Category Archives: Tax Law

Corporate Change of Control with the IRS

A change in control is a change in the ownership structure of a company. Such change of ownership typically involves another entity or individual acquiring more than 50% of the company’s shares. When such a change in corporate structure occurs, the company must file an “Information Return for Acquisition of Control or Substantial Change in Capital Structure” Form 8806 with the Internal Revenue Service.



What Is an Agricultural Tax Exemption in Florida?

The Agricultural Tax Exemption is a property tax exemption that landowners may receive, if they can show that their land is being put to agricultural use. Different states define “agricultural use” in different ways. For example, Florida requires agricultural use to be bona fide. Fl. Stat. § 193.461. “Bona fide agricultural purpose” is defined as a “good faith commercial agricultural use of the land.” Fla. Stat. § 193.461(1)(b) (2009). Some states require the agricultural use to be for commercial purposes, and for some profits to be gained from the land.



What is the EIDL Loan?

The EIDL program or Economic Injury Disaster Loan allows the SBA to provide loans of up to $2 million to small businesses that have suffered substantial economic injury. The EIDL reopened its loan program to small businesses on June 15, 2020 after closing to most small businesses in May of 2020.



Where Do Online Businesses Source Their Income? Part Two: Income Tax

Just as e-commerce has presented challenges for sourcing sales tax, e-commerce also presents issues for sourcing income taxes. This blog will discuss the income tax implications for online businesses.



Where Do Online Businesses Source Their Income? Part One: Sales Tax

E-commerce has created several tax-related issues for corporations conducting business across states without a physical footprint. This blog will discuss the sales tax implications for online businesses.



Who Does the SEC Oversee?

The Securities and Exchange Commission (“SEC”) is an independent government agency created to regulate corporate securities while maintaining fair market practices. The SEC is commanded by a five-member commission who act cooperatively to enforce the rules and regulations that make up the securities market.  Their authority is derived from the Securities Act of 1933 and the Securities Exchange Act of 1934.



What is the Purpose of the SEC?

The U.S. Securities and Exchange Commission is a governmental agency that serves the purpose of protecting investors from fraud and maintaining fairness and efficiency of the U.S. market. One of the main goals of the SEC is to mandate disclosures about all kinds of investments to both small and big businesses.



What are Accredited Investors and what is a Private Placement Memorandum?

The reason for such disclosures is to protect the company in the event things fall apart and the investors try to sue the company for securities fraud for example. Such disclosures will be used as the company’s defense. One of the best ways to provide such disclosures is through a document called a Private Placement Memorandum (aka PPM).



A Vendor Has Wrongfully Filed an Item With Your Credit Rating Agency: What to Do

Oftentimes, a creditor or vendor wrongfully files something with your credit rating agency. All of a sudden, you find your credit lowered by hundreds of points, with collection agencies knocking at your door. Black marks on your credit can have detrimental consequences for future financial transactions, like opening a credit card.



What IRS Troubles Are Occuring Due to COVID-19?

IRS Troubles During COVID-19 Due to the ongoing pandemic, the IRS had to cut its working staff, close its offices around the country, severely limit live telephone assistance and completely stop processing filing sent by mail. All of these measures, along with the current tax season and having to send out the government’s stimulus payments,…   + Read More…



Is There a Statute of Limitations for Federal Tax Liens?

What is a Federal Tax Lien? A federal tax lien is the government’s legal claim against your property when you neglect or fail to pay a tax debt. When the Internal Revenue Service (“IRS”) puts your unpaid balance due on their books, your liability to pay that balance is then assessed. Neglect or failure to…   + Read More…



Can a U.S Non-Profit Organization Provide Services in Foreign Countries?

Along with registering an organization in the United States, many, if not all countries require proper registration within their governmental agency as well. This not only allows foreign countries to have control over U.S organizations operating within their nation’s borders, it also helps keep track of activities and allows the enforcement of local laws.



