TaxEsqBlog -by Ronald J. Cappuccio, J.D., LL.M.(Tax)

Today, Pres. Trump unveiled the general outline for his new tax plan. Yes, to my great amazement, he is talking about simplification of the Internal Revenue Code. I do not know if Congress will let this happen, but the compliance cost of federal and state taxes is far too high and has become a large impediment on business growth in the economy in general. One way that simplification is being proposed is that there would be a reduction in the current seven tax brackets 23 tax brackets of 35%, 25% and 10%. Also itemize deductions, other than charitable donations and mortgage payments, would be eliminated. This means that medical deductions, state and local tax deductions, casualty and theft losses, and unreimbursed employee business expenses would be eliminated. As part of the simplification, there would be an elimination of the estate tax at the federal level. Although that would affect only a small amount of estates, it would eliminate tax planning for everyone's estate. Anothe...

Yesterday, the 115th Congress convened.The Republicans are in charge of both the House and Senate and there is been a lot of talk about tax reduction and "tax reform". Does this mean we will get tax simplification? Since President Reagan signed the Internal Revenue Code of 1986, there have been more than 30,000 changes, excluding Obama care. The fact is the Internal Revenue Code is ridiculously complex and far too much time and money spent in our society both by individuals and businesses in complying and planning for our burdensome tax laws. There definitely will be a push to lower corporate tax rates. This is good but let's also simplify our business tax structure. Even more unnecessary and confusing is the personal side of the Internal Revenue Code. For example the alternative minimum tax, designed to force a few wealthy millionaires of the late 1960s to pay tax, has now resulted in more than 1/4 of the middle class paying this burdensome tax. The AMT must go! Th...

GOP budget proposal would reduce top tax rate for businesses and individuals to 25% On March 20, Representative Paul Ryan (R-WI), chairman of the House Budget Committee, introduced his Chairman's Mark proposing a new budget for fiscal year (FY) 2013 and setting forth appropriate budgetary levels for fiscal years 2014 through 2022. Among other things, Ryan's budget would: a.consolidate the existing six individual income tax brackets to two (10% and 25%), b.reduce the corporate tax rate to 25%, c.repeal the alternative minimum tax, d.shift from a worldwide tax system to a territorial regime, e.drastically reform Medicare and Medicaid, and repeal the 2010 health care reform legislation. According to Ways and Means Committee Chairman Dave Camp (D-MI), Ryan's new budget “reforms our outdated and burdensome tax code to unleash innovation and investment.” However, Ways and Means Committee Ranking Member Sander Levin (D-MI) countered that the budget “would end up showering benefits...

All non profit organizations, including local Little Leagues, must file annually with the IRS. If the 990 is not filed, the Local Little League will lose its tax exempt status. See Notice

New IRS Offer In Compromise Forms The Internal Revenue Service has released a new version of Form 656-B, “Offer in Compromise Booklet,” and a revised Form 656, “Offer in Compromise.” The new Form 656-B contains all of the forms and instructions necessary to file an offer in compromise. The revised Form 656 has been slimmed down to four pages and now only includes the four-page offer-in-compromise application. All of the worksheets, checklists and instructions previously found in Form 656 can now be found in Form 656-B. The availability of the two forms allows taxpayers and practitioners to access the offer-in-compromise application without printing or sorting through the offer booklet. An offer in compromise is an agreement between a taxpayer and the IRS that resolves the taxpayer’s tax liability. Under certain circumstances, the IRS has the authority to settle federal tax liabilities by accepting less than full payment. Simply filling out the form is not enough! Your tax attorney must...

The AMT will continue to hit tens of thousands of unsuspecting taxpayers on their 2006 tax returns, which are due on April 17 this year. And, as one court case illustrates, you generally can't wriggle out of the AMT at tax return time. Click Here for more information