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Fort Worth Tax Law Blog

Tax reform and business owners: Two things to watch

Keeping up to date with the proposed changes and the debates regarding tax reform occurring within the Senate and House is a daunting, potentially impossible task. A number of changes are under discussion, but two big ones that specifically impact business owners are the corporate tax rate and pass-through taxes.

What does the proposal say about the corporate tax rate? The current tax rate applied to corporations is set at 35 percent. The most recent proposal aims to reduce this tax to 21 percent. 

Supreme Court deciding question of tax evasion obstruction

SCOTUS recently heard oral arguments on a case involving a New York businessman convicted of several counts of tax evasion for failing to pay personal or company taxes for a number of years. The government presented evidence that Carlo Marinello II purposely destroyed business records (including bank statements, receipts, employee time sheets and bills), paid his employees in cash to avoid tax issues, never issued tax documents like W-2 forms, and didn’t fail tax returns for nearly 20 years.

Mr. Marinello was eventually, following a years-long investigation of his tax practices, charged with and convicted of nine counts of tax evasion-related crimes. This includes eight misdemeanors for willfully failing to pay taxes between 2005 and 2008. He was also convicted on a single felony charge for violating 26 U.S.C. § 7212(a), an anti-obstruction statute.

When does shredding of a tax record rise to obstruction?

Cleaning out paperwork is an important part of keeping records. It is unrealistic to keep all records, but when is it okay to start purging important documents? The Supreme Court of the United States (SCOTUS) will provide some clarification in an upcoming case.

Details of the case: shredding records and taking case

Estate tax changes part of Congressional tax reform

Here at Brown, PC, we advise wealthy taxpayers and their fiduciaries, including business owners, heirs and beneficiaries, farmers and ranchers, and professionals in the Dallas-Fort Worth area, across Texas and nationally about estate tax matters, which are usually highly complex and sometimes controversial. We represent taxpayers against the IRS in estate tax audits, in settlement negotiations, in related court disputes and in appeals. Our goal is to minimize the estate tax burden as well as related civil and potentially criminal penalties. 

We also provide guidance about property valuation issues and about preventative tax planning mechanisms to minimize the full impact of this tax, including targeted use of lifetime gifts, trusts and charitable giving. 

What information will Coinbase have to disclose?

The soaring price of bitcoin has crossed the $10,000 mark. Fail to claim gains on a tax return and it could prove costly as the IRS continues an investigation into virtual currency reporting.

For about a year, the IRS has been seeking user information from Coinbase, one of the largest virtual currency exchanges. The numbers of people using virtual currencies (Coinbase claims a customer base of 6 million) has not lined up with tax return disclosures (fewer than 1,000 taxpayers disclosed gains between 2013 to 2015).

When is a Texas Automotive Oil Sales Fee due?

If you sell oil in Texas, you likely need to pay the Texas Automotive Oil Sales Fee. The application for the Automotive Oil Sales Fee states that everyone that either manufacturers and sells automotive oil in the state, imports oil into the state for sale, use or consumption or sells more than 25,000 gallons of automotive oil annually and owns a warehouse or distribution center in the state must file an Application for the Automotive Oil Sales Fee Questionnaire

2 criminal charges that could result from the Paradise Papers

The Paradise Papers, like the Panama Papers before them, were released in an effort to bring attention to the use of offshore accounts. As noted in previous posts, these accounts are not illegal. Issues arise if the account holder is making use of the account in an attempt to hide assets from the Internal Revenue Service (IRS).

When do criminal charges result from offshore accounts? Although the accounts themselves are not illegal, improper use can cause problems. Various criminal charges can apply if the IRS is concerned an individual is attempting to hide assets. The papers noted above could result in fodder for the IRS to consider an investigation. 

What should you do when you get an IRS letter?

The IRS sends out tens of thousands of notices annually to individual and business taxpayers. The reasons for these vary, but can include requests for additional information, payment reminders, audit or investigation notices, refund checks and more.

Most of these are fairly basic and straightforward. A simple response, an additional receipt or W-2, a signature inadvertently left off a form could all possibly resolve the entire matter. Sometimes, additional steps are required, but not always.

IRS and cryptocurrency: Is it property or currency?

The Internal Revenue Service (IRS) has a reputation for making tax matters difficult. Filling out tax forms is not an easy matter, but the agency has made matters even more difficult when it comes to cryptocurrency.

Why are tax matters for cryptocurrency so difficult? The biggest issue is the agency’s failure to clearly state if cryptocurrency is property or currency. The distinction is more than one of simple semantics. The classification as property or currency has direct tax implications. An owner of property in a foreign country, for example, generally does not need to report this property to the IRS. An owner of currency, in contrast, may need to report the asset.

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