Sales Tax Decrease on Commercial Property

Since 2018, the sales tax on commercial rent in Florida has consistently gone down, decreasing from 6% to 5.7% to 5.5% in 2020.



Taxes Upon Conversion

Corporations are often today converted into “disregarded entities” for tax purposes, such as avoiding “double taxation”. A disregarded entity is a business that is not separated from the owner for tax purposes.



Foreign Partnerships & Tax Form 8813

Under Internal Revenue Code “IRC” Section 1446, a partnership of this sort may be made up of any kind of foreign corporation, international organization, non-resident individual or foreign estate or trust. Any partnership that falls under the definition of 1446 must pay the required withheld taxes mandated by the IRS.



Can a U.S Non-Profit Organization lose its Tax-Exempt Status by Sending Funds to Foreign Organizations?

There are several ways that funds from U.S. non-profits can be sent to foreign organizations.  However, U.S non-profit organization may be exposing themselves to risks and possible dangers of losing their tax-exemption status.



What do I do if I owe Money to the IRS?

If you have not filed your tax returns for years and now you owe lots of money to the IRS, there are ways to deal with this issue but the best advice is to contact a tax attorney so they can explain all of the different steps and hopefully lower some of the money you owe.



How do I know if I am Being Misclassified as an Independent Contractor?

If your employer controls how long your lunch is, how many hours a day you have to come into the office, how many sick days or vacations you have, how the work is done, when the work is done, and where the work is done then you are being misclassified as an independent contractor.



Do you have to file Form 5471?

Form 5471, is an informational return that reports activity of foreign corporations in which certain U.S. citizens or residents, who are officers, directors, or shareholders of a certain foreign corporation are required to file. The term “certain” leaves room for interpretation, which is why it is important to consult a tax attorney who understand the different categories of fillers the IRS provides.



What is the 2025 Tax Sunset?

President Trump signed the Tax Cuts and Jobs Act (“TCJA”) into law on December 22, 2017, which brought many changes to the Internal Revenue Code (“IRC”).  The changes made have affected many taxpayers in different ways. 



What is Tax Form 1120?

When an individual or group of individuals decide to incorporate their domestic business, it is then a requirement to annually file IRS Form 1120, the U.S. Corporate Income Tax Return.



Is There Self-Employment Tax for a LLC with Passive Income?

If a LLC member is not personally liable for the LLC’s debts, has no authority to contract for the LLC, or does not participate in the LLC’s business for more than 500 hours per year, their income is considered passive, and therefore, not subject to self-employment tax.



Do I Qualify for a Qualified Business Deduction Under §199A?

The Internal Revenue Code provides business owners an income deduction when reporting their qualified trade or business’ income, also known as a qualified business income.



What to Know About the British Virgin Island Economic Substance Act

The Act came into effect on January 1, 2019 and was amended on January 30, 2019.  The Act was established based on concerns rising from the EU (European Union) Code of Conduct Group for Business Taxation and OECD (Organization for Economic Co-operation and Development) guidance around the economic substance of entities in jurisdictions a very low to zero percent corporate tax.



Business Tax Planning Opportunities Under the Tax Cuts and Jobs Act

As with any tax act, there are a number of areas for devious planners to take advantage. Following is a list of strategies you can take to ensure your business benefits from the new business tax landscape.



What’s the Deal with GILTI?

Introduced in 2017 as part of the Tax Cuts and Jobs Act, GILTI, or “Global Intangible Low Tax Income,” is an outbound provision that broadens the scope of foreign earnings subject to U.S. taxation with the goal of reducing the incentive to shift corporate profits out of the U.S. into low or zero-tax jurisdictions.[1] Applicable to large multinational companies and to U.S. shareholders of certain foreign corporations, GILTI is fundamentally an anti-deferral provision that limits the amount of foreign income a U.S. shareholder can defer from U.S. tax.



