This document summarizes and compares two programs for resolving state tax delinquencies - state tax amnesty programs and state voluntary disclosure programs. State tax amnesty programs offer benefits like penalty and interest abatement in exchange for filing delinquent returns during a limited-time amnesty period. However, amnesty programs have drawbacks like requiring taxpayers to file returns for many prior years and potentially waive appeal rights. State voluntary disclosure programs allow taxpayers to negotiate terms before disclosure and typically offer a limited look-back period and penalty waiver. While voluntary disclosure brings taxpayers onto state tax rolls, it requires addressing all owed tax types and subjects taxpayers to future audits. The document analyzes benefits and issues to consider with both approaches.
The IRS is making several changes to their tax lien process to help struggling taxpayers, including increasing the dollar threshold for when liens are issued which should result in fewer liens. They are also expanding installment agreement programs for small businesses and the streamlined offer in compromise program. Critics say the changes do not go far enough, while others see it as a step in the right direction to provide more flexibility for taxpayers getting back on track with their tax obligations.
What Is Life After Coronavirus? State and Local Tax: First Wave Response & Se...Rea & Associates
This free, high-level coronavirus overview is designed to help employers make sense of the state and local tax decisions to consider as the COVID-19 (coronavirus) crisis continues to unfold. Presented by Joe Popp, JD, LLM, a principal with Rea & Associates and the firm's director of state and local tax services, the hour-long presentation will cover the first wave of state and local tax department responses and will then move on to guidance for businesses and individuals who are preparing for the second wave of crisis response.
Specifically, this webinar will cover:
- Insight about the first wave of state and local tax responses and how tax departments are answering individuals and businesses during the COVID-19 crisis.
- Guidance on how to prepare for the next wave of decisions made by your state and local tax departments.
- Predictions on what states will do in the future as a result of the COVID-19 crisis.
This document summarizes the issue of high-net-worth taxpayers becoming subject to the Alternative Minimum Tax (AMT) even when they do not have traditional preference items. It develops an analytical framework to predict the probability a taxpayer will be subject to the AMT based solely on the percentage of total income from long-term capital gains and the state tax rate. The key factors are that state taxes are deductible for regular tax but not AMT, and the declining difference between regular and AMT rates exacerbates this issue. The framework is then applied to examples comparing regular tax liability to AMT liability at different income levels and capital gains percentages.
Punishment and Grace: On the Economics of Tax AmnestiesNugroho Adi
This document summarizes an economic analysis of tax amnesties. It discusses three types of amnesties: revision amnesties, which allow taxpayers to revise past returns with reduced penalties; investigation amnesties, which provide immunity from audits for a fee; and prosecution amnesties, which partially waive penalties for indicted taxpayers who plead guilty. It presents a model of optimal taxpayer behavior under different enforcement scenarios and analyzes how the different amnesty types may impact taxpayer compliance, government revenue, and the desirability of implementing amnesties permanently. Investigation amnesties are found to only increase long-term revenue if offered before audits begin, providing full insurance against audits.
Cleaning Up Your Tax with Voluntary Disclosure AgreementsCBIZ, Inc.
While paying taxes might not be our favorite pastime, the overwhelming majority of taxpayers strive to file and pay all of their tax obligations. However, sometimes taxpayers' best efforts to comply with their tax obligations are not enough, especially in the state and local tax world. Although it may be an innocent mistake, such non-compliance may be very costly if it is first discovered by the state or local taxing jurisdiction, because the taxpayer will not only be subject to tax and interest but also harsh penalties (up to 25 percent or more).
The document provides an overview of taxes and government spending. It discusses how taxes fund government programs through revenue collection. It outlines the three main tax structures - proportional, progressive, and regressive taxes. It also examines the characteristics of a good tax, who bears the tax burden, and the types of federal, state, and local taxes. The document analyzes mandatory and discretionary federal spending, including major entitlement programs. It also explores state and local budgeting and the sources of revenue for state and municipal governments.
The American Taxpayer Relief Act of 2012:
1) Allowed Bush-era tax rates to expire for individuals earning over $400,000 and families over $450,000, raising their tax rate to 39.6%;
2) Permanently patched the AMT by increasing exemption amounts; and
3) Provided for a maximum 40% estate tax and $5 million exemption.
It effectively raised taxes for all by not extending a payroll tax cut and delayed mandatory spending cuts. Congress will revisit tax and spending policies when addressing the debt limit in February, with entitlement reforms and the "chained CPI" likely to be controversial topics.
The document discusses taxes and government spending at various levels of government. It explains that taxation is the primary way governments collect money to fund operations. The federal government's authority to tax comes from the Constitution and Congress has the power to levy taxes, subject to some limits. Federal taxes include individual and corporate income taxes, payroll taxes, excise taxes, estate and gift taxes. Federal spending goes towards entitlement programs like Social Security and Medicare, as well as discretionary spending on defense, education, and more. State and local governments also collect taxes and create operating and capital budgets to fund their operations.
The IRS is making several changes to their tax lien process to help struggling taxpayers, including increasing the dollar threshold for when liens are issued which should result in fewer liens. They are also expanding installment agreement programs for small businesses and the streamlined offer in compromise program. Critics say the changes do not go far enough, while others see it as a step in the right direction to provide more flexibility for taxpayers getting back on track with their tax obligations.
What Is Life After Coronavirus? State and Local Tax: First Wave Response & Se...Rea & Associates
This free, high-level coronavirus overview is designed to help employers make sense of the state and local tax decisions to consider as the COVID-19 (coronavirus) crisis continues to unfold. Presented by Joe Popp, JD, LLM, a principal with Rea & Associates and the firm's director of state and local tax services, the hour-long presentation will cover the first wave of state and local tax department responses and will then move on to guidance for businesses and individuals who are preparing for the second wave of crisis response.
Specifically, this webinar will cover:
- Insight about the first wave of state and local tax responses and how tax departments are answering individuals and businesses during the COVID-19 crisis.
- Guidance on how to prepare for the next wave of decisions made by your state and local tax departments.
- Predictions on what states will do in the future as a result of the COVID-19 crisis.
This document summarizes the issue of high-net-worth taxpayers becoming subject to the Alternative Minimum Tax (AMT) even when they do not have traditional preference items. It develops an analytical framework to predict the probability a taxpayer will be subject to the AMT based solely on the percentage of total income from long-term capital gains and the state tax rate. The key factors are that state taxes are deductible for regular tax but not AMT, and the declining difference between regular and AMT rates exacerbates this issue. The framework is then applied to examples comparing regular tax liability to AMT liability at different income levels and capital gains percentages.
Punishment and Grace: On the Economics of Tax AmnestiesNugroho Adi
This document summarizes an economic analysis of tax amnesties. It discusses three types of amnesties: revision amnesties, which allow taxpayers to revise past returns with reduced penalties; investigation amnesties, which provide immunity from audits for a fee; and prosecution amnesties, which partially waive penalties for indicted taxpayers who plead guilty. It presents a model of optimal taxpayer behavior under different enforcement scenarios and analyzes how the different amnesty types may impact taxpayer compliance, government revenue, and the desirability of implementing amnesties permanently. Investigation amnesties are found to only increase long-term revenue if offered before audits begin, providing full insurance against audits.
Cleaning Up Your Tax with Voluntary Disclosure AgreementsCBIZ, Inc.
