Undervaluation Penalty Lifted Against Whitehouse
The beautiful Ritz-Carlton hotel in the French Quarter of New Orleans, opened in 2000, remains a nearly 17-year-old battleground between the hotel’s original developers and the US Tax Court. In the latest round of appeals this summer, the US Court of Appeals, Fifth Circuit (June 13, 2014), sided with the Tax Court on the valuation,…
Applying for Tax-Exempt Status Easier with New Form
To apply for tax-exempt status, a nonprofit organization now has to fill out only a three-page form – instead of a 26-page one. In July, the IRS introduced the shorter application Form 1023-EZ to help smaller charities apply for 501(c)(3) tax-exempt status more easily. To be eligible to use the streamlined form, a nonprofit organization…
Fraud at the Office? Should You Prosecute?
When an employer discovers employee embezzlement or fraud, there is often a quick settlement consisting of restitution and resignation by the wrongdoer, but no report to law enforcement. In fact, 35 percent of employers who experienced employee fraud did not refer the case to law enforcement, according to the latest report of the Association of…
Supreme Court: Creditors Can Reach Inherited IRAs
In a unanimous decision, the US Supreme Court has held that an inherited IRA does not qualify for the bankruptcy exemption generally available for retirement savings. In other words, inherited IRAs are not protected from creditors in bankruptcy (Clark v. Rameker, Sup. Ct. June 12, 2014). Brandon and Heidi Clark filed a bankruptcy petition in…
Renting vs. Buying: What Do Older Americans Do?
As Americans get older, are they more likely to buy or rent? The answer might surprise you. At age 50, 73 percent of Americans own their own homes. But by age 65, that number has increased to more than 81 percent, according to a new study by the Employee Benefit Research Institute. Nearly one-fourth of…
How to Run a Meeting on a Controversial Subject
An issue is brewing, opinions are being formed and camps are being organized. Arguments for and against are being developed. Everyone is ready for a fight. You know you need to get the issue on the table and resolved, but you dread the meeting. How can you keep the meeting from getting out of hand…
How Unrelated Business Income Tax Applies to Debt-Financed Property
This is the fourth article in a series exploring the world of unrelated business income. Insights provided by Gelman, Rosenberg & Freedman’s Nonprofit Tax Principals, Stephen Kelin and Richard Locastro. If a tax-exempt entity engages in a business that is unrelated to its primary purpose, the general rule is that income will be considered unrelated…
New Circular 230 Rules Repeal Lengthy Disclaimer
Most attorneys – not to mention CPAs, Enrolled Actuaries and Enrolled Agents – will be pleased with the recently issued final regulations under Circular 230, Regulations Governing Practice Before the Internal Revenue Service (31 C.F.R. Part 10). Even clients may take notice if they stop seeing those inscrutable, ubiquitous disclaimers on every email they receive…
Royalties and Sponsorship Payments: Are They Tax-Exempt?
This is the third article in a series exploring the world of unrelated business income. Insights provided by Gelman, Rosenberg & Freedman’s Nonprofit Tax Principals, Stephen Kelin and Richard Locastro. Many tax-exempt organizations allow for-profit entities to use the organization’s name or logo to market goods and services. Often, these agreements are structured as royalties…
Executive Theft Larger – and Harder to Catch
Although internal controls are designed to protect a company against fraudulent schemes by its employees, these controls often prove to be ineffective when senior personnel are involved. Owners and top executives are able to act out of sight of other employees, who might otherwise become suspicious about unusual conduct. Moreover, senior personnel are usually the…