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IRS Offers Safe Harbor from Penalty Provisions for Informational Returns

  Internal Revenue Code (IRC) §§6721 and 6722 impose penalties for any failure to file or furnish a timely, accurate, and complete information return or payee statement (i.e., 1099s for dividends or interest, W-2s, etc.). The penalty equals $250 for each delinquent statement or return not to exceed $3 million in total. A taxpayer can…

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Tax Documentation Strategies

Documentation Strategies under IRC §41 (Research and Development Credit) Internal Revenue Code (“IRC”) §41 rewards taxpayers for engaging in qualified research activities by providing a tax credit equal to a percentage of certain eligible expenses (“R&D Credit”). In addition, IRC §41 requires the taxpayer to substantiate through records and documentation that its activities qualify for…

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Phone Scam Targeting Electronic Taxpayers & Filers

From the Texas Comptroller: We recently became aware of a scam involving an individual falsely claiming to represent the Texas Comptroller of Public Accounts, or in some cases the Texas Department of Transportation. The caller claims the taxpayer has a tax liability or other issue and requests credit card information. The Comptroller’s office does not…

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Regulations On Internal-Use Software

IRS Releases Final Regulations under IRC Section 41 on Internal-Use Software for purposes of the Research Credit On October 4, 2016 the IRS issued final regulations regarding the application of the research credit to internal-use software development expenditures. The three main items addressed in the final regulations are as follows: • Clarification of the definitions…

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Dallas Business CPA

IRS Extends Deadline to Claim Benefits from Tangible Property Regulations

Time Travel Back to 2014 as IRS Extends Deadline to Claim Benefits from Tangible Property Regulations (TPRs) The crafting and implementation of the Tangible Property Regulations (TPRs) has been a long and winding road that proceeded in fits and starts. These extremely complex rules have transformed significantly since the Internal Revenue Service (IRS) began their…

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dallas business cpa

Revised Regulations On Debt And Equity

IRS Releases Revised Regulations on Debt and Equity under IRC Section 385 Earnings stripping is a common practice used by multinational corporations to lower their domestic tax burden by issuing debt instruments to, or being lent money from, a related party by claiming the interest deduction. This can produce substantial inter-jurisdictional tax savings to the…

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Change in Entity Classification and Employer Identification Numbers (EINs)

A common issue that arises when unincorporated businesses go from having one owner to multiple owners, or from multiple owners to a sole owner, revolves around the filing of federal employment tax returns and related forms. In particular, the question becomes whether the employment taxes owed by the business need to be filed under the…

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Accounting Standards Update for Intra-entity Transfers of Assets

FASB Releases Accounting Standards Update regarding the Accounting for Income Taxes related to Intra-entity Transfers of Assets other than Inventory Generally Accepted Accounting Principles (GAAP) require the recognition of both current and deferred income taxes to account for temporary differences between financial accounting income and income for tax purposes. For example, different depreciation methods are…

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Tax Due Diligence Checklist

Business Acquisition / Merger Tax Due Diligence Checklist   The following Tax Due Diligence Checklist is most applicable in terms of tax due diligence required by a buyer in a stock transaction to acquire another firm or business.[i] This checklist can be modified for use in the tax due diligence work required by the seller…

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Expensing, Bonus Depreciation, 15-Year Recovery Period for Qualifying Real Property – PATH Act

Examples of §179 Expensing, Bonus Depreciation, and the 15-Year Recovery Period for Qualifying Real Property under PATH Act A couple of blog posts ago we discussed the changes brought about to §179 expensing as well as first-year bonus depreciation and the reinstitution of the 15-year recovery period for qualifying real property through the 2015 PATH…

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