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

Here we go again! It is campaign season and some candidates just cannot wait to say how they are going to penalize business. Hillary Clinton is proposing a new scheme where businesses that manufactured things will be tax differently than businesses that are "trading" items. I am not exactly sure what this means but it sounds to me like a tax increase on service businesses and for people who invest in business. Let us face it, manufacturing has been on a continual decline in this country for the past 60 years. The US is known for producing intellectual property and services that are the envy of the world. Hillary Clinton, as well as some of her tax and spenders just do not get it! If you increase taxes on something you will get less of it. Increase tax on business and you will have less business in the US. I have clients all over the world. Many times a client chooses to locate its business outside of the US because of the very high cost of taxation particularly on worldwi...

IRS Announces New Interest Rates Rev Rul 2015-8, 2015-18 IRB The Applicable Federal Rates for May 2015 are reproduced below. Table 1 Applicable Federal Rates (AFR) for May 2015 Period for Compounding Annual Semiannual Quarterly Month Short-Term AFR .43% .43% .43% .43% 110% AFR .47% .47% .47% .47% 120% AFR .52% .52% .52% .52% 130% AFR .56% .56% .56% .56% Mid-Term AFR 1.53% 1.52% 1.52% 1.52% 110% AFR 1.68% 1.67% 1.67% 1.66% 120% AFR 1.83% 1.82% 1.82% 1.81% 130% AFR 1.99% 1.98% 1.98% 1.97% 150% AFR 2.29% ...

Durable Power of Attorney-the Smart Choice! Today I received a frantic telephone call from the adult daughter of a senior citizen client for whom I prepared an estate plan 10 years ago.  Unfortunately, the man, who is a widower, had a serious stroke.  He is alive but is not communicative.  The daughter called and asked if I had prepared a Durable Power Of Attorney.  Even though I had prepared a Will and a Living Will, the client had insisted that he did not want a Power Of Attorney. Specifically, this client is a very private person and wanted to be in complete control of all of his assets.  I had suggested that we establish a Trust, with him being the Trustee and having one of his children as a Co-Trustee who could take over if he came incapacitated.  That was rejected. I suggested a Durable Power Of Attorney.  That was also rejected because he did not want anyone to have authority over his affairs.  I suggest that the Durable Power Of Atto...

More Taxes – Time after Time Wake up and smell the coffee!  Its political season again and unfortunately it appears most candidates for State Governors and Congress are advocating a “tax the other guy” approach. “We need more money for the schools!”-Tax the Rich. “We need more money for the poor!” – Tax the oil companies. “We need more money for the seniors!”-Increase sales tax. “We need to fight Ebola!”-Tax the pharmaceutical companies. We need money for good clauses so therefore we need to increase taxes?  Does that really makes sense?  When a politician advocates increasing taxes they always try to make it sound like they are not going increase your taxes but somehow your taxes will be increased.  Has any country ever taxed themselves and prosperity?   The fact is if you tax something you get less of it.  That truth is immutable and is not difficult to understand.  Politicians just simply ignore that and try to get voters to forget abou...

The IRS announced in   IR 2014-99 increases to retirement plan contributions. Highlights include the following: The elective deferral (contribution) limit for employees who participate in 401(k), 403(b), most 457 plans, and the federal government’s Thrift Savings Plan is increased from $17,500 to $18,000. The catch-up contribution limit for employees aged 50 and over who participate in 401(k), 403(b), most 457 plans, and the federal government’s Thrift Savings Plan is increased from $5,500 to $6,000. The limit on annual contributions to an Individual Retirement Arrangement (IRA) remains unchanged at $5,500. The additional catch-up contribution limit for individuals aged 50 and over is not subject to an annual cost-of-living adjustment and remains $1,000. The deduction for taxpayers making contributions to a traditional IRA is phased out for singles and heads of household who are covered by a workplace retirement plan and have modified adjusted gross incomes (AGI) betw...

Most of my clients from around the world make their initial contact by email. It is usually a result of my website, blog posts (published on Tax Connections) and Avvo. Usually, they need a lawyer to negotiate a contract or deal with the IRS or State Tax agencies. When I get an email from a foreign business, even if the English is not perfect,  I respond. Unfortunately, the scam artists love a response and try their version of the famous “Nigerian Scam.” The trick usually works that I need to review a simple contract, receive payment from the buyer, deposit it in my trust account and immediately send the money (minus an unusually hefty fee) to them. Of course the check is no good and they will sucker me. The latest attempt was a so-called Japanese company selling a huge piece of equipment to a NJ business for $2 mil. The contract was one page and obviously not drafted by an attorney. There was a picture of construction equipment from a catalog. I emailed that I was not intereste...

Let’s review the facts: Ray Rice is a star NFL player. He is not a role model. He is not a minister. They pay him to be a “bruiser” and arguably a star attraction to the Baltimore Ravens. Rice clobbered his (now) wife in a domestic fight. The NFL kicked him out of the game. This hurt Rice, his wife (the victim?), his child and the Team. The NFL argues they had to do it to clean up football. This is an example for children! Well, maybe not. They banished Ray Rice. He is gone; disappeared. The Ravens are even offering refunds for Rice jerseys. The game will move on and he will disappear from the news. Not really much of a lesson. No discussions of the benefits of therapy, or the need for domestic violence education. If the NFL instead had taken a tax lawyers approach, it might have been far more effective - better for the Ravens and better for the game. Instead of an “indefinite suspension,” the NFL should have simply punished Rice by forcing him to suit up for the season and sit a...