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Minneapolis Tax Law Blog

Can tax debt curb your travel ambitions? The IRS says yes.

The Internal Revenue Service (IRS) recently published a reminder that tax debt can curb travel ambitions. A failure to pay off one’s bill with the IRS can result in problems with your passport.

How is the IRS making sure tax debt is paid? The agency has taken an aggressive approach when it comes to tax debt and passport applications. Simply put: fail to pay our tax obligations and the IRS can take away your passport.

Target applauds the SCOTUS decision allowing online tax

Brick-and-mortar retail giant Target has publicly applauded the Supreme Court of the United States’ (SCOTUS) decision to allow states to apply a sales tax to online retail purchases. The lack of the state sales tax has hurt business for these corporations and led to lost revenue for states.

What was the ruling? The case, Quill Corp. v. North Dakota, questioned a previous SCOTUS decision from 1992. In that previous case, SCOTUS essentially stated a business had to have a physical presence within a state for a state to charge a sales tax. At the time, online transactions were minimal. This is no longer the case.

Four ways the new tax law impacts property tax breaks

 

The Tax Cuts and Jobs Act (TCJA) resulted in many changes to tax law. These changes will directly impact property owners. Four specific examples include:

  • Standard deduction. The TCJA increased the standard deduction from $6,500 to $12,000 for individuals and $13,000 to $24,000 for married couples who file a joint tax return. This is notable when it comes to property tax breaks as the property tax break is only available for those who file an itemized deduction. The change made by the TCJA will likely encourage people to file based on a standardized deduction as opposed to an itemized deduction. If successful, the increase in the standardized deduction could make the property tax deduction a non-issue.

World Cup athletes face tax battles off the field

It is World Cup time. This year, the World Cup marks more than just a celebration of amazing soccer games. It also showcases athletes that are in the middle of international tax battles.

Arguably, two of the greatest soccer players of our time are currently facing serious allegations of tax fraud. Cristiano Ronaldo is one. The Spanish government recently accused the star of Real Madrid's soccer team of tax evasion. Instead of litigating the matter, he chose to settle with the Spanish government and pay a fine of $21.8 million, and accepted a suspended jail sentence as part of the deal. The government set the sentence for two years. However, Spanish law often offers a probation alternative for first offenders that have a sentence of two years or less. As such, the football great will likely not serve prison time.

Self-employed? Do not forget today’s tax deadline.

The estimated tax for the second quarter of 2018 is due today, June 15.

Why do the self-employed have to pay four times per year? Essentially, the United States tax system is a pay as you go system. Employers generally remove taxes for workers every paycheck.

Would Uncle Sam consider chickens the same as cash?

There is a great deal of uncertainty tied to the Tax Cuts and Jobs Act (TCJA). One involves the treatment of chickens. Puns abound when analyzing how the Internal Revenue Service (IRS) will define chickens without running afowl of the new tax law. But all jokes aside, the issue is a serious one for those in the poultry market.

The question centers on whether a live chicken would count as cash if a liquid market exists. Why would it matter? If considered a cash equivalent, a different tax rate would apply.

MN lawmakers debate the state’s tax on Social Security income

Minnesota is one of only 13 states that tax Social Security income. Minnesota, North Dakota, Vermont and West Virginia tax Social Security income using an income test. Colorado, Connecticut, Kansas, Missouri, Montana, Nebraska, New Mexico, Rhode Island and Utah each have their own rules to apply a state tax to this income. Those in favor of the tax claim it brings important revenue to the state. Critics argue that retirees leave the state because of this tax.

As a result, they are pushing for reform.

Restaurant chain owners face allegations of criminal tax evasion

The Internal Revenue Service (IRS) has accused seven restaurant owners of tax evasion. The accusations led to an investigation by the IRS and local state tax authorities of seven businessmen.

Investigation details

WI produce vendor gets 18-month prison sentence for tax evasion

The Department of Justice (DOJ) recently charged a former produce vendor out of Wisconsin with three different tax crimes. The 63 year-old man was originally charged in June of 2017 with tax evasion, failure to file a corporate tax return and structuring currency transactions, according to documents from the DOJ.

The man charged with the crimes oversaw the finance and tax operations of the produce business. He was the subject of an investigation by the Internal Revenue Service’s (IRS) Criminal Investigation team. The team gathered evidence through this investigation to support the charges.

2 tax consequences to consider before buying a second property

There are many advantages to owning a second property. In addition to diversification of your investment portfolio, a second property can allow you to make the most of an area you love.

Owning a property in a warmer location to escape the winter snow or in the mountains to take advantage of outdoor winter activities can make a lot of financial sense. However, it is important to keep in mind that this type of investment has unique tax implications. Two specific tax considerations to keep in mind include:

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