General Taxation

New School: The IRS Launches Educational Website

by Joshua on February 29, 2012

Imagine if a Graduate Tax program used this as its tag line — “ABC LL.M. in Taxation  – The Quick and Simple Way to Understand Your Taxes.”  I know my decision of which tax program to attend would certainly have been less agonizing, if I could choose a program where learning taxes was quick and simple.  Well, for those that have yet to embark on their graduate tax journey, you may want to check out the IRS’s new educational website called “Understanding Taxes” –where learning taxes is “quick and simple” and FREE!

There are two links on the Understanding Taxes homepage: One is for teachers that provides an “interactive tax education program for middle school, high school and community college classrooms.”  The other is for students and provides “middle schools, high schools, community colleges, and the general public with a technology-based instructional tool.”  For purposes of this post, I will focus on the Student site.

The Student site provides 38 lessons to students which are divided into two categories: “The Hows of Taxes” and “The Whys of Taxes.”  The lessons under “The Hows of Taxes” section include modules on payroll taxes and federal income tax withholding, wage and tip income, interest income, exemptions, and filing status to name a few.  Each lesson has a set of materials and a skill check (quiz) at the bottom of the lesson in order to test your understanding of the lesson.  For example, Module 1, relating to payroll taxes and federal income tax withholding provides a tutorial lesson, a fact sheet, and a simulation exercise where you attempt to help a retail store manager complete a form W-4.

“The Whys of Taxes” modules relate to various themes such as the history of taxes in the United States, fairness in taxes, and the impact of taxes to name a few.  Within each theme are lessons, which contain activities to help you learn the topic of the lesson and a little quiz to test your understanding.  I assume the IRS is expecting the lowest quiz scores to come from “The Whys of Taxes” lessons.

In addition to the separate “hows” and “whys” categories, you can access the lesson activities, tax tutorials, simulations, and assessments (quizzes) individually, through separate links provided on the Understanding Taxes Student main page.

In the end, I don’t expect “Understanding Taxes” to make US News’ top tax law specialty programs list next year.  However, for tax return preparers needing to brush up on a topic or individuals interested in learning a little something about how taxes affect their lives, Understanding Taxes is a simple and easy.


FATCA or Fiction?

by Joshua on February 22, 2012

A few weeks ago,  Treasury and the IRS released the long awaited proposed regulations on the Foreign Account Tax Compliance Act (FATCA).  FATCA was enacted as part of the Hiring Incentives to Restore Employment (HIRE) Act in March 2010.  As a result of its enactment, chapter 4 was added to the Internal Revenue Code.  The proposed regulations are intended to prevent U.S. taxpayers from playing “hide and go seek” with Uncle Sam by holding assets and investments offshore.   Below is a very general discussion of FATCA and describes some of the basic concepts in the proposed regulations by creatively adopting a “fact or fiction” format to this post.

The proposed regulations are really long.

    • FATCA.  Prior to publication in the Federal Register, the proposed regulations amounted to nearly 400 pages.  The guidance took up about 90 pages in the February 15, 2012 edition of the Federal register
    • Bonus: The IRS initially released the proposed regulations without any page numbers.  FATCA.

The proposed regulations impose a 30% withholding tax on certain payments.

  • FATCA.  Under the proposed regulations, a 30% withholding tax is applied to “withholdable payments.” Such payments include payments that are ordinarily subject to withholding tax (e.g. FDAP), including interest, dividends, and rents.  This category of payments also includes gross proceeds from the sale of any property that could produce interest or dividends from sources within the U.S.

The withholding tax applies to all “withholdable payments.”

  • FICTION.  The proposed regulations provide a number of significant exceptions to the withholding regime.  For example, certain “grandfathered obligations” are not subject to FATCA.  An “obligation” for purposes of the proposed regulations is essentially any legal agreement that could produce a withholdable payment.  The grandfather provision applies to obligations outstanding on or before January 1, 2013 and not materially modified thereafter.

A “foreign financial entity” (FFI) can also avoid the 30% withholding if they are a “deemed compliant FFI” or a      “participating FFI.”  Under the first category, certain FFIs are considered to be in compliance with the FATCA rules by meeting certain requirements.  For example a deemed compliant FFI that certifies its status to a withholding agent is a “certified deemed compliant FFI.” (Note: In general, only certain entities are considered to be “deemed-compliant” ). Participating FFIs are required to enter into an agreement with the IRS in order to avoid withholding.  Under the agreement, the participating FFI will be required to obtain certain information about its account holders in order to determine which are U.S. accounts as well as report certain information on those accounts, among other things.

FATCA starts tomorrow.

  • FICTION.  The proposed regulations provide an effective date of January 1, 2014 for withholding of FDAP and other pass-thru payments and a September 30, 2014 effective date for reporting identifying information.


How to Not Run a Tax Blog

by Joshua on December 27, 2011

Right now, I feel like a kid that just got out of time-out.  I had some time to reflect on what I have done, but I am left still feeling ashamed of myself.

I started Tax Docket in order to create a platform to reach out to other practicing and aspiring tax professionals, while furthering my interest in taxes and the law.  While I was able to keep this going for a few months, I did what many “bloggers” stop doing — blogging.  I let other things get in the way and repeated to myself the infamous line I often tell myself when I  don’t want to do something — “I’ll do it tomorrow.”