While paying taxes might not be our favorite pastime, the overwhelming majority of taxpayers strive to file and pay all of their tax obligations. However, sometimes taxpayers' best efforts to comply with their tax obligations are not enough, especially in the state and local tax world. Although it may be an innocent mistake, such non-compliance may be very costly if it is first discovered by the state or local taxing jurisdiction, because the taxpayer will not only be subject to tax and interest but also harsh penalties (up to 25 percent or more).
The document provides an overview of taxes and government spending. It discusses how taxes fund government programs through revenue collection. It outlines the three main tax structures - proportional, progressive, and regressive taxes. It also examines the characteristics of a good tax, who bears the tax burden, and the types of federal, state, and local taxes. The document analyzes mandatory and discretionary federal spending, including major entitlement programs. It also explores state and local budgeting and the sources of revenue for state and municipal governments.
The American Taxpayer Relief Act of 2012:
1) Allowed Bush-era tax rates to expire for individuals earning over $400,000 and families over $450,000, raising their tax rate to 39.6%;
2) Permanently patched the AMT by increasing exemption amounts; and
3) Provided for a maximum 40% estate tax and $5 million exemption.
It effectively raised taxes for all by not extending a payroll tax cut and delayed mandatory spending cuts. Congress will revisit tax and spending policies when addressing the debt limit in February, with entitlement reforms and the "chained CPI" likely to be controversial topics.
The document discusses taxes and government spending at various levels of government. It explains that taxation is the primary way governments collect money to fund operations. The federal government's authority to tax comes from the Constitution and Congress has the power to levy taxes, subject to some limits. Federal taxes include individual and corporate income taxes, payroll taxes, excise taxes, estate and gift taxes. Federal spending goes towards entitlement programs like Social Security and Medicare, as well as discretionary spending on defense, education, and more. State and local governments also collect taxes and create operating and capital budgets to fund their operations.
Although you can’t avoid taxes, you can take steps to minimize them. This requires proactive tax planning — estimating your tax liability, looking for ways to reduce it and taking timely action.
The document provides information about recent changes to mortgage and finance regulations in Australia. The Australian Prudential Regulatory Authority (APRA) has influenced lenders to be more prudent, which will impact the property market. The state budget removed the $3,000 First Home Owners Grant for established homes, though stamp duty concessions remain. The document also provides contact information for a finance broker and answers a question about how credit scores are calculated based on credit history, applications, and accounts.
Taxation is the inherent power of governments to impose and collect taxes from individuals, properties, and transactions in order to generate revenue for public purposes. There are several principles and theories of taxation, including the benefit principle, ability-to-pay principle, and equal-distribution principle. A tax system can be proportional, regressive, or progressive depending on how tax rates and amounts change relative to income. Taxes are an enforced contribution used by governments to fund programs and services that benefit citizens.
Retaining Wealth in a Rising Tax Environmentbruce_gillen
Tax rates are expected to rise in 2011 as Bush-era tax cuts expire. This will negatively impact high-income taxpayers through higher income, capital gains, and dividend tax rates. The document discusses three strategies for improving tax efficiency despite rising rates: 1) minimizing short-term capital gains distributions through manager incentives and technology; 2) investing in dividend-paying stocks for qualified dividends taxed at a lower rate; and 3) municipal bonds which provide tax-exempt income but require credit research expertise. It emphasizes the benefits of tax-efficient strategies, especially for accumulation and distribution phases of investing.
1) Uniformity across all state tax laws is impossible because each state has unique economic and demographic factors that influence their tax policies.
2) Even if uniformity is achieved, complexity among state tax laws is still inevitable due to the need for states to tailor laws to their specific circumstances.
3) What taxpayers want is clarity on how tax laws apply to their specific situations, not just uniformity of laws across states. Clarity depends on states providing clear guidance and working with taxpayers.
This document discusses establishing Florida residency and escaping taxes in northeastern states. It provides an overview of residency concepts like domicile and statutory residency. It compares Florida's definition, which focuses on filing a declaration of domicile, to other states like New York, New Jersey, and Pennsylvania. It also outlines factors considered for residency in Georgia and compares requirements in other states throughout the U.S. The document aims to help individuals determine if and when they should change their residency status.
The document discusses the principle of ability to pay and progressive taxation in Nepal. It states that those with more wealth or higher incomes should pay more in taxes, as a means of income redistribution. It also explains that tax burden should relate to one's ability to pay taxes, not what they receive from the government. It then analyzes different ways to measure ability to pay, concluding that income is the best measure. The document finishes by defining progressive taxation as when tax rates increase as income increases, and provides Nepal's income tax rates as an example.
President Obama was re-elected, setting the stage for difficult negotiations over expiring tax provisions. Key issues include the Bush-era tax cuts, automatic spending cuts, and over 50 expiring tax extenders. Obama supports allowing tax cuts to expire for higher incomes and increasing rates on capital gains and dividends for them. The fiscal cliff forces Congress to act by year-end on these issues.
This document provides an overview of various year-end planning strategies for 2010 related to taxes, investments, estate planning, and charitable giving. It notes the uncertainty around future federal tax rates and recommends considering strategies like harvesting tax losses, accelerating or deferring income and deductions, and making gifts before the end of the year. Specific strategies mentioned include Roth IRA conversions, exercising stock options, timing of charitable donations, and using trusts. The document emphasizes planning soon given the short timeline before year's end.
The document discusses President Obama's 2014 budget proposal which includes limiting high-income taxpayers' deductions, including the deduction for municipal bond interest income, to 28% of income. While this could negatively impact municipal bond prices in the short-term, the long-term impact is expected to be minimal as most municipal bond holders are not high-income taxpayers and municipal bonds still offer competitive yields compared to taxable bonds. Historically, similar tax changes have had little impact on municipal bond values as tax benefits remained attractive for many investors. The document recommends that municipal bond investors maintain a long-term perspective and diversified portfolio strategy.
Webinar: Sales Tax Issues to Keep an Eye Out For!Withum
This document discusses sales tax issues and provides an overview of nexus rules and the impact of the Wayfair decision. It summarizes key sales tax concepts such as nexus, economic nexus, marketplace facilitators, and taxability of software. The document advises reviewing a company's existing and post-Wayfair nexus footprint, assessing taxability of products/services, considering technology needs, and preparing to register and comply with new state sales tax requirements.
The document discusses a proposal in the Tax Reform Act of 2014 that would repeal the personal casualty and theft loss deductions for individuals. It notes some of the other itemized deductions that would also be repealed under the Act. The current system of allowing these deductions is analyzed using ten principles of good tax policy. Eliminating the deductions could simplify taxes by removing complex rules around qualifying losses, but it may also negatively impact taxpayers' equity and fairness by increasing taxes for those suffering unexpected losses.
This document discusses strategies for tax-smart investing to help investors keep more of their investment gains. It notes that taxes can significantly erode investment returns over time if not properly managed. The tax code is also evolving, with rates expected to increase in the future. The document recommends adopting a consistent, year-round approach to tax management using available tools from investment managers, such as tax-lot accounting and tax-managed funds, to help offset the effects of taxes and ease uncertainty.
August 2016 - New Proposed Regulations Restricting Valuation Discounts for Fa...Julia (Julie) Weaver, J.D.
The proposed regulations from the Treasury Department would greatly restrict the availability of valuation discounts for family-controlled entities. This could significantly increase some families' federal estate tax exposure by limiting discounts that allow more wealth to pass to heirs outside of estate taxes. The proposed regulations would disregard many restrictions that currently result in valuation discounts and contain broad family attribution rules. Key considerations for families include whether federal estate taxes are a current risk and whether planning strategies should be implemented in light of the potential changes to current estate planning laws if the regulations are finalized.
