How The Gift Tax Works

    




    
Each year millions of Americans give a gift to other individuals that they know. Gifts can be considered anything from a new vehicle, to a trip, to a piece of land. A gift tax is a tax that is imposed when an individual gives away a certain amount of gifts that are considered valuable.
According the Internal Revenue Service (IRS), an individual who gives a gift or a combination of gifts to one person that is valued at over eleven thousand dollars must pay a gift tax. The Internal Revenue Service (IRS) does not require that the individual who received the gift pays the gift tax. The only individual who is responsible for reporting and paying the gift tax is the person who gave the gift away. A gift is when something is given away at no cost. The Internal Revenue Service (IRS) defines a gift as something that is given away without receiving anything of similar value in return. Gifts that are recognized by the government include property and money.
There are a number of exceptions to the gift tax imposed by the Internal Revenue Service (IRS). Gifts that are given to a spouse are not considered taxable. Another gift tax exclusion includes gifts that are used for education or medical expenses. This gift tax is often applied when a close family friend or family relative pays a portion of the college tuition expenses or medical expenses of someone they know. Gifts that are given to a charity are also not considered taxable. Individuals can donate thei r land, their vehicle, or money to an established charity and it will not be considered taxable. http://www.taxhelpdirectory.com/taxstratagies/.
Individuals who give a taxable gift that exceed eleven thousand dollars are required to file a Form 709: United States Gift (and Generation-Skipping Transfer Tax Return). The Form 709 can be obtained by contacting the Internal Revenue Service (IRS) or by printing the form off of the Internet. It is also possible to obtain an online form by visiting the website of the Internal Revenue Service (IRS) at http://www.irs.gov. This form comes in a PDF format that al lows individuals to enter in their information using the computer, and they can print off the completed forms to be mailed to the Internal Revenue Service (IRS).
In addition to the eleven thousand dollars a year gift tax restriction, individuals are also subject to a lifetime gift tax limit. That lifetime limit is one million dollars. Individuals who exceed one millions dollars in gifts in any number of years are required to start paying taxes on any more gifts that are given in the future. This means that even if an individual gives a gift that is less than eleven thousand dollars, the next year they are still required to pay a gift tax because they exceeded th eir lifetime gift tax allowance.
Giving another individual or charity a gift of money or property is a great way to reduce the likelihood of having to pay an estate tax later on in life. In addition to offering a number of tax benefits, a gift also allows individuals to give back to their children, family, friends, or community.

About The Author

Gray Rollins is a featured writer for the Tax Help Directory. To learn more about the gift tax, visit http://www.taxhelpdirectory.com/morehelp/gifttax/ and for more answers to tax questions, visit http://www.taxhelpdirectory.com/morehelp/taxquestion/.

    

    

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How Are You Liable Under The Sarbanes Oxley Act

    




    



With the passage of the Sarbanes Oxley Act, two different legal routes for punishment were created, one for criminal penalties and one for civil penalties.
The civil penalties for the Sarbanes Oxley Act are listed under 15 U.S.C. ?7241 (Section 302). These penalties are designed to make certain full and accurate financial disclosure is made, and requires signing officers to be personally accountable for the papers they are signing off on. Implicitly under the Sarbanes Oxley Act, they are agreeing that they're responsible for establishing and maintaining internal controls, and that they have ensured that all of a company's material information necessary for investors to make intelligent decisions is made known by internal procedures of the company.
This guarantees that, unlike the MCI and Enron officers of yesterday, tomorrow's executives cannot plead ignorance. If they are ignorant of the daily finances of their own company, they have no one but themselves to blame. After all, they were the ones who designed the internal controls and promised to ensure these controls worked properly.
In addition, under the Sarbanes Oxley Act officers are required to evaluate the effectiveness of these controls, and to report on their conclusions after the testing.
Section 404 also requires that management produce an internal control report for each annual Exchange Act report. These reports guarantee every year that management signed off for responsibility on under the requirements of the Sarbanes Oxley act. Ultimately, Congress has made the SEC responsible for ensuring regulations related to these provisions are communicated and enforced.
Criminal Penalties for Violating the Sarbanes Oxley Act
Criminal penalties for the Sarbanes Oxley Act are found under 18 U.S.C. ?1350 (Section 906). Among them are:
1. a whistleblower's protection clause;
2. a clause invoking criminal penalties if corporations destroy, alter, or conceal documents relating to a criminal or civil investigation by the Federal government, or that relate to a bankruptcy proceeding;
3. a clause extending criminal liability to accountants who do not maintain a complete audit paper trail.
Federal mail fraud statutes have been extended to cover many fraudulent business practices associated with the Sarbanes Oxley Act and very serious criminal as well as civil penalties for corporate officers who certify financial statements as accurate when they are aware that these statements are not.
Corporate officers are highly liable in many phases of the Sarbanes Oxley Act. Moreover, ignorance is not an acceptable excuse. Corporate officers are expected to be accountable for the contents of anything they sign off on, and if they don't know what's in the document it's considered to be their own fault.
Oddly, the one item not specifically listed as making you liable for either civil or criminal penalty is not signing off on financial statements at all. This may be to prevent corporate officers who dispute the accuracy of a statement from being damaged by someone else's errors.
In order to protect yourself from penalties in the Sarbanes Oxley Act, you should get some sort of training on how the Sarbanes Oxley Act affects you specifically. For larger corporations, complete training for each section of your company affected, as well as overall training to let each section know how the Sarbannes-Oxley Act affects the company at large, is recommended.

About The Author

Earl Powers, US Lawyer and Sarbanes Oxley Bill expert at Aquest Group LLC ( http://www.sarbanes-oaxley.info ) publishes other articles related to Sarbanes Oxley Bill at http://www.sarbanes-oxly.info and http://www.compliance-sarbanes-oxley.info.

    

    

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