Tax Planning Services


At Tax Client Services, we reduce your tax bill through effective tax planning. We do not hesitate in spending time reviewing alternative and creative ways to structure your transaction to minimize your tax liability. Though reduction of your tax liability is our ultimate goal we will also consider your business objectives, the tax posture of all of the parties to the planning transaction, as well as any financial reporting concerns. Our primary mission is to help you arrange your financial affairs in order to optimize your tax liability considering and valuing your business objectives first before implementing any tax planning strategy.

Tax planning and tax advice encompass a “diverse range of services, including assistance with tax audits and appeals, tax advice related to mergers and acquisitions, employee benefit plans and requests for rulings or technical advice from taxing authorities. Planning can be divided into two types of transactions: open-fact or closed-fact.

Types of Tax Planning Transactions

Open-Fact Tax Planning – In an open-fact transaction, the transaction has not been completed as the facts have not yet been fully established. The transaction is in the early formative or projected stage. There is still an opportunity to plan anticipated facts to get a better tax result. As an example, if an agreement for the sale has not yet been signed, the taxpayer can still structure the agreement (modify the facts) so that the tax consequences of the transaction are more favorable. That is, with this type of transaction, modifications can be made before the transaction is closed to obtain a more favorable tax treatment.

Closed-Fact Tax Planning – In a closed transaction, all of the facts have been completed as the transaction has occurred; therefore tax planning may be limited to the presentation of the facts to the IRS in a more favorable, legally acceptable manner. The confusion with this type of tax planning transaction is the unfound belief that the consequences to the taxpayer are fully determined without any tax research and no additional tax planning is possible. That may not be the case. At times additional through research will uncover support for a legislative, administrative or judicial tax law position that provides an opportunity to legally lower the taxpayers tax liability. At TCS, we fully research the transaction and only then do we focus on how to present the information in a taxpayer positive legally acceptable manner to the IRS.

It is very important to understand that a significant part of tax planning for both open and closed transactions is not only to fully gather and understand the facts but the thoroughness of the tax research. Without excellent tax research skills, tax planning, whether open or closed can cause considerable problems for a client. Many clients are unaware of how important their tax professional’s tax research skills are to their financial tax health.


Tax Research Skills

Tax Credentials – Before hiring your tax professional for any tax planning project make sure they have a true mastery of “tax law”. Look at both the tax professionals education and credentials. To ensure your tax professional has a high level of tax sophistication I recommend using the services of a Tax CPA (a CPA with a Masters in Taxation) or a Tax Attorney (an Attorney with a LLM (Masters in Tax law)).

Be fully aware of who you choose to work with you with your tax planning. You should treat this decision no differently from who you would see if you were sick. Would you risk your health seeing a nurse when a doctor is available? Would you have a generalist doctor operate on you when a specialist is more qualified? This same analogy applies in the tax field. Would you see an enrolled agent when a CPA is better qualified? Would you have a CPA work on a complex open or closed fact planning transaction when a “Tax CPA” or “Tax Attorney” is more qualified?


Tax Planning Techniques

At TCS, we focus on tax planning techniques that maximize after tax cash flow. We do not focus on the lowest tax liability possible approach to tax planning as this could result in lowering your net revenue from the transaction defeating the purpose of the tax planning. We also spent the time necessary to fully gather the facts as surprisingly many IRS disputes focus on questions of the correct facts in-addition to interpretation of tax law. Some of our tax planning techniques discussed below include: deferring the receipt of income; characterizing capital outlays as ordinary; legal benefits of using different business entity forms; cost segregation analysis; maximizing individual and business deductions; structuring corporate acquisitions; avoiding distribution of corporate dividend through distributions in redemption of stock; and international tax planning techniques.

When possible we increase your allowable retirement plan contributions; accelerate your charitable contributions; maximize your allowed debt financing versus equity financing, etc. We work with you to convert ordinary income into capital gain; convert active income to passive income for purposes of maximizing your passive loss deduction; convert passive expenses to active expenses thereby allowing you to offset these expenses against your active income; assist you with making lifetime gifts to family members; maximizing savings vehicles (e.g., life insurance and single-premium annuities); creating, increasing, or accelerating your tax deductions through allowed legal means.

Transactions executed to achieve efficient tax planning must withstand anti-abuse challenges such as economic substance, sham transaction, and business purpose and therefore we carefully review and avoid these tax traps (e.g., reasonable compensation challenges, below market loan issues, step transactions, related party problems, etc).

