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On December 22, 2017, Governor Andrew M. Cuomo signed an executive order that allows homeowners in New York to prepay their 2018 property taxes by the end of 2017. The goal is to mitigate the impact of H.R. 1 (known as the “Tax Cuts and Jobs Act”) signed into law by President Trump which modifies and limits the state and local income tax and property tax deduction. Under prior law, in general, subject to the alternative minim tax, state and local income tax and property tax could be deducted from federal income taxes of an individual if the taxpayer itemized their deductions, even if the deduction was unrelated to business or for-profit activity. The Act modifies this deduction for state and local income and property taxes, subject to a $10,000 exception ($5,000 for married taxpayer filing a separate return). It should be noted that foreign real property taxes are not subject to this exception and therefore, foreign real property taxes cannot be deducted.*1

The Act also provides that one cannot prepay their 2018 income taxes in 2017 to avoid this change in 2018. However, such limitation does not apply to property taxes. Therefore, state and localities are encouraging their constituents to prepay their property taxes before year-end, if possible. We also encourage our clients who might be affected to do the same.

*1 For your convenience, we have included Section 11042 of the Act.


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President Donald J. Trump signed into law H.R.1 (known as the “Tax Cuts and Jobs Act” and hereinafter referred to as the “Act”). The Act made certain modifications of the gift and estate tax exemption. In general, under prior law, US citizen or residents are subject to US gift and estate taxation subject to an exemption amount. The exemption amount was set at $5 million for 2011 and is indexed for inflation for later years. For 2017, the inflation-indexed exemption amount is $5.49 million. The exemption used during life to offset taxable gifts reduces the amount of exemption that remains at death to offset the value of a decedent’s estate. The Act doubles the estate and gift tax exemption for estates of decedents dying and gifts made after December 31, 2017, and before January 1, 2026.*1 This is accomplished by increasing the exemption amount from $5 million to $10 million. The $10 million amount continues to be indexed for inflation occurring after 2011. The provision is effective for estates of decedents dying and gifts made after December 31, 2017. Of particular importance is that the doubling of the exemption amount expires for tax years 2026 and beyond. In addition, the provision could be modified before then depending on the political party in power. Therefore, we recommend that clients take advantage of this provision and reevaluate their gift and estate planning needs.


*1 For your convenience, we have included Section 11061 of the Act. 


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It has been reported that the IRS has shifted focus to auditing taxpayers who were previously denied entry into the Offshore Voluntary Disclosure Program (“OVDP”). Approximately 6,000 are in in focus. The IRS is also encouraging delinquent taxpayers to hurry into compliance if they have not already done so.

We encourage taxpayers who have been evaluating their options to make a decision and come into compliance. The IRS’s patience may be running thin. In addition, the IRS is receiving information from various sources, including exchange of information under FATCA. Once an audit begins, your options for penalty abatement may be limited.

Feel free to contact us with any questions or if you need assistance with your case. We are happy to assist. 


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The ICIJ released what is now known as the “Paradise Papers,” which claim to reveal tax avoidance strategies of the rich and famous. 1 In particular, the papers claim to:

  • Reveal offshore interests and activities of more than 120 politicians and world leaders, including Queen Elizabeth II, and 13 advisers, major donors and members of U.S. President Donald J. Trump's administration
  • Expose the tax engineering of more than 100 multinational corporations, including Apple, Nike and Botox-maker Allergan;
  • Reveal tax haven shopping sprees by multinational companies in Africa and Asia that use shell companies in Mauritius and Singapore to reduce taxes;
  • Shine a light on secretive deals and hidden companies connected to Glencore, the world’s largest commodity trader, and provides detailed accounts of the company’s negotiations in the Democratic Republic of the Congo for valuable mineral resources; and
  • Provide details of how owners of jets and yachts, including royalty and sports stars, used Isle of Man tax-avoidance structures.

Appleby appears to be the law firm at the heart of the leak. It is an offshore law firm with around 470 people, having 10 offices, primarily in offshore tax havens. It apparently had 31,000 US clients.

1 See

While many of items highlighted by the papers are legitimate tax planning strategies and therefore should not be correlated with a negative connotation notwithstanding media bias, we encourage our clients to review the release and to compare them with their tax filing obligations. Clients ensnared by the release of these documents should make sure they have filed all requisite forms with respect to their offshore holdings. The US requires substantial information reporting relating to offshore holdings and activities. Failure to file the appropriate forms may result in significant penalties. For example, willful intent to file an FBAR may result in penalties up to fifty percent (50%) of the account balance. We also encourage our clients that have any offshore holdings to review their historical compliance, notwithstanding the use of Appleby. It appears that attacks on offshore service providers will continue and may only get worse. The desire to obtain confidential information for political or nefarious gains is real and should be taken seriously.

Should you have any questions relating to this release or need assistance, feel free to contact us. We would be happy to assist.




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Dear Clients and Friends:

The IRS has provided relief for partnerships who filed their extension by 4/18 instead of 3/15. As noted in prior client alerts, the deadlines were switched for tax years 2016 and thereafter. Some persons may not have been aware of, or were confused by, the switch. Therefore, in general, the IRS is providing relief, as long as the extension form was actually filed by 4/18 and the partnership return is filed by the due date of 9/15 with respect to calendar year taxpayers.[1]

Enclosed you will find the Notice 2017-47 describing the requirements for relief in more detail.

Please do not hesitate to contact us with any questions.



[1]          The IRS also later applied the relief to REMICs. 


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Dear Clients and Friends:

This is a friendly reminder that the new entity US federal income tax filing deadlines for companies that filed a timely extension with respect to the 2016 tax filing year are, in general, as follows, as follows:

·       Partnerships: 9/15

·       Corporations: 10/15

Congress changed the law on partnership and corporation filings. Under the new law, before January 01, 2026, corporations would still have to file by 9/15; thereafter, the deadline would be 10/15. However, the IRS has provided for a six-month extension for corporations for the 2016 calendar year.[1]

You should check, however, that, to the extent there is a state and local income tax filing obligation, such deadlines follow federal.[2]


[1]          See, instructions to Form 7004.

[2]          In general, NYS and NYC follow federal.