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Tax Smart America® Reports Tax Court Decides 'Family Support' Payments are Tax-Deductible
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Added: 04/24/2006
Type: Summary
Viewed: 525 time(s)
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Tax Smart America® Reports Tax Court Decides 'Family Support' Payments are Tax-Deductible
Tax Smart America® reported today that an important tax court case heard in San Diego California, the United States Tax Court has held that some portion of family support payments are considered to be tax deductible as “alimony” payments. In the case, (BERRY vs. COMMISSIONER T.C. Memo 2005-91) the United States Tax Court held that some portion of what was defined as family support payments are to be considered tax deductible as “alimony” payments as determined under the facts in this case.
The case will have a significant impact on family support settlements, court orders regarding family support payments, and the fact that many taxpayers may now be able to amend prior year tax returns for this issue and claim refund of overpaid taxes related to deductions that may now be claimed under this decision.
The case began with the taxpayer being represented by Tax Smart America® Corporate Offices in the filing of amended tax returns based upon the analysis that some portion of the support payments appeared to represent “alimony.” The refund claim was denied by IRS, and shortly thereafter, San Diego Tax Attorney, Gary M. Erickson was contacted to move the matter into federal tax court.
The case was heard last year and was decided in favor of the taxpayer, in what many are calling an important case that will have far reaching impact on family law settlements. According to San Diego Family Law Attorney, Robert J. Steinberger, “this case will cause some need for review in support settlements in many divorce cases.”
Tax Smart America® Business Center spokesman, Daniel Love indicates that efforts will now begin to educate the tax professional community as well as the public that they may have overpaid tax refund claims resulting from this decision for as much as the past three years.
About Tax Smart America® Business Center
Tax Smart America® recently announced it is well underway in its nationwide launch of the Tax Smart America® Business Center License Program to tax professionals, as an alternative to old-style franchise models.
The company has created a number of business support programs offered only at an approved Tax Smart America® Business Center. Clients who use an approved tax professional under the program are invited to attend business support workshops to better understand basic operations from payroll to recordkeeping. A business client is then free to select from a variety of business support services and engage the approved Tax Smart America® Specialist to assist in implementing these important services much like a team approach in developing an overall game plan for the business client.
The company’s expansion plans are an effort to provide small and mid-sized CPA and Tax Firms with an alternative to the more traditional expensive old-style franchise systems, such as those of H&R Block (HRB), Jackson-Hewitt (JTX), and Liberty Tax Services. The unique methods have been in development since early 2000 with a series of innovative business systems that will provide independent tax firms with the benefits of a proven successful business program, while at the same time offer an extremely attractive low-cost license fee.
Tax Smart America® released its “Business Center” license program in cooperation with Entrepreneur® magazine with advertising on the popular magazines website.
With estimates reported at more than 60,000 to 70,000 new business start ups each month, the company believes its plans are well positioned to attract tax professionals of all types away from competitors who seem to remain fixed on the more traditional franchise and corporate-owned store model, as well as independent tax firms who desire the benefits offered in the business license models.
The company further stated, “We are very happy at the response we have received from our initial efforts. We are now working with tax professionals in more than 49 cities who have requested our license information kit and we have actually signed license agreements with some in Southern California as we continue to move our program into the marketplace. We see this as an exciting time with a new future of business licensing systems for the tax industry. We are confident that once a tax professional sees the tremendous value of these methods, they will never consider a franchise system again”, this according to company representative, Daniel Love, who is President of the parent company (SAGE).
The company went on to state that it believes significant change is in the future with such explosive growth in the numbers of new small business start-ups. Under its license model, tax-professionals at all levels, will be able to create a unique competitive advantage over the more traditional seasonal tax preparation services of H&R Block (HRB), Jackson-Hewitt (JTX), and Liberty Tax Services.
In at least two cases where the focus seems to remain fixed on the seasonal and e-filing approach with a combination of franchise owned and corporate owned stores like those of H&R Block (HRB) and Jackson-Hewitt (JTX), the company sees this as an opportunity to create an alternative to independent tax professionals under the Tax Smart America® brand name.
Tax Smart America®, Tax Smart Centers of America™, Tax Smart University™ and 59-Minute Solutions™, are licensed registered trademarks of (Smart America Group Enterprises). The company offers unique business model and educational systems for tax professionals under a unique license agreement as an alternative to old-style franchising such as that of H&R Block (HRB), Jackson-Hewitt, (JTX), and Liberty Tax.
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