Will the New Tax Plan Result in More Divorces in 2018? Eliminating Deductibility of Alimony Payments May Fast-Forward Some Divorces

One of the many changes contained within the Tax Cuts and Job Act of 2017 (“the Act”) may prove to be a boon for divorce (and tax) attorneys in 2018.  As explained in more detail below, section 11051 of the Act does away with the long-standing provision that allowed for the deductibility of alimony payments. …

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Coinbase and the IRS: The Takeaway for Virtual Currency Investors (Comply with Tax Obligations or Face Real Consequences)

On November 28, 2017, a federal judge in California ordered Coinbase, Inc. (“Coinbase”), a major virtual currency exchange, to provide the Internal Revenue Service (“the Service”) with account information for thousands of individuals trading virtual currency through its exchange.  (A copy of the entire Order in United States v. Coinbase, Inc., et al., No. 17-cv-01431-JSC…

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As If! Restitution Order Does Not Permit the IRS to Collect Penalties and Interest without First Assessing a Tax Liability

On October 3, 2017, the United States Tax Court issued an opinion in Klein v. Commissioner, 149 T.C. No. 15,[1] which creates a potential roadblock for the Internal Revenue Service (“the Service”) in civil cases stemming from criminal matters.  In particular, the Tax Court held that the Service cannot use a criminal order of restitution…

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Evaluating the Impact of Bedrosian

On September 20, 2017, the Eastern District of Pennsylvania issued an important taxpayer-friendly opinion regarding the willfulness standard in FBAR penalty matters.  In Bedrosian v. United States, Case No. 2:15-cv-05853-MMB (E.D. Pa., Sept. 20, 2017), the court held that the government had not met its burden in proving that Bedrosian had willfully violated FBAR reporting…

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Form Change for Maryland Taxpayers Designating Power of Attorney

Maryland residents may designate a tax professional as his or her agent through assigning Power of Attorney. This legal document authorizes the person to prepare and file a tax return on the taxpayer’s behalf before the Maryland State Department of Taxes. Maryland Power of Attorney for tax payers: form change On January 1, 2017, the Maryland Comptroller’s…

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Acquiring a Business with Employment Tax Issues: Tips for Avoiding Personal Liability for Taxes

In times of financial crisis, many businesses succumb to financial pressures and “borrow” from employees’ tax withholdings to pay other creditors.  To some, this seems like a viable alternative to meet short-term cash needs, keep the lights on, or service existing debt.  Unfortunately, for many struggling businesses, circumstances never significantly improve and tax withholdings are…

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Bitcoin Buffs Beware! IRS Ramps Up Efforts to Monitor Potential Criminal Activities Involving Virtual Currency

According to various news reports, the Criminal Investigation Division (CID) of the Internal Revenue Service (IRS) is ramping up efforts to track potential noncompliance caused by – and hidden through – the use of virtual currencies (or “cryptocurrencies”).  These efforts are occurring on multiple fronts and are likely to leave some unwary taxpayers with higher…

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Day Trading: Understanding Common Issues and Pitfalls Can Increase Return on Investment

Technological advances have greatly improved access to financial information and likewise improved the ability for many Americans to trade for their own accounts.  While most casually trade a few securities for pleasure, a growing number engage in high-volume trading.  These traders may perform adequate research on their investments before engaging in these transactions; however, not…

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Marijuana in Maryland: Tax Considerations for Businesses as Legalization of Medical (and Recreational?) Use Become a Reality

With the creation of the Maryland Medical Cannabis Commission and the dispensary permitting process moving forward, Marylanders will soon have access to marijuana for medical use.  Many anticipate that the legalization of the recreational use of marijuana is not far behind.  In the most recent session of the Maryland General Assembly, multiple bills calling for…

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