...current year a higher tax penalty was determined. It was suggested by the clients that they individually file single until the day before they married, terminate their tax years and subsequently file a “short period” joint tax return for the time that they are married. Conclusion: On the Donald R. Pierce, TC Memo 1980 - 563. , Code Sec(s) 143 it states how “no matter what is the taxpayer’s status during the year, the law will only use taxpayer’s status on the last day of the year December 31.” The approach that the couple wants to take is illegal according due to the fact that once a “man and woman are legally married they are considered married for the entire year” per IRS Sec 7703-1. Furthermore, John and Susan will not be able to file as they suggested, and will have to accept the “marriage penalty tax.” Ultimately they could face severe penalty taxes by the IRS either for negligence at the time of filing their return or any other applicable reason. Supporting Evidence: As evidence to my conclusion, to determine the situation of the couple and if they could file their return as they suggested I used Donald R. Pierce, TC Memo 1980-563. , Code Sec(s) 143. On it is clearly stated the situation of marital status of taxpayers as follows: Sections 143 and 6013(d) 3 provide the [pg. 80-2385] general rule that a person's marital status shall be determined as of the end of his or her tax year. It makes no difference when during the year that people get married or divorced....
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...Subject code: BBEK1103 Subject: Principles of Microeconomics Contents Preface .......................................................................................................................................................... 2 Introduction ................................................................................................................................................... 3 Effects of Tax systemt .................................................................................................................................. 4 Evaluation of Tax Reforms……………………………………………………………………………………………………………………..10 Conclusion…………………………………………………………………………………………………………………………………………....11 References…………………………………………………………………………………………………………………………………………….14 Easa Faheem S11422649 Bachelors Degree in Human Resource Management 1 Subject code: BBEK1103 Subject: Principles of Microeconomics Preface This is a work done as part of the module „Principles of Microeconomics‟, which is part of the course Bachelor of Human Resource Management. Consisting of an analysis of a Tax reforms for Maldives, this assignment evaluates the purpose of the tax system, types of tax systems, effects of the tax reform systems to the economy and other factors which affect it. The objective of this work is to develop students‟ ability to analyse the critically tax reform systems of certain country, as well as the various external factors that have an impact on the economy...
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...out-of-state businesses did not have a physical presence in the state and were not paying their fair share of Washington State taxes, they were nonetheless receiving the following significant benefits provided by the state: • Laws providing protection of business interests or regulating consumer credit; • Access to courts and judicial process to enforce business rights, including debt collection and intellectual property rights; • An orderly and regulated marketplace; and • Police and fire protection and a transportation system benefiting in-state agents and other representatives of out-of-state businesses.2 * Armikka R. Bryant, Tax Policy Counsel, Washington State Department of Revenue; J.D., 2001, The University of Iowa; LL.M. (Taxation), 2004, The University of Washington; B.A., 1997, The University of Michigan; member of Washington State Bar. I would like to thank Gilbert Brewer, Senior Assistant Director for Tax Policy at the Washington State Department of Revenue and Russ Brubaker, National Tax Policy Advisor at the Washington State Department of Revenue for reviewing this article and Miriam Ayoub for the many times she has edited and proofread it for me. 1. See Second E.S.S.B. 6143, 61st Leg., 1st Spec. Sess. (Wash. 2010),...
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...times, may compel them to adopt a stringent method of monitoring and recording financial transactions to minimize these exposures. One of the strategies is to focus on particular risk areas including taxation. In doing so, professional managers and business owners may be compelled to maintain a separate set of records in addition to other financial records used internally. For as long as the objective of preparing a separate record is clean and without the intention to evade tax payments due and to defraud the respective government tax agencies, this so-called practice is within the ethical standards of the business circle as a whole. To erase any cloud of doubt and to control and avoid accounting scandals, several codes of ethics governing the practice of recording and reporting financial information, has been crafted. Provisions on integrity, disclosure, management representation, competence, independence and many others are often emphasized in the preparation and presentation of financial data. In the end, however, it is only with a strong moral conviction of owners and managers to conduct their undertakings with utmost integrity that fulfils the objective of these codes. But this may be easier said than done – for beyond a clean business intention lie the woes of taxation and other risks that can cause the moral standards of these owners and managers to lean on the darker side of...
