President Donald Trump made due on his promise. Congress got a proposed tax law onto his desk before the end of the year. He signed it. Now taxpayers are trying to get a better idea of how the law will impact their tax returns.
The sale of a home is more than just a simple transaction. It is important that home owners are aware that these transactions can have tax implications. Three specific tax implications to watch for include:
The Internal Revenue Service (IRS) was recently accused of discriminatory practices. In Linchpins of Liberty v. United States of America, a group of plaintiffs allege that the agency intentionally delayed the approval of their tax-exempt status.
It can be difficult for entrepreneurs and humanitarians to put together businesses to benefit society. There are a few perks that are present to help encourage these endeavors. One of the main perks: exemption from taxation.
Talk about your sticky wickets. Pardon what might seem a flip remark about a sensitive issue, but it's hard to describe the situation regarding legalizing marijuana any other way. Minnesota is only at the stage of allowing the use of marijuana for a short list of specific medical conditions. Regulatory structures for that aren't in place yet and the notion of recreational marijuana isn't enjoying much support at the State Capitol.
Confrontations with Minnesota or federal tax collectors are not something any business or individual looks for. Avoiding practices that could lead to needing to resolve tax disputes is something most experts agree deserves prioritizing. Achieving that aim typically requires solid tax planning, or as singer/songwriter, Carly Simon crooned about – "Anticipation."
Back in the 1990s, the U.S. Supreme Court issued a ruling that established that if a business has a physical presence in a state, even if that presence is a person, sales taxes apply to any transactions that occur. As we noted in a series of posts more than a year ago, this notion of so-called nexus hasn't stood the test of time all that well.
Being a responsible person is a good thing. Of course, there are two sides to every coin and the same applies when using this term. In terms of the IRS, carrying the responsible person label in a role associated with a Minnesota business can mean significant headaches for you in the event of a dispute over taxes.
There is tax evasion and then there is tax avoidance. The former isn't something anyone with experience in tax law would recommend. The latter is legal, but the caveat is that there are limits to what is possible.
The IRS uses many tools to identify and go after individuals to meet their tax obligations. Those with experience dealing with federal or Minnesota tax issues know that one of the most common is the audit. The error many people seem to make, though, is drawing the conclusion that an audit means the agency already believes the taxpayer is guilty of doing something illegal.