In tighter job markets, recruits are often offered signing bonuses (and sometimes moving expenses) to join a firm. Sometimes construction workers temporarily relocate to jobs in other states while they are employed by the company that hired them in their home state. This article reviews some of the foundational tax concepts to consider when evaluating sourcing of income for state tax purposes.
READ MORETax pros help clients with a lot of catastrophes: wrangles with tax authorities, paltry nest eggs, more wrangles with tax authorities. More frequently, your clients might face a more tangible and cinematic disaster. These days, there’s always a storm comin’. Swept away in that destruction, for many people, are physical tax and financial records. A few precautions could have prevented such loss and made life at least a bit easier for victims. Here’s how to help clients head off trouble – and recover after it hits.
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The Cohan rule is named for George M. Cohan. George Michael Cohan (1878 – 1942) was a theatrical producer. In the decade before World War I, he was called the “man who owned Broadway” and is considered the father of American musical comedy. In 1940 he was awarded the Congressional Gold Medal for his contribution to morale during World War I with his songs “You’re a Grand Old Flag” and “Over There,” the first time the medal was awarded to someone in an artistic field. But his most enduring legacy may be the tax rule that shared its name.
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Let’s be direct: AI is one of the most powerful capacity tools tax professionals have seen in decades. Used correctly, it buys you time you can reinvest into high-value advisory: planning, structuring, audits, negotiations, strategy, client education, and relationship building. But here’s the catch that you as an elite tax practitioner already understand: aggressive planning requires rigorous defensibility. If you’re going to use AI to accelerate complex planning work, your defense file must be stronger, not weaker. This playbook gives you that: a practical framework that keeps you safe while you scale.
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Following Betteridge’s Law of Headlines, the answer to the question posed in the headline is, “no.” Actually — because we’re talking about taxes here — we can say the answer is never so definitive, so let’s change it to “probably not.” But it’s more complicated than it may seem.
If you spend any time in the world of cross-border taxes, you start to notice a pattern: the hardest problems usually begin with a deceptively simple question—who gets to tax you? And the answer is rarely as simple as “the country where I live.” That’s because tax systems don’t rely on just one concept to decide who belongs in their net. They use citizenship, residency, and domicile. These terms sound similar, and people often use them interchangeably in casual conversation, but in tax law they mean very different things. For globally mobile individuals, understanding the difference matters. You can be a U.S. citizen, a tax resident of another country, and still have your long-term home base tied to a different jurisdiction altogether. Each label can trigger different tax consequences, different filing obligations, and different planning opportunities.
The simplest way to reduce your taxable income from an S corporation is to take some of the gross receipts directly into your personal account without running them through the corporate books. Don’t mention this to your tax preparer and make sure they don’t find out. If you get caught by the IRS, though, hire an expert to explain why it is your preparer’s fault. This plan did not work all that well for a couple, both physicians, who were running two medical family medical clinics through an S Corporation called MedExpress. They ended up being liable for the fraud penalty which has the collateral effect of extending the statute of limitations indefinitely. At 75% the fraud penalty is as bad as it can get without losing your liberty.
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