May, 2011

Message from Nelson & Company, P.S., CPAs

Offshore Account Amnesty - Sort of.

The IRS is offering taxpayers with undisclosed income from offshore accounts one more chance to participate in a new, voluntary disclosure initiative to get current on their tax returns. The 2011 Offshore Voluntary Disclosure Initiative (OVDI) will be available only through August 31, 2011.

The 2011 initiative has a higher penalty rate than the previous voluntary disclosure program, which ended October 15, 2009, but it offers clear benefits to encourage taxpayers to disclose foreign accounts now rather than risk IRS detection and face criminal prosecution later. The 2011 initiative includes new guidelines to provide fairness to people with smaller amounts of undisclosed assets or unusual situations.

Now is your chance to come clean - you only have until August 31, 2011.

For more information, go to: http://www.irs.gov/newsroom/article/0,,id=235695,00.html


David S. Nelson, CPA, CTRS
NELSON & COMPANY, P.S.
Certified Public Accountants

Business Owner? - Benefits of an LLC.

If you have employees and are not either a Corporation or an LLC, YOU SHOULD BE!
The IRS has ruled that business owners under an LLC (even if you only file as a sole proprietor/Schedule C), would only be held responsible for the employee portion of payroll taxes if the business suffers financial difficulties.

Employ Your Children!
Not only do children need to develop a good work ethic, they must learn how to earn. You can help them do this and earn yourself a little tax break by having your dependent children perform work for you for compensation. 

This is especially beneficial if you are in a 35% + tax bracket and your kids don't have an income. In 2010, they were entitled to a standard deduction of $5,700 - this means the first $5,700 you paid that child would have shifted income from your 35% to them - tax free.

Contact us for details.

IRS Times & Inquirer

Inside This Issue...

Nicolas Cage Examined by the IRS
Ozzy and Sharon Owed $1.7 Million


Nicolas Cage Examined by the IRS

Actor Nicolas Cage, broke and already under IRS scrutiny, now has even more trouble courtesy of the taxman.

The IRS filed a tax lien against Cage in Los Angeles that reports he owes $624,934.64 in unpaid taxes. From 2004 to 2009, Cage gave gifts worth a combined $1.8 million. Givers of large gifts must pay a 35% tax on the value of those gifts and Cage did not.

Cage, who won a Best Actor Academy Award for his portrayal of a drunk in Leaving Las Vegas, reportedly owed $14 million to the IRS in 2009. The actor later blamed his accountant, who he said had sent him "down a path of financial ruin".

As unfortunate as that may be, guess who is going to get stuck with the tax bill.


Ozzy and Sharon Owed $1.7 Million

Ozzy and Sharon Osbourne owed $1.7 million in back taxes to the IRS.

The pair paid the tax debt after the IRS filed a lien in Los Angeles that showed they owed $718,948.25 for 2008 and $1 million for 2009.

The couple blamed their tax troubles on bad advice. Sharon Osbourne, who has more than 400,000 followers on Twitter, tweeted: "You can't rely on anyone but yourself. You have to be on top of your own business affairs. My fault...lesson learned."

Sharon later spoke about the debt on her TV show The Talk.

"I get a phone call from [gossip website] TMZ telling me there's a lien on my house, and I'm like, 'Oh dear. I'd better call my accountant'."

Sounds like Sharon has learned her lesson the hard way, but learn it she did.




--Our Policies-- www.DNelsonCPAs.com

Nelson & Company, P.S., CPAs Since 1979

====NOTICE REQUIRED BY IRS====
Circular 230 Disclosure:
To ensure compliance with requirements imposed by the IRS, we inform you that (i) any tax advice contained in this communication (including any attachments) was not intended or written to be used, and cannot be used for the purpose of avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing or recommending to another party any transaction or matter addressed herein.

 

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