Author Archives: David L. Silverman, J.D., LL.M. (Taxation)

COLLECTION OF RESPONSIBLE PERSON ASSESSMENT BARRED UNTIL JUDGMENT

Printer-friendly PDF:  Collection of Responsible Person Assessment is Barred Until Judgment.wpd Tax Law §1138(a)(1) sets forth the procedure in which (i) sales tax is determined; (ii) the determination is mailed to the taxpayer (“Notice of Determination”); and (iii) 90-day appeal … Continue reading

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Summary Determination May Enhance Tax Appeals Prospects

Printer-friendly PDF:  Summary Determination May Enhance Tax Appeals Prospects.wpd Motions for Summary Judgment are common in civil practice. Any party may so move after issue has been joined if no triable issue of fact exists. CPLR 3212. Section 3000.9(c) of … Continue reading

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Tax Outlook for 2008

Printer-friendly PDF:  Tax Outlook for 2008.wpd A.             Income Tax Personal income tax rates reached a historic low of 28% under President Reagan in 1988. Pre-EGTRRA rates were increased in 1993 to 39.6%. Under EGTRRA, the highest personal income … Continue reading

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ADVANCE RULING ON CO-OWNERSHIP PRESENTS TAX-PLANNING OPPORTUNITIES

Ownership in real estate through a partnership as opposed to mere co-ownership (tenancy-in-common) can result in vastly divergent estate and income tax consequences. Either classification may at times be preferable to the other. Rev. Proc. 2002-22 provides guidance for taxpayers … Continue reading

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Anticipating IRS Challenges to FLPs and FLLCs

Possessed of favorable tax attributes and tremendous flexibility, family limited partnerships (FLPs) and family limited liability companies (FLLCs) have proliferated over the past decade and have become an integral part of many estate plans. They can be used to manage a family business, to implement a plan of family succession and can even serve as extremely effective testamentary instruments. Recognized as separate legal entities, FLPs and FLLCs also accomplish formidable asset protection objectives. Continue reading

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Negotiating the Generaton-Skipping Tax

The Generation-Skipping Transfer (GST) tax thwarts multigenerational transfers of wealth by imposing a transfer tax “toll” at each generational level. Prior to its enactment, beneficiaries of multigenerational trusts were granted lifetime interests of income or principal, or use of trust assets, but those lifetime interests never rose to the level of ownership. Thus, it was possible for the trust to avoid imposition of gift or estate tax indefinitely. Continue reading

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Delaware Dynasty Trusts

Traditionally, trusts were viewed primarily as a means to protect immature or dysfunctional beneficiaries from themselves. Traditional trusts typically terminated when a minor child attained a certain age. Dynasty Trusts, on the other hand, seek to maximize all of the benefits of the trust arrangement, which include asset protection and tax savings, as well as the traditional objective of protecting immature or spendthrift persons. In fact, the Dynasty Trust can serve as the centerpiece of an estate plan. Continue reading

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President Bush Proposes Further Tax Cuts

President Bush has proposed a $674 billion stimulus package featuring marginal rate tax cuts and an exclusion from gross income of most dividends. Both provisions would be retroactive to January 1, 2003. The exclusion would apply only to dividends already … Continue reading

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2002 Gift and Estate Tax Decisions of Note

The viability of and the discounts attributable to interests in family entities were again the subject of considerable litigation in 2002. The Fifth Circuit in Estate of Strangi, 293 F.3d 279, affirmed the Tax Court’s holding that Strangi’s estate planning … Continue reading

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Requirement of Filing Federal Gift Tax Return

A.      Introduction The requirement of filing a federal gift tax return arises when one has made a completed taxable gift. Incomplete gifts do not impose any gift tax filing requirement. Thus, the donor’s gift of a diamond ring would exemplify … Continue reading

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2002 Regs., IRS Rulings & Pronouncements

EGTRRA now permits a retroactive allocation of GST exemption. For example, assume parent creates a trust for child which provides for outright distribution to child at age 30. Normally, parent would not allocate GST exemption to such a transfer, because … Continue reading

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Supreme Court Upholds NYC Tax Liens Against India

The Supreme Court has held that the Foreign Sovereign Immunities Act (FSIA) does not immunize a foreign government from a New York City declaratory judgment action brought to declare the validity of real property tax liens asserted against India. Permanent … Continue reading

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Recent IRS Rulings and Pronouncements — October 2007

The IRS has granted return preparers transitional relief from the revised IRC §6694 penalties enacted under the Small Business and Work Opportunity Tax Act of 2007. The Act made significant changes to return preparer penalties under IRC § 6694, effective … Continue reading

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Tax Appeals Tribunal Finds Pole Dancing Not Exempt from Sales Tax as a “Dramatic or Musical Arts Performance”

The Tax Appeals Tribunal by decision dated April 14, 2010, granting the exception of the Division of Taxation, reversing the Determination of ALJ Catherine Bennett, and sustaining the Notice of Determination, held that admission charges imposed on patrons to enter … Continue reading

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The Continued Importance of Gift & Estate Tax Planning

Although the estate tax is repealed effective January 1, 2010, fiscal considerations may cause Congress to “repeal the repeal” allowing the estate tax to remain, albeit with a higher applicable exclusion amount, perhaps $3.5 million.  Time-tested estate tax planning techniques … Continue reading

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