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...Arayawna Moore ACCT 613- Federal Income Taxation February 22, 2014 University of Maryland University College Susan K. Duke Issue: The Dynamic Effects of Personal and Corporate Income Tax Changes in the United States within the Labor Market Rule: * Most corporate income is subject to a 35% statutory tax rate * Taxpayers with an ordinary income tax rate of 15% or less pay the 0% rate on dividends. Taxpayers in the 25%, 28%, 33%, and 35% tax brackets are subject to a 15% tax rate on dividends. * 26 U.S. Code § 861 - Income from sources within the United States * 26 U.S. Code § 3510 - Coordination of collection of domestic service employment taxes with collection of income taxes * 26 U.S. Code § 3401 - Definitions Analysis: This article helps the reader look beyond the impact of tax changes on output or revenues allowing us to gain further insight into how tax changes are transmitted to the economy and into possible differences between the two tax components; personal and corporate income tax. The authors point out that changes in taxes may impact on costs of production and may affect inflation, to the extent that cost changes are passed into prices. There are important differences in how personal and corporate income tax changes affect the labor market. Studies that focus exclusively on total average tax rates or revenues are therefore only of limited use for assessing the ability of tax policy to affect employment...
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...4: Code Section 351 Section 351(a) provides that no gain or loss shall be recognized if property is transferred to a corporation by one or more persons solely in exchange for stock in such corporation and immediately after the exchange such person or persons are in control (as defined in § 368(c)) of the corporation. Control is defined by Section 368(c) means the ownership of stock possessing at least 80 percent of the total combined voting power of all classes of stock entitled to vote and at least 80 percent of the total number of shares of all other classes of stock of the corporation. The purpose of this provision is to not discourage the formation of corporations. Per our text, there has been no change in the taxpayers wherewithal to pay taxes so the stock represents a continuation of investment but in a different form. Source: Federal Taxation Comprehensive Topics Chapter 14: Page 5 and http://www.irs.gov/pub/irs-drop/rr-03-51.pdf 20: Corporation tax years C-corporations have greater flexibility in choosing a tax year. They may choose to use as their tax year the calendar year or any other12 month period. They can choose a tax year different from its shareholders which can result in income deferral in the first year. This differs from other business organizations as follows: • S-corps and personal service corporations: required to use a calendar year for tax purposes unless a business purpose can be established for using a fiscal year. • Partnerships:...
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...levied occasionally to pay for some huge expenses such a war. Since then the British tax system has developed in a largely ad hoc and politically expedient method’’. Amendments have been made to the existing tax systems, usually when the government required more funds. Little if any planned or integrated thinking seems to have taken place. According to the Adam Smith Institute, Great Britain has the most complex tax system in the world, which is largely believed that is roughly five times as long as the German tax code (Geraint Jones, 2011) Currently, governments request to use taxation in some situations for purposes which is different than raising funds to cover up its expenditure. To begin with, the economic resources, which are accessible for the nation are limited, thus a raise in government spending usually leads to a decrease in private expenditure. In addition to this, one technique of transferring recourses from the private to the public sector is the use of taxation, but there are also further methods. One of these alternative methods is the degradation of the currency through the creation of additional money, but the main problem of this method is that it leads to inflation. Moreover, an additional alternative option is for the government to charge the goods and services it offers. However, it is not possible to charge individuals directly on the basis of their utilization of many government services (James and Nobes, 2011). According to Musgrave (1959), the economic...