Investment Tax Landscape Countdown To 2013dvanderjagt
The document discusses the tax landscape between now and 2013 as Congress wrestles with budget deficit issues. It may represent a stay of execution for higher taxes rather than a pardon. Several types of investors should pay attention to planning, including those with substantial capital gains, those reliant on dividends/bonds for income, and those investing in small businesses. Capital gains and dividend tax rates may increase after 2012, and tax-free municipal bonds may become relatively more attractive for high-income investors. The 100% capital gains exclusion was extended for qualifying small business stock issued before January 2012.
This chapter introduces federal taxation in the United States. It discusses the four major types of federal taxes: income taxes, employment taxes, estate and gift taxes, and excise and customs taxes. It also provides an overview of tax revenue statistics, the differences between tax avoidance and tax evasion, the history of the federal income tax, the tax legislative process, and the objectives of tax law.
Is the process by which the sovereign, through its lawmaking body raises revenues used to defray expenses of government.
Means of the government in increasing its revenue under the authority of the law purposely used to promote welfare and protection of its citizenry.
H&A US Legislative and Incentive Update Spring 2015William Cox
The document summarizes legislative and incentive updates across multiple US states in Spring 2015. It discusses changes to existing incentive programs and introduction of new incentives in states like Alabama, Arizona, California, Colorado, Florida, Illinois, Louisiana, Michigan, Missouri, Maryland, and New Jersey. These changes include overhauling incentive programs, reducing funding, capping tax credits, extending incentives to new industries, and establishing new economic development agencies.
Not-for-Profit Compensation Controversies Continue to Add Fuel to the FireCBIZ, Inc.
Compensation in the not-for profit sector has been a consistent lightning rod for the IRS and other federal governing bodies, as well as for states, for many years.
1. The IRS ruled that an Indian tribal government can own or lease renewable power projects without being subject to rules that restrict tax benefits for tax-exempt entities. This opens the door for tribes to play a larger role in renewable projects.
2. There are a few structures that tribes and tax-exempt entities could use to participate in renewable projects while transferring tax benefits to taxpayers, including partnership flips, sale-leasebacks, and inverted leases.
3. The IRS ruling suggests tax-exempt entities may be able to claim some tax benefits for renewable projects if they are considered to have taxable income from the projects, which could expand participation in renewables.
Tokyo is the capital city of Japan, located in the Kanto region, with a population of nearly 13 million inhabitants. Some of the most popular attractions in Tokyo include Shinjuku Gyoen National Park, Sensoji Temple, views of the city from Tokyo Tower, Meiji Jingu Shrine, the Tokyo Anime Center, and the Ghibli Museum. These attractions and more can be found on the websites listed for planning trips and activities in Tokyo.
Haiku Deck is a presentation tool that allows users to create Haiku style slideshows. The tool encourages users to get started making their own Haiku Deck presentations which can be shared on SlideShare. In just a few sentences, it promotes the idea of being inspired to create brief yet impactful presentations using Haiku Deck.
Although you can’t avoid taxes, you can take steps to minimize them. This requires proactive tax planning — estimating your tax liability, looking for ways to reduce it and taking timely action.
The document provides information about recent changes to mortgage and finance regulations in Australia. The Australian Prudential Regulatory Authority (APRA) has influenced lenders to be more prudent, which will impact the property market. The state budget removed the $3,000 First Home Owners Grant for established homes, though stamp duty concessions remain. The document also provides contact information for a finance broker and answers a question about how credit scores are calculated based on credit history, applications, and accounts.
Taxation is the inherent power of governments to impose and collect taxes from individuals, properties, and transactions in order to generate revenue for public purposes. There are several principles and theories of taxation, including the benefit principle, ability-to-pay principle, and equal-distribution principle. A tax system can be proportional, regressive, or progressive depending on how tax rates and amounts change relative to income. Taxes are an enforced contribution used by governments to fund programs and services that benefit citizens.
Retaining Wealth in a Rising Tax Environmentbruce_gillen
Tax rates are expected to rise in 2011 as Bush-era tax cuts expire. This will negatively impact high-income taxpayers through higher income, capital gains, and dividend tax rates. The document discusses three strategies for improving tax efficiency despite rising rates: 1) minimizing short-term capital gains distributions through manager incentives and technology; 2) investing in dividend-paying stocks for qualified dividends taxed at a lower rate; and 3) municipal bonds which provide tax-exempt income but require credit research expertise. It emphasizes the benefits of tax-efficient strategies, especially for accumulation and distribution phases of investing.
1) Uniformity across all state tax laws is impossible because each state has unique economic and demographic factors that influence their tax policies.
2) Even if uniformity is achieved, complexity among state tax laws is still inevitable due to the need for states to tailor laws to their specific circumstances.
3) What taxpayers want is clarity on how tax laws apply to their specific situations, not just uniformity of laws across states. Clarity depends on states providing clear guidance and working with taxpayers.
This document discusses establishing Florida residency and escaping taxes in northeastern states. It provides an overview of residency concepts like domicile and statutory residency. It compares Florida's definition, which focuses on filing a declaration of domicile, to other states like New York, New Jersey, and Pennsylvania. It also outlines factors considered for residency in Georgia and compares requirements in other states throughout the U.S. The document aims to help individuals determine if and when they should change their residency status.
The document discusses the principle of ability to pay and progressive taxation in Nepal. It states that those with more wealth or higher incomes should pay more in taxes, as a means of income redistribution. It also explains that tax burden should relate to one's ability to pay taxes, not what they receive from the government. It then analyzes different ways to measure ability to pay, concluding that income is the best measure. The document finishes by defining progressive taxation as when tax rates increase as income increases, and provides Nepal's income tax rates as an example.
President Obama was re-elected, setting the stage for difficult negotiations over expiring tax provisions. Key issues include the Bush-era tax cuts, automatic spending cuts, and over 50 expiring tax extenders. Obama supports allowing tax cuts to expire for higher incomes and increasing rates on capital gains and dividends for them. The fiscal cliff forces Congress to act by year-end on these issues.
This document provides an overview of various year-end planning strategies for 2010 related to taxes, investments, estate planning, and charitable giving. It notes the uncertainty around future federal tax rates and recommends considering strategies like harvesting tax losses, accelerating or deferring income and deductions, and making gifts before the end of the year. Specific strategies mentioned include Roth IRA conversions, exercising stock options, timing of charitable donations, and using trusts. The document emphasizes planning soon given the short timeline before year's end.
The document discusses President Obama's 2014 budget proposal which includes limiting high-income taxpayers' deductions, including the deduction for municipal bond interest income, to 28% of income. While this could negatively impact municipal bond prices in the short-term, the long-term impact is expected to be minimal as most municipal bond holders are not high-income taxpayers and municipal bonds still offer competitive yields compared to taxable bonds. Historically, similar tax changes have had little impact on municipal bond values as tax benefits remained attractive for many investors. The document recommends that municipal bond investors maintain a long-term perspective and diversified portfolio strategy.
Webinar: Sales Tax Issues to Keep an Eye Out For!Withum
This document discusses sales tax issues and provides an overview of nexus rules and the impact of the Wayfair decision. It summarizes key sales tax concepts such as nexus, economic nexus, marketplace facilitators, and taxability of software. The document advises reviewing a company's existing and post-Wayfair nexus footprint, assessing taxability of products/services, considering technology needs, and preparing to register and comply with new state sales tax requirements.
