...paper seeks to glean an understanding of corporate tax shelters, in respect to legal and ethical considerations. Tax shelters are often viewed with negative connotations, yet the general public holds different perceptions of the various classifications of tax shelters, tax avoidance, tax evasion, and tax flight (Kirchler, Maciejovsky, & Schneider, 2003). While this suggests a tolerance based on legal concerns, there exists a growing accountability for corporate social responsibility, “whereby organizations consider the interests of society by taking responsibility for the impact of their activities on customers, suppliers, employees, shareholders, communities, and others stakeholders, as well as their environment” (Guliani, 2014, p. 1117). Part of this includes, “companies paying their due taxes and obeying the law” (Guliani, 2014, p. 1120). In order to analyze the ethicality of tax shelters, this paper will introduce a variety of corporate tax shelters, discuss corporate tax shelters in relation to tax avoidance and tax evasion, explore the impact of corporate tax shelters on stakeholders, and examine the affect corporate social responsibility has on tax liability. A Legal and Ethical Examination of Corporate Tax Shelters As each business embarks on a pursuit for profit, companies often find opportunities to reduce tax liabilities in the form of corporate tax shelters. Corporations should be aware that when reducing tax liability, they must consider the legality and the...
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...All legal same-sex marriages recognized for tax purposes NOVEMBER 2013. In the wake of the Supreme Court’s Windsor decision (Sup. Ct. Dkt. No. 12-307 (6/26/13)), which invalidated a portion of the Defense of Marriage Act (DOMA), P.L. 104-199, the Treasury Department and IRS announced in late August that “same-sex couples, legally married in jurisdictions that recognize their marriages, will be treated as married for federal tax purposes.” The IRS also issued a revenue ruling (Rev. Rul. 2013-17) providing guidance on the topic. The ruling will apply to all federal tax provisions where marriage is a factor, for all federal taxes, including income, estate, and gift taxes. Tax provisions in which marriage is a factor include filing status, personal and dependency exemptions, the standard deduction, employee benefits, contributions to IRAs, the earned income tax credit, and the child tax credit, among others. According to the IRS, more than 200 provisions in the Code and Treasury regulations include the terms “spouse,” “marriage,” “husband,” “wife,” or “husband and wife.” Under the revenue ruling, the IRS will treat gender-neutral terms, such as “spouse” and “marriage,” as including, respectively, an individual who is married to a person of the same sex if the couple is lawfully married under state law and such a marriage between same-sex individuals. The terms “husband,” “wife,” and “husband and wife” will be interpreted to include same-sex spouses. ...
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...Accredited Tertiary Courses Listing 2012 Accredited Tertiary Courses Listing 2012 – as at 26 September 2012 1 2012 Accredited Undergraduate Courses AUSTRALIAN CAPITAL TERRITORY The Australian National University University of Canberra NEW SOUTH WALES Australian Catholic University Australian Institute of Higher Education Avondale College Charles Sturt University Kings Own Institute Macquarie University Southern Cross University Top Education Institute The University of New England The University of New South Wales The University of Newcastle The University of Sydney University of Technology, Sydney University of Western Sydney University of Wollongong Williams Business College NORTHERN TERRITORY Charles Darwin University QUEENSLAND Australian Catholic University Bond University Central Queensland University Christian Heritage College Griffith University James Cook University Queensland University of Technology The University of Queensland The University of Southern Queensland University of the Sunshine Coast SOUTH AUSTRALIA Flinders University Kaplan Business School The University of Adelaide University of South Australia Open Universities (conferred by Uni of SA) TASMANIA University of Tasmania VICTORIA Australian Catholic University Cambridge International College Carrick Higher Education Deakin University Holmes Institute Holmesglen Institute of TAFE La Trobe University Melbourne Institute of Technology Monash University Northern Melbourne Institute of TAFE RMIT...
