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State Tax Problem? Florida Department of Revenue’s Voluntary Disclosure Program May Offer a Solution

By: Matthew O’Kane

If the Florida Department of Revenue (FDR) determines that a business owner has failed to pay tax in a timely manner, it will assess the business owner and the tax plus interest and penalties in most circumstances.  The penalties can be as much as 50% of the tax.  If no tax return has been filed, the FDR may assess tax, interest and penalties against the business owner from when the compliance problem began.  We have represented business owners who have had assessments issued going back more than 15 years.  On account of the potential liability issues, some business owners who discover a compliance problem (not paying use tax on internet purchases, not paying or collecting sales tax on commercial lease payment, etc.) are not willing to address the issue.  However, the FDR does offer relief if the business owner discloses the problem before the FDR contacts the business owner. read more

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April 15th Offers an Important Tax Planning Opportunity for Partners

By:  Amanda Wilson

April 15th is usually greeted with dread as tax day.  However, April 15th also offers an important tax planning opportunity for partners in partnerships (including limited liability companies that are treated as partnerships for federal income tax purposes).  The tax rules allow partners to amend their partnership agreement retroactively to January 1 of the prior year if the amendment is in place by April 15th.  If your business has a partnership, this might be a great opportunity for you.  You should take a moment to look at how your partnership is allocating taxable income and losses to the partners in 2013 and make changes if a different allocation would work better for your partnership.  Act fast, though, because unlike the due date for filing your return, this deadline cannot be extended. read more

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2014 Brings Increase in Federal Estate and Gift Tax Exemption

On January 1, 2014, the federal estate tax exemption (and lifetime gift tax exemption) increased to $5,340,000 per person.  This represents a $90,000 increase from $5,250,000 in 2013.  Keep in mind the federal estate and gift tax exemption is “unified”.  Use of federal gift tax exemption during your lifetime will reduce the amount of federal estate tax exemption remaining at your death.  For example, if you give away $2,000,000 in taxable gifts during your lifetime you would likely owe no federal gift tax because you would use a portion of your lifetime federal gift tax exemption ($5,340,000 in 2004) to avoid paying federal gift tax.   If you die in December 2014, however, your federal estate tax exemption amount will be reduced by the amount of lifetime federal gift tax exemption you used during your life.  In our example,  you have already used $2,000,000 of your exemption so you would have $3,340,000 of your federal estate tax exemption remaining to use to pass your estate to your beneficiaries free from federal estate tax. read more