The document discusses a proposal in the Tax Reform Act of 2014 that would repeal the personal casualty and theft loss deductions for individuals. It notes some of the other itemized deductions that would also be repealed under the Act. The current system of allowing these deductions is analyzed using ten principles of good tax policy. Eliminating the deductions could simplify taxes by removing complex rules around qualifying losses, but it may also negatively impact taxpayers' equity and fairness by increasing taxes for those suffering unexpected losses.
This document discusses strategies for tax-smart investing to help investors keep more of their investment gains. It notes that taxes can significantly erode investment returns over time if not properly managed. The tax code is also evolving, with rates expected to increase in the future. The document recommends adopting a consistent, year-round approach to tax management using available tools from investment managers, such as tax-lot accounting and tax-managed funds, to help offset the effects of taxes and ease uncertainty.
August 2016 - New Proposed Regulations Restricting Valuation Discounts for Fa...Julia (Julie) Weaver, J.D.
The proposed regulations from the Treasury Department would greatly restrict the availability of valuation discounts for family-controlled entities. This could significantly increase some families' federal estate tax exposure by limiting discounts that allow more wealth to pass to heirs outside of estate taxes. The proposed regulations would disregard many restrictions that currently result in valuation discounts and contain broad family attribution rules. Key considerations for families include whether federal estate taxes are a current risk and whether planning strategies should be implemented in light of the potential changes to current estate planning laws if the regulations are finalized.
Investment Tax Landscape Countdown To 2013dvanderjagt
The document discusses the tax landscape between now and 2013 as Congress wrestles with budget deficit issues. It may represent a stay of execution for higher taxes rather than a pardon. Several types of investors should pay attention to planning, including those with substantial capital gains, those reliant on dividends/bonds for income, and those investing in small businesses. Capital gains and dividend tax rates may increase after 2012, and tax-free municipal bonds may become relatively more attractive for high-income investors. The 100% capital gains exclusion was extended for qualifying small business stock issued before January 2012.
This chapter introduces federal taxation in the United States. It discusses the four major types of federal taxes: income taxes, employment taxes, estate and gift taxes, and excise and customs taxes. It also provides an overview of tax revenue statistics, the differences between tax avoidance and tax evasion, the history of the federal income tax, the tax legislative process, and the objectives of tax law.
Is the process by which the sovereign, through its lawmaking body raises revenues used to defray expenses of government.
Means of the government in increasing its revenue under the authority of the law purposely used to promote welfare and protection of its citizenry.
H&A US Legislative and Incentive Update Spring 2015William Cox
The document summarizes legislative and incentive updates across multiple US states in Spring 2015. It discusses changes to existing incentive programs and introduction of new incentives in states like Alabama, Arizona, California, Colorado, Florida, Illinois, Louisiana, Michigan, Missouri, Maryland, and New Jersey. These changes include overhauling incentive programs, reducing funding, capping tax credits, extending incentives to new industries, and establishing new economic development agencies.
Not-for-Profit Compensation Controversies Continue to Add Fuel to the FireCBIZ, Inc.
Compensation in the not-for profit sector has been a consistent lightning rod for the IRS and other federal governing bodies, as well as for states, for many years.
1. The IRS ruled that an Indian tribal government can own or lease renewable power projects without being subject to rules that restrict tax benefits for tax-exempt entities. This opens the door for tribes to play a larger role in renewable projects.
2. There are a few structures that tribes and tax-exempt entities could use to participate in renewable projects while transferring tax benefits to taxpayers, including partnership flips, sale-leasebacks, and inverted leases.
3. The IRS ruling suggests tax-exempt entities may be able to claim some tax benefits for renewable projects if they are considered to have taxable income from the projects, which could expand participation in renewables.
Tokyo is the capital city of Japan, located in the Kanto region, with a population of nearly 13 million inhabitants. Some of the most popular attractions in Tokyo include Shinjuku Gyoen National Park, Sensoji Temple, views of the city from Tokyo Tower, Meiji Jingu Shrine, the Tokyo Anime Center, and the Ghibli Museum. These attractions and more can be found on the websites listed for planning trips and activities in Tokyo.
Haiku Deck is a presentation tool that allows users to create Haiku style slideshows. The tool encourages users to get started making their own Haiku Deck presentations which can be shared on SlideShare. In just a few sentences, it promotes the idea of being inspired to create brief yet impactful presentations using Haiku Deck.
The document outlines the design of a magazine called City Life focusing on Salford and Manchester. It discusses conducting a survey to determine what content and features readers want in the magazine. Logo designs were created using font and illustration software. The front cover was designed using the logo and a modified photo. Considerations around file format, copyright and organizing files are also covered. The final design is thought to meet the client's needs by being in the correct file format, high quality, and promoting the City Life magazine.
My work is about Las vegas city, I talked about its location, the best places where to go and the best things to do there,
It is an amusing place where if you go it is impossible not to have fun.
Enjoy!
This document provides information on corporate tax rates and rules in Croatia. It discusses Croatia's tax treaty network, value added tax rates, cross-border withholding tax rates on dividends, royalties and interest payments, thin capitalization rules, and general corporate income tax rates and payment deadlines. The headline corporate tax rate in Croatia is 20%, though lower rates may apply under investment promotion rules. VAT is charged at 23% standard or 10-0% reduced rates on most transactions. Withholding taxes of 15% generally apply to cross-border royalty and interest payments to non-residents. Thin capitalization rules limit interest deductions where related-party debt exceeds 4 times equity.
The document describes an area located in the Mojave desert in Nevada that offers impressive lights, colors and sounds similar to Las Vegas. It has two streets where you can go shopping or eat at luxury restaurants and encourages not missing the party atmosphere at night.
Croatia has 45 income tax treaties currently in force that generally follow the OECD model. Treaties must be incorporated into domestic law before taking effect. Croatia has a 20% corporate profits tax generally payable annually. Capital gains are taxed as part of corporate profits and there is a participation exemption for dividends. Croatia addresses tax avoidance through disclosure requirements and general anti-avoidance rules. Branches of foreign companies are taxed similarly to subsidiaries.
La pandemia de COVID-19 ha tenido un impacto significativo en la economía mundial. Muchos países experimentaron fuertes caídas en el PIB y aumentos en el desempleo debido a los cierres generalizados y las restricciones a los viajes. Aunque las vacunas ofrecen esperanza de una recuperación económica en 2021, el panorama a corto plazo sigue siendo incierto dado el resurgimiento de casos en algunas partes del mundo.
Johnson & Johnson is a U.S. multinational medical devices company founded in 1886 and headquartered in New Jersey. It manufactures pharmaceutical and consumer packaged goods. Some of Johnson & Johnson's well-known brands include Band-Aid, Tylenol, Johnson's Baby products, Neutrogena, Clean & Clear, and Acuvue contact lenses. In 2012, the FDA approved Sirturo, a new Johnson & Johnson tuberculosis drug that was the first new treatment for the infection in over 40 years. Alex Gorsky serves as the company's CEO.
Festival dances are cultural dances performed by communities to celebrate important events like harvests or religious figures. They portray the people's culture through costumes, movements, and instruments. Some famous Philippine festivals include Sinulog, Dinagyang, Ati-atihan, and Aliwan Fiesta. Festivals unite communities and boost local economies through tourism. They celebrate both religious icons and industries like fishing, farming, and weaving.
