Supreme Court Decides Severance Pay is Subject to FICA Tax

In a unanimous decision (with Justice Kagan recused), the Supreme Court, reversing the Sixth Circuit Court of Appeals, has held that severance payments that were made to involuntarily terminated employees and that weren’t tied to the receipt of State unemployment insurance, are subject to tax under the Federal Insurance Contributions Act (FICA). The Court easily …

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The Evolving Affordable Care Act – Health Insurance

Yesterday morning, President Obama announced that 2014 sales of previously-canceled individual health plans that don’t meet ACA standards would be allowed to be issues and stay in force for another year. The change will offer a temporary “fix” to the millions of consumers whose policies have been canceled or altered as a result of healthcare reform. …

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IRS Matching – Better Success than Online Dating?

No IRS has not gotten into the online dating biz.  While I’m sure they tax it, matching couples is a bit beyond their scope. But IRS does share a very distinctive characteristic with online dating.  Try as they might, they don’t always get it right when it comes to making a good “match”. As many …

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Abandonment May Be A Good Thing – Get Rid of Capital Call Payments

Tired of making those capital call payments on an investment partnership that may never recover its value? Consider abandoning it. If the value is depressed and recovery is nowhere in sight, why continue to throw money at it. By abandoning the investment, not only do you get the tax loss now, but it may be …

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New Reporting for Certain Ponzi Scheme Losses

Financial headlines in the last several years have been filled with stories of investors whose losses have occurred as a result of Ponzi Schemes.  In 2009 the U.S. Securities and Exchange Commission identified 20% of the fraud cases they investigated as Ponzi schemes.  Investment News reported that 9,244 billion in losses from Ponzi schemes were …

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Assessing Your Assessment the Wrong Way

Tax assessments are formally recorded on a record of assessment in accordance with Internal Revenue Code Section 6203.  The assessment is made by an assessment officer signing the summary record of assessment per Treasury Regulation section 301.6203-1.  The summary record of assessment must “provide identification of the taxpayer, the character of the liability assessed, the …

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Of Baseball and Senators

This is not technically tax related, unless you stretch the fact that Senator John McCain was at the same baseball game as my family on August 12th.  He has had a hand In Tax legislation for decade’s worth of my career. But the exciting part was seeing the joy on my oldest daughter’s face when …

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Do I Owe Taxes On My Scholarship?

Once the euphoria of receiving a scholarship starts to subside you might start to wonder what kinds of strings are attached. Thankfully this is one of those few instances where you can receive a large payment and not have to worry about the IRS coming to look for their share. Scholarships are generally tax-free, whether …

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Final Repair Regulations are Out!! Excitement Reigns!

Okay – maybe excitement is not really reigning on the new repair regulations that were just released by the IRS on Friday.  I may be better able to determine the actual excitement factor when I review them, but since a major tax deadline is on Monday, September 16th, the perusal is not working themselves into …

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S Corporation Members are not Subject to Controlled Group Sec. 179 Limitations

In information letter 2013-0016, the IRS determined that S corporations of a controlled group are not subject to the Section 179 limitations of a controlled group. For tax years beginning in 2013, the maximum amount that can generally be taken as a Section 179 expense deduction, which is split among all of the members of …

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