CCH Tax Day ReportIn a Summary Decision, the California Board of Equalization (BOE) determined that (1) an S corporation’s income should flow through to the taxpayers, rather than to an employee stock ownership plan (ESOP), under IRC §409(p); (2) steps taken by the taxpayers in connection with the acquisition of the S corporation by the ESOP, and the implementation of a management fee arrangement, were part of a sham transaction that lacked economic substance; (3) the Franchise Tax Board (FTB) properly applied the assignment of income doctrine to re-allocated income passed through by the S corporation from the ESOP to the taxpayers; and (4) the FTB properly applied the noneconomic substance transaction (NEST) penalty and an interest-based penalty for each year in issue.The S corporation in question was originally created to provide management services to another business owned by the taxpayers. The S corporation later established the ESOP for its employees established a trust fund for the ESOP to hold, invest, and administer the assets of the trust by the taxpayers, who were designated as the ESOP’s trustees. The trust fund also purchased the S corporation’s stock from the taxpayers, and the ESOP became the sole shareholder of the S corporation. The S corporation and the taxpayers’ other business entered into a management agreement under which the taxpayer-husband would provide services to the other business and the other business would pay the S corporation for those services. During the 2003 tax year, the S corporation reported a distribution of over $6 million on its tax return. The taxpayers did not report the 2003 distribution on their 2003 return. The FTB audited the S corporation and determined that it passed through all of its income to the ESOP during the years in issue. However, the auditor concluded that the creation of the ESOP was a sham transaction that lacked economic substance and treated the income as though it was passed through to the taxpayers. As a result, the FTB issued a Notice of Proposed Assessment (NPA) for the 2001, 2002, and 2003 tax years, which re-allocated the income passed through by the S corporation from the ESOP to the taxpayers. Each NPA also proposed a NEST penalty and an interest-based penalty.First, the BOE noted that, under IRC §409(p), participants of an ESOP are subject to tax if they are determined to be “disqualified persons” during a nonallocation year. According to the BOE, the S corporation stock was allocated 100% to the taxpayer-husband, which resulted in a nonallocation year in the 2001, 2002 and 2003 plan years. Therefore, the taxpayer-husband was considered a “disqualified person” under IRC §409(p) and treated as having received 100% of the deemed distributions for those years.The BOE then applied a two-prong “sham transaction” test to determine whether the transfer of the S corporation stock to the ESOP had any practical economic effects other than tax benefits by examining whether the taxpayers showed (1) a subjective business purpose for entering into the transaction, and (2) the objective economic substance of the transaction. With respect to the first prong, the evidence showed that the taxpayer-wife was the S corporation’s only employee and the other persons designated as “participants” were actually employed by the taxpayers’ other business. While the taxpayers claimed that the transactions had the business purpose of providing meaningful benefits to rank-and-file employees, the BOE determined that the evidence indicated that the transactions were actually undertaken for the purpose of sheltering the taxpayers’ income from tax. With respect to the second prong, the annual valuation stated that 100% of the S corporation stock, the sole ESOP asset, was allocated to the taxpayer-husband who, prior to the transfer, was one of the S corporation shareholders. Although the taxpayers claimed that the annual valuation was in error, they did not provided any evidence to show that there were allocations to rank-and-file employees. Finally, approximately $3.3 million of the management fees was paid into deferred compensation trusts for the benefit of the S corporation employee, which the BOE stated belied the alleged purpose of the ESOP assets (the S corporation stock) as a means of providing broad-based retirement coverage for rank-and-file employees. Thus, the transaction did not change the taxpayers’ economic position in a meaningful way (apart from the income tax effects), because they held a beneficial interest in 100% of the S corporation stock before and after the transfer. In addition, there was no evidence that the management agreement had a subjective business purpose other than as a means of shifting income from the taxpayers’ other business to the tax-exempt ESOP.The FTB claimed that if the S corporation is determined to be a separate entity, the assignment of income doctrine requires the taxpayers to report the income rather than the S corporation. According to the FTB, the taxpayers improperly assigned the “consulting” income that their other business allegedly paid to the S corporation under the management agreement and, as the only shareholders of the other business, the taxpayers should report that income. The BOE noted that the taxpayers were the only shareholders of the other business and had exclusive control over the disposition of its income. In addition, there was no evidence that the taxpayer-husband performed services as an