Volume 22 Issue 2 -- January/February 2010
Wouldn’t it be nice if you knew everything there was to know about tax law? But that would be a very tall order, indeed.
National Taxpayer Advocate Nina Olsen, writing in The Wall Street Journal, in April, 2009, estimated that the Tax Code (just the part written by Congress, not including any regulations!) includes more than 3.7 million words. The text of the Internal Revenue Code, as available from the US House of Representatives, runs to more than 3,600 pages.
Worse, perhaps, than the length of the Code itself is its ever changing character. Congress just cannot leave it alone! Again, Nina Olsen counted more than 3,250 changes to the Code between 2001 and 2009, averaging more than 1 change every day for 9 years!
How can a conscientious tax professional cope with this?
One way is to get knowledgeable, professional help. Tax & Business Professionals has been providing such assistance to attorneys and accountants for more than 20 years. The nature of our services has evolved with the times.
When Tax & Business Professionals first started in 1988, virtually all of its contact with its clients was by telephone, regular mail, and fax. While those options are still available, increasingly many clients find it quicker and easier to communicate by email. Clients can send us questions by email and we can respond the same way, often within 24 hours.
Not only has the mode of communication changed, but also the range of the services we offer and the use clients put them to.
Naturally, we assist clients in answering hard or unusual tax questions. Many clients use Tax & Business Professionals as their tax partner, a friendly and knowledgeable colleague who is available by phone or email to discuss tax issues, planning options, or just to get a second opinion on a tax question. The scope of our services can be as large or small as the client’s situation dictates.
In recent years, as the world has seemingly grown smaller, the number of international tax issues that tax professionals face has grown substantially. Tax & Business Professionals has helped clients deal with issues such as tax treaty questions, foreign currency transaction issues, and tax planning for businesses that operate across national boundaries. This has enabled Tax & Business Professional clients to provide additional services to their valued clients, without having to refer the client to another tax firm.
Some clients have leveraged our services to expand the range of their own practices. For example, one client, who had never done an estate tax return, used the assistance of Tax & Business Professionals to prepare his first one. Armed with that experience, he soon after acquired several new estate clients.
In contrast to many tax assistance service providers, Tax & Business Professionals gives clients access to tax attorneys, who understand both the legal and the tax aspects of transactions.
Many clients, for example, come to us with questions about trust and estate planning transactions. One client needed help to figure out the income tax consequences of certain partnership and LLC structures that an estate planner had created, without consulting with the accountant who would eventually have to handle the tax reporting.
The estate planner had created several separate single-owner limited liability companies, ownership of which was then transferred to a limited partnership, interests in which were then given to other family members. Understanding the nature and the purpose of these legal structures was essential to determining the correct income and gift tax treatment, and Tax & Business Professionals was able to help the client on both counts.
Another way in which Tax & Business Professionals can help clients is through planning assistance. For example, because of current economic conditions, now may be a favorable time to consider “converting” C corporations to partnerships or S corporations for tax purposes. Although such a transaction is taxable, it can make sense to do this now, particularly where many businesses have recorded net operating losses that can be used to reduce the adverse tax consequences of the “conversion.”
In planning such transactions, however, there are least 4 or 5 different methods or different legal routes to take to reach the desired result. Which is better under a given circumstance depends upon a number of tax and non-tax factors, including applicable state law. Tax & Business Professionals can help with this sort of planning task.If you have further questions about this, call Tax and Business Professionals.
By Tax and Business Professionals, Inc.
9837 Business Way
Manassas, VA 20110
While designed to be accurate, this publication is not intended to constitute the rendering of legal, accounting, or other professional services or to serve as a substitute for such services.
Redistribution or other commercial use of the material contained in Tax & Business Insights is expressly prohibited without the written permission of Tax and Business Professionals, Inc.