This document discusses concepts of taxation including definitions, principles, theories, structures, and characteristics of tax systems. It defines taxation as the process by which governments raise revenue to fund expenses through mandatory contributions imposed on individuals and organizations. The key principles discussed are the benefit principle, ability-to-pay principle, and equal-distribution principle. Taxes can be proportional, regressive, or progressive based on rates. The document also outlines forms of tax exemption and avoidance.
This is a plausible and productive insight, with the obvious implication that the government can encourage greater tax compliance by increasing the audit and the penalty rates of its regulatory regime and reducing psychic cost for tax payers.
http://dailyasianage.com/…/45648/psychic-cost-of-tax-evasion
Week 5 Discussion Responses - EconDiscussion for Response 1B.docxcockekeshia
Week 5 Discussion Responses - Econ
Discussion for Response 1
By: P,V
Week 5 - Taxes
Currently, our tax system is a progressive tax system. This means that the more money you make, the more money you pay. This way, those who do not struggle to put food on the table can afford to pay the government. In considering a better tax system, there should be five fundamental theories: fairness, adequacy, simplicity, transparency, and administrative ease.
In fairness, everyone pays a fair share of taxes within horizontal equity meaning that everyone pays a similar proportion of tax. In adequacy, there should be an adequate amount of taxes to provide enough revenue to meet the needs of society. Simplicity meaning that having a simpler tax system will help taxpayers understand the tax system and, therefore, remain compliant. Having transparency and knowing who is being taxed and how much. Everyone is also aware of what the money is being used for. Finally, with administrative ease compares to simplicity where the tax system is not too complicated or expensive for both the taxpayer and collector (Oklahoma Policy Institute).
Raising taxes has some pros and cons. Some pros include: ensuring that services to citizens are available and needs, such as road repair, are completed without needing bonds. Cons include having a less disposable income to citizens as well as lowering the consumer expenditure which hurts businesses and the overall economy. Another con is that raising the tax encourages excessive government spending.
Some advantages of a progressive tax system include allowing those who are poorer to live more comfortably. It also helps the government establish higher tax brackets to generate revenue. Other advantages of a progressive tax system are that it can potentially produce more total income for the government and it improves the spending power of those who are of lower income. Disadvantages include having complex incentives and rules drive the cost of compliance way up (Murphey, 2017).
Income tax refers to the amount one pays on total income from businesses to the federal and state governments. Sales tax refers to the percentage paid by consumers when purchasing certain items. One involves the business owner and the other involves the consumer. The estate, or death/inheritance tax also has pros and cons. Pros include the same amount of tax is charged to everyone, only approximately 0.2% of people are eligible for the death tax, almost no employers pay the estate tax upon transfer, and estates worth more than $5 million have an average of 55% of net worth that was never taxed. Cons include assets are taxed at the same rate of liquid assets. The tax affects lower income families than others. The estate tax is based on the current value of the property and government can tax up to 3 times on estate tax (Brandon Gaille, 2015).
Taxes are necessary to pay the government in order for states to have the necessary things to keep.
A brief guide to tax management processesDonLarson17
A Brief Guide to Tax Management Processes In today’s business world, managing the processes that deal with tax management can be complicated, primarily if your company works in more than one state or has more than one location.
Website - https://larsonwm.com
This document defines taxation and provides explanations of key concepts related to taxation. It discusses:
- Definitions of taxation including it being a means for governments to generate revenue to fund services.
- Taxation being an inherent power of governments to impose contributions on individuals, property, and rights.
- Principles of taxation including benefit principle, ability-to-pay principle, and equal distribution principle.
- Characteristics of a sound tax system including fiscal adequacy, equality, administrative feasibility, and consistency with economic goals.
- Classification of different types of taxes and entities that may be exempted from taxation.
- Concepts like situs of taxation, double taxation, and forms of escape
ITR Pay Tax Later A Comprehensive Guide to the Government SchemeRiyaWalke
The "ITR: Pay Tax Later" scheme is a government initiative that aims to provide taxpayers with more flexibility when it comes to settling their tax liabilities. This scheme allows individuals and businesses to defer their tax payments, which can be particularly beneficial during challenging economic times or when unexpected financial burdens arise. In this comprehensive guide, we will delve into the details of this scheme, how it works, who can benefit from it, and the steps to take advantage of this tax-saving opportunity.
Week 14_Lec 1 Introduction to Taxation.pptxnaseebkhan46
This document provides an overview of taxation. It defines tax as fees enforced by governments to fund activities. There are two broad categories of taxes: direct taxes on individuals/corporations like income tax, and indirect taxes on goods/services like sales tax. An ideal tax system has five characteristics - it is economically efficient, administratively simple, flexible, provides transparent political responsibility, and is fair. The document then discusses various effects of taxation like behavioral, financial, organizational, and general equilibrium effects. It also covers the concepts of distortionary versus nondistortionary taxation.
This document discusses various sources of revenue for state and local governments. The top source is taxes, including property taxes, income taxes, sales and use taxes, and excise taxes on items like alcohol and tobacco. Other sources covered include user fees, impact fees, intergovernmental transfers, licenses and permits. The document explains how property tax rates are set through assessing property values, establishing a millage rate, and collecting taxes. It also provides examples of calculating property tax amounts.
bill-of-rights nd.gov tax indincome forms 2008taxman taxman
The document provides a summary of the North Dakota Taxpayer Bill of Rights. It begins with an introduction stating that the bill of rights represents a joint effort between the public and private sectors to provide greater uniformity, consistency, and equity in tax laws. It then lists some key rights of taxpayers, including the right to fair treatment, confidentiality, representation, appealing assessments, courtesy from employees, and waiver of penalties under certain circumstances. The summary concludes by stating that the rights outlined apply to taxes administered by the North Dakota Office of State Tax Commissioner and that locally assessed property taxes are not administered by that office.
Chapter21 International Finance ManagementPiyush Gaur
This document contains questions and answers about international taxation and transfer pricing. It discusses key concepts like tax neutrality, different types of taxes like income tax and VAT, how double taxation can occur if all countries tax worldwide income, and methods used to mitigate double taxation like foreign tax credits. It also covers how the organizational structure of a foreign affiliate as a branch or subsidiary can impact tax liability. Finally, it summarizes how multinational companies may use transfer pricing strategies and ways to potentially repatriate blocked funds from a host country.
The document discusses several key points about taxes:
1. Governments need tax revenue to fund services like defense, infrastructure, and education. Taxes are required even if unpopular.
2. The US Constitution gives Congress the power to tax and outlines some restrictions like uniformity and prohibiting taxes on exports or churches.
3. The 16th Amendment allowed the federal income tax, now providing nearly 50% of revenue. It addressed the government's growing needs and reduced reliance on other sources.
4. Taxes can be proportional, progressive, or regressive depending on how rates change with income level. Sales taxes are typically regressive.
Maximizing Your Tax Refund: Strategies to Boost Your ReturnsThe Kalculators
When tax season approaches, many individuals eagerly anticipate receiving a tax refund. A tax refund is the amount of money returned to you by the government when you've paid more in taxes than your actual tax liability. However, to make the most of this opportunity, it's crucial to understand effective strategies for maximizing your tax refund. In this blog post, we will explore several actionable tips that can help you boost your tax refund and put more money back in your pocket.
Regulatory policy and taxpayer's moralityM S Siddiqui
The moral or personal compliance or fear of punishment may succeed in reduction of tax evasion only when tax department gain confidence of tax payers of strict compliance of law and rule by themselves in determination and collection of tax on the basis of law and rules.
http://dailyasianage.com/…/regulatory-policy-and-taxpayers-…
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This article on your 2016 tax return and tax planning tips for nonqualified deferred compensation plans is reprinted with permission of myNQDC.com, a respected source of information, content, and tools on nonqualified deferred compensation.