Deferring the receipt of Income – Planning for deferral may be allowed in certain instances where the income is deferred until a subsequent transaction occurs. This may be accomplished through the concept of “substituted basis”. There are two general types of these non-recognition planning techniques.

The first type involves the transfer of property from one person to another with full or partial non-recognition of the gain realized from the transfer by the transferee. The property is treated as “transferred basis property” in the transferee’s hands and the transferee determines basis in whole or in part by reference to the transferor’s basis. This type of non-recognition provision includes such transactions as transfers between spouses, gifts, and transfers of property to controlled corporations, partnerships, etc.

The second type involves a taxpayer’s acquisition of one property in exchange for another with full or partial non-recognition of the gain realized from the transfer. The property is treated as “exchanged basis property” in the hands of the taxpayer and its basis is determined in whole or in part by reference to the taxpayer’s basis in the property formerly held. This type of non-recognition provision includes transactions such as, the receipt of stock for property contributed to a controlled corporation, the receipt of a partnership interest for property contributed to a partnership, the exchange of property for property of a like-kind, the reacquisition of certain real property by a seller, involuntary conversions, etc.

Characterizing Capital Outlays as Ordinary Expenses – We review the theory and practical application of the tax principles and doctrines determining whether an expenditure may be currently deducted as an ordinary and necessary business expense or whether instead it must be capitalized and recovered through another tax accounting mechanism, such as depreciation. We analyze the clear reflection of income and matching requirements including the theoretical underpinnings in addressing the tax treatment of a wide variety of business expenditures, including the direct and indirect costs incurred to acquire, create, repair and maintain tangible property. Finally, we consider a variety of other expenditures incurred by business taxpayers, including software and website design expenditures, advertising, business reengineering costs, etc. Through this thorough analysis we are able to identify otherwise capitalized costs that may be deducted currently.

Legal Benefits of Using Different Business Entity Forms – The legal entity forms reviewed include the sole proprietorship, general partnership, limited partnership, regular corporation, S corporation, limited liability company, and trust. We work with you and compare the attributes of these various entities to your business goals. We consider both the legal and business structure and the federal income tax rules applicable throughout the entire life of the entity. Consequently, we analyze and compare the income tax law applicable, reviewing the entity directives: (1) when organized, (2) when operating and receiving profits or incurring losses, (3) when making distributions of profits in cash, property, or entity ownership units, (4) when terminating your ownership interest, (5) when the entire entity terminates, and (6) when the entity takes on a tax-free restructuring.

Cost Segregation – Cost segregation studies review property depreciated over long recovery periods such as the 27.5 or 39 years applicable to real property. These studies attempt to identify portions of this property that should be reclassified as tangible personal property subject to shorter depreciable recovery periods. The study therefore may provide analysis and support documentation to depreciate these assets over a more favorable recovery period. In addition to depreciating personal property over as few as five years, carving out the personal property from the real property allows faster 200% or 150% declining balance method of depreciation rather than the slower straight line method of depreciation applicable to real property. A favorable study then allows a taxpayer to take additional tax depreciation, which then lowers the taxpayers tax liability.

Maximizing Individual and Business Deductions – We maximize your tax deductions by analyzing in detail the character, theory, extent, and application of deductions, including imputed deductions. Each particular deduction is carefully reviewed, including interest, taxes, charitable contributions, casualty losses, bad debts, etc. This includes the special deductions limited to individuals (moving expenses, medical, alimony, contributions to retirement savings plans, cooperative housing corporation tenant-shareholder items, and personal and dependency exemptions), special deductions limited to corporations (dividends received or paid, insurance companies, financial institutions, etc.), deductions allowed to estates and trusts, etc. When possible we then increase your allowable deductions including for example your retirement plan contributions; accelerate your charitable contributions; maximize your allowed debt financing versus equity financing, etc.

Structuring Corporate Acquisitions – We implement with you a transactional planning structure for your corporate acquisition. Our service includes reviewing with you the appropriateness, considering both legal and tax considerations, for either a stock and asset acquisition. We discuss the consequences to various parties of each transactional form, with particular emphasis on the factors which point to the use of a particular acquisition structure. We discuss with you the more complex acquisition structure options, the critical aspects of financing techniques (including the tax consequences of various financial instruments which may be used to finance acquisitions), the special rules of Section 351 in the context of corporate acquisitions, the preservation and usability of any loss carryovers and other tax attributes, the tax treatment of transaction costs, any acquisition-related compensation issues, methods for eliminating assets that are not wanted, the allocation of tax risks between a buyer and seller of a corporate business, and other non-tax issues.