employee of the S corporation or, even if he did perform such services, that he received reasonable compensation indicating that he was employed by the S corporation. Thus, the BOE stated that there was no evidence that the S corporation employed the taxpayer-husband and thereby had the right to control his activities and the amount of his compensation. As a result, the BOE concluded that, under the assignment of income doctrine, the payment from the other business was properly taxable to the taxpayers.With regard to the NEST penalty, since the BOE found that the subject transaction lacked economic substance and that the taxpayers did not have a valid nontax California business purpose for entering into the transactions at issue, the penalty was applicable. Furthermore, the BOE noted that (1) it was precluded from reviewing the decision of FTB’s Chief Counsel denying the taxpayers’ request for penalty relief, and (2) it did not have the authority to determine whether the penalty was unconstitutional. However, the BOE did reverse the interest-based penalty because the transaction in question was not identified by regulations as having a potential for tax avoidance or evasion.Park, California State Board of Equalization, No. 529805, March 25, 2015 (released May 2017), ¶406-689
General Manager of Wigton Windfarm Limited, Earl Barrett, says that the organisation has been busy over the last 10 months rolling out its training programme in several facets of renewable energy. “Along with accommodating scheduled instructional tours of the Windfarm for students from primary to tertiary institutions, training modules have been delivered and efforts are being made to get certification for a number of courses (so) that the students, on successful completion of their training, will be awarded certificates of competence,” Mr. Barrett informed. Story Highlights General Manager of Wigton Windfarm Limited, Earl Barrett, says that the organisation has been busy over the last 10 months rolling out its training programme in several facets of renewable energy.He said areas of focus include solar thermal, concentrated solar power, photovoltaic, fuel cells, small hydro, windpower and bioenergy.“Along with accommodating scheduled instructional tours of the Windfarm for students from primary to tertiary institutions, training modules have been delivered and efforts are being made to get certification for a number of courses (so) that the students, on successful completion of their training, will be awarded certificates of competence,” Mr. Barrett informed.He was speaking at the launch of the Wigton Windfarm-endorsed book, ‘Understanding Wind Energy: Youth Repowering the Future’, at a function held at the Petroleum Corporation of Jamaica, Trafalgar Road, in Kingston on August 16.The book, written by Wigton employee, Senior Engineer, Oswald O. King, provides a summary of the fundamentals of wind energy and how this renewable resource can be exploited for harnessing electricity.Mr. Barrett explained that participants have requested certification from the training programme “and we have been listening to our people”.“Despite the naysayers, renewable energy is here to stay, and so I encourage you all to participate in the training sessions when they are advertised,” he said.The training sessions are provided at the Wigton Renewable Energy Training Laboratory, in Manchester, which was opened in November 2016.The lab offers training courses in all areas of renewable energy, and curricula are delivered through workshops, lectures and practical lab work. Target groups include energy professionals and entrepreneurs, tertiary students and the general public.
VH1 today announced its annual “Dear Mama: A Love Letter to Moms” will premiere on Monday, May 7th at 9 PM ET/PT.Emmy and Golden Globe nominee Anthony Anderson will return as host for the third time alongside VH1 fan favorite, actress, and New York Times best-selling author La La Anthony.“Dear Mama: A Love Letter to Moms” honors mothers with celebrity guests paying tribute to the women who have shaped their success. Past A-listers who have saluted the leading women in their lives include Alicia Keys, Will Smith, Halle Berry, Queen Latifah, Mary J. Blige, Ludacris, DJ Khaled, Kelly Rowland, Robin Thicke, Chris Paul and Maxwell.“Dear Mama: A Love Letter to Moms” will take place at The Theatre at Ace Hotel in downtown Los Angeles, California.Anderson is an actor, comedian, writer and host who currently stars and executive produces the hit show “Black-ish” as well as produces the spinoff “grown-ish.” He recently won his fourth individual Image Award in the category of “Outstanding Actor in a Comedy Series.”La La Anthony, a cast member of the STARZ Network hit series “POWER,” has enjoyed a career that has crossed several genres, including producing Broadway, a burgeoning film career, best-selling New York Times author, and former radio personality.Official sponsors of “Dear Mama: A Love Letter to Moms” include Baby Dove and Honey Nut Cheerios.“Dear Mama: A Love Letter to Moms” is being produced by Flavor Unit and Jesse Collins Entertainment. Shakim Compere, Queen Latifah, Jesse Collins, and Jeannae Rouzan-Clay are Executive Producers. For VH1, Amy Doyle, Garrett English, Elena Diaz and Andria Parides are Executive Producers, and Joe Buoye is Executive in Charge of Production.A list of this year’s presenters and honorees will be announced soon.For more updates go to DearMama.VH1.com.