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...MULTISTATE CORPORATE TAX COURSE John C. Healy | Michael S. Schadewald 2014 EDITION CPE CoursE! BONUS Earn CPE Credit and stay on top of key Multistate Corporate Tax issues. Go to CCHGroup.com/PrintCPE 2014 EDITION MULTISTATE CORPORATE TAX COURSE John C. Healy | Michael S. Schadewald ii Contributors Authors ........................................................... John C. Healy, MST, CPA Michael S. Schadewald, PhD, CPA Technical Review ....................................................... Sharon Brooks, CPA Production Coordinator ................................................... Gabriel Santana Production ......................................................................... Lynn J. Brown Layout & Design..................................................................Laila Gaidulis This publication is designed to provide accurate and authoritative information in regard to the subject matter covered. It is sold with the understanding that the publisher is not engaged in rendering legal, accounting, or other professional service. If legal advice or other expert assistance is required, the services of a competent professional person should be sought. © 2013 CCH Incorporated. All Rights Reserved. 4025 W. Peterson Ave. Chicago, IL 60646-6085 800 344 3734 CCHGroup.com No claim is made to original government works; however, within this Product or Publication, the following are subject to CCH’s copyright: (1) the gathering, compilation...
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...Internet Taxation Solutions for Amazon, Inc. Guy D. Hugaert October 9, 2011 IS 535 Professor Amita Suhrid-Cherewick Internet Taxation and Legislation One of the hottest political issues regarding taxation is how to tax revenue generated on the internet. Before the internet, stores were required to collect the appropriate sales tax rate in the state where the store was located. The store then forwarded the collected tax to the state tax collector. This system was working fine and was quite simple until the invention of the internet. The system has not changed for the traditional ‘brick and mortar’ store but things are much different for the ‘online’ store. This is where it gets interesting, how do we ensure that the sales taxes are paid or who is responsible for collecting the tax and what rate is paid and what state gets the taxes? For example, where should any sales tax is paid for candy ordered via the Internet from an Ohio vendor by a California resident while traveling in Georgia that is sent to a relative in Michigan (Nellen, 1999)? When the internet went commercial in 1995 it was free of regulation and taxes from the US government at all levels until 1996 when several US states saw the Internet as a great source of revenue for their states. Ten states (Hawaii, New Hampshire, New Mexico, North Dakota, Ohio, South Dakota, Tennessee, Texas, Washington & Wisconsin) started charging ISP’s an Internet access tax. This lead to the authoring of the...
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...CHAPTER ONE INTRODUCTION 1.1 Background to the Study Since the 1960s to date, small and medium sized enterprises (SMEs) have been given due recognitions especially in the developed nations for playing very important roles towards fostering accelerated economic growth, development and stability within several economies (Yitzhaki, 2006). They make-up the largest proportion of businesses all over the world and play tremendous roles in employment generation, provision of goods and services, creating a better standard of living, as well as immensely contributing to the gross domestic products (GDPs) of many countries (OECD, 2000).Over the last few decades, the contributions of the SMEs sector, the development of the largest economies in the world have beamed the searchlight on the uniqueness of the SMEs; and this have succeeded in overruling previously held views that SMEs were only ―miniature versions‖ of larger companies (Al-Shaikh 1998; Gaskill et al. 1993). And although Small and Medium Enterprises have been at the center of the policy debate for quite some time in both developed and developing countries, little analytical work has been undertaken in this area.The dearth information that exists among researchers on Small and Medium Enterprises however provides a sense of how important this sector is for sustainable development in emerging economies (Medina, 2001). For instance, recent studies conducted by United Nations Industrial Development Organization (UNIDO) concur that SMEs...
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........................................................................... 25 Implementation of GST in other countries......................................................................................... 37 Data Analysis and Interpretation........................................................................................................... 38 BIBLIOGRAPHY ............................................................................................................................................. 40 LEGAL ASPECTS OF BUSINESS | GST-the next big reform Page 2 INTRODUCTION Probably the biggest tax overhaul system, which independent India has seen could be the introduction of Goods and Services Tax, leave apart the Direct Tax Code (which could replace the Income Tax Act, 1961). Though the implementation date of GST is still unclear, but it could see the light of day soon. The Goods and Services Tax...
