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E-Commerce and Taxation

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Many of our clients are entrepreneurial and some of these have online businesses. So taxation in the online space is always a hot topic. For US domestic persons, the question is somewhat simpler at the Federal level but becomes complex at the State level. For foreign persons selling goods to US consumers however, it can be complex at both the Federal and at the State level.


Let’s talk about the States first. At the moment, sales tax rates vary widely and range from less than 1% to over 10%. There are myriad exemptions and exceptions and rates vary across types of goods and services as well as cities and even counties. Clothing and footwear under $110 is tax free in New York City, for example. But buy something worth more than $110 in Manhattan and the item is subject to a 4.5% city sales tax and a 4% state sales tax. Sales taxes are collected in 45 states, the District of Columbia and Guam. Five states, including Alaska and Montana, do not collect sales taxes. Ok so you get…

What’s Form BE-10?

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Most know June 30th as the deadline for filing FBARs or Foreign Bank Accounts - http://derrenjoseph.blogspot.sg/2014/11/fbars-and-form-8938.html

But this year there’s a new kid on the block and that’s Form BE-10.




What’s Form BE-10?

It is not a tax form. The BE-10 is a Benchmark Survey from the Bureau of Economic Analysis (BEA) under the U.S. Department of Commerce. The BE-10 is conducted every five years and is meant to cover all U.S. direct investment abroad from both large and small companies; it’s related to the annual BE-11 Survey of Large Companies. According to the rules, the BE-10 treats people as “companies” and is required for even the smallest economic activity abroad by an individual — for instance, the BEA expects you to report if your small apartment in Trinidad generates $5,000 in income each year.



What’s the purpose?

A number of federal statistical reporting requirements apply to U.S. companies that

- Make investments abroad,

- Are the beneficiarie…

Quiet Disclosures

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I previously wrote about the amnesty program in general, and streamlined procedures in particular.

Most agree that it is critical to contact the IRS before they contact you.  At the same time, many tax professionals get concerned when it is suggested that a taxpayer just quietly file prior year returns outside of any amnesty program.  Given the state of technology today, the chance of the IRS noticing is quite high.  Pretty soon, we may say that there is no such thing as a "quiet disclosure".

Earlier this month, the Federal Tax Crimes blog reported on a recent Tax Controversy Forum where Nanette Davis, a DOJ Tax senior litigation counsel, cautioned taxpayers about quiet disclosures, with the threat that additional enforcement action may follow because
(i) the DOJ program is helping identify quiet disclosures and  (ii) "the patterns of late returns and FBARs are clear in the data."


 The data referenced in that quote is apparently the data in the IRS records when en…