Nonprofit Forms 1023 & Form 1023-EZ

The main difference between Form 1023-EZ and Form 1023 is the information required from the organization and the time for approval. Form 1023 is used by organizations that are bigger and expect to receive more than $50,000 in the following three years. While Form 1023-EZ is three pages, Form 1023 is 26 pages!



What Happens If A W-2 Employee Finds Out The Employer Wasn’t Withholding Employment Taxes?

Employers are responsible for sending the W-2 form to the IRS and to the employee each year, which reports the employee’s annual wages and the amount of taxes withheld from his or her paychecks.



Qualified Opportunity Zone Funds

The first Opportunity Zones were designated on April 9, 2018. To date, the Treasury Department has certified more than 8,700 Opportunity Zones spanning 50 states, the District of Columbia, and five U.S. territories qualifying for the aforementioned tax benefits.



What is a Tax Clearance Letter & what is the Purpose?

A potential buyer should obtain a businesses’ tax clearance letter. If a buyer fails to conduct its due diligence on the tax side of the business, he or she could be on the hook for any taxes owed by the seller.



The IRS is looking to Use Social Media to Investigate Tax Fraud

Online sellers are notoriously known by the IRS as tax cheats. The IRS estimates that businesses across the United States pay $125 billion less in taxes each year than they actually owe. The IRS is on a mission to reduce that number.



Foreign Reporting for US Taxpayers 101

While it is not illegal to earn income abroad or to hold an offshore account, failure to disclose income to the Internal Revenue Service is illegal.



The Different kinds of Tax Penalties

Missed a tax payment? Here are the consequences.



What are the new procedures after the “OVDP” was terminated?

On September 28, 2018, the IRS officially terminated the Offshore Voluntary Disclosure Program (“OVDP”). The OVDP has been in existence since 2009, which is a form of the tax amnesty program. It allowed U.S. taxpayers with unreported foreign accounts to avoid criminal charges and pay reduced civil penalties by making a voluntary disclosure to the…   + Read More…



An Overview of Qualified Business Income (QBI) Deductions: Part Three; Taxpayers Between the Taxable Income Thresholds

The first and second post of this series on QBI deductions analyzed the purpose of the deduction and how it applies specifically to taxpayers below the lower threshold or above the higher threshold. This post addresses taxpayers that fall between the two thresholds.



An Overview of Qualified Business Income (QBI) Deductions: Part Two; Taxpayers Above the Higher Taxable Income Threshold

The first post in this series on QBI deductions examined the purpose of the deduction, who can claim it, and how to calculate QBI deductions for taxpayers in a lower threshold. This post specifically addresses taxpayers with a taxable income above the higher threshold of $207,500, for individuals, or $415,000, for joint filers.



An Overview of Qualified Business Income (QBI) Deductions; Part One

A new and important provision in the Tax Cut and Jobs Act (TCJA), enacted in December of 2017, is Section 199A, which allows deductions for qualified business income (QBI). This post is part one of a three-part series and addresses what QBI is, who may claim QBI deductions, how they may claim such deductions, and how to calculate the deduction for taxpayers below the lower threshold.



What are the Deductions for the new Tax Act?

The Tax Cuts and Jobs Act passed in 2017, and effective in 2018, provides businesses with a reduced tax rate, but also significantly alters the tax deductions businesses can claim. Some major categories of tax deductions that have been adjusted are meals, entertainment, and travel for either employees or clients



What is Slander of Credit?

The saying used to go, “A man’s only as good as his word.” However, these days, according to banks and other lenders, A man is only as good as his credit. Whether it is applying for a home loan, car loan, personal loan, credit card, or even getting approved to rent an apartment. Your credit…   + Read More…



How Tax Lien works

When a person fails or neglects to pay income taxes owed, the likely consequences involve the Internal Revenue Service (IRS) placing a federal tax lien on the individual’s property. A federal tax lien is a claim that the United States government makes on the individual’s property where the government’s interest in the person’s property is…   + Read More…



Do I have to pay Property Taxes as a Foreigner Investor?