Avoiding Distribution of Corporate Dividend through Distributions in Redemption of Stock – We review the practical planning techniques of a stock redemption both to the redeeming corporation and the redeemed shareholder under Section 302. As your aware a redemption is tax free transfer to the recipient shareholder unlike a dividend which is generally taxable. It is a transfer by a shareholder of some or all of his stock to an issuing corporation in return for cash or other property. Section 302 contains the basic tax rules allowing and governing redemptions of stock by shareholders. It authorizes “exchange” treatment to a recipient of a redemption distribution if: (1) its effect is not essentially equivalent to a dividend; (2) the exchange is “substantially disproportionate;” (3) the shareholder’s interest in the corporation is completely terminated; or (4) it is a distribution in redemption of the stock of a non-corporate shareholder in a partial liquidation. If a redemption fails to satisfy any of these tests, the distribution is treated as a dividend. We also review Section 311 which determines with the effect on the issuing corporation of a distribution of property (other than cash or obligations of the issuing corporation), and analyze Section 312 which establishes the effects on the issuing corporation’s earnings and profits.

International Tax Planning – U.S. multinational corporations have many complexities such as cross-border movement of capital, global products and services, and complicated intellectual property issues. Tax planning for a global business enterprise thus requires continuous planning, monitoring of new domestic and foreign laws, and the calculating of many different tax transaction ramifications in order to keep an efficient effective tax rate (ETR), maintain a low net taxable income and yet maximize financial statement corporate earnings. To address these concerns, TCS with its extensive international tax background can assist the tax function with this planning process. We can help it evaluate the company’s domestic and foreign tax positions and respond with a tax analysis that prospectively addresses the requirements of the global business. We provide analysis and support to allow the tax function to meet its goal of reducing U.S. and local country taxes, maximize foreign tax credit utilization, understanding and coordinate the movement of cash among foreign affiliates, provide for tax efficient repatriation of cash from foreign affiliates to the U.S. affiliated group, keep an efficient effective tax rate (ETR), maintain a low net taxable income and maximizing financial statement corporate earnings.

We have the experience to significantly reduce your tax liability. We understand how the tax law is implemented through the legislative process, enforced through administrative law and later defined through judicial law in the court system. We are constantly keeping up with new tax law changes to better serve our clients. Part of our tax planning approach is to ensure that we consider all of the facts; that we look at the big picture and don’t just get to an answer and stop; that we talk over the tax issues with our clients; that we have all of the relevant information, sufficient documentation, and recordkeeping to ensure the desired result is actually obtained.

Let us help you maximize your after tax cash flow through our tax planning strategies!

Juan Carlos Villalobos


“I contacted James Duffy at Tax Client Services to have him prepare the financial statements and tax returns for Aapex Financial Solutions, LLC. He did a great job preparing my friend’s tax return, significantly reducing their tax liability. They were impressed on how detailed he was as he looked at all of the tax planning techniques allowed under the tax law. My friends liked that he looks at your prior year tax returns to determine if there are any missed tax deductions without any up-front charge. He then found a lot of tax savings! With that background I had no issues asking for his assistance on this project. He helped me on issues with the California Residential Mortgage division, the US department of HUD, reviewed my prior year financial statements and tax returns, etc. He identified important issues in the prior and current year tax returns. It is a given that I will continue with his services. He is a very accomplished professional and a pleasure to work with. I highly recommend Tax Client Services!”

President at Aapex Financial Solutions, LLC

2014-05-14T12:10:46+00:00
“I contacted James Duffy at Tax Client Services to have him prepare the financial statements and tax returns for Aapex Financial Solutions, LLC. He did a great job preparing my friend’s tax return, significantly reducing their tax liability. They were impressed on how detailed he was as he looked at all of the tax planning techniques allowed under the tax law. My friends liked that he looks at your prior year tax returns to determine if there are any missed tax deductions without any up-front charge. He then found a lot of tax savings! With that background I had no issues asking for his assistance on this project. He helped me on issues with the California Residential Mortgage division, the US department of HUD, reviewed my prior year financial statements and tax returns, etc. He identified important issues in the prior and current year tax returns. It is a given that I will continue with his services. He is a very accomplished professional and a pleasure to work with. I highly recommend Tax Client Services!” President at Aapex Financial Solutions, LLC

