Human Resources; Transnational litigation; Tax controversy; Environmental; Tax Precision; Energy & Environmental: New blogs joining the LexBlog Network

That title’s really a mouthful huh? But for the best of reasons: We’ve got a whole lot of new blogs joining the LexBlog Network! Hope your blogroll is ready for more, because here they are:

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Remembering veterans’ contributions and offering tax help for still-serving military men and women

We call it Veterans Day here in the United States.

An Army veteran salutes the colors being carried in the Veterans Day parade in downtown Pittsburgh, Pennsylvania, on Nov. 11, 2011. (Photo courtesy U.S. Army via Flickr)

That Nov. 11 is such an important date is evidenced by the fact that federal holiday has escaped conversion into a Monday that wraps up a long weekend that’s usually more focused on consumer spending than actual commemoration.
End of the Great War: Each November we mark what originally was the official, formal end of World War I at the 11th hour of the 11th day of the 11th month of 1918.
The day, which is celebrated as Armistice Day and Remembrance Day in other countries that recognize the anniversary, has evolved into a day that honors military veterans.
My dad and other relatives served in the U.S. armed forces over the years. I am thankful that my father’s active duty in the Navy did not coincide with any wars or other military entanglements, although much to my mother’s dismay he was in the Naval Reserves during Korea and she lived in constant worry, so I am told, that he would be called up. He wasn’t.
Still, I think of my father and other family members who served on this day. And I think of those families whose loved ones did not fare as well as mine.
Gratitude and peace be with you and all military service personnel, still serving or retired, and their families today.
Tax tips for the military: While there is much debate, political and otherwise, about how to better serve the needs and interests of our service men and women, the Internal Revenue Code does at least contain some tax help.
Here are some tax breaks, representing this week’s Weekly Tax Tip, that members of the military and their families should look into at filing time to ensure that they get every available tax benefit.

Combat pay is partially or fully tax-free. Service members serving in support of a combat zone may also qualify for this exclusion.
Reservists whose reserve-related duties take them more than 100 miles from home can deduct their unreimbursed travel expenses, even if they don’t itemize their deductions. This so-called above-the-line deduction is found only on the long Form 1040, so if you usually file a 1040A but can claim this, change forms.
The Earned Income Tax Credit, or EITC, may be worth up to $6,269 on 2016 taxes for low-and moderate-income service members. Inflation adjustments bump the 2017 EITC max up to $6,318. Military personnel also are allowed to include technically nontaxable combat pay in their taxable income if it will boost their EITC benefit.
An IRA or 401(k)-type plan might mean saving for retirement and cutting taxes, too. Service members who contribute to these accounts, such as the Thrift Savings Plan, also may be able to claim the Retirement Savings Contributions Credit, which can be worth as much as $1,000 directly against any tax you owe.
U.S. service members stationed abroad get an automatic extension until June 15 to file a federal income tax return. Also, those serving in a combat zone typically have until 180 days after they leave the combat zone to file and to pay any tax due.
Most military bases offer free tax preparation and filing assistance during the tax filing season. Some also offer free tax help after the April deadline. Service members who prepare their own return qualify to e-file their federal return for free using Internal Revenue Service’s Free File online option.
Both spouses normally must sign a joint income tax return, but if one spouse is absent due to certain military duty or conditions, the other spouse may be able to sign for him or her. A power of attorney is required in other instances. A military installation’s legal office may be able to help.
Those leaving the military and looking for work may be able to deduct some job search expenses, such as the costs of travel, preparing a resume and job placement agency fees. Moving expenses (another above-the-line deduction) also may qualify for a tax deduction.
Be sure to let your new employer know of your military service. In addition to being a resume selling point, it also could provide your new boss a tax break via the Work Opportunity Tax Credit.

