Fuller, Partner, Tax Group

Backdating checks for write-off purposes

He also has no way of knowing whether the backdating will be scrutinized by a regulatory authority or even a Court. Even though it might go unaddressed for a few years, or even forever, the threat of an audit is always ever present.

Knowingly not properly reporting income, expenses and credits is a form of tax fraud and can lead to late payment interest and penalties. Backdating, in this case, may be useful as the parties, who have already begun acting on the agreement, finish the final details of the written contract. Backdating Checks for Write-off Purposes Business owners often find themselves short of cash at the end of the year, just as a huge tax bill is about to come due. This is a fraud on the tax authorities, a criminal offence and is likely to get the lawyer who prepared the document disciplined by his regulator and possibly also charged as a co-conspirator. Important Implications for Individuals The Directive instructs agents to identify the existence of any backdating issues at the beginning of any corporate examination.

If allowed, up to six-month backdating would apply as long as the buyer pays for that time period. These are questions he will probably be asked by the judge or regulator if things go wrong and to which he will need convincing answers. However, he only realizes this in January and so wishes to backdate the document to December. Tax Implications There are three principal tax issues associated with the backdating issue. The insurance company may or may not allow backdating depending on the state where the person lives.

These are questions he will

Not Filing a Return Burying your head in the sand is not a good tax planning maneuver because it will eventually catch up with you. An exception to this limitation is set forth in Treas. In order to qualify for this exception, the option in question must have an exercise price that equals or exceeds the per share value on the grant date other requirements also apply.

If allowed up to sixmonth