The Treasury Inspector General for Tax Administration (“TITGA”) recently has released a report on the status of efforts by the Internal Revenue Service (“IRS”) to develop the digital asset monitoring and compliance strategy mandated by Congress with the Inflation Reduction Act of 2022. For purposes of federal taxation, a “digital asset” is defined as “any digital representation of value which is recorded on a cryptographically secured distributed ledger or any similar technology as specified by the Secretary.”[1] This includes non-fungible tokens and virtual currencies. As part of the Infrastr ..read more

This article provides some brief insight surrounding the initial steps in making an S election. The entirety of issues that may arise can often be mitigated, if not entirely avoided, with proper tax planning. The scope of this article should familiarize a taxpayer with the different tax statuses of businesses and the legal eligibility requirements of S corporations. Many business owners may find the tax treatment of an S corporation to be preferential to that of a C corporation or partnership. Subchapter S, while thorough, does provide a less complex set of rules. However, to avail oneself to ..read more

The estate tax is a tax on transferring assets from a deceased person to their heirs or beneficiaries. The federal estate tax in the United States is imposed on the transfer of the taxable estate of every decedent who is a US citizen or resident. The taxable estate includes all assets that the decedent owned or controlled at their death, such as real estate, investments, and personal property. The history of the US estate tax dates back to 1797, when Congress imposed a tax on the value of legacies and inheritances. Since then, the estate tax has undergone numerous changes and revisions. In its ..read more

Explaining a Foreign Trust in Easy-to-Understand Language In this global economy, it’s becoming increasingly common for U.S. citizens and residents to have financial ties overseas. These financial ties often come in the form of foreign bank accounts, real estate holdings, and trusts. Foreign trusts in particular are subject to special rules under the Internal Revenue Code (“IRC”).  However, understanding what constitutes a foreign trust and its treatment under the IRC can be difficult even for the most seasoned lawyer. What is a Trust? The Internal Revenue Service (“IRS”) defines a trust ..read more

Throughout the history of the U.S. stock market, individuals have used insider access to information to gain an unfair advantage over other investors. The use of material non-public information (“MNPI”) in financial trading by corporate insiders has long been a significant concern of the U.S. government and investors. For such insiders, being accused of insider trading can have devastating consequences, especially due to the public nature of these cases in the media. Even if the charges are dropped or if a trial results in an acquittal, the simple fact of being accused can result in damage to ..read more

Mexico’s robust economic landscape and hospitable business setting establish an appealing choice for investors aiming to make their mark in the Latin American market. Understanding the various corporate legal entities available in Mexico is essential for making an informed decision when setting up a business from a U.S. and a Mexican perspective. This article will address the types of Mexican corporate legal entities, namely the Sociedad Anónima, Sociedad de Responsabilidad Limitada, Sociedad Anónima Promotora de Inversión, and Sociedad Civil to guide investors through their characteristics, b ..read more

Since their establishment in 1974, Employee Stock Ownership Plans (“ESOPs”) have become a popular and effective mechanism for private companies (both C corporations and S corporations) to provide employees an opportunity to share in the potential growth of their employer’s stock, as well as help the company with its business. ESOPs provide several important benefits.  ESOPs can assist with succession planning for owners of private companies who want to transition flexibly out of their business and wish to sell their shares using this method.  ESOPs also enable companies to align the ..read more

Fewer taxpayers are subject to gift taxes thanks to a $12,920,000.00 lifetime gift tax exemption for 2023. Because many taxpayers do not fall under the exemption amount, they do not necessarily have to file a gift tax return. However, taxpayers who are required to file a Form 709 should know about common mistakes made on Form 709 to avoid incurring tax liabilities from the Internal Revenue Service (“IRS”). A Few Updates Taxpayers should be aware of the following updates regarding IRS Form 709. Notably, in 2020, in response to the Coronavirus Pandemic, the IRS enabled Form 709 to be accepted di ..read more

The Internal Revenue Code (“IRC”) authorizes the use of levies to collect delinquent taxes. [1] An IRS levy is the actual legal seizure of a taxpayer’s property to satisfy a tax debt. By contrast, an IRS lien is a legal claim against a taxpayer’s property used to secure payment of a tax debt. There are two primary types of levies. The first kind of IRS levy has a “one-time” effect. In this scenario, the IRS takes the asset all at once. The second kind of IRS levy has a continuous effect. These levies remain in place until the IRS releases the levy or the taxpayer’s debt is satisfied in full. T ..read more

FinCEN Issues Proposed Rule Requiring Real Estate Professionals to Report Transfers of U.S. Residential Real Property The Treasury Department’s Financial Crimes Enforcement Network (“FinCEN”) has issued a proposed rule under the Bank Secrecy Act (“BSA”) requiring that real estate professionals report certain information regarding transfers of residential real property to legal entities or trusts. Reasons for Proposed Rule When issuing the proposed rule, FinCEN expressed concern that “[t]he United States’ stable real estate market and strong property rights protections make U.S. residential rea ..read more