After years of investigation by U.S. law enforcement authorities, and a plea of guilty for conspiracy, Credit Suisse AG was sentenced on November 21, 2014 for conspiracy to aid and assist U.S. taxpayers in filing false income tax returns and other documents with the IRS. Credit Suisse admitted to operating an illegal cross-border banking businesses purposefully assisting thousands of U.S. clients in opening and maintaining undeclared accounts and in concealing offshore assets and income from the IRS. Credit Suisse acknowledged doing this for decades prior to and through 2009. Credit Suisse will now provide a complete disclosure of its cross-border activities, including account information regarding clients and other banks with which it operated to maintain secrecy for clients from the United States.
Tamara Ashford, who is currently acting assistant attorney general in the Tax Division of the U.S. Department of Justice, was confirmed as a Tax Court Judge by voice vote.
For decedents dying in 2015, the applicable exclusion amount (or the value of assets a decedent may own without incurring an estate tax liability) is $5,430,000.
On November 17, 2014, the IRS released suggestions to insure successful year-end charitable giving. Please see below for six tips from the IRS, and contact our office at (916) 488-8501 if you have any questions.
Internal Revenue Service Commissioner, John Koskinen, and The National Taxpayer Advocate, Nina Olson, spoke to an audience of tax professionals at the AICPA National Tax Conference in Washington, DC on November 4, 2014. Both presented a dismal tax filing season for taxpayers seeking assistance and guidance from the IRS, including a prediction by Commissioner Koskinen of over 30 minute hold times for phone service. Among the reasons cited for the anticipated challenges this tax filing season:
In Kernan v. Commissioner, T.C. Memo. 2014-228, the Tax Court sustained the IRS's proposed deficiencies and additions to for tax years 2001 through 2006 due to the taxpayer's failure to file income tax returns. However, the Court rejected the IRS's proposed penalties for fraudulent failure to file these same returns.
During the years at issue, the taxpayer sold income tax avoidance products and performed paralegal functions, and deposited the income from these activities into a personal checking account. However, the taxpayer didn't file tax returns to report this income.
On October 23, 2014, U.S. District Court Judge Reggie Walton dismissed two lawsuits against the Internal Revenue Service (IRS). True the Vote, an offshoot of the Tea Party-Affiliated King Street Patriots, sued the IRS claiming the IRS targeted conservative tax-exempt groups by providing greater scrutiny to their applications for tax-exempt status and delaying approval of tax-exempt status. The Court did not rule on the merits of the lawsuit, but stated "unless an actual, ongoing controversy exists in this case, this court is without power to decide it." Since the IRS is no longer screening tax-exempt applications based on political leanings, the governmental conduct is no longer an impact on the plaintiffs in the case. True the Vote received its tax exempt status from the IRS after the lawsuit was filed, and sot its complaint is now moot. Click here to read the full opinion.
Aside from prurient interest in a celebrity's estate plan, there is often a lesson to be learned in the structure of the estate plan of the wealthy. The passing of fashion icon Oscar de la Renta on October 20, 2014 is a reminder for all business owners, no matter how large or small the company, to put a succession plan in place to insure the ongoing success of the business.
Oscar de la Renta founded a fashion empire 50 years ago. He often joked that he would never retire and worked up until his death. By all accounts, the long term success of Oscar de la Renta LLC was Mr. de la Renta's creative design work and his personal relationships with clients. Many would describe the privately held LLC as a "one-man show". A week before his death, Mr. de la Renta named a creative director to take over for him and lead the continued development of the company's iconic designs. This last minute appointment raises concerns for the company, as well as the heirs with an interest in the company, whether the new creative director can continue the legacy started by Mr. de la Renta.
Beginning in 2015, any business entity that files an original or amended tax return prepared by using a tax preparation software program will have to file electronically (e-file) with the FTB beginning January 1, 2015. A waiver may be obtained from the FTB if the business has certain technology constraints, would suffer undue financial burden by complying with the new law or can show circumstances that constitute reasonable cause to obtain a waiver. For more information, visit the FTB's website.