All foreign investors owning U.S real property are responsible for paying taxes on any and all rental income they earn in the United States from that property. As a general rule, a non-US person who rents out his or her U.S. property is subject to a 30% withholding tax imposed on the gross amount of each rental payment.



The 2014 Offshore Voluntary Disclosure Program is Ending

Unreported foreign accounts or income could trigger huge penalties and criminal liability in the U.S. The IRS has fined taxpayers for unreported offshore assets as much as 300% of the accounts the IRS discovered. So, if you’re hiding $1 million in the Cayman Islands, and the IRS catches you, the penalty could be as much…   + Read More…



What can you do when your foreclosure is set for sale?

What is a Foreclosure? A bank will usually foreclose on your house after you have failed to make four successive payments. The bank will send you a notice of default which is an indicator that they are intending on beginning foreclosure proceedings. These proceedings can usually take anywhere between six months up to a year….   + Read More…



Substantial Presence Test

If you are a snowbird or a person that likes to spend a considerable amount of time in the U.S. (often to escape the winters in your country), you should be aware that you might be liable for U.S. income tax. A person is considered a United States resident for tax purposes if she meets…   + Read More…



Short & Simple: How to obtain an ITIN

An Individual Taxpayer Identification Number (ITIN) is a tax processing number issued by the Internal Revenue Service. The IRS issues ITINs to individuals who are required to have a U.S. taxpayer identification number but who do not have, and are not eligible to obtain a Social Security Number (SSN) from the Social Security Administration (SSA)….   + Read More…



Trust Fund Recovery Penalty and the IRS

If you are reading this article, it is likely because you or someone you know received a letter from the IRS. The letter is probably several pages long, gives the name of a revenue agent to contact, and indicates that the IRS is seeking to assess the Trust Fund Recovery Penalty (TFRP) against you under…   + Read More…



U.S. Tax considerations for Foreign Non-Residents.

1. Resident Alien of the U.S. for Tax Purposes Under the Internal Revenue Code, an individual is a resident alien of the U.S. for tax purposes if they meet either the green card test or the substantial presence test for the calendar year (January 1 – December 31). To meet the substantial presence test, an…   + Read More…



OVDP is ending, now what?

The Offshore Voluntary Disclosure Program or, OVDP, essentially is designed to allow taxpayers to come clean with the certainty that they will not face criminal prosecution for not previously disclosing their overseas accounts. Taxpayers have the added benefit of receiving a fixed penalty structure for settlement of past non-compliance. In exchange for their voluntary compliance…   + Read More…



Charitable Giving During The Application Process

Can your contributions to a charity that has its IRS application pending be still tax exempt? The answer is that it depends on the final outcome and determination of the IRS. While an IRS application is pending for the charitable organization to receive its final tax exemption status, the organization can still treat itself and…   + Read More…



What is FBAR?

The Bank Secrecy Act rules require taxpayers with financial accounts outside of the United States which total more than $10,000 in the aggregate to file an annual report – called the Report of Foreign Bank and Financial Accounts or “FBAR” – with the IRS.



Did you know there are “Whistle Blower Awards”?

WHAT IS AN IRS TAX “WHISTLEBLOWER”? A “whistleblower” is someone who reports misconduct by an employer, co-worker, or another party. For decades, whistleblowers have assisted the Internal Revenue Service (“IRS”) in identifying and prosecuting tax law violations. In 2006, under the Tax Relief and Health Care Act, the IRS Whistleblower Office (“WO”) was created to…   + Read More…



What is the 1031 “Like-Kind” Exchange and what has updated?

