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The Responsible Party – Changes Effective May 2019

The Responsible Party – Changes Effective May 2019

The U.S. Taxpayer Identification Number used by entities is the Employer Identification Number (“E.I.N.”).  To apply for an E.I.N., the entity must identify the “responsible party” who ultimately owns or controls the entity or who exercises ultimate effective control over the entity – in other words, the person who controls, manages, or directs the entity and the disposition of its funds and assets.  In March, the I.R.S. announced that, beginning on May 13, 2019, only individuals with a U.S. Taxpayer Identification Number will be allowed to request an E.I.N.  Moreover, the responsible party must be a natural person – not an entity – unless the applicant is a government entity.  This change will affect many foreign companies entering the U.S. market after the effective date.  Galia Antebi and Nina Krauthamer explain all and speculate on whether revisions to the new procedure should be anticipated.

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State and Local Tax Credit Programs – Businesses May Get What Individuals Cannot

State and Local Tax Credit Programs – Businesses May Get What Individuals Cannot

Since recent Federal tax law changes have capped the state and local tax deduction for individuals to $10,000, many states have been trying to implement solutions to help alleviate the effects of the change.  New York State has introduced two programs to get around the $10,000 limitation:  New Yorkers can make payments to state charitable programs and receive a credit against N.Y. income tax or, alternatively, use an Employer Compensation Expense Program. Nina Krauthamer and Rusudan Shervashidze look at the back and forth between N.Y. and Federal regulators.

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New Jersey Provides G.I.L.T.I Guidance

New Jersey Provides G.I.L.T.I Guidance

Federal tax law has introduced a new type of gross income: Global Intangible Low Tax Income (“G.I.L.T.I.”).  The provisions are designed to stop U.S. companies from shifting their profits to offshore jurisdictions, and states are given a choice to incorporate parts of Federal law in one of three ways.  New Jersey has chosen “selective conformity.”  Nina Krauthamer and Rusudan Shervashidze explain what this means for the state and for taxpayers.

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F.B.A.R.’s — What You Need to Know

F.B.A.R.’s — What You Need to Know

April 15 is almost here, and while most people know this date as the filing deadline for individual tax returns, it is important to another filing requirement: the Report of Foreign Bank and Financial Accounts (“F.B.A.R.”).  Although the form has been around since the 1970’s, many people continue to profess ignorance of  its existence.  Others are simply confused about the requirements.  A recent Federal case illustrates the perils of failing to file a required F.B.A.R.  Rusudan Shervashidze and Nina Krauthamer explain that penalties are high, and courts are skeptical about claims of ignorance of the law, especially when taxpayers have accumulated several million dollars placed in an offshore account.

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Democrats Turn to Tax Reform to Reduce Wealth Disparity

Democrats Turn to Tax Reform to Reduce Wealth Disparity

The U.S. Federal deficit is expected to reach $1 trillion in 2019.  Meanwhile, a hedge fund billionaire recently purchased a New York City condominium for $238 million, and it is estimated that the top 0.1% possess almost the same amount of wealth as the bottom 90% of all households.  Clearly there are wealth disparities and funding needs in U.S.  When it comes to tax policy, Democrats have traditionally focused on tax relief, including a negative income tax, for poor and working-class families.  Several recent pronouncements and extensive press coverage indicate a new approach, designed to tax the wealthiest individuals at significant rates of tax. Nina Krauthamer explains how current Democratic Party policy makers are planning to even out the distribution of wealth. 

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