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...KPMG's Tax Shelters Tax shelter is a legal way to reduce taxable income, which in turn reduces taxes. By utilizing legal tax shelters, it is possible to avoid taxes without evading them illegally and suffering consequences. However, in the case presented by Tanina Rostain. KPMG has used tax shelters as a form of tax evasion rather than tax avoidance. My goal in this paper is to discuss how the concept of Groupthink and Rationalization played a role in the partners decisions, point out when tax avoidance becomes tax evasion, Describe how CPA firms can provide high quality tax consulting for their clients without crossing the line into tax evasion, and Finally analyze why KPMG (as an organization) failed to prevent this scandal from occurring at their firm. First of all, when discussing concepts like "Groupthink" and "Rationalization" I prefer to start with a brief definition. "Groupthink occurs when a group makes faulty decisions because group pressures lead to a deterioration of “mental efficiency, reality testing, and moral judgment”(Irving). While " Rationalization is a defense mechanism that involves explaining an unacceptable behavior or feeling in a rational or logical manner, avoiding the true reasons for the behavior"(Cherry). As we can see from these definitions, the tax partners in KPMG showed popular symptoms' of groupthink which are: * "Illusion of invulnerability –Creates excessive optimism that encourages taking extreme risks. * Collective rationalization...
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...XYZ From: ABCD Date: 06.05.2015 Subject: Research on the right form of business entity Mr. XYZ, Conducting thorough research on the plausibility of choosing a specific form of legal business entity form for a certain specific business, several facts have been learned. I have been able to understand why it is always very much needed to know and verify the right form of legal structure to be applied to a business before actually setting up the business and carry on with its operation. As the business of my desire must have to be established in the state of Florida, the primary research has been thoroughly based on the legal requirements of setting up any form of business in the concerned state. The desired form of business is a bookstore. The basic task before setting up any business calls for determining the legal structure that will suit the business in an appropriate manner. Several options, in this regard, have been explored by me. This exploration has made it possible for me to ultimately choose the right kind of legal structure befitting the bookstore business. I have explored the different forms like sole proprietorship and partnership, and not the forms like a limited liability (LLC) and a corporation. I have not thought it right to go deep into the structural details of such legal forms of business because I have never thought of investing that much in my business. In the course of my research I did look for gaining more knowledge about sole proprietorship form...
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...business that has committed an ethical violation as well as a legal violation. I will discuss the impact of the violations as a consumer or investment. Also discuss why there is an increase in these types of legal and ethical violations. What does this say about the United States business environment? The company that I chose is KP MG. KPMG is an accounting firm. In August of 2005 KPMG admitted to criminal wrongdoing. They will pay $456 million for, finds, restitution, as well as penalties, to stay out of jail. From 1996 until 2003, KPMG and a lawyer decide to set up four phony tax shelters. The name of the four tax shelters is FLI P, OPIS, BLIPS, and SOS. These tax shelters targeted people who needed $10,000,000 to$ 20,000,000 in tax loss. Instead of paying the IRS they paid KPMG a percentage of the tax loss. They also file fraudulent tax returns. These returns were phoning. Even though KPMG tax department told the nine individuals that the tax shelters would not stand up to IRS scrutiny, they did the tax fraud anyway. The Tax fraud cost the United States at least $2.5 billion in lost tax revenue. KPMG were ordered to pay the following amounts, 100 million in fines, hundred and 28 million in criminal fines, 228 million in clinical restitution. Also KPMG had to stop doing two areas of practice. They were tax help and permanent adherence to a higher tax practice standard. Also with their preparation of tax returns. The agreement also said that KPMG is required to put...
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...There are also some disadvantages in a sole proprietorship-such as the owner is personally liable for all debts and obligations of the business. Another disadvantage is that the business and the owner are not separate beings (Cheeseman, 2013). A business organization that is owned by two or more individuals is a partnership. The advantages to a having a business partnership are that there is more capital put into the business and that the obligations and debts are shared among each partner. Individuals who are part of a partnership can also deduct their losses through their personal income tax. There are a few disadvantages to being part of a partnership are that all profits are shared and that all decisions need to be made by each partner (Cheeseman, 2013). A C Corporation is any corporation that is taxed separately from its owners. Corporations are a “separate legal entity (or legal person) for most purposes" (Cheeseman, 2013, p. 594). The advantages of a corporation are that it can have more than 75 shareholders that allow for growth of the business, and the business does not dissolve due to the death of the owner. The disadvantage to having a corporation is that there is double taxation, and this means that the business is taxed as well as the shareholders. A small domestic corporation...
