IRS crackdown on abusive tax shelters
Article Abstract:
Definitions of abusive and non-abusive tax shelters (taken from the Internal Revenue Manual) precede a discussion of the Internal Revenue Service's work to eliminate abusive tax shelters. Some of the abusive tax shelters uncovered by the IRS include: overstated art appraisals on works about to be donated to museums, tax frauds involving alleged trading of government securities, and $5.7 million in tax write-offs related to an abusive shelter that sold overpriced interests in taped celebrity interviews. The number of tax shelter investigations initiated by the IRS has increased from 400 cases in 1973 to 174,000 investigations in 1980 and 400,000 in 1986. Also discussed are the legislative initiatives under which these investigations are authorized, including the Tax Equity and Fiscal Responsibility Act of 1982, the Deficit Reduction Act of 1984, and Revenue Procedure 83-78.
Publication Name: Management Accounting (USA)
Subject: Business, general
ISSN: 0025-1690
Year: 1986
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Independent contractor or employee?
Article Abstract:
There can be significant tax penalties incurred for misclassifying employees as independent contractors. In order to recover some of the approximately $1.6 billion in lost tax revenue that results from the misclassification of employees, the IRS has issued new guidelines and increased its scrutiny of employer relationships with independent contractors. The IRS seeks to uncover those contractors who are in reality employees of the firms, thus making both employee and employer liable for higher taxes. The guidelines that indicate whether a provider of a service is actually an employee rather than an independent contractor includes: whether the contractor must comply with instructions on when, where, and how work is preformed; whether the contractor is required to be trained, to work with others, or attend meetings; and whether the worker is subject to direction and control.
Publication Name: Management Accounting (USA)
Subject: Business, general
ISSN: 0025-1690
Year: 1990
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V.A.T.: Harmful to our economic health?
Article Abstract:
A value-added tax (VAT) is a consumption tax imposed on the value added to a product or service at various stages of manufacture and distribution. Value-added taxes are being discussed as a possible means of increasing revenues to offset budget deficits, but the disadvantages of VATs may outweigh the benefits. The consumer ultimately pays for the taxes that are added to a product; the companies that purchase the product at different stages of development can effectively get a rebate on their tax payment, but the end user of a product has no such opportunity. Value added taxes are regressive in that people with lower incomes pay a proportionately higher percentage of the income for goods and services, and they are inflationary because they raise prices.
Publication Name: Management Accounting (USA)
Subject: Business, general
ISSN: 0025-1690
Year: 1986
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