Running a blog, let alone a tax blog, requires a commitment to keeping up with current events including what others are saying about whatever it is you blog about, staying in touch with your audience, and continuing to communicate content consistently and reliably.  I may have been steeped (oftentimes buried) in the world of tax during my time in the Graduate Tax Program at NYU and now as a first-year tax associate, however, it meant nothing to my blog, because I put off sharing the information for another day.  Here are a few lessons I want to share with you about my experience that I intend on incorporating into my blogging routine moving forward with Tax Docket:

Take it slow. One of my regrets is blogging to often.  In the early days of Tax Docket, I tried to update the blog 4-5 times-a-day.  For a full-time student and now full-time associate, that is an unreasonable posting goal.  Also, posting a few times a week, rather than a few times a day, would have allowed me to post more thoughtful articles.  From now on, I will leave it to my long-lost pals over at Going Concern to provide you with your more than once-a-day tax fix.

Provide a point-of-view.  As I scroll back through my past blog posts, I realize a lot of what I did was post “up-to-the-minute” tax news, instead of focusing on providing the news, in addition to some analysis.  As an attorney, there is always that “legal advice” line you have to worry about crossing, but I think there are still ways of providing thoughtful posts without stepping over to the “unethical” side of the profession.

Keep going.  If you are like me, blogging is a part-time gig (and as of late, not a gig at all).  Like everything else that is not your full-time job, you have to find time to put blogging in your already busy schedule.  One thing my wife does, is write multiple posts in one sitting.  This is a great time management technique that ensures that your blog stays fresh with new posts.




‘Tis the [tax] season for new ways to file your tax returns. Last week we told you about a new app that allows you to file various individual and business tax returns on your iPad. Yesterday, TurboTax released a new app that allows a taxpayer to file his or her 1040EZ or state income tax return on an iPhone or Android mobile device. According to the app’s description on iTunes (Apple’s interface for downloading apps to the iPhone), filing a tax return using SnapTax is as easy as 1-2-3. First, you snap a photo of your W-2. Then, you answer a few questions. Finally, you review, pay $14.99, and e-file securely (I heard Ron Popeil saying “Just set it and forget it” as I was typing that last sentence).

For more information on this new app checkout the YouTube video below and see WalletPop’s article.


C’Mon Man! — Tax Edition

by Joshua on January 4, 2011

Fountain Soda Drink Tax! C’Mon Man!

See America’s strangest taxes, Huffington Post


The Internal Revenue Service announced that taxpayers will have an extra three days to file and pay their taxes this 2011 Tax Season. The Service explained that the extension is due because Emancipation Day, a holiday observed in the District of Columbia, falls this year on Friday, April 15. By law, District of Columbia holidays impact tax deadlines in the same way that federal holidays do. Further, taxpayers requesting an extension will have until Oct. 17 to file their 2010 tax returns.


New Year. New You.

by Joshua on January 3, 2011

After about a month of “intense” preparation for my first set of exams at New York University’s LL.M. in Taxation program and followed by a week of recovery (although recovering has been a slow process), I am back to regularly posting on Tax Docket. I called this post “New Year. New Yew” for two reasons. First, after taking a four hour corporate tax exam, it was the first thing one of the proctors said to us as we were packing up our regs, code, computers, outlines, and other food and drink items. Second, as I am sure you are aware of, I decided to give Tax Docket a little makeover. I hope you like some of the changes and I look forward to the year ahead. Thanks for reading!

– Josh

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Pop Quiz: How Much Do You Know About Tax Cheats?

by Joshua on December 15, 2010

As I continue to find things to distract me while studying for my remaining LL.M. Tax finals, I came across this humorous quiz on Howstuffworks. Enjoy. I look forward to being able to post more frequently once finals are over.


The Health-Care Bill as passed by the House of Representatives (H.R. 4872) last night will take nearly a decade to roll out in full. Within the legislation are tax changes that effect individuals and small businesses. Here is a timeline of the proposed changes as detailed in the Wall Street Journal today:


  • None


    • $2.5 Billion annual fee imposed on drug makers (rises in later years)


    • New Medicare taxes on individuals earning more than $200,000 a year and couples filing jointly earning more than $250,000 a year.
    • Tax on wages rises to 2.35% from 1.45%.
    • New 3.8% tax on unearned income such as dividends and interest.
    • Excise tax of 2.9% imposed on sale of medical devices


    • Subsidies for small businesses to provide coverage increase. Businesses with 10 or fewer employees and average annual wages of less than $25,000 receive tax credit of up to 50% of employer’s contribution. Tax credits phase out for larger businesses.
    • Employers with more than 50 employees that don’t provide affordable coverage must pay a fine if employees receive tax credits to buy insurance. Fine is up to $3,000 per employee, excluding first 30 employees.
    • Insurance industry must pay annual fee of $8 billion (rises in later years).


    • Penalty for those who don’t carry coverage rises to 2.5% of taxable income or $695, whichever is greater.


    • Excise tax of 40% imposed on health plans valued at more than $10,200 for individual coverage and $27,500 for family coverage.


    Simple Plan? New Code and New Forms

    by Joshua on February 24, 2010

    As reported earlier, Sens. Wyden and Gregg introduced a new bipartisan bill that proposes a simplification of the U.S. Tax Code. Here is a sample of a “simplified” Form 1040, U.S. Individual Income Tax Return under the proposed plan.        Sample 1040