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Replacement of Underground Storage Tanks at Retail Gasoline Stations

Under regulations issued by the Environmental Protection Agency, petroleum companies and independent marketers owning and operating gasoline stations are required to remove and replace leaking underground storage tanks and to clean up any related contamination. The question arises as to whether the substantial costs of removal, replacement, cleanup, and monitoring are capital expenditures or are currently deductible expenses.

Taxation of Commissions

Generally, commissions are taxed in the same way as other forms of compensation. They are taxable in the year that they are credited to your account and you are entitled to draw on them. The question of whether or not you actually withdraw them is irrelevant so long as they are subject to your withdrawal.

Partnership Anti-abuse Provisions

The Internal Revenue Service has the authority to disregard the partnership form of an entity if the operations of the business are found to be inconsistent with the intent of the partnership tax statutes and the partnership form is being used for tax-avoidance purposes. According to Treasury Regulations, the intent of the partnership laws is to allow taxpayers to conduct a joint business activity through a flexible economic arrangement without incurring an entity-level tax.

Business Leagues and Trade Organizations

In order to qualify for tax-exempt status under Internal Revenue Code Section 501(c)(6), an association must show that it is devoted to the improvement of business conditions of one or more lines of business as distinguished from the performance of particular services for individual persons. The organization seeking tax-exempt status as a nonprofit business league, chamber of commerce, real estate board, or professional football league must do more than indicate the name of the organization or the object of the local statute under which it is created.

Corporation Sole Tax Scams

Corporation Sole statutes permit the incorporation of religious leaders in order to ensure the continuation of ownership of property held for the benefit of a legitimate religious organization. Generally, religious leaders such as bishops or parsons take advantage of corporation sole statutes. Creditors of a Corporation Sole may not look to the assets of the person holding the office nor may creditors of the officeholder look to the assets of the Corporation Sole. Not all states permit the Corporation Sole form of corporate structure.