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Boston Tax Law Blog

Tax evasion plea deal could result in two years behind bars

Federal taxes are in large part paid through income withholdings by employers. The employer is trusted to withhold the right amount from employee wages and turn that sum over the IRS.

In Boston, a longtime owner of the city’s largest taxi company hadn’t been doing this. Coupled with the tax issue were other employment law lapses. The company hired drivers who were in the U.S. without proper documentation and never paid overtime when employees worked more than 40 hours in a week.

Short-term rentals remain tax free in Massachusetts

This month, Airbnb starts collecting taxes from hosts of short-term rentals in Los Angeles. Massachusetts will not follow this lead. Even after Airbnb lobbied for a recent tax proposal that would have extended hotel levies to short-term rentals.

The defeat wasn’t a complete surprise, because Governor Charlie Baker has said he would not raise taxes on private rentals. Others have noted that the additional income (up to $20 million per year) could be helpful in expanding the state’s earned income tax credit.

An inheritance in Swiss accounts triggers criminal charges

This was not solely a Swiss account inheritance. But it does raise issues for anyone who inherits a financial portfolio that includes international bank or investment accounts.

The U.S. attorney’s office reports that the taxpayer allegedly went through some great lengths to hide millions of dollars from a 2003 inheritance. Apparently, the taxpayer was listed as the executor and failed to disclose the full value of the inheritance on an estate tax return. Then approximately four million dollars was funneled into six undeclared bank account in Switzerland and France.

Taxes and the sharing economy: issues in play as legislative session ends

One of the threads we've been following in this blog is the impact of the ever-increasing sharing economy on taxes.

Services such as Uber and Lyft for ride-hailing and Airbnb for short-term housing rentals have become remarkably popular in a very short time. But they have also created new types of tax compliance issues for people who provide such services.

Taxes on cancelled debt, part 2: Graduate and professional students

In the first part of this post, we began discussing how forgiveness of student loan debt can lead to a big tax bill for the debtor.

The case concerned the grief-stricken parents of a recent college graduate.
After their son died suddenly of a brain tumor, the lender forgave the students loans the parents had taken out. But years later, the parents got a bill from the IRS for income tax on cancelled debt.

Cancelled debt as income, part 1: case raises student loan issue

The IRS has long taken the position that cancelled or forgiven debts are generally taxable income.

To be sure, there are certain exceptions to this. For example, in recent years Congress has granted relief for struggling homeowners who have gone through a foreclosure or short sale.

Taxing part-year residents: What if have a second home elsewhere?

There are a couple of different scenarios by which Massachusetts can try to tax you as a full-year resident, even if you don't live here all year round.

One is if your domicile (legal residence) is here for the entire year, even if you spend some time elsewhere, such as in a Florida condo during the winter or in a summer home in Maine.

3 Tips for 1099s in the “gig economy”

Listing a guest bedroom on Airbnb or picking up some side income driving for Uber? You need to be thinking about taxes already. Whether or not you receive a 1099 in January, you have the responsibility of reporting income and supporting deductions.

You may be paying more attention to legislation being debated at the Massachusetts Senate that could affect the Uber/Lyft business model. Background checks and a new certification process may make signing up more cumbersome. But what is rarely addressed in the debates are taxes.

What you need to know about the June 30 FBAR deadline

If your investment portfolio includes funds held in an overseas account, you need to pay attention to an upcoming tax filing deadline. U.S. persons (this includes citizens and residents) with an interest, even a signature interest, in a foreign account need to pay attention.

An account or combination of foreign accounts with an aggregate balance of $10,000 or more in 2015 will trigger the reporting requirement. Form 114, Report of Foreign Bank and Financial Accounts (FBAR) needs to be efiled by June 30. There are no filing extensions.

What the IRS has to say about selling your home

In the not-too-distant past, homeowners watched in horror as their most prized asset plummeted in value and their prospects of realizing a profit on its sale rapidly diminished. Fast forward to the present, however, and things are considerably different.

Indeed, with the recession now fully in the rearview mirror and the economy continuing to improve, it's once again become a seller's market for residential real estate. As encouraging as this development is for homeowners, questions naturally arise as to how the Internal Revenue Service treats the sale of a primary residence.

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