You can find more about military tax matters in IRS Publication IRS Publication 3, Armed Forces Tax Guide, as well as at the IRS’ special Tax Information for Members of the U.S. Armed Forces web page.
You also might find these items of interest:

Don’t overlook state tax breaks for military personnel 
NFL to repay sporting event ‘paid patriotism’ tax money
Remembering fallen military members and helping their families

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Remembering veterans’ contributions and offering tax help for still-serving military men and women

Marijuana and other taxes tended to win on Nov. 8

Voters in California, Massachusetts, Nevada and Maine approved recreational marijuana use, and taxing those personal pot amounts, on Nov. 8.

The votes are in, for the most part, not only for the U.S. president, but also for myriad ballot initiatives.

Only Arizona voters on Tuesday rejected personal marijuana legalization. The lone consolation for many disappointed Grand Canyon State supporters is that travel is easy to the neighboring, and pot-approving, states of Nevada, California and Colorado.
While the weed votes – medical marijuana also was on ballots, and approved, in North Dakota, Arkansas, Florida and Montana – got most mass media attention, there were plenty of other tax-related ballot measures  decided by state and local voters.
Here’s a snapshot of more of Tuesday’s ballot measure results.
Added taxes for the rich: Coastal efforts to raise taxes on the rich appear to have earned voter support.
It’s close in Maine, but a proposal to add a 3 percent surcharge on wealthier residents has an 375,169 to 368,952 voting edge. If the results are certified, Maine’s top tax rate would go from 7.15 percent to 10.15 percent on incomes of more than $200,000. That would give the Down East State the second highest top marginal rate in the United States, following only California.
The Golden State definitely will keep that top individual tax rate title thanks to voter approval to extend for 12 more years the state’s top marginal rate of 13.3 percent on wealthy Californians.
Smoking taxes mostly failed: Tobacco tax hikes were on four state ballots. They failed in three.
Californians were the only voters to approve higher taxes on smoking on Nov. 8. Proposition 56, which won by a decisive 63 percent to 37 percent margin, will raise the tax on a pack of cigarettes from $0.87 to $2.87.
Voters in Colorado rejected Amendment 72, which would have raised the state’s tax on a pack of cigarettes from $0.84 to $2.59.
Missouri voters defeated two cigarette tax proposals. Proposition A would have raised the per pack tax on cigarettes from $0.17 to $0.40 by 2021, as well as added a 5 percent sales tax to other tobacco products. Amendment 3 proposed raising the tax $0.60.
North Dakota’s Statutory Measure 4 called for hiking the tax on a pack of cigarettes from $0.44 to $2.20. It also would have raised the wholesale purchase tax on all other tobacco products, including e-cigarettes, from 28 percent to 56 percent.
But smoking tax advocates in this year’s losing states shouldn’t give up. An effort four years ago to increase cigarette taxes in California failed, but laid the groundwork for this year’s winning initiative.
Soda taxes approved: Former New York Mayor Michael Bloomberg wasn’t able to celebrate a victory by his preferred presidential candidate, but he did get some good news on Nov. 8. So-called soda taxes that he supported were approved on Election Day in four western U.S. cities.
The sugar-sweetened beverages sin taxes were approved by voters in San Francisco, Oakland and Albany, California and in Boulder, Colorado. (For New Yorkers and Georgians, the Golden State counterpart to your Albany is in the San Fran/Oakland area.)
The California communities will see a penny per ounce tax, the same amount that was approved in neighboring Berkeley back in 2014. The Boulder vote was for a 2-cent-per-ounce tax.
Yes and no to Missouri sales taxes: In addition to the tobacco tax hikes, Show Me State voters also were asked to decide on some statewide sales taxes.
The most notable was Constitutional Amendment 4 to prohibit the expansion of the state’s sales tax to services.
Expanding the sales tax base has become a common tactic by states nationwide trying to cope with shrinking revenue and an economy that’s moved from sales of goods to sales of services. But Missouri voters told their lawmakers they’ll have to find other options, approving the ban 57 percent to 43 percent.
Missouri voters, however, were much more amenable to a renewing a state sales tax that has been on the state’s books since it was approved by voters in 1984 and pays for the state park system and soil and water conservation programs. Constitutional Amendment 1 passed by an 80 percent to 20 percent margin.
No to NW taxes: The effort by some Washington state climate change activists to enact the nation’s first statewide carbon tax on fossil fuels failed. Initiative 732 won only King County, home to Seattle.
Part of the problem was that environmental and politically progressive groups never reached a consensus on the measure. Plus the oil industry poured lots of money into the fight against the ballot measure. 
In neighboring Oregon, voters rejected a $3 billion corporate tax initiative. Measure 97 proposed charging certain C corporations a 2.5 percent tax on their gross annual sales that exceed $25 million.
You can find more on all this year’s ballot measure results, tax and otherwise, at Ballotpedia.
You also might find these items of interest:

