Taxing Nonrecourse Litigation Funding

2014 ◽  
Vol 12 (2) ◽  
pp. 85-104
Author(s):  
John Gamino
Keyword(s):  
Income Tax ◽  
Tax Compliance ◽  
Single Model ◽  
Administrative Guidance ◽  
Business Market ◽  
Starting Point ◽  
Federal Income Tax ◽  
Business To Business ◽  
Pro Forma

ABSTRACT This article examines the implications of the growing phenomenon of nonrecourse litigation funding. The increasing acceptance and use of such funding raises elemental federal income tax issues of characterization and timing for funding providers and for plaintiffs accepting such funding in exchange for agreeing to share the cash proceeds of any settlement or judgment. Emphasizing the commercial (business-to-business) market for litigation funding as it has evolved, this article addresses the lack of guidance as to the implicit tax compliance issues by testing alternative guidance models that may apply by analogy. It concludes by identifying the single model that should apply and offers a pro forma revenue ruling as a starting point for the government's further consideration of the issues and early promulgation of administrative guidance.

scholarly journals THE CASE FOR OVER-WITHHOLDING FEDERAL INCOME TAX: BENEFITS TO LOW-INCOME TAXPAYERS

2021 ◽  
Vol 12 (2) ◽  
Author(s):  
Susannah Kroeber
Keyword(s):  
Low Income ◽  
Income Tax ◽  
Tax Compliance ◽  
Single Source ◽  
Multiple Sources ◽  
Marginal Rate ◽  
Federal Income Tax ◽  
Tax Benefits ◽  
The Government ◽  
Income Taxpayers

The W-4 tax withholding form has been used by individual taxpayers for decades to calculate their tax withholdings. It is based, however, on the faulty assumption that most U.S. workers have a single source of income. This assumption has caused millions of taxpayers to incur unnecessary tax debt. The formula for calculating federal income tax withholding for employees routinely under-withholds for low-income workers who have multiple sources of income because, without substantial documentation and calculation by the employee, employers withhold as if they are the employee’s single source of income. Taxpayers may therefore see their income tax withheld at too low a marginal rate, oftentimes zero percent, and can have significant balances due on short notice at the end of the tax year.This Note documents that reality and proposes a solution. It proposes a reconception of the Form W-4 and the withholding formula through the lens of low-income filers and aims for a policy of over-withholding from those filers in order to reduce surprise tax due and related penalties. The proposed solution removes the bias towards achieving a “zero refund” from the form design by eliminating the tax-free threshold—for most filers, the equivalent of their standard deduction—from the withholding scheme. As discussed in the Note, the proposed policy would also have the benefit of increasing tax compliance, minimizing bureaucratic burdens, and providing a revenue-neutral solution for the government. This Note further suggests an extension of the proposed policy to provide a much-needed savings mechanism for low-income filers.

Analisis Manajemen Pajak Pada Industri Penyedia Jasa Telekomunikasi

2010 ◽  
Vol 2 (1) ◽  
pp. 57-69
Author(s):  
Iim Ibrahim Nur
Keyword(s):  
Income Tax ◽  
Tax Compliance ◽  
Transformation Method ◽  
Tax Burden ◽  
Tax Allowance ◽  
Straight Line ◽  
Tax Management ◽  
Family Gathering ◽  
Straight Line Method ◽  
Depreciation Methods

Tax Management must be done throughout the company’s activities. In principle, tax management can be done via good tax compliance and minimizing tax burden. The latter can be achieved by transforming non-deductible expenses into deductible expenses. For example, PT Nyambung Teruuusss Tbk. (PT. NT) must change income Tax Art. 21 paid by the company into tax allowance with gross-up method, pooling company's cars at the office instead of letting these cars brought home by the employees, outbound training for employees instead of family gathering, and other methods including converting fringe benefits into allowance. Another method to minimize tax burden is to change depreciation methods into double-declining method instead of straight-line method. With nondeductible transformation method have saved PT NT Rp 5.26 billion of corporate income tax, while depreciation methods transformation is predicted to save the company Rp 735.66 billion for an eightyear period

Mr. and Mrs. Smith: A Student Introduction to Federal Tax Compliance and Documentation

2015 ◽  
Vol 31 (1) ◽  
pp. 119-132 ◽  
Author(s):  
Michaele L. Morrow ◽  
Shane R. Stinson
Keyword(s):  
Communication Skills ◽  
Professional Practice ◽  
Income Tax ◽  
Tax Compliance ◽  
Personal Income Tax ◽  
Initial Information ◽  
Face To Face ◽  
Client Advocacy ◽  
Tax Practice

ABSTRACT In this case, students assume the role of new accounting staff tasked with the preparation of a personal income tax return and supporting documentation for a client of their firm. Students are provided prior year work papers and client communications, a copy of the prior year's tax return, as well as a letter and supporting documents from the client for the current year. To complete the case, students generate questions based on the initial information provided, meet face-to-face with the client, and roll forward a set of electronic work papers before submitting a complete current year engagement file for senior review. This case adds work papers and client interaction to the traditional tax compliance case to reinforce both the technical and communication skills valued in professional practice. The formulation of questions for the client also allows students to practice discussing technical topics in a non-technical manner and underscores the required balance between attitudes of client advocacy stressed in professional tax practice and legal requirements for “good-faith” tax return reporting. This case is appropriate for an individual income tax course at either the undergraduate or graduate level, and can be easily adapted to increase or decrease difficulty.

FEDERAL INCOME TAX

1922 ◽  
Vol 2 (4) ◽  
pp. 101-105
Author(s):  
H. L. Cunningham ◽  
Robt. J. Stute
Keyword(s):  
Income Tax ◽  
Federal Income Tax
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