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So far alliantNational has created 403 blog entries.
2706, 2018

Unclear if the IRS Can Save the Client Business Meal

By |June 27th, 2018|publishedarticles|0 Comments

June 27, 2018
By Stephanie Cumings
Published in Tax Notes

Tax observers are torn on whether the IRS has the power to restore the deduction for client business meals that Congress seems to have unintentionally axed in the 2017 tax law.

While some practitioners contend that the IRS can salvage the deduction, one professor argues that Congress will have to amend the law if it really intended to keep client business meals deductible. The answer hinges on whether client business meals constitute “entertainment.” Under the prior law, entertainment expenses were 50 percent deductible if they met certain qualifications, but the Tax Cuts and Jobs Act (P.L. 115-97) eliminated the deduction altogether.

“Up until this change in the law, it didn’t really matter whether or not food and beverage was considered entertainment because it was 50 percent deductible either way,” Michael L. Hadley of Davis & Harman LLP told Tax Analysts.

The TCJA conference report […]

2206, 2018

Tax Court Follows Avrahami Analysis in Reserve Mechanical Decision

By |June 22nd, 2018|Resource Library|0 Comments

Last August, the US Tax Court issued its decision in Avrahami v. Comm’r of Internal Revenue, No. 17594-13, (T.C. Aug. 21, 2017), the earliest Tax Court opinion involving a micro-captive. A second case has joined its ranks. On June 18, the Tax Court released its ruling in Reserve Mechanical v. Comm’r of Internal Revenue, No. 14545-16, (T.C. June 18, 2018). While it involved a small insurance company and whether it qualified under Internal Revenue Code section 501(c)(15), Reserve Mechanical provides additional information about the Tax Court’s views on captives and what the court considers insurance in this context.

Captive insurance owners and managers should note that even though the taxpayer’s facts in Reserve were different than those facts presented in Avrahami, the Court’s underlying analysis of the issues remained similar between the two cases. For example, both the Avrahami and Reserve decisions focused primarily on two of the four criteria required […]

406, 2018

Early 2018 is LB&I’s Campaign Season

By |June 4th, 2018|Resource Library|0 Comments

On May 21, 2018, the Large Business and International (LB&I) Division of the IRS released six additional Compliance Campaigns. Initially rolled out in January 2017, LB&I’s Compliance Campaigns are designed as an issue-based approach to address areas of tax that the Service has identified as having a high risk of compliance issues. This determination is based on extensive data analysis as well as suggestion from IRS employees and other members of the tax community.

Of the six campaigns announced on May 21, three revolve around nonresident aliens (NRA’s). These three campaigns, Nonresident Alien Tax Treaty Exemptions, Nonresident Alien – Schedule A and Other Deductions, and NRA Tax Credits, will attempt to increase compliance through both outreach, education and traditional examinations. The Nonresident Alien Tax Treaty Exemptions campaign is aimed at increasing compliance related to requests for exemptions under U.S. tax treaties. The Nonresident Alien – Schedule A and Other Deductions […]

3105, 2018

Tax Notes: Global Settlement Offer for Captive Transactions Could Be Tricky

By |May 31st, 2018|In the news|0 Comments

Steven T. Miller, National Director of Tax at Alliantgroup LP, and Mark Everson interviewed by Tax Notes in regards to captive transactions.

May 31, 2018
Published in Tax Notes

3105, 2018

Global Settlement Offer for Captive Transactions Could Be Tricky

By |May 31st, 2018|publishedarticles|0 Comments

May 31, 2018
By Emily L. Foster
Tax Notes

The IRS could resolve captive insurance transaction disputes with a global settlement, as it did for abusive transactions in the 2000s, but tax professionals say the trick is to root out the bad actors.

Microcaptive insurance cases are seeing high volume in three areas — examination, appeals, and litigation — and could be ripe for a global settlement initiative, according to several tax professionals. Their estimates range from hundreds of outstanding cases involving captive insurers — companies wholly owned and controlled by their insureds — to potentially thousands of them. The IRS had no immediate comment on how many cases it is dealing with.

But the tax professionals warned that the solution won’t be as simple as offering settlement programs to captive insurance abusers, because the agency’s first and largest hurdle is determining which operations are legitimate and which are misusing the tax code.

Global settlement […]

2905, 2018

Cracking Down on Cryptocurrency

By |May 29th, 2018|Resource Library|0 Comments

While there are many reasons for people to invest in any given financial platform, the attraction of investing in cryptocurrency has long been rooted in the platform’s anonymity, lack of oversight, and inherent decentralization. As such, many investors, relying on the anonymous and unregulated nature of cryptocurrency, have not reported their earnings to the IRS and have avoided disclosure without consequence. However, recent indicators from prominent tax practitioners, the IRS, and the Department of Justice are hinting at the demise of the days of abject anonymity in the crypto-world.

