3M COMPANY vs IRS

February 17, 2023 by admin

Thursday February 16, 3033 – National Review’s Travis Nix asks the question “Who is in charge of tax legislation, the IRS and the Department of the Treasury or Congress. The question is raised because of a recent Tax Court decision of 3M Company vs Commissioner of the IRS.

In the 3M case, the IRS claimed 3M should pay 6% tax royalties on net sales from its Brazilian subsidiary, even though Brazilian Law caps payment at 1%. Thereby double taxing the 5% difference.

The decision allows the IRS to ignore foreign laws which limit inter-company transactions and disregards the keystone of U.S. transfer-pricing regulations that allocate income as if both companies were negotiating with a non-related company, resulting in tax avoidance and evasion.

The decision may have severe economic consequences, such as lost market access for U.S. companies and less economic growth in both countries. Should Congress enact legislation overturning this regulation by mandating the IRS to respect foreign law in transfer-pricing cases?

Attorney Steven A. Leahy reviews this important Tax Court case on Today’s Tax Talk.

https://www.nationalreview.com/2023/02/congress-should-stop-the-irs-from-taxing-phantom-income/

https://aboutbtax.com/6Hi

Steven A. Leahy is a tax attorney in Illinois. He was the host of the long-running popular Radio Show “The IRS Radio Hour” heard every Sunday evening on AM 560 The Answer. Attorney Leahy is also the author of the book “Deal With Your IRS Problems Today!” You can get a FREE copy of this important book at FreeIRSBook.com. Or Call 24/7 (312)664-6649

IRS Commissioner Confirmation Hearing Underway

February 16, 2023 by admin

Wednesday February 15, 2023 – The confirmation hearing for the nomination of Daniel Werfel as Commissioner of the Internal Revenue Service (IRS) is underway, with a variety of topics to be discussed. The Senate Finance Committee will question Mr. Werfel on matters such as the $80 billion increase in IRS budget for enforcement and collection activities, recent leaks of taxpayer information, and audit rates that will not increase for households earning less than $400,000.

This hearing could determine whether or not he is confirmed as Commissioner of the IRS by President Biden’s administration. He will be confirmed. Mr. Werfel is exactly the Washington insider who gets these jobs. Remember, Mr. Werfel was an acting commissioner for a time May 22, 2013 to December 23, 2013.

With so much at stake during this hearing, it remains to be seen what answers has Mr. Werfel prepared and how it will influence the outcome of his nomination process. It is only a matter of time before the Senate confirms Mr. Werfel as IRS Commissioner.

Attorney Steven A. Leahy reviews the confirmation hearing on Today’s Tax Talk.

https://www.nytimes.com/2023/02/15/business/irs-daniel-werfel-hearing.html

https://www.cnn.com/2023/02/15/politics/daniel-werfel-irs-commissioner-confirmation-hearing/index.html

See the testimony at C-Span:

https://www.c-span.org/video/?525971-1/irs-commissioner-nominee-daniel-werfel-testifies-confirmation-hearing

Crypto Crackdown!

February 15, 2023 by admin

Crypto-Tuesday February 14, 2023 – The crypto world has been rocked by several major regulatory actions. New York regulators shut down new issuance of the world’s third-largest stablecoin, BUSD, while the SEC fined the parent of another big crypto exchange and forced it to stop offering a popular type of crypto-yield product to U.S. investors.

Banking regulators are also quietly pushing for more oversight into crypto exchanges and other digital currency businesses. These moves could have a profound impact on the future of cryptocurrency.
For those already involved in cryptocurrency, it means greater scrutiny from government agencies and more stringent regulations that must be followed.

Being aware of these changes can help you identify potential areas of growth in the industry that might have otherwise gone unnoticed. For example, if one crypto exchange is no longer allowed to offer certain products or services due to regulatory pressure, another company may be able to step in and fill that void—allowing some to capitalize on an untapped market opportunity.

The recent flurry of regulatory activity shows that cryptocurrency regulation is here to stay. That’s why it’s essential for business owners to stay up-to-date on these developments in this space so they can make informed decisions when it comes to their own operations and investments in cryptocurrencies.

Attorney Steven A. Leahy summarizes the latest Cryptocurrency news on Today’s Tax Talk.

https://www.cnbc.com/2023/02/14/cryptocurrency-markets-on-edge-as-us-regulatory-crackdown-intensifies.html

https://www.wsj.com/articles/crypto-investors-brace-for-more-crackdowns-from-regulators-c1507134?mod=djemalertNEWS

https://coinflip.tech/markets

IRS “Hurry up & Wait”

February 10, 2023 by admin

Thursday February 9, 2023 – As tax season begins, the IRS has yet to decide an important question: are state payments or refunds received in 2022 taxable? So, The IRS is asking people to hold off filing their Tax Returns.

The Internal Revenue Service (IRS) tells us they have been working for months with state tax officials about these special payments and refunds that were made available by some states in 2022.

“The IRS is aware of the complexity surrounding these payments and is doing its best to provide additional information that will help taxpayers make an informed decision.” In the meantime – Hurry up and Wait.

The Sixteenth Amendment to the Constitution proclaims, “Congress shall have power to lay and collect taxes on incomes, from whatever source derived.” There are, however, some statutory exceptions. Do these state rebate checks fit into the exceptions? The IRS doesn’t know yet.

The IRS tells taxpayers “the rules surrounding them are complex.” In the meantime “the IRS recommends [taxpayers] wait until additional guidance is available.” “[T}he best course of action is to wait for additional clarification on state payments rather than calling the IRS.”

Attorney Steven A. Leahy looks at the IRS February 3, 2023 Statement on Today’s Tax Talk.

https://www.irs.gov/newsroom/irs-statement-taxability-of-state-payments

https://www.nationalreview.com/corner/the-irs-fails-at-the-basics/

https://www.marketplace.org/2023/02/09/were-last-years-state-payments-taxable-taxpayers-in-24-states-wait-while-the-irs-decides/

https://www.fatherly.com/news/wait-to-file-your-tax-return-irs-warns

IRS Withholding

February 7, 2023 by admin

Monday February 6, 2023 – The IRS collects taxes from every paycheck issued. This is called withholding and it’s how most Americans pay their taxes. America is a “Pay as you go” system.

The idea is for employers to withhold an estimated amount of money from each paycheck that reflects what you owe in taxes; when you file your return, the difference between what was withheld and what you actually owe is either refunded to you or requested from you.

The problem is that the amount withheld is based on your income estimates for the year, and with wages increasing, many people are facing a surprise—instead of getting a refund, they owe money come April 18.

The good news is that you can adjust your withholding so it more closely matches what you owe when tax time rolls around. Talk to your payroll department or consult with a tax professional to figure out how to make sure you’re not giving away money in the form of a refund that you would have been better off using in your regular budget. That way, when Tax Day comes around, you’ll be prepared.

Pay attention to the amount withheld from each paycheck and make the necessary adjustments throughout the year to ensure that come tax time, you won’t be in for a shock. When it comes to taxes, knowledge is power. Take the time to understand your individual tax situation and make sure you’re withholding the right amount from each paycheck—so you can keep more of what’s rightfully yours.

After all, there’s no better way to celebrate Tax Day than with a little extra money in your pocket. Happy filing

https://www.thestreet.com/dictionary/w/withholding

https://www.mississippivalleypublishing.com/the_hawk_eye/the-irs-tightens-the-screws-on-the-gig-econimy/article_8d822b3a-a3d9-11ed-836a-9368abad0b67.html

https://www.fightbacknow.com