A look back at California’s landmark Prop 13
Oregon collects almost $26 million in marijuana taxes
Texas town’s ballot measure seeks to remove queries about candidates’ delinquent taxes

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Marijuana and other taxes tended to win on Nov. 8

RESPECT Act to protect against IRS asset seizures awaiting final Congressional action

With the 2016 election over, a lame duck Congress will return to Washington, D.C., next week to begin the job of wrapping up some pending legislation. One tax measure that passed the House earlier this year, but is still awaiting Senate action, is the RESPECT Act, which tax attorney Darrin Mish discusses in this guest post.

A bank customer working with a teller to complete a transaction. If some large withdrawals seem suspicious to bank officials, a person could end up having assets seized by the Internal Revenue Service. 

In a rare show of bipartisanship, the Clyde-Hirsch-Sowers RESPECT Act was passed unanimously this fall by the House of Representatives.
The intent of the Act is to protect U.S. citizens from having their assets seized at the mere whim of the Internal Revenue Service. 
As the law now stands, the government DOES NOT have to charge you with a crime to be able to seize money from innocent citizens.
How’s that for an ugly little fact?
Nasty, right? But it’s true nonetheless.
Here’s an even uglier fact:
Victims of these seizures must first prove they are innocent before they can get their money back.
Try doing that with a wiped-out bank account.
The IRS can get away with it because:
They don’t have to charge you with a crime to take your money. Instead, they charge your money with the crime.
You, as a U.S. citizen have certain unalienable rights that cannot be violated. Unfortunately, those rights do not extend to your money.
So, the IRS charges your money with the crime instead of you.
Make sense?
It doesn’t have to as far as the IRS is concerned.
There are real abuses taking place in this country. Abuses where children of innocent people get hurt every day. Under the current law, if the IRS wants your money, they can take it with no questions asked.
What Is the Current Law Though?
Under federal law, all cash transactions over $10,000 must be reported to the U.S. government by bank officials.
That counts for deposits as well as withdrawals. Anyone evading this reporting rule could be subject to having their bank account seized.
The name of this law is the Bank Secrecy Act. It’s also known as the Currency and Foreign Transactions Reporting Act.
The problem with it is that it’s often used to seize money from innocent people who are never charged with a crime.
It’s been on the books since 1970, and requires all U.S. financial institutions to cooperate with the U.S. government to help combat cases of money laundering and fraud. 
On the surface the law is a good one. It has stopped a lot of bad guys.
Remember former U.S. House Speaker Dennis Hastert?
From 2010-2012, he withdrew $50,000 or more from his bank account 15 times, allegedly to pay off sexual abuse victims. 
Hastert was eventually questioned by bank officials on the purpose of the withdrawals as per the law. Afterwards he changed his withdrawal patterns to several withdrawals of under $10,000 a piece to fly under their radar. In April, Hastert was sentenced to 15 months in federal prison in connection to the bank fraud case linked to the abuse allegations.
Which is a textbook example of structuring. He got busted. So, the law does work in most instances.
The Government Also Requires Banks to Report Suspicious Withdrawals of Under $10,000
Oh, oh. Did you catch that?
If your bank teller thinks your transaction looks fishy she can report it to the feds.
Which gives you even more reason to treat tellers like gold.
All the government needs to receive is just one of these snitch reports from a disgruntled bank teller to be able to seize your money.
Keeping in the good graces of your teller won’t protect you completely from having your money seized though.
The government is always scanning through bank statements hoping to catch unreported suspicious withdrawals. If they see something they think looks weird they can seize every nickel you have in your bank account.
Which is where a lot of good people get hurt by the law.
Sometimes the Government Gets It Wrong.
Let’s say you own a small business and you make deposits of $9,000 one day; the next day $4,000; the next day $8,000 and so on.
The government sees that pattern and asserts that it’s a false one. They claim that your deposits were all an attempt to keep from declaring the cash in one lump sum.
If your deposit pattern looks fishy to the IRS, then you’re guilty of structuring in their sight…
…and since you’re guilty, they have every right to seize your money.
In reality, it could be that you own a convenience store doing daily cash deposits. Some days are great, others not so much.
So, looking at your deposits over time it could look as if you are criminal structuring the deposits.
You’re innocent. But you lose anyways.
How the Clyde-Hirsch-Sowers RESPECT Act Will End IRS Forfeiture Abuse
Once the bill is signed into law, the IRS will need to prove criminal wrongdoing before they can seize funds from a bank account they believe is involved in structuring.
They will also be required to notify taxpayers of seizures as well as provide them with a post-seizure hearing within 30 days of taking your money.
While these steps may seem like small ones, they will do absolute wonders in protecting the assets and rights of all U.S. citizens.
So, let’s hope Congress can keep up this new spirit of bipartisanship well into the future. Good things will happen for our country if they do.
Darrin Mish is a tax attorney who has taught dozens of attorneys, CPAs and Enrolled Agents how to help their clients with tax problems. Grab one of best selling tax help books by searching “Darrin T. Mish” on Amazon.com. If you have an IRS problem of your own he invites you to visit his site at https://getirshelp.com/.