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...LEGAL ASPECTS OF BUSINESS The next big reform – GST Submitted to – Prof. I. Sridhar By, Ashwin R Golapkar Section E 2012PGP120 TABLE OF CONTENTS Introduction ....................................................................................................................................................... 3 Objectives of Tax reforms ............................................................................................................................. 5 Implementation of the Existing System .................................................................................................. 11 Shortcomings of the Existing Tax Structure .......................................................................................... 13 Alternatives Available in the implementation ....................................................................................... 18 Tax base and Rates ........................................................................................................................................ 25 Implementation of GST in other countries......................................................................................... 37 Data Analysis and Interpretation........................................................................................................... 38 BIBLIOGRAPHY ............................................................................................................................................. 40 LEGAL ASPECTS OF...
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...Chances to adopt ADR in administrative disputes (Explaining on tax dispute instance) Chuluuntsetseg Ochirjantsan* (Member of Mongolian Bar Association, Senior teacher at Law school of NUM) I. II. III. IV. V. VI. Introduction The origin and development of ADR in Mongolia Concept and stages of administrative proceeding Necessity to adopt mediation procedure on Mongolian tax case and dispute Conclusion References Abstract Tax law covers a significant presence in administrative law sectors. Tax dispute and cases are part of the administrative law disputes and resolving tax dispute and cases through ADR is much peaceful mechanism. Despite the mediation procedure on tax cases and dispute is occupying great position in the national legal systems of countries, international level dispute resolution based on the principles of mutual trust is a flexible and effective method. Countries tend to implement mediation procedure on tax cases in accordance with their legal culture, consciousness level and characteristics of the population regardless of their legal family. Reconciliation and mediation on tax cases and dispute is system which settling cases by parties making dialogue to find mutual consent that can fit to the actual situation without getting restricted by a tight law regulation. Therefore the necessity to resolving tax cases through reconciliation and mediation is seen as a pressing problem in many countries. Key words: Reconciliation And...
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...dealt with several cases challenging the legality and the constitutionality of attempts by several U.S. states to demand taxes on goods purchased online and shipped to residence from various states. For instance, in Bellas Hess v. Illinois and Quill Corp. v. North Dakota where the court withheld that the state could not demand an online sales firm to collect sales tax on its behalf if the latter does not have any physical representation in the former (FindLaw, 2013 & CBO, 2013). On 16 April 2013, S. 743, Marketplace Fairness Act of 2013 was introduced in the senate and passed on to 7 May 2013. Apparently, Marketplace Fairness Act of 2013 was meant to restore U.S. states’ integrity to demand online sales firms to remit sales taxes on more than $1million of revenues made by selling goods to people residing in their territories (www.gpo.gov). Even though some of these laws (both common and legislative) are meant to reduce hurdles on states’ attempts to impose taxes on internet sales that occur within their territories, there are still other legal and practical challenges that will keep on cropping up, hence necessitating legal and regulatory mechanisms to address issues related to the taxation of internet sales. One of the problems that online sales firms are facing is a reduction in customer base for larger online retailers. This is because the Marketplace Fairness Act of 2013 set $1milion as the minimum amount of sales that is taxable for those online retailers who do not have a...
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...Establishing a Business in Cambodia March 2010 Contents • Choice of Legal Entity • Registering a PLC • Bank Account & Deposit • Name & Trademark • Tax Considerations • Labor Obligations • Licensing S trong economic growth, low startup costs, and a wealth of untapped markets make Cambodia an attractive environment for starting up a business. Many foreigners arriving with no intention of becoming an entrepreneur, find themselves opening their first business in this exciting marketplace. Whether you are an experienced entrepreneur coming here to start another venture, or are transitioning to self-employment for the first time, properly establishing your company in full compliance with the law is crucial. While many businesses operate informally, many more have been shut down or encounter ongoing problems from the authorities. Spending the time and money to do everything properly is the only way to avoid potentially insurmountable hassles in the future. a single member limited company, with all the advantages of a PLC. The law also allows for public limited companies, though these will only be established once the Cambodian Securities Exchange is opened, sometime this year. Sole Proprietorship A sole proprietorship is owned and operated by a single person who owns all its capital and is entitled to all its profits. Conducting business on your own, without ever formally registering, will be deemed a sole proprietorship. All obligations and liabilities of the proprietorship...
