Fluent in English, Spanish & Italian | 888-882-9243

call us toll free: 888-8TAXAID

Blog

FL TAX ALERT: USE TAX ON MANUFACTURERS / FABRICATORS INSTALLING TPP OUT OF STATE

April 20, 2012

MANUFACTURED / FABRICATED TANGIBLE PERSONAL PROPERTY INSTALLED INTO REAL PROPERTY IS SUBJECT TO FLORIDA USE TAX EVEN WHEN INSTALLED OUTSIDE FLORIDA.

Florida is not known for having many manufacturing or fabricating companies, but every single manufacturer / fabricator that we have is extremely valuable to the local and state economy, and particularly to our precarious job market. The state of Florida is regularly trying to attract more manufacturing companies by offering numerous tax incentives.
So it will likely surprise you that the Florida Department of Revenue has taken a very aggressive position that is likely to drive manufacturing and fabricating companies away from our great state (or possibly out of business all together).
Does your company (or your client's company) manufacture or fabricate tangible personal property which is then installed as real property improvements, such as cabinets, elevators, screened porches, fabricated steel, bleachers, custom stairs, solar panels, or other similar items?
Do some of these products get installed into realty outside the state of Florida?
If so, then you should prepare for a tax shock.

PostedBy James Sutton on Apr 19, 2012 5:54am PDT

Read more at: Tax Times blog

Ex-BDO Seidman Partner Favato Gets 18 Months for Tax Crimes

April 19, 2012

Stephen A. Favato, a former partner at New York-based auditor BDO Seidman LLP, was sentenced to 18 months in prison for two tax crimes related to helping a client falsify his returns.
Favato was sentenced in federal court in Newark, New Jersey, where a jury convicted him in August 2010 of one count of obstructing the administration of Internal Revenue Service laws and one count of aiding the preparation of a false tax return. He faced as many as three years in prison on each count. He was acquitted on one count of tax evasion.

Prosecutors showed jurors that Favato, formerly a partner in BDO Seidman’s office in Woodbridge, New Jersey, advised client Daniel Funsch to include false items on joint tax returns in 2002, 2003 and 2004, according to a statement by the Justice Department and Internal Revenue Service. Favato gave advice that“enabled Funsch to fraudulently deduct his personal yacht expenses as business expenses,” according to the statement.

Funsch, chief executive officer of Intarome Fragrance & Flavor Corp. in Norwood, New Jersey, pleaded guilty in 2006 to conspiracy and tax evasion, court records show. Funsch testified as a prosecution witness against Favato.

Favato’s attorney, Alan Zegas, didn’t immediately return a call seeking comment.
After Favato’s indictment in April 2009, he was placed on a leave of absence, BDO Seidman spokesman Jerry Walsh said in an e-mailed statement at the time of his conviction. A month later, his partnership interest was terminated, Walsh said.

The case is U.S. v. Favato, 09-cr-237, U.S. District Court, District of New Jersey (Newark).

Bloomberg

Read more at: Tax Times blog

IRS Issues Final Rules on Reporting Interest Paid to Nonresident Aliens

April 17, 2012

The Internal Revenue Service issued final rules April 17 on the reporting requirements for interest on deposits maintained at U.S. offices of certain financial institutions and paid to nonresident aliens.

The regulation (T.D. 9584) will affect commercial banks, savings institutions, credit unions, securities brokerages, and insurance companies that pay interest on deposits.

The regulation applies to payments of interest made on or after January 1, 2013. It becomes effective April 19, the date it is published in the Federal Register.

Read more at: Tax Times blog

Software Has Enabled The Tax Code's Slide Into Madness

April 17, 2012

Ecerpts from Forbes

It occurs to me that our current insanely complex tax rules are made possible by technology. Yes, computer software makes filing easier (both for professionals and civilians). But that may be the problem.

The relative ease of filing, made possible by programs such as Intuit’s TurboTax, also makes it easier for Congress to write incomprehensible tax law.

Have you ever read, for example, Form 6251, the paperwork millions of middle-class households must complete just to figure out whether or not they owe the dreaded Alternative Minimum Tax? The IRS instructions for the form are 12 pages long.

In truth, if voters actually had to navigate this gibberish, we’d have a revolution that would make the tea party look like the League of Women Voters. But we don’t. In 2009, 92 percent of us got help, either from a third-party preparer or tax software, the IRS estimates.

In this way, technology both inoculates us from much of the complexity of tax filing and reduces compliance costs. But, more importantly, it immunizes the politicians from the consequences of their decisions that lead to this madness.

Tax complexity isn’t just about the number of forms and their incomprehensible instructions, no criticism intended towards the folks at the IRS who write them. They do the best they can, given the loony law Congress hands them.

The real price of complexity is the very opaqueness of the Tax Code itself. Because we don’t understand the law, we are convinced we are paying more than we owe and that everyone else is paying less.

Yet, tax software allows politicians to add ever more complexity, which we accept with little complaint. Think about the Buffett Rule endorsed by President Obama. The version debated in the Senate this week would create yet another minimum tax that would result in even more complex forms. But, of course, the households making $1 million or more who’d owe this tax would likely never see the forms. They’d just pay the accountant.

Happy tax day.

Read more at: Tax Times blog

Live Help