New rules on retrospective tax penalty waivers, installments, tax litigation,...AhmedTalaat127
The new decree grants taxpayers more flexibility in dealing with tax penalties by allowing penalty payments in installments and specifying acceptable reasons for penalty waivers. Key points:
- Taxpayers can now request to pay penalties in installments of at least AED 50,000 as long as there is no ongoing tax litigation.
- Accepted reasons for partial or full penalty waivers include taxpayer illness/death or system failures outside the taxpayer's control.
- Taxpayers must choose between disputing penalties or requesting installments/waivers, but not both simultaneously.
- The decree applies retrospectively by allowing waivers for penalties paid in the past 5 years.
Withholding tax is a tax that the payer of income deducts from income payments such as employment income, interest, dividends, and other types of income. The payer pays the withheld tax directly to the tax authorities on behalf of the recipient. Withholding tax aims to combat tax evasion. It is typically treated as a prepayment of the recipient's final tax liability but may be refunded or result in additional taxes owed depending on the recipient's actual tax situation. SAP provides classic and extended withholding tax functions to calculate and report withholding tax amounts.
This document discusses sales tax. It defines sales tax as a tax paid by consumers at the point of purchase of goods or services, usually listed separately on receipts. Sales tax rates are determined by tax authorities and can be included in or added to the price. The document also examines the elasticity of demand and supply in relation to sales tax, noting that the party with the more inelastic curve will bear more of the tax burden.
Understanding the Connection Between Tax Filing and Health CoverageEnroll America
This document provides an overview of how the Affordable Care Act impacts tax filing. It discusses reporting health coverage status, the premium tax credit for marketplace coverage, and exemptions from the individual mandate penalty. It explains the new Form 1095-A for marketplace enrollees and Form 8962 for reconciling advance premium tax credits. The document also reviews options for free tax preparation assistance and additional online resources for questions about ACA tax provisions.
A non-filer is someone who does not file a tax return by the required due date. They may be subject to penalties such as interest and late fees. The Federal Board of Revenue in Pakistan specified that non-filers will have their withholding taxes doubled under a new law. Withholding tax refers to a tax deducted from income payments by the payer and paid to the government on behalf of the recipient. It may be treated as a partial payment of the recipient's total tax liability.
Similar to PrietoDion Consulting Partners LLC _Comparing State Tax Amnesty to Voluntary Disclosure_SALT Whitepaper (20)
PrietoDion Consulting Partners LLC _Comparing State Tax Amnesty to Voluntary Disclosure_SALT Whitepaper
1. PrietoDion Consulting Partners LLC
State & Local Tax Whitepaper
Comparing State Tax Amnesty to Voluntary Disclosure,
Which Program is Best for Resolving State Tax Delinquencies
By Sylvia Dion, MPA, CPA
Page 1
Introduction
Helping companies understand the state tax implications of conducting business activity in new states is a major
focus of mine. If you follow my writings on the various blogs where I write, you know that nexus is a topic that I
write about often. And if you’re familiar with the term “nexus”, then you most likely know that nexus means a
“connection” or a “tie.” In the state tax world, the term nexus is used to describe a threshold that has been exceeded
(in terms of activities in state) which create a state tax obligation in a state. Those obligations may mean a
requirement to pay corporate or other business taxes, collect and remit sales and/or use taxes, withhold and remit
state income tax on the wages of employees who perform services in the state or comply with a state’s other
requirements.
However, the types of activities that can create nexus aren’t always obvious. While activities, such as opening up a
corporate office or retail store, owning property or having resident employees working in a state would all certainly
be activities that exceed a state’s nexus threshold, there are many ‘less than obvious’ activities that can create nexus,
such as sending non-resident employees or independent sales representatives to attend trade shows in a state,
engaging in-state third party marketing affiliates that post a web-links on their instate websites which refers
customers to the out of state businesses’ online store, leasing space on a third party server that is physically located
in a state – some states have nexus rules that apply even if a business has no physical presence in a state at all.
The reality is that there are many activities that can create nexus and it is very common for a business to realize that
they’ve had nexus in a particular state after the fact. And often, because of the complex, non-uniform and often
vague state tax laws that exist, a business may sometimes discover that they have had nexus in a state for many
years.
But what happens if a business has had “nexus” in a state for many years?
Luckily, there are options available for individual and business taxpayers who wish to resolve state tax
delinquencies– State Tax Amnesty and State Voluntary Disclosure.
What exactly are these programs? How do they work? What benefits do they provide? And how does a delinquent
taxpayer participate in one these programs?
Whitepaper Table of Contents:
• Introduction, Page 1
• State Tax Amnesty Programs, Page 2
• State Voluntary Disclosure Programs, Page 4
• Summation, Page 6
• About the Author, Page 7
• Disclaimer, Page 7
2. PrietoDion Consulting Partners LLC
State & Local Tax Whitepaper
Comparing State Tax Amnesty to Voluntary Disclosure,
Which Program is Best for Resolving State Tax Delinquencies
By Sylvia Dion, MPA, CPA
Page 2
In this whitepaper I explain what State Tax Amnesty and Voluntary Disclosure programs are, but more importantly,
I’ll compare and contract these two options and point out what taxpayers should consider before moving forward
with one type of program or another.
State Tax Amnesty Programs
State tax amnesty programs (or amnesty periods, as they are often called) have been quite popular in recent years.
These programs are periodically held by the states as way for states to quickly bring in much needed tax revenue, as
well as a way to add new taxpayers to their tax rolls. As matter of fact, the “amnesty train” has been charging full
steam for several years now and within the past 10 years about one-third of the states have offered some form of
amnesty program. Even individual cities, many of which also have the authority to impose their own nexus rules
and subject businesses to their city taxes, have held tax amnesty programs.
But what exactly is a state tax amnesty program or period? A state tax amnesty is program which runs for limited-
time, during which taxpayers can come forward voluntarily and satisfy their delinquent tax obligations in exchange
for certain benefits, such as an abatement of penalties and some or all of the interest owed. In general, before a state
tax amnesty program (period) can occur, it must be approved by a state’s legislature. Once approved, a state tax
amnesty is administered by the state agency responsible for administering and enforcing the state’s tax laws, (e.g.,
the Department of Revenue, Department of Taxation, Division of Taxation, State Comptroller, etc.)
One of the main benefits of state tax amnesty, the abatement of penalties and possibly interest, can be substantial as
penalties and interest accrue when a tax liability remains unpaid for many years can be significant, and could very
possibly exceed the tax liability itself. Therefore, these abatements help taxpayers retain cash they might otherwise
have had to pay. Filing delinquent taxes during an amnesty also allows taxpayers to come forward with minimal
scrutiny as “eligible” taxpayers need only follow the amnesty “process” which generally requires the filing of all
required returns and payment of delinquent taxes by the amnesty’s deadline. Of course, filing under amnesty also
alleviates the potential negative consequences (notices, assessments, penalties, interest, liens on property, civil or even
criminal investigation) that could result if a taxpayer’s delinquencies are discovered by the state first.