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...fund for creating small businesses. One’s interest is to establish a small business and must determine which of the four forms of business organization will best suit the business chosen. Legal, tax, accounting, and other implications when selecting from the four business types are matters of considerations (University, 2008 - 2011). The four forms of business include Sole proprietorship, Partnership, C Corporation, and S Corporation. Discussion will explain advantages and disadvantages of the four forms of business, financial statement associated with each form of business organization, and the consequences of tax implications, legal implications, and accounting implications such as SOX and FASB. An explanation what one’s business provides, the choice of one’s business organization form, and one’s rationale for choosing the form of business organization chosen (University, 2002). Sole proprietorship advantages and disadvantages Sole proprietorship is the most common and simplest form of business. An individual owns and manages the business and is responsible for business transactions and responsible for debts and liabilities incurred (AllBusiness.com, 2007, p. 1). Advantages of sole proprietorship is the proprietor is in full control of the business, no corporate taxes, legal cost is at a minimal, formal business requirements are at a minimal. Disadvantages of sole proprietorship is the proprietor is responsible for personally liable of debt and obligations, can...
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...starting a business. Therefore, summarizing in a substantial way the different types of business structures that are suitable for small and medium sized business, along with describe the legal, tax, accounting, and other implications when of each form of business structure. Business Plan According to Abrams, R. (2003), “ The business plan process entails five fundamental steps: (1) Laying out your basic business concept, (2) Gathering data on the feasibility and specifics of your concept, (3) Focusing and refining the concept based on the data you compile, (4) Outlining the specifics of your business, and (5) Putting your plan in compelling form”. New Business Project Business Name: Universal ATM Service Product or Service: Retailed of Automated Teller Machines, Automated Teller Machines Products, Transactions Processing, Automated Teller Machines Placement, and Automated Teller Machines Services and Repairs. Business Structure: Limited Liability Company (LLC) Rationale for choosing this form of business organization: the founders of Universal ATM Service have opt to file as an LLC for their new business structure. Management has chosen this entity because it allows the benefit to “pass-through entities”. This will benefit the company’s owners by not been obligated to pay any income tax as a corporation, do to self employment. Another great benefit that attracted us to choosing an LLC is because it limits the liability on the owners with the...
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...SUBJECT: Difference between tax evasion, tax avoidance, and tax fraud? The times when taxes were first imposed on American Citizens, from that day people have been trying to find different ways to escape from taxes. While some taxpayers continue to find legal ways to avoid taxes on the other hand some choose to evade taxes, or not to pay at all. Three ways to avoid taxes are tax evasion, tax avoidance, and tax fraud. The distinguishes are: Tax Evasion It is an illegal practice where a person, organization, or corporation intentionally avoids paying their tax liability. However, typically tax evasion schemes involves an individual or corporation misrepresenting their income to the Internal Revenue Service (IRS). Misrepresentation may take the form either of under reporting income, inflating deductions, or can be hiding money, and its interest altogether in offshore accounts. Individuals who are involved in illegal enterprise often engage in tax evasion because reporting their original incomes would serve as an admission of guilt and could result in criminal charges. A party which can also try to report these earning as coming from a legitimate source can face serious charges. In the United States, tax evasion constitutes a crime that may have been given rise to substantial monetary, imprisonment, or both. Some of the examples of Tax Evasion are: In 2002 James Traficant, was convicted of ten felony counts including bribery, racketeering, and tax evasion, and corruption of...
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...Four Ways to Legally Organize Your American Church or Ministry By Dr. Roger Sapp We recognize that some of you on our email list are not in America but perhaps you could send this information to your American Christian friends. We promise not to send out too many things that only speak to the American church. According to the IRS Publication entitled Tax Guide for Churches and Religious Organizations, there are at least four different ways to organize a legal ministry or church. All four forms of organization are legal and all four can receive completely tax-deductible gifts from donors and offer completely legal receipts for those gifts. The donors to all four kinds of organization are able to take the donations off their taxes without fear if it was a genuine donation and no services or items of value were received in exchange. Here is a quote from page 2 from the IRS Tax Guide for Churches and Religious Organizations: Churches and religious organizations may be legally organized in a variety of ways under state law, such as unincorporated associations, nonprofit corporations, corporations sole, and charitable trusts. These are the four kinds of organizations that the IRS describes as being appropriate for a Christian group that is receiving donations: 1. The unincorporated association 2. The non-profit corporation 3. The corporation sole 4. The charitable trust It is our purpose in this article to give a little information about the strengths and weaknesses of each of these...
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