At a recent May 12th tax conference, a specific panel called “Life Cycle and Tax Implications of a Cryptocurrency” discussed ways in which the tax landscape is changing for cryptocurrency investors. Two major themes emerged from the panel—the Internal Revenue Service (IRS) is stepping up their enforcement capabilities, and the Department of Justice (DOJ) is primed to prosecute cryptocurrency crimes.

First, the IRS […]

1804, 2018

Cryptocurrency Creating Taxpayer Conundrums

By |April 18th, 2018|Resource Library|0 Comments

As the tax season winds to a close, tax practitioners and taxpayers can once again begin the process of looking ahead. However, this tax filing season has left several questions unanswered. In particular, the treatment of certain cryptocurrency transactions have left taxpayers searching for answers without a clear path forward.

Generally, the basic tax treatment of cryptocurrency has been addressed. In Notice 2014-21, the IRS alerted taxpayers that cryptocurrency will be subject to the same laws surrounding other forms of property. Although this concept seems straightforward, the nature of cryptocurrency has already lead to several substantial complications. For instance, simply determining the value of a cryptocurrency at any given moment may depend greatly on the exchange you are looking at and, given the volatility of the market, the time of day.

Compounding these issues is the general lack of public understanding surrounding the taxability of cryptocurrency. In US v. Coinbase Inc., the […]

2703, 2018

Spending Bill Makes Major Changes to Captive Insurance Rules

By |March 27th, 2018|Resource Library|0 Comments

On March 23, the President signed into law H.R. 1625. This legislation, also known as the “Consolidated Appropriations Act, 2018,” provides appropriations for the Federal Government through Sept. 30, 2018. However, H.R. 1625 also retroactively amends IRC § 831(b), by making changes to the diversification requirements imposed by the PATH Act of 2015.

The Path Act, in addition to increasing the limitation on premiums under 831(b), also required taxpayers to pass one of two tests. For ease, we will call these: 1) the 20 Percent Test or 2) the Ownership Test. However, questions arose regarding both of these tests – thus resulting in changes under H.R. 1625.

The 20 Percent Test

Under the 20 Percent Test, no more than 20 percent of the annual net written premiums of the captive insurance company can be attributable to one policyholder. For purposes of this test, brother/sister corporations are considered to be one policyholder.

Questions arose […]

2603, 2018

2018 Dirty Dozen Announced, Captive Insurance Remains on the List

By |March 26th, 2018|Resource Library|0 Comments

On March 19, the Serviced announced 2018’s “Dirty Dozen.” This list, compiled annually, warns taxpayers to stay alert and avoid items that the IRS refers to as “common scams.” Micro-captives, included in the Dirty Dozen under IR-2018-62, appear on this list for the fourth consecutive year. The 2018 Dirty Dozen also includes: frivolous tax arguments, falsified income, falsely padding deductions and returns, improper claims for business credits, falsely inflated returns, identity theft, phone scams, phishing, fake charities, and return preparer fraud.

Although an important, and legally recognized, tool for managing the insurable risks of businesses, the tax laws surrounding micro-captives leave them susceptible for abuse. This reality has fueled the Service’s apprehension of micro-captive arrangements. Since their first appearance on the Dirty Dozen in 2015, 831(b) captives have faced ever increasing scrutiny. Since then, a high profile ruling regarding 831(b) captives has been issued in Avrahami v. Commissioner, and micro-captives have […]

1503, 2018

IRS Increases Interest in Bitcoin

By |March 15th, 2018|Resource Library|0 Comments

Beginning last year, the IRS has been looking at transactions involving cryptocurrency with an increased scrutiny. Taxpayers buying, selling, mining, or exchanging cryptocurrency should be aware of the interest the IRS has shown in the area, and the possible consequences for failing to report taxable gain stemming from its use.

The IRS investigation into cryptocurrency abuses began when a John Doe Summons was issued to Coinbase Inc. This summons required Coinbase to turn over large amounts of personal data on any user making a transaction with cryptocurrency between Jan. 1, 2013 and Dec. 31, 2015. Coinbase, the nation’s largest Bitcoin exchange, refused to submit to the summons. On March 16, 2017, Coinbase filed a petition in the Federal District Court for the Northern District of California to have the summons thrown out.

The IRS argued in support of their summons that the number of taxpayers reporting Bitcoin related items on electronically filed […]

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