What Is Obstructive Conduct with IRS? – By John R. Bullis

Kim Pilant John's Articles

IRS investigated Carlo Marinello’s activities for years 2004 through 2009. In 2012 IRS charged him with violating several criminal tax statutes under Code Section 7212(a). That Section makes it a felony to corruptly or by force obstruct or impede the due administration of the Internal Revenue Code. IRS claimed Marinello failed to keep corporate books and records, failed to provide …

Royalty Income Was Ordinary, Not Capital Gain – By John R. Bullis

Kim Pilant John's Articles

Spiridon Spireas is a pharmaceutical scientist who invented some drug delivery techniques. He signed a licensing agreement with Mutual Pharmaceutical Company in 1998 so he did not have to develop the technology alone. The development of a practical liquisolid formulation and clinical testing as well as getting FDA approval and doing the marketing all was done per the agreement. Sales …

Business Entertainment Deductions Reduced – By John R. Bullis

Kim Pilant John's Articles

Effective Jan. 1, 2018, the new Tax Cuts and Jobs Act reduced business expense deductions for many types of business entertainment activities to zero. Now, business meals associated with entertainment with clients or prospects are not deductible. Some of the business meals you used to build your business, get new clients or meet with prospective customers are no longer an …

Big Change on Alimony Beginning in 2019 – John R. Bullis

Kim Pilant John's Articles

The new tax law, 2017 Tax Cuts and Jobs Act, changes tax treatment of Alimony beginning in 2019. For divorce or separation agreements signed AFTER Dec. 31, 2018, the person paying alimony will no longer get an income tax deduction and the person receiving alimony payments will not have taxable income. For divorce or separation agreements that were done before …

Amending Partnership Agreements – By John R. Bullis, CPA

Kim Pilant John's Articles

David Bruner and Eneas Kaner were equal partners in a partnership in Arizona. They had an original partnership agreement that had been amended five times over the years. In 2011 and 2012 the partnership paid large amounts to a defined benefit pension plan with 92% of the 2011 contribution and 100% of the 2012 contribution allocated to Mr. Bruner. IRS …

Tally Sticks – Early Internal Controls – By John R. Bullis

Kim Pilant John's Articles

Internal Controls are a process to provide reasonable assurance on the efficiency and effectiveness of business operations as well as giving reliability of financial reporting and compliance with various laws. All publicly traded companies have internal control requirements since 2002 when the Sarbanes-Oxley Act was passed by Congress. The beginning of double-entry bookkeeping is thought to originated by Luca Pacioli …

Choose Your Business Entity Carefully – By John R. Bullis

Kim Pilant John's Articles

Paul and Irvin Barnhart (brothers) claimed their “C” corporation (separate entity that pays its own taxes) was only their agent and losses in 2010, 2011 and 2012 were deductible on their individual returns, not the corporation returns. IRS disagreed. IRS disallowed the individual return losses and assessed accuracy-related penalties. The Tax Court held a trial and decided IRS was correct. …

What is “Step up in Tax Basis”? – By John R. Bullis

Kim Pilant John's Articles

A special tax benefit to save future income taxes is known as the “Step Up in Tax Basis”. This happens when someone dies and leaves stocks, bonds, personal property and real estate to the heirs. For example, suppose Joe bought a stock for $ 1,000 years ago and still has it when he dies. If the fair market value of …