Hobbies are an important part of our lives. They offer stress relief, the opportunity to develop new skills, the ability to escape from the rigors of our everyday lives, and are an important part of allowing us to remain vital and active into our twilight years.
Getting contacted by the Internal Revenue Service (IRS) is one thing that can put everyone on equal footing. It does not matter if you are a regular Joe the Plumber or the King of Pop, a phone call or mailing from the IRS will likely increase your heart rate and cause you to break into a cold sweat.
Penalties for underpayment of taxes or the disallowance of business expenses can quickly tip your personal or business balance sheet into the red. When does it make sense to challenge the IRS?
The IRS recently issued Notice 2017-10 addressing flaws in what are known as "syndicated conservation easements." The IRS has stressed that legitimate conservation easements (when the owner of land gets a tax deduction for donating use of the land is for a protected purpose such as wildlife or wetland preservation, grazing, historical importance, etc.) are not meant to be impacted by this Notice.
Benjamin Franklin notably said that only death and taxes were inevitable. This adage still holds true today. If you live, work or invest in the U.S., you will likely have a tax debt in some way, shape or form. Today's tax landscape is much, much more complicated than that experienced by our founding fathers, though. Not only do people nowadays have to deal with a tax code that is literally tens of thousands of pages long and an IRS procedural manual that's approximately the same size, they also have to deal with ever-evolving methods used by scammers and criminals trying to separate them from their hard-earned money.
The latest chapter in a years-long legal saga between the IRS, the SEC, and once-prominent businessman Sam Wyly (and the estate of his late brother Charles) came this week in the form of a 459-page verdict from U.S. Bankruptcy Judge Barbara Houser. The Court found that there is "clear and convincing evidence" that Sam and Charles Wyly knew that their extremely complex and convoluted system of offshore trusts and shell corporations was designed for the sole purpose of hiding profits and other business transactions from the IRS to avoid paying taxes.
Checking the mail box each day often involves sifting through significant amounts of junk mail to locate anything important. Miss a couple days and the pile of mail grows quickly.
In the first part of this post, we took note of the remarkable growth of the sharing economy. Perhaps the highest profile example of this is the ride-sharing company Uber, which is already thought to be worth more than $60 billion.
One of the threads we continue to explore in this blog is the growth of the sharing economy and its impact on taxes.
In the first part of this post, we began discussing the question of when nonresidents or partial year residents have to pay taxes in California.