The
IRS Office of Professional Responsibility plans to release guidance in the
first quarter of 2015 for practitioners working with marijuana retailers in
states where the business is legal. The practitioners are pushing for the IRS to issue guidance clarifying that a tax professional will not be considered unethical, targeted for audit or be considered in violation of Circular 230 rules solely for preparing a return for a marijuana business. Although some states now allow the sale of marijuana, those sales are still illegal under federal law. Because the sale of marijuana is an illegal activity under federal law, the cost of goods sold will be an issue as drug dealers are never allowed to claim a cost of goods sold. In addition, there are related issues such as deductions dependent on whether the sale of marijuana is a trade or business
of cultivating or sale, or whether it's a subsidiary trade or business that
just happens to have a connection. Indeed, if the IRS does not allow COGS or Section 162 deductions, the tax bills could be a major hurdle.
Showing posts with label tax returns. Show all posts
Showing posts with label tax returns. Show all posts
Wednesday, November 19, 2014
Friday, April 11, 2014
Taxpayer Don't Forget to Report Foreign Financial Assets and Accounts:
With the tax return filing deadline fast approaching, taxpayers should not forget to report any foreign income or financial assets on their tax returns. Foreign dividends and interest must be disclosed on by checking the box on your Schedule B, and foreign income from trusts and gifts should be disclosed on the Form 3520. Even certain foreign assets totaling greater than $50,000.00 that are income producing or not must be disclosed on the Form 8938, Statement of Foreign Assets. Many tax return preparers in the past failed to ask clients if they had foreign income and assets, and such mistakes are less common with the prevalent media of the IRS's collection efforts against foreign assets. However, don't get unwittingly caught because the penalties for non-reporting are stiff.
Moreover, FBAR disclosures must be made this June 30th electronically to the U.S. Treasury through the following website: http://bsaefiling.fincen.treas.gov/main.html. It is not much comfort that the website is entitled, "Financial Crimes Enforcement Network."
If you have questions about foreign income or asset issues, feel free to contact us.
With the tax return filing deadline fast approaching, taxpayers should not forget to report any foreign income or financial assets on their tax returns. Foreign dividends and interest must be disclosed on by checking the box on your Schedule B, and foreign income from trusts and gifts should be disclosed on the Form 3520. Even certain foreign assets totaling greater than $50,000.00 that are income producing or not must be disclosed on the Form 8938, Statement of Foreign Assets. Many tax return preparers in the past failed to ask clients if they had foreign income and assets, and such mistakes are less common with the prevalent media of the IRS's collection efforts against foreign assets. However, don't get unwittingly caught because the penalties for non-reporting are stiff.
Moreover, FBAR disclosures must be made this June 30th electronically to the U.S. Treasury through the following website: http://bsaefiling.fincen.treas.gov/main.html. It is not much comfort that the website is entitled, "Financial Crimes Enforcement Network."
If you have questions about foreign income or asset issues, feel free to contact us.
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