Legislative follow-up: H.R. 5523, the  Restraining Excessive Seizure of Property through the Exploitation of Civil Asset Forfeiture Tools (RESPECT) Act, cleared the house by a 415-0 vote on Sept. 26. Its Senate companion bill, S. 3353, is pending in the Senate Finance Committee. If the RESPECT Act doesn’t make it through Congress and to the president’s desk this session, it must be reintroduced in the coming 115thh Congress that will convene in January 2017.

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RESPECT Act to protect against IRS asset seizures awaiting final Congressional action

President Trump and your taxes

With Donald J. Trump’s presidential win, Republicans will be in control of the White House, House and Senate.
Get ready for changes to your taxes.

President-elect Donald Trump makes his victory speech early Nov. 9. He is joined on stage by, at right, his youngest son Barron, whose mom Melania is just out the frame, and at left VP-elect Mike Pence and his wife Karen. (Screenshot of Right Side Broadcasting YouTube video)

Here are some highlights of how your taxes might change in the near future. 
Huge cost of first plan: After Trump’s first tax plan was roundly criticized by even many in his own party as being too costly (the initial estimate was a $9 trillion budget deficit over 10 years), he revised it, essentially incorporating the House GOP proposal.
The changes made back in August cut the expenditures to around $6 trillion over a decade. Some calculations slash it even more, to just $3 trillion when dynamic scoring, which takes into account assumed economic growth, is uses.
Part of the savings came from bumping up taxes a bit.
From 7 to 3 tax rates: Currently, we have seven rates, starting at 10 percent and topping out at 39.6 percent for single filers making $418,401 or more and married filing jointly taxpayers making $470,701 or more in 2017.
How long will those rates hold?
How quickly can the Trump Administration, with guidance from House Speaker Paul Ryan (R-Wisc.), a former House Ways and Means Committee chairman, get its proposed revamp of just three rates and income brackets through that chamber and to the Senate for approval?

