Blog Archives - Page 19 of 52

Tax Implications of the Paycheck Protection Program

April 23, 2026January 18, 2021 by Brotman Law

COVID-19 has left millions of Americans asking questions – some of them no more or less complicated than “what do I do now?” To help answer this question and ease the minds of Americans, on March 27, 2020, Congress signed the Coronavirus Aid, Relief, and Economic Security Act, also known as the CARES Act.

Key Takeaways

COVID-19 has left millions of Americans asking questions – some of them no more or less complicated than “what do I do now.
In this $2.2 trillion economic stimulus bill was the Paycheck Protection Program (“PPP”), an incentive for employers to keep their workers on payroll. Many business owners were left wondering what tax implications this had for their businesses.
Generally, the amount of a loan that is forgiven represents taxable income for income tax purposes in the year it is written off.

Penalties for Non-willful Violations

April 23, 2026January 15, 2021 by Brotman Law

Tax attorney consultation at Brotman Law

Often, taxpayers may neglect to comply with the tax code for reasons that have nothing to do with efforts to evade taxes. That is understandable. International tax laws, especially those associated with FBAR, are complicated and confusing.

Key Takeaways

How Does the IRS Define “Non-willful?”
Voluntary Disclosure
Conclusion

Penalties for Willful Violations

April 23, 2026January 15, 2021 by Brotman Law

Key Takeaways

Willful Penalties
Willful Violations
Possible IRS Rulings
Criminal Penalties Other Than FBAR Penalties
Guidance for Non-Compliant Clients

This is where things can go south quickly, if you knowingly did not file a FBAR. This is known as a willful violation and the sanctions can be severe.

Other Important Filing Requirements for Those with International Interests

April 23, 2026January 15, 2021 by Brotman Law

In previous chapters, I have walked you through specific forms you need to file if you have any financial ties to any foreign entities, whether they are business or personal. International transactions are already on the IRS’ radar, so you do not want to do anything to move closer to their bull’s eye.

Key Takeaways

Form 8621 – For Shareholders of Passive Foreign Investment Companies or Qualified Electing Funds
Form 8858 – Foreign Disregarded Entities and Foreign Branches (FBs)
Form 8865 – Foreign Partnerships

Filing Requirements for Those with an Interest in Foreign Corporations, Form 5471

April 23, 2026January 15, 2021 by Brotman Law

Here is yet another form you need to file surrounding any foreign accounts or other assets you may own or be associated with. This one deals with foreign corporations. If this speaks to you, keep reading.

Key Takeaways

Who Must File Form 5471
Definitions
Form 5471 Penalties

Filing Requirements for Those With Foreign Assets, Form 8938

April 23, 2026January 15, 2021 by Brotman Law

This chapter is a continuation about the form you may need to submit if you are filing a FBAR, which is Form 8938 Statement of Specified Foreign Assets Form.

Key Takeaways

Differences Between Form 8938 and FBAR
Filing Criteria for Those with Foreign Assets
Exempt Accounts and Assets

International Tax Considerations for Individual 1040 Filings

April 23, 2026January 15, 2021 by Brotman Law

Key Takeaways

1040/1040-SR – Schedule B
1040 Schedule B — Question 7a
1040 Schedule B — Question 7a Line 2
1040 Schedule B — Question 7b
1040 Schedule B — Question 8

There are many information forms associated with international taxes and we are not sugar-coating this — they are complicated. To add to the angst, failure to file these forms or not file them on time can incur hefty penalties.

Types of Foreign Income that Trigger Filing Requirements

April 23, 2026January 15, 2021 by Brotman Law

If you are a foreign business or person that does business with the U.S., then you are subject to U.S. income taxes. Some examples would be if your business has an office that generates income located in the U.S. or if a company owns rental property in the U.S. from which it derives income.

Key Takeaways

Effectively Connected Income (ECI)
FDAP Income
Foreign Dividends, Service Income, Property Sales, Rents, and Other Income
Conclusion

An Update on California’s Proposals to Tax the Rich

April 23, 2026January 8, 2021 by Brotman Law

During the summer of 2020, California’s political machinery continued to whine and hum. As its populace sheltered in place with COVID-19, two tax bills were introduced on the state’s Assembly floor.

Key Takeaways

Wealth Tax
Assembly Bill No. 2088
Income Tax May Go Up
Relitigating is Likely

How Does the FTB Handle Business Tax Collections?

April 23, 2026January 8, 2021 by Brotman Law

Key Takeaways

Partnership Collections
Field Collections
Conclusion

The people who administer state tax laws generally show up in the news only when a newsworthy case is reported, typically one involving tax evasion, a “big fish” going to jail for not paying taxes.