What is a 1031 “Like-Kind” Exchange Under the Prior Code? A 1031 exchange, also known as a “like-kind exchange,” allows an investor to “defer” paying capital gains taxes on an investment property when it is sold, as long another property of “like-kind” is purchased with the profit from by the sale of the first property….   + Read More…



The 2018 Federal Tax Filing Due Dates

Important dates to keep in mind for this tax season! Deadline Type: Partnership (Form 1065) and S-Corporations (Form 1120S) – March 15, 2018 C-Corporations (Form 1120) and Individuals (Form 1040) – April 17, 2018 Exempt Organizations, Nonprofits and Charities (Form 990) – May 15, 2018 Trusts and Estates (Form 1041) – April 17, 2018 Foreign Bank Account Reporting (FBAR…   + Read More…



What Must a U.S. Citizen Do Upon Receiving a Large Cash Gift from a Foreign Non-Resident?

As a general rule, foreign gifts of money or property received by a U.S. citizen from a foreign non-resident will be treated as a gift for IRS tax purposes. Reporting Requirements IRS gift taxes only applies to the individual making the gift, not the person receiving the gift. Typically, foreign non-residents are not liable for…   + Read More…



Single-Member LLCs and the New Form 5472 Rules

A Single-Member Limited Liability Company (“SMLLC”) is a Limited Liability Company (“LLC”) which only has one owner and is not classified as a corporation. A SMLLC is also known as a disregarded entity, because it is generally disregarded as separate from its owner. Disregarded entities do not have Internal Revenue Service (“IRS”) U.S. tax filing…   + Read More…



EPGD Law Guide to the New 2018 Tax Reform

If you’re a business owner, you’re probably under some sort of tax category when you first registered your business. Well, did you know there is a new tax reform in the works that could possibly change all that? The new tax reform, which is expected to be signed into law by President Trump, comes with…   + Read More…



Tax Law Changes Affecting Partnerships and LLCs starting January 1, 2018

The 2015 Bipartisan Budget Act (the “BBA”), which was signed into law on November 2, 2015, modified certain audit and tax election rules for entities taxed as partnerships (including most LLCs). The IRS has now issued proposed regulations that will take effect on January 1, 2018, which will have implications that necessitate review and action….   + Read More…



What is residential constructive eviction in Florida?

A tenant may terminate their lease with a landlord in the event of a constructive eviction. Constructive eviction is defined as any disturbance to the tenant by the landlord that: (1) renders the premises unfit for the purpose for which they were leased; or (2) deprives the tenant of the beneficial enjoyment of the premises….   + Read More…



Looking Into Trust Fund Recovery

  The initial question at hand; What is the Trust Fund Recovery Penalty? Every single employer is required to pay a trust fund tax to the government. A trust fund tax is an employer’s added responsibility to withhold money from an employee’s wages or salary—such as income taxes, social security, and Medicare taxes—and hold it…   + Read More…



Love and Marriage.. I mean, Taxes and Bankruptcy…

It is 6:30pm.You open the door, and come home from a long-day of work. You are instantly reminded of the stack of bills lying on your dining room table, which you have been ignoring for the past two-years—more specifically your income tax obligations. However, your significant-other will not allow you to forget. Your family wants…   + Read More…



Let’s blow the whistle on this joint.

A “whistleblower” is someone who reports misconduct by an employer, co-worker, or another party. For decades, whistleblowers have assisted the Internal Revenue Service in identifying and prosecuting tax law violations. In 2006, under the Tax Relief and Health Care Act, the IRS Whistleblower Office was created to oversee the IRS whistleblower program, which rewards informants…   + Read More…



Could Dorothy be Held Liable for Foreign Taxes in The Land of OZ?

Now that the title caught your attention, the reality is that buyers of real property may be held liable for the Tax of a Foreign Seller. A non-foreign certification is a document that protects buyers of real property interests from liability for the IRS withholding tax, which applies if the seller is a foreign person….   + Read More…



2016 Corporate Tax Filing Deadline

There is a saying, usually attributed to Benjamin Franklin, that says “nothing is certain except for death and taxes”. As 2016 came to an end, one of the things companies focus on, is filing their 2016 corporate taxes. Single member LLC’s, Corporations, and Partnerships, have a tax deadline of March 16th. As this date approaches…   + Read More…



Receiving Social Security from an Ex-Spouse

If your ex-spouse was the primary earner, you might be eligible for a higher social security benefit based on his or her work history instead of your own. However, there are limitations, and you must fall within all these categories to qualify for a “divorced spouse” benefit: Your marriage lasted for at least 10 years;…   + Read More…



Buyers of Real Property May Be Held Liable for the Tax of a Foreign Seller!