Income Tax Rate

Single Taxpayers’ Income

Married Jointly Filing Taxpayers’ Income

12%

up to $37,500

up to $75,000

25%

$37,501 to $112,500

$75,001 to $225,000

33%

$112,501 and up

$225,001 and up

No, I didn’t forget the head of household filing status. Trump’s plan will eliminate it, along with the Alternative Minimum Tax and the federal estate tax.
And while Trump’s original 0 percent rate is now gone, he promises that other provisions will mean that low-income Americans will have an effective income tax rate of nada nil.
Other tax tweaks: The wealthiest taxpayers will get another tax break in addition to the almost 7 percent ordinary income tax rate cut. With the promised repeal of the Affordable Care Act, or Obamacare, now a certainty, the health care law’s additional 3.8 percent surtax on net investment income also will be gone.
Capital gains taxes will remain, says Trump, at the existing rates. That means meaning no tax for those in the lowest bracket, 15 percent for filers in the 25 percent bracket and a top 20 percent capital gains levy on folks in the highest income bracket.
Deduction revisions: As for deductions, Trump wants to increase the standard deduction for single taxpayers to $15,000; double that for joint filers. For the coming 2017 tax year, those amounts are $6,350 and $12,700, respectively.
In addition to hiking the standard deductions, personal exemptions will be discontinued, which are $4,050 for each taxpayer and his/her spouse and dependents on 2016 and 2017 returns.
Itemized deductions will remain, as will limits on those amounts. While current law calls for a phase-out once you make a certain amount for your filing status, Trump’s plan will cap itemized deductions at $200,000 for married joint filers or $100,000 for single taxpayers.
Lots of lower income families lose: With all these changes, who will be the big winners? And losers?
The Tax Policy Center’s analysis says that while almost all taxpayers will see some savings, nearly 47 percent of Trump’s tax cuts will go to the richest 1 percent.
And because the Trump plan gets rid of some deductions that large families currently tend to rely on, studies have suggested his plan could end up raising taxes on millions of families.
New York University law professor Lily Batchelder, in a report published Oct. 28, says that Trump’s plan would significantly raise taxes for millions of low- and middle-income families with children. The tax increases, according to Batchelder’s analysis, would be especially large for working single parents.
Trump’s tax plan would affect about one-fifth of families with minor children and about half of all single parents, Batchelder says in the paper published by the Tax Policy Center. That means, she writes, as many as 8.7 million families with school-age children could actually see a tax hike under the proposal.
Businesses go first: Then there are businesses taxes. That section of the Internal Revenue Code is likely to be addressed first since the relocation of U.S. multinational corporation to foreign headquarters was a major topic during those few times when policy was discussed during the campaign.
Trump argued that the solution to the business headquarters’ relocation issue, known as inversions, is to make huge cuts to the business tax rate, from 35 percent to 15 percent.
Companies also would be able to immediately deduct the cost of assets they purchase, rather than being forced to depreciate those costs over a number of years.
Pass-throughs on tap, too: Trump also proposed changing the treatment of what are known as pass through entities, but exactly how is unclear.
Currently, businesses that operate as S corporations and partnerships allocate, or pass through, income to the owners, who then pay tax at their individual tax rates on their personal tax returns. Many of Trump’s own businesses are set up this way.
These so-called pass-through entities under on version of Trump’s tax plan would pay the 15 percent business tax rate. Trump’s unified business rate also would apply to sole-proprietors who file Schedule C with their 1040s.
So the business tax rate for all companies of all sizes would drop from a possible 39.6 percent under current law to 15 percent, regardless of what the owner’s individual tax rate is.
Or would it?
Tax reform or another loophole? After this provision was added, questions and criticism of this apparent new loophole arose.
In addition to noting how Trump would benefit personally, others also pointed to the possibility probability that a lot of high wage earners would quit and then sign on with their companies as self-employed freelancers to get the 15 percent tax rate.
That prompted the Trump tax advisers to remove all references to pass-through taxation from the campaign’s website, noting simply that, “The Trump plan will lower the corporate tax rate from 35 percent to 15 percent, and eliminate the corporate alternative minimum tax.”
Welcome to tax reform, President-elect Trump.
Some GOP hurdles to clear: Now that Trump is officially America’s 45th president, his tax advisers will start working in earnest on the legislative specifics.
But even with Republicans in control of Congress and the White House come January 2017, Trump’s tax plan still faces some hurdles.
Many in the GOP remain worried about the deficit, which Trump’s tax plan would, as noted earlier, add significantly to what Uncle Sam owes. Will the tax cutting faction override the Party’s deficit hawks?
For argument’s and this post’s sake, let’s assume tax cuts get the go ahead early in the Trump Administration.
Although it probably will be relatively easy to push the changes through the GOP Congress, 2017 still is likely to be a transition year. I’d count on the tax code staying as is for the first year of Trump’s administration.
But by this time next year, get ready for the new Trump tax system’s effects.