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...Seite 1 DOING BUSINESS IN SWITZERLAND CONTENTS 1 1.1 1.2 1.3 1.4 2 2.1 2.2 2.3 2.4 3 3.1 3.2 3.3 3.4 3.5 3.6 3.7 3.8 3.9 4. 4.1 4.2 4.3 5 5.1 5.2 5.3 6 6.1 6.2 6.3 7 7.1 7.2 7.3 A Brief Survey Geography Population and Languages Political System The Economy Swiss Company Law Governing Law and Forms of Business Enterprises Corporation Books of Account Annual Business Report Taxation of Resident Corporations Liability to Swiss Tax Determination of Taxable Income Tax Privileged Corporations Treaty Benefits for Swiss Resident Corporations Computation of Corporate Taxes Assessment of Corporate Taxes Withholding Taxes of Dividend Distributions of Swiss Corporations Filing of Tax Returns, Assessments of Tax, Tax Litigation Corporate Reorganizations Taxation of Non-Resident Corporations Liability to Swiss Tax Determination of Taxable Income and Capital of Swiss Permanent Establishments Remittance of Profits Withholding Tax Income Subject to Withholding Tax Exemptions from Withholding Tax Withholding and Reimbursement of Tax Indirect Taxes Value Added Tax Stamp Duties Real Estate Taxes Personal Taxation Income Taxes on Residents Income Taxes on Non-residents Other Individual Taxes Seite 2 7.4 8 8.1 8.2 8.3 9 9.1 9.2 10 10.1 10.2 10.3 10.4 10.5 10.6 Tax Returns, Assessment and Payment of Tax Labour Conditions an Social Security Working Conditions Social Security Social Security Treaties Government Incentives Export Risk Guarantee Program Investment Incentives Government Controls...
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...Introduction to Federal Taxation Week 4 Assignment November 24 2012 4. What is the purpose of Code Sec. 351 in regard to transfers to corporations? The purpose of Code Sec. 351 is to allow shareholders of a corporation to defer recognition of a gain or loss on the transfer of assets to a corporation. The transfer of property can be made when a new corporation is formed, or when additional capital is put into existing corporations. Without Code Sec. 351, sole proprietors and partnerships would have a difficult time adopting the corporate form of organization for legal and tax purposes because the transfer of appreciated property would create a taxable transaction. The deferral of gain or loss under this section is justified because the assets have simply been transferred to a corporation that is controlled by the transferors. Section 351 also prevents the recognition of losses on transfers of property that has declined in value. 20. What tax years are available to corporations? How do the options differ from other forms of business organizations? Upon establishing a new corporation, the corporation may choose either a calendar year or a fiscal year. They may choose either of the two regardless of the tax years of its owners which creates tax savings. This differs from other forms of business organization as the S corporation, the Partnership, and Limited Liability Companies are all required to use the calendar year unless they can establish a business purpose to...
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...the corporation decides to sell the assets and distributes the remaining cash to the shareholder, it is taxed on the sale and the shareholder is viewed as though the shareholder sold their stock to the corporation for the value of the assets. This is based on the fair market value of the property. Corporations can be organized as C or S corporations. One of the differences between the two is that the C corporations are subject to double taxation, while S corporation are considered a flow-through entity. The income earned by the C corporations is taxed at corporate level and again at the shareholder level when income is received. The distribution of income at the shareholder level can be taxed as a dividend income or as capital gain. A major consequence to shareholders is that "a distribution is made from the corporation's earnings and profits, it is taxed to the shareholder as a dividend." In some cases shareholders may feel that the distribution be treated as a dividend. By doing this it allows the corporation to take advantage of Code § 243. This is special dividends-received deduction that allows the dividend to only be taxed once at the corporate level. In conclusion, distributions that are considered capital gain reduce the shareholders basis in the corporations and are reduced by the portion of the liability. Additionally, shareholders have the ability to determine how they would like distributions to affect them and the company and who...
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...Persson (2014), one reason why low-income countries have lesser levels of taxation may be a weaker ethic of tax compliance than the one that has evolved in high-income countries. So the absence of a strong compliance norm may result in less revenue than would otherwise be expected. Fjeldstad & Heggstad, (2012)...
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