FBAR Amnesty (Again)

The IRS has recently announced a second period of amnesty for undisclosed foreign bank and financial accounts (FBAR). In order to disincentivize “holding out” the IRS has upped the potential penalties to 25% from 20% on the highest aggregate account balance between 2003 and 2010. Taxpayers must also file amended returns declaring all foreign income and pay the related taxes, penalties, and interest. The deadline for entering the amnesty program is August 31, 2011.

In exchange the IRS is promising not to pursue criminal charges. In addition to criminal charges, the penalties can be as high as 50% of the highest aggregate account balance as well as declaring all foreign income and paying the related taxes, etc.

The IRS has made it clear they are actively pursuing these perceived tax “loopholes” in an aggressive fashion. If you have undisclosed foreign bank accounts you need to know your rights and options. Please call our office immediately to speak with your trusted LMGW advisor.

1031 Exchanges – Follow the rules!

In a recent summary opinion by the US Tax Court (Ralph Crandall TC Summary Opinion 2011-14) the taxpayers were found to not qualify for nonrecognition treatment under Section 1031. The parties established two escrow accounts for the exchange but neither account limited the taxpayer’s right to receive, pledge, borrow, or otherwise obtain the benefit fo the funds.

As with many prospective tax transactions, it is of paramount importance that the rules and form of transactions be followed to the letter.

Up to a 95% tax break for employer provided child care

For those of you with small businesses out there, opportunity exists for an up to 95% tax savings for providing child care for your employees. The tax savings involves the following items: federal employer child care credit, California employer child care credit, federal income tax deduction, California income tax deduction, FICA savings.

The maximum credit can be obtained by paying up to $100 per month, per child in qualifying child care payments. Payments must be made directly by the employer to the qualifying child care provider. Care must be provided under the authority of a license when required by California law. Read more

No more Paper Coupons for business after 12/31/10

As of January 1, 2011 business taxpayers will no longer be allowed to use a paper coupon (IRS Form 8109 – Federal Tax Deposit Coupon) to deposit federal taxes directly to an authorized bank. You will now be required to make deposits by telephone or online using the Electronic Federal Tax Payment System (EFTPS). Because the process for enrolling in EFTPS can take several weeks and involves multiple steps, we highly suggest you enroll right away if you have not already done so. Enrollment can be done via the web at www.eftps.gov or by completing Form 9779 EFTPS Business Enrollment Form.

Enrollment can take about 10-15 business days for online enrollment and up to 10 weeks for paper enrollment, so sign up today!

If you have any questions or would like any assistance with the enrollment process, please contact us.

DAM Cancer 2nd Annual Golf Classic

LMGW team members are proud to support and attend the upcoming 2nd Annual David Andrew “Pooh” Maddan Foundation Golf Classic on Friday, September 24th at the Presidio Golf Course in San Francisco, CA. Matt Wheeler of LMGW sits on the Foundation Board of Directors and helped establish the foundation in honor of his friend and college swimming teammate, David “Pooh” Maddan. For more information on the golf tournament and to make a tax-deductible gift to the foundation or to donate items for the golf tournament silent auction, please contact Matt.