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President Trump and your taxes

Election Day 2016 is here. Finally. Vote!

Nov. 8. Election Day 2016. Blessed relief, at least from one of the most divisive campaigns for the White House in modern memory.

N.H. earliest votes: Three small communities in rural New Hampshire, as is tradition every four years, cast the first 2016 presidential ballots of the day just after midnight Eastern Time. Under state law, towns with fewer than 100 voters can open voting locations at midnight and close them as soon as all registered voters have cast their ballots.
Dixville Notch voters opted for Hillary Clinton over Donald Trump 4-2. Libertarian Gary Johnson got one vote. Clinton also won in Hart’s Location, taking 17 votes to Trump’s 14, with Johnson getting three.
Meanwhile, Millsfield is Trump country. The Repulican nominee won that N.H. hamlet 16-4, with Bernie Sanders getting one write-in vote.
The combined very early Granite State tally gives Trump the edge 32-25.
Now it’s up to the rest of America’s voters who weren’t among the more than 46 million early voters in 28 states and the District of Columbia.
Tax matters to decide: If you’ve made your ballot decisions, great. Get to your polling place today. If you need help finding it, the Voting Information Project, HeadCount or Rock the Vote (yes, it’s still around) can help.
If, however, you’re still making up your mind and some tax info could help you decide – you are at a tax blog after all – then the ol’ blog has some items you might find useful.
No, sorry, we still don’t have Donald Trump’s tax returns. If he doesn’t win tonight, we’ll never get a glimpse of the Republican candidate’s 1040s. 
We do have, though, 30 years of Hillary Clinton tax returns, as well as a decade of filings from her Democratic running mate, Virginia Sen. Tim Kaine. Trump’s VP, Indiana Gov. Mike Pence, also shared a decade’s worth of his taxes.
You also can see what Trump and Clinton had to say about their taxes, sort of, during their three televised debates, the final of which took a “nasty” turn. There also was the lone head-to-head by the Kaine and Pence.
State measures, too: And don’t forget about more local election concerns. In addition to U.S. House and Senate candidates, 154 statewide ballot measures will be decided today.
My previous post on some of the key tax-related initiatives, which range from marijuana and tobacco taxes to ground-breaking climate change and sales tax questions, includes an interactive map you can use to find details on ballot questions in your area.
Yeah, there’s a lot to be decided today. And it’s all important.
So do your final voting review and get to your polling place!
You also might find these items of interest:

Oregon collects almost $26 million in marijuana taxes
Bloomberg taking effort to tax sugary drinks nationwide
Texas town’s ballot measure seeks to remove city questions about candidates’ delinquent taxes

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Election Day 2016 is here. Finally. Vote!