Brittany Hobson APTN National NewsDrugs are at the root of violence in the Sagkeeng First Nation in Manitoba where a 19-year old girl was beaten to death.That’s according to some members of the community 120 km northeast of Winnipeg.RCMP have arrested two young people for the killing of Serena McKay who was identified on social email@example.com
LSU’s Ben Simmons is a ludicrously versatile basketball prodigy whose freshman numbers already compare favorably with greats of the past. He’ll probably go first overall in this summer’s NBA draft, and deservedly so. But for all of Simmons’s brilliance, his Tigers aren’t very good — they rank 75th in Ken Pomeroy’s ratings, and at 18-12 they’re a long shot to make the NCAA Tournament.This pairing of an exceptional individual and an unremarkable team is pretty rare. When a team has a prospect as good as Simmons, it doesn’t usually lose before the second weekend of the tourney, much less miss the field entirely. To measure this, I gathered ESPN’s prospect rankings for collegiate players from 2001 through last season, tracking how far their teams went in the postseason during their final NCAA season. Among top-five prospects in that span — and Simmons ranks No. 1 this year — 87 percent were on teams that made the NCAA Tournament, with about half going as far as the Elite Eight before losing. The rest of the No. 1s went far — and I mean really far. Half went to the Final Four, and a third went to the national title game. They didn’t do it alone, though. Shane Battier, Anthony Davis and Greg Oden, for instance, generated almost exactly 25 percent of their teams’ win shares when they blazed a path to the championship game. Simmons has been a bit less productive than that trio on a per-minute basis, but he’s also generated 33 percent of LSU’s win shares this season, with his teammates creating roughly 45 percent fewer wins per game than those of Battier, Davis and Oden. If Simmons had anything close to their supporting casts, LSU probably wouldn’t be fretting about Selection Sunday.Instead, we’ll probably be left with a March Madness that doesn’t feature the nation’s best NBA prospect. That isn’t unprecedented, but it is pretty rare — and, mainly, it’s a bummer because Simmons is such an electrifying all-around talent in a sport that needs all the excitement it can get. The crew of prospects Simmons will join if LSU fails to make the tournament isn’t exactly bad — even Steph Curry ended his Davidson career in the NIT, after all. (Granted, Davidson in the Southern Conference and LSU in the Southeastern Conference are apples and oranges; perhaps a better comp for Simmons is Chris Bosh, who couldn’t elevate Georgia Tech into the tournament out of the ACC in 2002-03.) But the distribution of basketball talent is steep. Top draft picks are, on average, so much better than their peers that a No. 1-ranked prospect should probably be held to a higher standard than the rest of the top five.And, sure enough, in the 15 years before Simmons only one No. 1 prospect was on a team that missed the NCAA Tournament: Nerlens Noel, in 2012-13. The other 92 percent of No. 1s at least got to the round of 64, and even Noel’s case comes with a huge asterisk. Before Noel was lost for the season with a knee injury, his Kentucky team was on the bubble at 17-6, but improving; afterward, the Wildcats closed out the season 4-5 and stamped a nonrefundable ticket to the NIT.
The department of telecom is likely to start the auction of 2G and 3G spectrum bands from February 2015.Proposed timeline for February’s auction:- 17 October ( Finalisation of new auctioneer)- 1 December (Notice for auction applications )- 8 December (Pre-bid conference)- January 12 ( Last date for bid submission)- January 28 (List of final bidders)- February (Auction starts)The government has projected ₹9355 crore as revenue receipts from 2G auctions in its budget estimates from current fiscal and is hopeful of raising a further ₹5000 crore through the sale of 3G airwaves.The Telecom Regulatory Authority of India is expected to direct the price of 900 and 1800 MHz spectrum by October.”We will write to Trai (Telecom Regulatory Authority of India) as soon as the swap comes through,” The Economic Times quoted an official.”On 800 MHz we will write to the regulator for some more clarity once the Telecom Commission has ratified the findings of the Dot (Department of Telecommunications) committee.”The Department of Telecommunication is scheduled to auction a total of 184 MHz of spectrum in the 900 MHz band presently owned by Idea Cellular and Vodafone, the permits for which are due to expire next November.The official also explained that in the previous auctions held in February, the government sold three fourths of the total airwaves available in the 1800 MHz band and the remaining one fourth would be put up for auction next year.There are about 29 licences that would expire across 18 circles in 2015-2016, reported Business Standard.
Photo via Wikimedia CommonsFormer president George H.W. Bush.Another woman has stepped forward to accuse former President George H.W. Bush of inappropriately touching her.Roslyn Corrigan tells Time magazine that she posed for a photo with Bush in 2003 at a gathering of CIA officers north of Houston. She was 16 at the time and attended the event with her mother and father, who was an intelligence analyst.“My initial action was absolute horror. I was really, really confused,” she told the magazine. “The first thing I did was look at my mom and, while he was still standing there, I didn’t say anything. What does a teenager say to the ex-president of the United States? Like, ‘Hey dude, you shouldn’t have touched me like that?’”A spokesman for the 41st president, Jim McGrath, said in a statement Monday that Bush regrets any offensive actions.“George Bush simply does not have it in his heart to knowingly cause anyone distress, and he again apologizes to anyone he offended during a photo op,” he said.Time spoke with seven people who said they had been told by Corrigan about the encounter in the years afterward.Corrigan is at least the fifth woman to claim Bush groped her. Time reports that a sixth woman, a retired journalist in Pennsylvania, posted to Facebook last month that Bush touched her from behind during a 2004 photo opportunity.The stories came to light after television actress Heather Lind said last month that Bush, now 93, touched her from behind and told a dirty joke while they were posing for a 2014 photo. McGrath at the time explained that Bush has been in a wheelchair for about five years “so his arm falls on the lower waist of people with whom he takes pictures.” Bush, who served as president from 1989 to 1993, has vascular parkinsonism, a rare syndrome that mimics Parkinson’s disease, and he uses a wheelchair for mobility.“To try to put people at ease, the president routinely tells the same joke — and on occasion, he has patted women’s rears in what he intended to be a good-natured manner,” McGrath said.Bush was standing alongside Corrigan for the photo taken in 2003. McGrath’s statement Monday did not elaborate. Share