More Off Shore Tax News

Just when you thought your Swiss bank account was a secret.  Apparently Switzerland is considering the disclosure of bank account information to the IRS.

Swiss to deliver some bank account data

The IRS has placed increasing emphasis on off shore and international tax compliance as part of its efforts to reduce the tax gap.

Buying a house in the U.S.? The IRS wants to know

That's if you are a Canadian resident.  It is interesting how a weak dollar promotes foreign citizens to consider purchasing real property in the US (can you say "do I have a deal for you?").  This is a great article about the income tax compliance issues for Canadian citizens who believe US real estate is a good investment.  It's not all roses...

http://www.financialpost.com/personal-finance/Buying+house+wants+know/5138905/story.html

The States' Battle for Revenue

The States' battle for sales tax revenue continues.  I wonder if a more productive process to determine who must collect a particular states sales tax could be developed with a little leadership from Washington.

http://www.latimes.com/business/la-fi-amazon-war-20110713,0,2902994.story

IRS Changes in Business Standard Mileage Rate

The IRS has announced a mid-year adjustment to the 2011 optional standard mileage rates. Effective July 1, 2011, the business standard mileage rate increases from 51 cents-per-mile to 55.5 cents-per-mile for the second half of 2011. The medical/moving standard mileage rate also increases by 4.5 cents-per-mile for the second half of 2011 but the charitable standard mileage rate remains unchanged at 14 cents-per-mile. The IRS took the unusual step of adjusting the rates mid-year because of higher gasoline prices.

Businesses generally can deduct the entire cost of operating a vehicle for business purposes. Alternatively, they can use the business standard mileage rate, subject to some exceptions. The deduction is calculated by multiplying the standard mileage rate by the number of business miles traveled. Self-employed individuals also may use the standard rate as can employees whose employers do not reimburse, or only partially reimburse, them for business miles driven.

In late 2010, the IRS set the 2011 business standard mileage rate at 51 cents-per-mile for 2011 and the medical/moving rate at 19 cents-per-mile. The charitable rate is set by Congress and remained at 14 cents-per-mile for 2011. The IRS uses a formula to calculate the rates. The formula takes into account gasoline prices and other costs associated with operating a vehicle.

Since the start of 2011, gasoline prices have risen in most parts of the country. In May 2011, a bipartisan group of lawmakers in Congress asked the IRS to consider a mid-year increase in the mileage rates to help offset higher gasoline prices. The IRS took similar action in 2005 after Hurricane Katrina and in 2008 when gasoline prices also climbed very high.

On June 23, 2011, the IRS announced an increase in the mileage rates for the second half of 2011. The business standard mileage rate is 55.5 cents-per-mile for business miles driven on or after July 1, 2011 and on or before December 31, 2011. The medical/moving rate is 23.5 cents-per-mile for miles driven on or after July 1, 2011 and on or before December 31, 2011. The charitable rate, because it is determined by Congress and not the IRS, is unchanged for the second half of 2011.

The Tax Side of Same Sex Marriage

New York State has adopted new laws (pending the Governors signature) that legalizes same sex unions in New York State.

What will be the impact of this event on income tax filing for same sex couples? Will they be considered to be married for tax filing purposes and receive the same tax benefits that other married couples receive?

While New York State may consider same sex unions as a marriage, the federal government has not passed similar rules. Thus these couples are not considered to be married when filing with the IRS.

Tax simplification????

Real Estate Income Tax Issues Update

We delivered a webinar related to updates of real estate income tax issues on May 18, 2011.  Click on the link and you can listen to a replay of the webinar.  You can get an update on important income tax issues that impact real estate developers, owners and lessors.

Please contact Mike Cooke or Mark Blood if you have questions.

DKB webinars

U.S. Business Has High Tax Rates but Pays Less - NYTimes.com

Great article in the New York Times about the impact of corporate income tax rates on American businesses. I cannot imgine a reduction in corporate income taxes rates without an adjustment of the taxable income base. The federal budget cannot afford any further loss of revenue. There are a number of credible arguments that reductions in corporate income tax rates could have a signficiant impact on bringing high quality jobs (manufacturing!) back to the United States.

It will be interesting to see how the states might react to a broading of the taxable income base. Will they reduce rates or use federal changes as an opportunity to collect more revenues?

I think the article is correct that nothing will happen before the 2012 elections. Neither party has the desire to be portrayed in the press as having provided a tax break to large corporations.

U.S. Business Has High Tax Rates but Pays Less - NYTimes.com

Gas prices: Obama urges repeal of oil company subsidies - latimes.com

I understand that income taxes assessed on oil companies are not directly assessed on American consumers. However, it seems like a relatively simple conclusion that gas prices will likely increase if oil and gas producers are forced pay additional income taxes to the federal and state governments. They are corporations that are working hard to produce earnings for their shareholders. Additional income taxes would seem like a reason for oil and gas producers to further raise prices to support their earnings and stock valuation. Am I missing something here?

Gas prices: Obama urges repeal of oil company subsidies - latimes.com

CCH, a Wolters Kluwer business | Congress Repeals Expanded 1099 Reporting Requirements

It took a while to repeal the 1099 reporting requirements that accompanied the health care legislation. Looks like it has been repealed for now...until the politicians think it is a good idea a few years from now. CCH, a Wolters Kluwer business Congress Repeals Expanded 1099 Reporting Requirements

IRS Targets Wealthy With More Audits - FoxNews.com

More news on IRS enforcement actions. IRS Targets Wealthy With More Audits - FoxNews.com