Sales Tax Archives | SF Tax Counsel

18Apr 2024 by Anthony Diosdi

A Closer Look at the United States- Italy Income Tax Treaty

Sales Tax

The major purpose of an income tax treaty is to mitigate international double taxation through tax reduction or exemptions on certain types of income derived by residents of one treaty country from sources within the other treaty country. Because tax treaties often substantially modify U.S. and foreign tax consequences, the relevant treaty must be considered in order to fully analyze the income tax consequences of any outbound or inbound transaction. The U.S. currently has income tax treaties with approximately 58 countries. This article discusses the implications of the United States- Italy Income Tax Treaty.There are several basic treaty provisions, such as permanent establishment provisions and reduced withholding tax rates, that are common to most of the income tax treaties to which the United States is a party. In many cases,…

10Apr 2024 by Anthony Diosdi

Pushing Back on IRS’s Attempts to Immunize Its Employees from Subpoenas

Sales Tax

Civil litigation often follows Internal Revenue Service (“IRS”) assessments of income tax liabilities, interest, and penalties assessments. In these situations, as well as in cases involving criminal indictments, obtaining testimony from IRS employees, such as investigators, managers, or revenue agents, could be highly relevant. The question facing many litigants is how to obtain such testimony. This article will discuss the process and hurdles involved in obtaining testimony from an IRS employee. Introduction to Touhy Decision The first step in the process is to understand the Supreme Court case United States ex rel. Touhy v. Ragen, 340 U.S. 462 (1951). Touhy was an inmate in an Illinois State penitentiary who filed a habeas corpus proceeding in federal court alleging a violation of his due process rights by the warden. During the…

07Jan 2022 by Anthony Diosdi

Some Common Defenses in Criminal Tax Cases

Sales Tax

By Anthony Diosdi In previous articles, we discussed various defenses to indirect method cases, such as prior accumulated funds, nontaxable sources of net worth increases, bank deposits, improper allocation of income between taxable years, and accounting defenses. This article will focus on defenses to specific item cases. In these cases, once the Internal Revenue Service (“IRS”) establishes by proof a specific understatement of a tax liability, the question is will criminal liability follow and if so, does the taxpayer at issue have any viable defenses. The IRS has the burden of proof on this question. The IRS must tie the understatement of taxes to the defendant, demonstrating both his knowledge and intent. Translating this proposition into the language of investigative and administrative stages of a criminal tax case, the IRS…

09Apr 2021 by Anthony Diosdi

Many Fortune 500 Companies Use Foreign Subsidiaries to Avoid Paying U.S. Tax- Here is One Way Your Foreign Corporation Can Avoid Paying U.S. Income Tax

Sales Tax

By Anthony Diosdi The Internal Revenue Code provides that a U.S. shareholder of a controlled foreign corporation (“CFC”) is subject to tax on the CFC’s subpart F or global intangible low-taxed income, called “GILTI.” For many years, U.S. multinational corporations and other CFCs were able to utilize a high-tax election to defer the recognition of Subpart F income. However, when the GILTI taxing regime was announced in late 2017, a corresponding high-tax election was not available. Shortly after the enactment of the GILTI taxing regime, U.S. multinational corporations and their advisors began lobbying the Department of Treasury (“Treasury”) and the Internal Revenue Service (“IRS”) to issue regulations to permit the use of a high-tax election for GILTI income. On July 20, 2020, the Department of Treasury (“Treasury”) promulgated final regulations…

27Feb 2020 by Anthony Diosdi

The Collection of State Sales Tax in Today’s eCommerce World

Sales Tax

By Anthony Diosdi Introduction For years, retailers conducting business through eCommerce were advised that states could not require them to collect and remit sales tax on online sales unless they were ‘doing business’ in a taxing state based on the tax laws of that state. This concept was referred to as a “nexus” based on a seller’s physical presence within a state. Therefore, a seller who is determined to have a physical presence within a state would be obligated to withhold and remit sales tax to the taxing state. Examples of physical presence included but were not limited to having employees working in a taxing state, placing sales agents in a taxing state, moving business property into a taxing state, or renting property in a taxing state.Many online merchants avoided…