Issues to Consider When Resolving State Tax Delinquencies though State Tax Amnesty
But while state tax amnesty offers many benefits, there are issues that taxpayers need to consider before disclosing
and filing under amnesty. For instance, a taxpayer coming forward during an amnesty period may be required to file
and pay delinquent taxes for as far back as the taxpayer’s liability extends. You’ve likely heard the term “statute of
limitations”, which, for tax law purposes, refers to the maximum amount of time after the filing of a return or the
payment of a tax that the federal or a state government can assess or collect an additional tax, or a taxpayer can file
an amended return or a claim for refund. When a taxpayer has never filed a return for which they liable, the statute
of limitations never begins to “run”. Therefore, in order to be fully compliant a taxpayer may be required to file (and
pay the associated tax) for as many years as the taxpayer is delinquent unless the amnesty program specifies that a
taxpayer only needs to report a set number of prior years or periods.
3. PrietoDion Consulting Partners LLC
State & Local Tax Whitepaper
Comparing State Tax Amnesty to Voluntary Disclosure,
Which Program is Best for Resolving State Tax Delinquencies
By Sylvia Dion, MPA, CPA
Page 3
Some amnesty programs will include
a negative incentive in the form of
an “amnesty penalty” which is
imposed on taxpayers with
outstanding assessments who
choose not to participate in the
current amnesty. A taxpayer who
disagrees with, but is unsuccessful in
protesting the assessment may end
up owing the original assessment,
interest, reinstated penalties, plus
the additional amnesty penalty.
Also, although a taxpayer participating in a tax amnesty can file their delinquent returns during an amnesty period
with minimal scrutiny, the submitted returns could still be audited at a later date. Additionally, taxpayers filing
under amnesty shouldn’t expect that they can “negotiate” for better terms. As I’ll discuss in bit, this is one of the
major differences between an amnesty and voluntary disclosure program (which may permit negotiation).
Another possible drawback applies to taxpayers who have received tax assessments. These taxpayers may be
required, as a condition of participation, to pay the full amount of the tax owed to the state even if they do not agree
with the assessment. Some amnesty programs may also require taxpayers to expressly waive their right to claim a
refund or protest an amount paid under amnesty, thus creating a further dilemma for a taxpayer whose
participation requires payment of the disputed assessment. Additionally, some state tax amnesty programs require
taxpayers who are already in the process of protesting an assessment through the state’s administrative process or
in state court, to formally withdraw their protest, or dismiss any administrative or judicial proceedings.
Here’s another consideration. Some amnesty programs will
include a negative incentive in the form of an “amnesty
penalty” which is imposed on taxpayers with outstanding
assessments who choose not to participate in the current
amnesty program. Thus, a taxpayer who disagrees with a tax
assessment, chooses not to participate in the amnesty, and is
ultimately unsuccessful in protesting the assessment may
end up owing the original assessment, interest, reinstated
penalties, plus the additional amnesty penalty.
Also since amnesties only run for a specified, limited time,
taxpayers may find they don’t have sufficient time to fully
evaluate the pros and cons of participation, or to generate
the funds needed to fully cover the taxes due as the full
amount of taxes and interest (if not abated as part of the
program) must generally be paid in full by the amnesty’s
deadline. Often an amnesty program may only be in effect
for a couple of months and sometimes a State may not
provide a lot of advance notice about the specifics of the
amnesty.
You see, although the state legislature approves an amnesty, the specifics of the amnesty program, such as, the
eligibility requirements for participation and the specific procedures that must be followed, are generally left to the
State taxing agency (Department of Revenues, Division of Taxation, etc.) to determine and administer. For this
reason, amnesty programs can vary widely from state to state. For instance, a state may offer a general amnesty
program, which means that it covers many types of taxes (personal income, corporate income, sales and use, etc.), or
a state may offer a specific amnesty program, one which is targeted at a specific type of tax or specific category of
taxpayers, such as corporate taxpayers or taxpayers who have notified that they can participate.
4. PrietoDion Consulting Partners LLC
State & Local Tax Whitepaper
Comparing State Tax Amnesty to Voluntary Disclosure,
Which Program is Best for Resolving State Tax Delinquencies
By Sylvia Dion, MPA, CPA
Page 4
One common requirement found in most amnesty programs is that taxpayers under criminal investigation for tax
law violations are not allowed to participate (though some amnesty programs will allow taxpayers under
civil investigation to participate). Some amnesty programs may prohibit taxpayers who have been chosen for audit
from participating, but others may include special provisions that allow these taxpayers to participate. As noted
above, some amnesty programs require taxpayers to waive their appeal or refund rights, while others allow
taxpayers to retain these significant rights.
State Voluntary Disclosure Programs
Unless a state legislature has introduced or passed a bill approving a future amnesty, it’s nearly impossible to
predict when a state will offer an amnesty program (period) as amnesties do not generally occur according to any
specific schedule. Often a state or city may not hold an amnesty for many years. For instance, in 2010 the City of
Philadelphia’s held an amnesty program – which occurred 25 years after the City’s previous amnesty. On the other
hand, the state of Massachusetts has held an amnesty program almost every year since 2009.
But waiting for the next amnesty to come along isn’t the best idea, as the longer a state tax delinquency remains
unresolved, the worse the possible consequences become. As I noted above, because the requirements to participate
in a state amnesty vary from state to state, even if an amnesty program does occur it’s possible that a delinquent
taxpayer may not meet the requirements to participate.
But delinquent taxpayers need not wait for an amnesty to occur as there’s another avenue available to taxpayers to
assist them in resolving their state tax delinquencies. A state’s Voluntary Disclosure Program (“VDP”).
These programs, generally administered by a voluntary disclosure unit or designated group within a State Taxing
Agency (e.g., Department of Revenue, etc.), exist in almost every state and are generally on-going. Although an
“eligible taxpayer” can almost always avail themselves of the benefits of disclosing under a state’s VDP, sometimes a
state will suspend its VDP during an amnesty period.
Like state tax amnesty, state voluntary disclosure encourages delinquent taxpayers to come forward and file and pay
their delinquent state taxes. Participating in a VDP generally requires that a taxpayer meet certain eligibility
requirements and enter into a Voluntary Disclosure Agreement (“VDA”) with the state. In exchange for the
taxpayer’s voluntary disclosure, the state agrees to grant the taxpayer certain benefits and protections. The level of
formality of the programs varies from state to state. For instance, while many states may issue a formal binding
agreement (an actual legal contract) signed by a state official and the taxpayer, other states simply send out a letter
communicating to the taxpayer they have been accepted into the program and listing what the taxpayer must
provide. For taxpayers, the primary benefit to entering into a VDA is that it allows a taxpayer to resolve outstanding
tax delinquencies fully and completely under beneficial terms. And although the exact benefits offered under the
various VDPs vary from state to state (and may even vary from taxpayer to taxpayer within the same state), in
general, the primary benefits include a limited “look-back” period and a waiver of all applicable penalties. The “look-
back” period refers to the number of prior years or periods a taxpayer will be required to report and pay tax on. For
example, a three or four year look-back period is common under most VDPs. (Note, Massachusetts is an exception in
5. PrietoDion Consulting Partners LLC
State & Local Tax Whitepaper
Comparing State Tax Amnesty to Voluntary Disclosure,
Which Program is Best for Resolving State Tax Delinquencies
By Sylvia Dion, MPA, CPA
Page 5
One of the most significant benefits to
resolving tax delinquencies through
Voluntary Disclosure is the ability to
request participation in the VDP on an
anonymous basis through a taxpayer
representative, such as a CPA,
attorney, or tax consultant. This
provides an opportunity to negotiate
preferred terms before the taxpayer’s
identity is disclosed.
that some taxpayers may be subject to a seven year look-back period.) Where sales & use taxes are involved, the
look-back period is generally expressed in months, with 36 or 48 months being common. This means that a
taxpayer's tax delinquencies for years prior to the beginning of the state's voluntary disclosure look-back period
would not need to be disclosed or paid. This could translate to significant cash savings in particular if the taxpayer
owed back taxes for many years.
