be aware that an overhaul of how deductions are handled is also under serious discussion.

In this post, we will use a Q & A format to update you on some of the possible changes.

Texas banks help IRS fight money laundering and tax evasion

A conviction for criminal tax evasion carries serious penalties, including a stint in federal prison, hefty fines and the costs of government prosecution. Then there is the negative impact on business or individual reputation and the limitations that a criminal record can impose on future opportunity.

The role of banks in federal tax-crime investigation

The IRS and federal prosecutors are serious about investigation and enforcement of possible money laundering or tax evasion and financial institutions are required to help meet that goal.

What triggers a prison sentence in offshore prosecutions?

Willfulness is usually required to support criminal charges. Assigning signature authority to someone else to conceal account ownership could show willful conduct. Filing a document, such as a Foreign Bank and Financial Accounts/FinCEN Report 114 (FBAR) with false information is another.

A five year prison sentence is on the table in most federal criminal offshore account prosecutions. Allegations of failure to file or false statements related to foreign holdings must therefore be taken seriously. A recent case illustrates what can happen when the attorney general alleges significant assets were hidden offshore to avoid U.S. taxes.

Tax penalties: Does the IRS need clearer standards for using them?

The IRS's budget has been going down, not up. These cuts have made the agency less able to play its accustomed customer-service role in helping taxpayers comply with the U.S. tax code.

To be sure, the IRS also has its enforcement side, with penalties, audits, investigations and collection actions.

Could it be, however, that widespread use of tax penalties under the current system undercuts the goal of encouraging voluntary compliance?

Sports stars and money management: when things go wrong

College athletes still aren't paid (other than receiving scholarships). But the role of agents and advisers is very important in helping players procure pro contracts and managing their money if and when they do.

Like other financial advisers, those who represent athletes can run afoul of tax authorities. In this post, let's look at a specific case involving a businessman from North Carolina who recently pleaded guilty to filing a false tax return and committing wire fraud.

New rules on taxation of intercompany debt

Federal regulation of businesses is poised to change with the new administration, with important implications for tax compliance.

President-elect Trump has promised to roll back business regulation across the board. And with his surprising victory this week, he is in a position to put that promise into practice.

But it doesn't necessarily take a change of administration for there to be changes in tax rules to benefit businesses. In this post, we will inform you about one such change. It concerns "cash pooling," a technique that raises concern for regulators about so-called "earnings stripping."

Proposed estate tax rules could disparately impact franchisees

The IRS has reportedly received more than 8,000 public comments regarding proposed changes to how the agency determines valuation discounts under Section 2704 of the U.S. Tax Code. This provision, contained in Reg-163113-02 of the agency's regulations, deal with discounts allowed for valuation of business holdings and assets for purposes of calculating estate tax.

Many of the comments received from the public, as well as the subject of a letter issued November 1 by the Office of Advocacy of the U.S. Small Business Administration, deal with the unique issues facing franchise operators. Specifically, franchisees fear that failing to account for the valuation concerns inherent in franchise ownership would leave them disparately impacted by estate taxes.

Election angst leads many to consider moving abroad

According to some sources, Google searches for "emigrating to Canada," "moving abroad" and "leaving the U.S." (among others) spiked the night of the first election debate between Hillary Clinton and Donald Trump. Say what you will about either candidate, the truth remains that this election cycle has been a tumultuous one that has inspired deep feelings in supporters on both sides. These feelings have even inspired many to consider a radical solution if their candidate doesn't come out on top: moving out of the country.

It's one thing to dream of fleeing what you fear will be an unsuccessful government and another entirely to actually make it happen. There are countless considerations to be made before such a big move, many of which could have serious tax implications for you as an American citizen.

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