Michael Bennington’s Post

The Pennsylvania Supreme Court has ruled that for tax years before 2023, the state did not conform to IRC Section 1031 for personal income tax. As a result, taxpayers who engaged in like-kind exchanges were required to pay state income tax in the year of the exchange, even if they deferred gains for federal tax purposes. Find out how this ruling could affect your tax situation. https://okt.to/l0OueC #TaxUpdate #IRC1031 #Pennsylvania #TaxLaw

If it looks like a tax increase and your books show it is a tax increase, it probably is a tax increase.

ITR filing 2024: A tweak leaves many taxpayers in a bind. A recent update to the income tax filing utility has left many taxpayers in a bind, forcing them to forego a valid tax rebate of up to Rs 25,000 under the new tax regime. This issue, arising from an error in the utility, contradicts the Income Tax Act, 1961, and is creating confusion and financial strain for low-income earners. https://lnkd.in/gcPHrajA

Read "This Week in State Tax" by KPMG US and stayed tuned for the release of our next State Tax and Economic Review quarterly report later this month. "State tax revenue growth continues to grow slowly, if at all, according to recent reports. The most comprehensive look in the State Tax and Economic Review by Lucy Dadayan at the Tax Policy Center indicates that for the 12 months ending March 31, 2024 (three-fourths of FY 2024 for most states), state revenues increased by only 2.2 percent in nominal terms and declined by 0.6 percent after adjustment for inflation. This rather tepid growth continued through the 2nd quarter of 2024 with the median state growth in all taxes coming in a 1.0 percent in nominal terms. This trend of moderating to negative real growth first began to appear in late 2022 after two years of double-digit increases in state tax increases." https://lnkd.in/eJXfNdMe https://lnkd.in/eXSKy_7m

🚨 Why Are Taxpayers Receiving Additional Tax Demand Notices on Capital Gains? 💼📈 If you recently filed your Income Tax Return for FY 2023-24 and have reported capital gains, you might have received an unexpected tax demand notice. 😕 This sudden surge in notices is creating confusion among taxpayers. Let's dive into what’s happening: Many taxpayers availed the benefit under Section 87A, which provides a rebate of up to ₹25,000 on taxable income up to ₹7 lakh, resulting in no or reduced tax liability. Most of them filed their returns accordingly. ✅ 💡 But what changed? On July 5, 2024, the Income Tax Department revised its interpretation of Section 87A. Under the new interpretation, incomes subject to special tax rates (like short-term capital gains on shares and long-term capital gains on assets such as property) were excluded from the ₹25,000 rebate. This change led to taxpayers receiving additional tax demand notices. 🚨💸 This unexpected move has left many questioning: Can the tax law be subject to such abrupt changes in interpretation? 🤔 Why weren't these exclusions made clear when the section was introduced? It’s important to note that prior to July 5, 2024, both the IT department’s utility and expert opinions supported the taxpayer-friendly interpretation. Yet, the revised view has now imposed an extra burden on many small taxpayers, leading to frustration and distrust in the system. 😓 We urge the authorities to reconsider this approach, as it disproportionately affects small taxpayers who relied on the earlier interpretation. Small taxpayers deserve fairness and clarity. 💬✨ Have you received a notice? 📄 Let us assist you in navigating this! Reach out to us at 📞 7665156000 or visit www.apkireturn.com for expert help! 💼👨💻 #IncomeTax #TaxNotice #CapitalGains #TaxFiling #Section87A #ApkiReturn #TaxExpert #IncomeTax2024 #tax

Within the complex landscape of the Tax Court, deadlines are unforgiving. A recent case underscores a crucial lesson: failing to meet the 90-day filing window, as outlined in an IRS notice, can foreclose the opportunity to contest tax assessments. Explore the ins and outs of Tax Court procedures in this Dollars & Sense article.

The IRS has collected over $1 billion in overdue taxes from high-wealth taxpayers, leveling the playing field for all. Learn more about this significant enforcement push and what it means for future tax compliance. #TaxLaw #IRS #TaxCompliance #BackTaxes #TaxLawyer https://hubs.ly/Q02Pl_bl0

The Massachusetts Department of Revenue has introduced a Tax Amnesty program for 2024, offering taxpayers a unique opportunity to resolve their tax liabilities with a 100% waiver on eligible penalties and potentially a limited lookback period for certain qualified taxpayers. Learn more in this EisnerAmper article: https://okt.to/9jHgcd #massachusetts #taxamnesty #tax

I believe the title of my latest article which ran in State Tax Notes this Monday, Feb. 26, 2024 sums it up nicely: "Zilka: A SALT Case the Court Must Take." Coincidentally, attorneys for the taxpayer (Carter G. Phillips at Sidley and Stewart Weintraub and Jennifer Karpchuk) filed her petition for certiorari with the U.S. Supreme Court on Feb. 23, 2024.  In Zilka v. City of Philadelphia, the Court will have to consider whether Pennsylvania and the City of Philadelphia are constitutionally required to fully credit a Philadelphia resident for the taxes she paid to another state. Diane Zilka is a Philadelphia resident who earned all of her income from working as an attorney just over the border in Wilmington, Delaware. She paid Delaware personal income tax of 5% and Wilmington, DE city income tax of 1.25% on that income, for a total tax rate of 6.5%. As a Pennsylvania and Philadelphia resident, she also paid both Pennsylvania and Philadelphia tax on that same income at the rate of 3.07% and 3.922%, respectively, for a total tax rate of 6.992%. As nearly all states do to avoid double taxation of interstate income, each of Pennsylvania and Philadelphia granted a resident credit. Pennsylvania, however, limited its credit to the Pennsylvania tax rate and Philadelphia limited its credit to the Wilmington city rate. Effectively, this policy of the commonwealth and the city meant that overall, Ms. Zilka was paying about 2% more in taxes on her income than if she simply lived and worked in Philadelphia. Looked at together, the Pennsylvania/Philadelphia regime in effect imposes a greater tax rate on her income just because she was engaged in interstate commerce. That outcome seems clearly unconstitutional and directly conflicts with the US Supreme Court's ruling just a few years ago in Comptroller of Treasury of Maryland v. Wynne, 575 U.S. 542 (2015). As Justice Alito stated in Wynne, the Maryland regime operated as a "tariff" and as the stinging dissenting opinion of the Pennsylvania Supreme Court mathematically demonstrated so does the Pennsylvania/Philadelphia regime in Zilka. The good news is that the Zilka case was decided by a 3-2 majority, one of whose members even suggested that the US Supreme Court should take up such an appeal citing to a 2022 State Tax Notes article by Professor Hellerstein, the pre-eminent authority on state and local taxes, as to why it is constitutionally irrelevant how a state divides up its tax authority among the state and its political subdivisions for measuring whether a tax policy is unconstitutional or not. The U.S. Supreme Court has four new members who might, however, think differently. Considering the direct conflict with Wynne and the constitutional importance of preventing the states from imposing unreasonable burdens on interstate commerce, Zilka is a state and local tax case appeal the Court must take.  Tax Notes  Audrey E.P. Pollitt  Stewart Weintraub Jennifer Karpchuk Carter G. Phillips

The TCJA improved the U.S. tax code, but the meandering voyage of its passing and the compromises made to get it into law show the challenges of the legislative process. https://hubs.ly/Q02vWRLv0