Another significant benefit offered through most VDPs is full
abatement of penalties. As noted above, an abatement of penalties
can also add up to significant cash savings, as accrued penalties can
be substantial when tax liabilities remain unpaid for many
years. Interest, however, is almost always required by the various
state statutes and generally cannot be abated. (Texas is an example
of one state that offers a waiver of interest provided the voluntary
disclosure does not involve a trustee type tax, e.g., sales tax.)
However, one of the most significant benefits to resolving tax
delinquencies through Voluntary Disclosure is the ability to request
participation on an anonymous basis through a taxpayer
representative, such as through a Certified Public Accountant (CPA),
attorney or tax consultant. This provides an opportunity to
negotiate preferred terms before the taxpayer’s identity is disclosed
to the state.
How is this possible? Well, often the first step in the process involves a phone call or a letter to the voluntary
disclosure unit or designated state contact. Because most states do not require the actual name of the taxpayer
during the initial communication with the state, a taxpayer’s representative can ferret out whether the taxpayer will
meets the program’s eligibility requirements and might even be able to obtain a general idea of the benefits the
taxpayer might receive.
Issues to Consider When Resolving State Tax Delinquencies through State Voluntary Disclosure
Just as there potential issues to consider with state tax amnesty programs, there are issues to consider when
deciding whether to resolve state tax delinquencies through voluntary disclosure. States offer voluntary disclosure
as a means of collecting undisclosed taxes that might have never been recovered by the state or that might have only
been recovered through extensive collection efforts. However, another reason states offer voluntary disclosure is
because it brings new taxpayers onto the state’s tax rolls. This is because a typical eligibility requirement of many
VDPs is that the taxpayer not already be registered for the type of tax for which they are requesting a VDA. (There
are always exceptions to the general rule. Minnesota, for instance, offers voluntary disclosure even for registered
taxpayers through alternative, but similar program.) Once a taxpayer is on the state rolls, the taxpayer is then
subject to future filings and audits.
6. PrietoDion Consulting Partners LLC
State & Local Tax Whitepaper
Comparing State Tax Amnesty to Voluntary Disclosure,
Which Program is Best for Resolving State Tax Delinquencies
By Sylvia Dion, MPA, CPA
Page 6
Another issue is that a state may require that the taxpayer either come forward for every type of tax the taxpayer
owes (state corporate income, franchise, sales, use, payroll withholding). Some states also require that the taxpayer
make an affirmative statement that no other type of state tax is owed. (Alabama, for instance, requires that all tax
types to be addressed in the initial written request to enter the VDP or that the taxpayer make an affirmative
statement that no other Alabama taxes are due.) But a taxpayer may not realize that other types of state taxes are
owed. This is because the various state “nexus” rules are complicated, as well as because the nexus threshold is not
the same for different types of state taxes, and a taxpayer may not be aware that his activities in a state have created
a filing obligation and tax liability for other types of state taxes.
Additionally, once a state has accepted the taxpayer’s request to participate in the VDP and has prepared the VDA for
signature, the state may require completion of additional documents such as a nexus questionnaire, registration
forms, or other documents. (Texas is an example of a state that will not process a VD request without the completion
of a nexus questionnaire.) The responses on these “other forms” may be scrutinized by the state, and could
inadvertently subject the taxpayer to other taxes or filing requirements. A taxpayer could end up owing other state
taxes which would need to be resolved outside of the protection offered through a VDA.
Finally, some states, in particular those with structured programs, require that the various steps in the voluntary
disclosure process be completed within short time-frames. For instance, once a taxpayer has come forward, been
accepted into the program, and disclosed their identity, the taxpayer may have only 30 or 60 days to prepare and file
all delinquent returns and pay all monies owed to the state. Because the taxpayer has entered into a legal contract
with the state, failing to comply with all the requirements of a VDA within the state’s timeframe could cause the VDA
to become null and void, thereby extinguishing all the benefits and protections to the taxpayer.
Sylvia's Summation
Well, there you have it! State Tax Amnesty and Voluntary Disclosure – two avenues that allow taxpayers to come
forward voluntarily and resolve prior period tax delinquencies. Which avenue is best? As we like to say in the state
tax world, "it depends". While there are many benefits to resolving delinquencies under both of these options, there
are significant issues to consider too. Whichever avenue is chosen, it’s particularly important to understand the
eligibility requirements, including how quickly returns and tax payments must be remitted to the state and what the
implications of failing to follow-through on these requirements could be. Using a taxpayer representative, in
particular when coming forward under voluntary disclosure, can be extremely beneficial. And using a
representative with extensive experience in the voluntary disclosure process (such as your author here, wink!) is
extremely important as this individual not only negotiates on the taxpayer’s behalf, but is also the primary
communicator with the state voluntary disclosure contact. Establishing a good relationship with the state voluntary
disclosure official can make the difference between a voluntary disclosure that goes smoothly and one that doesn’t.
7. PrietoDion Consulting Partners LLC
State & Local Tax Whitepaper
Comparing State Tax Amnesty to Voluntary Disclosure,
Which Program is Best for Resolving State Tax Delinquencies
By Sylvia Dion, MPA, CPA
Page 7
About the Author
Sylvia Dion, CPA, is the Founder and Managing Tax Partner of PrietoDion Consulting Partners LLC, a State &
Local Tax and Employment Tax consulting practice. Sylvia specializes in assisting U.S. and international companies
with understanding whether their business activity has created nexus for the various types of state taxes and in
helping companies resolve their nexus exposure through the Voluntary Disclosure process.
Sylvia is also a speaker and tax writer whose articles on tax issues and developments have been published in the
Journal of Accountancy, Journal of State Taxation, Journal of Multistate Taxation and Incentives, Journal of Practical
US/Domestic Tax Strategies, Bloomberg BNA State Tax Weekly, Bloomberg BNA Multistate Tax Report, the Institute for
Professionals in Taxation (IPT) Tax Report and e-Commerce Law & Policy. She is also the author of “Minding
Massachusetts”, a quarterly column on Massachusetts tax developments, published in State Tax Notes, a Tax
Analysis publication.
Sylvia is also an avid tax blogger who covers ‘Internet Sales Tax’, ‘U.S. Sales Tax for Foreign Sellers’, and
‘Massachusetts Sales Tax’ for SalesTaxSupport.com and is a tax contributor for AllBusiness.com. Sylvia is quoted
frequently on state tax issues, and has been quoted in Forbes.com and BloombergBusinessweek. For more about
Sylvia and PrietoDion Consulting Partners LLC, visit her firm’s company website at www.sylviadioncpa.com
Disclaimer: The content provided in this whitepaper is for informational purposes only, and is not a substitute for legal,
accounting or tax advice. PrietoDion Consulting Partners LLC is available to discuss your specific facts and circumstances and
assist you with disclosing during an available Tax Amnesty program, represent you in the Voluntary Disclosure process or
discuss other alternatives. If you’re interesting in learning more about our capabilities, please contact us at
info.prietodiontax@gmail.com. You can also contact Sylvia Dion directly at sylviadion@prietodiontax.com, or
sylviadion@verizon.net or at 978-846-1641.