A state judge ruled against Wal-Mart in a dispute over whether the company could deduct from its taxes rent it paid to a real estate investment trust in which Wal-Mart had a 99 percent ownership stake.
In a decision filed Jan. 4, Emergency Special Judge of Superior Court Clarence E. Horton Jr. wrote that Wal-Mart's structure had no "real economic substance" other than cutting taxes, The Wall Street Journal reported. Wal-Mart had sought a refund of $33.5 million in taxes, interest and penalties that it paid after state tax authorities determined it had underpaid its taxes.
Saturday, January 5, 2008
Wednesday, January 2, 2008
Church-owned businesses get tax bills
A growing number of local tax officials are scrutinizing church-owned businesses and property to determine whether they are charitable missions or for-profit enterprises, The Wall Street Journal reported today.
This has led to lengthy disputes and court fights between some tax assessors and churches. For instance, the Journal said, Christ Chapel Community Church in Macon, Ga., ended up paying $16,000 for 2005 and 2006 taxes after disputing for 18 months a tax bill for an athletic club it had purchased for $6 million that offered tennis, basketball, and roller hockey for a fee. On the weekend, church members set up seats for 1,000 worshipers.
The changing nature of churches "forces both courts and agencies and tax commissioners to decide what's a religious or charitable use," John Witte Jr., director of the Center for the Study of Law and Religion at Emory University, told the Journal.
This has led to lengthy disputes and court fights between some tax assessors and churches. For instance, the Journal said, Christ Chapel Community Church in Macon, Ga., ended up paying $16,000 for 2005 and 2006 taxes after disputing for 18 months a tax bill for an athletic club it had purchased for $6 million that offered tennis, basketball, and roller hockey for a fee. On the weekend, church members set up seats for 1,000 worshipers.
The changing nature of churches "forces both courts and agencies and tax commissioners to decide what's a religious or charitable use," John Witte Jr., director of the Center for the Study of Law and Religion at Emory University, told the Journal.
Tuesday, December 11, 2007
AT&T division will pay millions to settle cellphone tax
AT&T Mobility, a unit of AT&T Inc., has agreed to pay as much as $76 million to settle a cellphone-tax lawsuit brought by Missouri municipalities against wireless carriers operating in the state, The Wall Street Journal reported.
The municipalities assert that they can levy on cellphone service a tax normally applied to utilities and traditional "landline" phone companies.
Verizon Wireless settled the lawsuit last September for $31.5 million. Both Verizon and AT&T agreed to start collecting the tax from their customers.
The municipalities assert that they can levy on cellphone service a tax normally applied to utilities and traditional "landline" phone companies.
Verizon Wireless settled the lawsuit last September for $31.5 million. Both Verizon and AT&T agreed to start collecting the tax from their customers.
Monday, December 3, 2007
Security firm challenged on whether guards are contractors or employees for tax purposes
A congressional leader is looking into Blackwater Worldwide's practice of paying its guards as independent contractors and not withholding taxes, the Wall Street Journal reported today.
Rep. Henry Waxman (D-Calif.), chair of the House Oversight and Government Reform Committee, wrote in an Oct. 22 letter to Blackwater that he believes the company "may have avoided paying millions of dollars in Social Security, Medicare, unemployment, and related taxes for which it is legally responsible," according to the Journal.
Blackwater, which provides security for the U.S. government in Iraq and elsewhere, said its tax policy follows the law.
Rep. Henry Waxman (D-Calif.), chair of the House Oversight and Government Reform Committee, wrote in an Oct. 22 letter to Blackwater that he believes the company "may have avoided paying millions of dollars in Social Security, Medicare, unemployment, and related taxes for which it is legally responsible," according to the Journal.
Blackwater, which provides security for the U.S. government in Iraq and elsewhere, said its tax policy follows the law.
Monday, November 26, 2007
States and IRS join forces to crack down on employment-tax violations
The IRS recently signed information-sharing agreements with agencies in 29 states as part of an increased effort to uncover employment-tax violations.
One of the major issues is whether companies are correctly classifying independent contractors. Unlike for employees, companies don't withhold Social Security, payroll taxes or other taxes from independent contractors' pay.
The states that have signed the agreement so far are: Arizona, Arkansas, California, Colorado, Connecticut, Hawaii, Idaho, Kentucky, Louisiana, Maine, Massachusetts, Michigan, Minnesota, Nebraska, New Hampshire, New Jersey, New York, North Dakota, Ohio, Oklahoma, Rhode Island, South Carolina, South Dakota, Texas, Utah, Vermont, Virginia, Washington and Wisconsin.
One of the major issues is whether companies are correctly classifying independent contractors. Unlike for employees, companies don't withhold Social Security, payroll taxes or other taxes from independent contractors' pay.
The states that have signed the agreement so far are: Arizona, Arkansas, California, Colorado, Connecticut, Hawaii, Idaho, Kentucky, Louisiana, Maine, Massachusetts, Michigan, Minnesota, Nebraska, New Hampshire, New Jersey, New York, North Dakota, Ohio, Oklahoma, Rhode Island, South Carolina, South Dakota, Texas, Utah, Vermont, Virginia, Washington and Wisconsin.
Wednesday, November 21, 2007
Bush nominates new IRS chief
President Bush will nominate Douglas Shulman, vice chairman of the Financial Industry Regulatory Authority, to be commissioner of the Internal Revenue Service, the White House announced.
Previously, he was vice president of Darby Overseas Investments and chief of staff of the National Commission on Restructuring the Internal Revenue Service.
Linda Stiff has been acting commissioner since April when Commissioner Mark Everson resigned to become president and chief executive officer of the American Red Cross.
Previously, he was vice president of Darby Overseas Investments and chief of staff of the National Commission on Restructuring the Internal Revenue Service.
Linda Stiff has been acting commissioner since April when Commissioner Mark Everson resigned to become president and chief executive officer of the American Red Cross.
Monday, November 12, 2007
Nonprofits must meet new tax filing requirements
New rules require even the tiniest nonprofit to file disclosure statements online with the Internal Revenue Service by May 1, 2008 or face losing their tax-exemption.
The rules introduce a category of Form 990 filing called the 990-N, which applies to organizations with annual revenues from $1 to $25,000.
Bob Ottenhof, chief executive of GuideStar (guidestar.org), which posts reports on charity finances, told the New York Times that, "Most nonprofits are complying with the rules. The problem is with those whose primary goal is not providing charity, but using charities for personal gain or to avoid taxes improperly.”
The rules introduce a category of Form 990 filing called the 990-N, which applies to organizations with annual revenues from $1 to $25,000.
Bob Ottenhof, chief executive of GuideStar (guidestar.org), which posts reports on charity finances, told the New York Times that, "Most nonprofits are complying with the rules. The problem is with those whose primary goal is not providing charity, but using charities for personal gain or to avoid taxes improperly.”
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