Category Archives: Tax Law

End of the Calendar Year: A Good Time to Confirm Compliance Issues for Businesses

Corporations, limited liability companies (LLCs), and other business entities are certainly aware of the need to make certain end of year decisions for income tax purposes, but it also is a good time to perform a business audit for possible state, local, and personal property tax return deadlines. It is also advisable for businesses to review other corporate compliance issues, such... Read More >

Commercial Recordation/Transfer Tax Increase and Mandatory Use of New FP7

The Washington, D.C. Office of Tax and Revenue has issued an official notice of the increase on transfer and recordation tax on commercial properties where the consideration (real or imputed) is more than $2 million. The increase is effective on October 1, 2019 and is scheduled to expire on September 30, 2023. A... Read More >

Washington, D.C. Office of Tax and Revenue Homestead Unit Suspending Processing Of Homestead Applications

The division of the DC Office of Tax and Revenue that processes homestead, senior, and disabled applications (FP-100) has announced that, as of July 17, 2019, it will suspend the processing of applications, grant benefits, and tax account adjustments. This action was “taken to meet a demanding billing timeline to reconcile tax accounts” associated with the upcoming 2019 second half... Read More >

Conservation Easements: Saving Our Green Spaces or Illegal Tax Shelters?

A property owner who donates an easement of his or her property to a charitable organization for conservation or historical purposes is permitted to take a charitable deduction for the value of that donated property easement. The statutory requirements are set forth in Internal Revenue Code §170(h). There are many conservation easements that are fulfilling the intent of the legislation... Read More >

SCOTUS Opinion: Fractured Court Upholds 1855 Indian Treaty Against State Gasoline Tax

A company owned by the Yakama Nation Indian tribe transported gasoline from Oregon to the tribe’s land in the State of Washington, using the public highways. Washington sought to tax those imports. The Yakama Nation objected, citing to an 1855 treaty with the federal government granting the Nation the right to use the public highways. The Washington state courts held... Read More >

Revocable Trusts and Real Property in Washington, D.C.

When thinking about transferring a Washington, D.C. real property into a revocable trust, there are several considerations to take into account. Beginning Steps: To ensure the transfer occurs properly, a deed has to be recorded. A transfer is usually exempt from transfer and recordation taxes, provided that the trust is revocable and that the grantor remains the beneficiary. Deductions: In most circumstances, the property... Read More >

Court Applies Intergovernmental Tax Immunity In Favor Of Federal Retirees

In Dawson v. Steager, West Virginia sought to tax a federal law enforcement retiree’s pension. Under 4 U.S.C. §111, the federal government permits this so long as the state tax does not discriminate on the basis of the source of the compensation, otherwise known as the intergovernmental tax immunity doctrine. However, West Virginia, by statute, did not tax... Read More >

Excise Tax on Nonprofits: Executive Compensation

Many tax-exempt organizations will now be required to pay an excise tax on any compensation over $1 million paid to each of their top five employees. That amount of compensation, including end-of-career parachute payments, may be subject to the corporate tax rate, which is currently 21 percent. Internal Revenue Code section 4960, enacted as part of the Tax Cuts and Jobs... Read More >

Tax Treaty Interpretation: Nonjusticiable Political Question?

The U.S. Court of Appeals for the District of Columbia reversed and remanded the lower court’s decision in a case involving the interpretation of the US-Switzerland tax treaty. In Starr International Company, Inc. v. United States, No. 1:14-cv-01593  (D.C. Cir. Dec. 7, 2019), Starr sought a tax refund for a portion of the 30 percent withholding taxes automatically... Read More >

Are Business Lunches Entertainment?

The new tax legislation, called the Tax Cuts and Jobs Act (TCJA) eliminated most deductions for client entertainment expenses. Prior law allowed a 50 percent deduction for both meals and entertainment expenses, and so there was no need for businesses to differentiate between the two categories. The newly enacted TCJA eliminated deductions for entertainment, amusement, and recreation expenses, but... Read More >

Pending Emergency Legislation to Affect Tax Sales and Recordation Tax on Leases

The Washington, D.C. Council is considering B22-922: Fiscal Year 2019 Budget Support Congressional Review Emergency Act of 2018 which, among many provisions, contains a few changes of interest to real estate practitioners which are found here. Recordation Tax: On leases in excess of 30 years, the Washington, D.C. government may determine the fair market value of the leasehold interest... Read More >

D.C. Tax Rate Changes Effective October 1, 2018

The District of Columbia’s Office of Tax and Revenue has issued a notification of changes in various tax rates that will become effective on Monday, October 1, 2018. The real property tax for Class 2 properties will increase to $1.65 per $100 of value for properties worth less than $5,000,000; $1.77 from $5 million to $10 million; and $1.89 for... Read More >

Government Must Prove Specific Interference With Targeted Tax-Related Proceedings For Tax Obstruction Charge

IRS code makes it a crime under 26 U.S.C. sec. 7212(a) to “obstruct or impede, or endeavor to obstruct or impede, the due administration of” the Internal Revenue Code, either “corruptly or by force or threats of force.” The IRS investigated Carlo Marinello, and ultimately charged him with several violations of the tax code, including for tax obstruction under Section... Read More >

Exempt Organizations: Tax Reform Provisions to Watch

Part II:  Senate and House proposals By Nancy Ortmeyer Kuhn, Chair of Jackson & Campbell's Tax Group The Joint Committee on Taxation released the Senate’s “Description of the Chairman’s Mark of the ‘Tax Cuts and Jobs Act’” on November 9, 2017.  The Ways and Means Committee of the U.S. House of Representatives previously released its long-awaited tax bill on November 2,... Read More >

Exempt Organizations: Tax Reform Provisions to Watch

By Nancy Ortmeyer Kuhn, Chair of Jackson & Campbell's Tax Group The Ways and Means Committee of the U.S. House of Representatives released its long-awaited tax bill on November 2, 2017.  The bill is entitled Tax Cuts and Jobs Act, H.R. 1  (“TCJA”).  Note that there is nothing in the title referencing “tax simplification”.  The full text of the bill... Read More >

Charitable Conservation Easements

RP Golf, LLC, lost its appeal and its claim of a $16.4 million charitable tax deduction for its donation of a conservation easement on its two golf courses.  On June 26, 2017, the Eighth Circuit affirmed the U.S. Tax Court’s opinion, holding that not all of the detailed requirements for charitable conservation easements had been complied with in a timely... Read More >

The United States as a Tax Haven for Non-Citizens:  QDOT’s to the Rescue

Now that Switzerland and other off-shore locations are not as attractive to those wishing to safeguard their funds, the United States has emerged as a tax haven, of sorts, with several states providing friendly incentives for investors who are not U.S. citizens. However, foreign investors need to be aware of their potential liability for estate taxes.  U.S. property owned by... Read More >