A non-foreign certification is a document that protects buyers of real property interests from liability for the IRS withholding tax, which applies if the seller is a foreign person. If a seller is a non U.S. citizen or resident, then FIRPTA (The Foreign Investment in Property Tax Act) applies and the buyer must withhold 15%…   + Read More…



How a Tax Lien Works

When a person fails or neglects to pay income taxes owed, the likely consequences involve the Internal Revenue Service (IRS) placing a federal tax lien on the individual’s property. A federal tax lien is a claim that the United States government makes on the individual’s property where the government’s interest in the person’s property is…   + Read More…



Tax Reporting Obligations for Foreigners

As a U.S. citizen or resident alien, you have several reporting obligations to the Internal Revenue Service regarding your foreign assets and accounts that you must be aware of. Failing to comply with these requirements can lead to severe penalties, additional taxes, and even civil and/or criminal penalties. Here is what you need to know:…   + Read More…



ITIN and You!

To invest in a business in the US, especially for establishing a banking relationship with a US bank or for filing tax returns, a foreign investor often runs into a common problem: they don’t have a federal tax ID number. Most citizens and permanent residents have a Social Security Number, so this isn’t a problem….   + Read More…



Estate and Trust Taxes

IRS Form 1041 is an income tax return for estates and trusts, similar to Form 1040 for individuals. If you are the executor for an estate, you may be required to file Form 1041 – U.S. Income Tax Return for Estates and Trusts. Form 1041 must be filed for the person who died in addition to any personal income…   + Read More…



Taxes sont libérables en cas de faillite?

It is 6:30pm.You open the door, and come home from a long-day of work. You are instantly reminded of the stack of bills lying on your dining room table, which you have been ignoring for the past two-years—more specifically your income tax obligations. However, your significant-other will not allow you to forget. Your family wants…   + Read More…



Notice of Proposed Property Taxes

Every year, property owners receive a Notice of Proposed Property Taxes from the Miami-Dade Property Appraiser, listing the total of Ad Valorem and non-Ad Valorem property taxes to be paid. These property taxes are based on the assessed value of the property, as determined by the Property Appraiser every January 1st. Sometimes, however, the value of the property is listed too low, affecting a property’s resale value, or too high, leaving an owner paying an exorbitant amount of taxes.



How to Appeal Property’s Market or Assessed Value with Value Adjustment Board (VAB)

Every year, property owners receive a Notice of Proposed Property Taxes from the Miami-Dade Property Appraiser, listing the total of Ad Valorem and non-Ad Valorem property taxes to be paid. These property taxes are based on the assessed value of the property, as determined by the Property Appraiser every January 1st.



Taxes Dischargeable in Bankruptcy

Federal income taxes are the only taxes that can be discharged in bankruptcy proceedings, preferably Chapter 7 bankruptcy, if you meet all of the following requirements:  The taxes must be income taxes. Taxes due to fines or penalties cannot be discharged in bankruptcy.  You did not file a fraudulent tax return or tried to willfully…   + Read More…



Offshore Voluntary Disclosure Program (OVDP)

In January 2012, the IRS announced a new Offshore Voluntary Disclosure Program (OVDP) available to taxpayers with undisclosed foreign assets. The 2012 OVDP is similar to the IRS’ 2009 OVDP and 2011 OVDI, but the 2012 OVDP is (for the time being) open-ended. The 2012 OVDP is designed to allow taxpayers to come clean with the certainty that they will not face criminal prosecution for not previously disclosing their overseas accounts. Taxpayers have the added benefit of receiving a fixed penalty structure for settlement of past non-compliance.