Blake Christian


“James hired our firm to evaluate UCB’s California Enterprise Zone Credits. James proved to be a highly technical, high quality, tax executive and was very helpful in managing a complex, multi-year, project. With James assistance, we were able to jointly identify over $6M of supplemental tax savings for his bank.”
Tax Partner, HCVT LLP

2014-05-14T11:57:59+00:00
“James hired our firm to evaluate UCB’s California Enterprise Zone Credits. James proved to be a highly technical, high quality, tax executive and was very helpful in managing a complex, multi-year, project. With James assistance, we were able to jointly identify over $6M of supplemental tax savings for his bank.” Tax Partner, HCVT LLP

Pat Powers


“James identified a difficult and complex tax issue that required resolution. This particular issue was unusual and potentially quite troublesome. James supervised analysis and resolution of this issue in a very professional manner. His handling of the issue demonstrated a very good grasp of highly complex legal issues balanced by sound and mature judgment.”

Tax Partner at Baker & McKenzie

2014-05-14T12:05:55+00:00
“James identified a difficult and complex tax issue that required resolution. This particular issue was unusual and potentially quite troublesome. James supervised analysis and resolution of this issue in a very professional manner. His handling of the issue demonstrated a very good grasp of highly complex legal issues balanced by sound and mature judgment.” Tax Partner at Baker & McKenzie

Wesley Wakeford


“James Duffy has advised me on several tax matters. I give him my highest recommendation for his knowledge of tax law, for having the highest integrity and also for being a true gentleman. James is a very sharp intellectual and is also a very creative professional. If you need tax help, you will not go wrong with James Duffy.”

Attorney

2014-05-14T12:07:08+00:00
“James Duffy has advised me on several tax matters. I give him my highest recommendation for his knowledge of tax law, for having the highest integrity and also for being a true gentleman. James is a very sharp intellectual and is also a very creative professional. If you need tax help, you will not go wrong with James Duffy.” Attorney

Mike Ford


“I’ve known James Duffy for over thirty years and rely on him for rock solid tax and accounting advice and the very latest in clever AND LEGITIMATE solutions to complex situations. I am very comfortable referring him to my associates and friends and know they will receive the same high standard of care he delivers to his national clients, and to me. He never fails to go the extra mile and has always been a proactive part of every situation I have dragged him into. While many consultants see clients as mere engagements his style is much more comprehensive and it’s not unusual at all to get an email from him at an odd hour treating the topic we’ve been kicking around. I am confident that he is the best of the best.”

Real Estate Professional

2014-05-16T05:01:37+00:00
“I’ve known James Duffy for over thirty years and rely on him for rock solid tax and accounting advice and the very latest in clever AND LEGITIMATE solutions to complex situations. I am very comfortable referring him to my associates and friends and know they will receive the same high standard of care he delivers to his national clients, and to me. He never fails to go the extra mile and has always been a proactive part of every situation I have dragged him into. While many consultants see clients as mere engagements his style is much more comprehensive and it’s not unusual at all to get an email from him at an odd hour treating the topic we’ve been kicking around. I am confident that he is the best of the best.” Real Estate Professional

Howard Chen


“Jim has strong technical skills in the tax field. He is very independent and hard working. Jim gets the job done!”

VP, Corporate Development and Strategy at Bank of the West

2014-05-14T12:14:08+00:00
“Jim has strong technical skills in the tax field. He is very independent and hard working. Jim gets the job done!” VP, Corporate Development and Strategy at Bank of the West

George Baker


“James was hired because of his outstanding tax expertise. He worked on tax issues related to financial statement documents backing the bank’s submission of its 10-K, 10-Q and other SEC submissions. He was responsible for tax compliance and filings for a $6 Billion market cap company. His knowledge of the tax law led to substantial savings for the bank. One example was the bank’s foreign earnings repatriation strategy–$8 million in federal taxes were saved as well as some $2 million in state taxes. James is a master at sorting through details on tax issues and used this to reach correct tax applications to the benefit of the bank.”

Senior Vice President at Zions Bank

2014-05-14T12:04:36+00:00
“James was hired because of his outstanding tax expertise. He worked on tax issues related to financial statement documents backing the bank’s submission of its 10-K, 10-Q and other SEC submissions. He was responsible for tax compliance and filings for a $6 Billion market cap company. His knowledge of the tax law led to substantial savings for the bank. One example was the bank’s foreign earnings repatriation strategy–$8 million in federal taxes were saved as well as some $2 million in state taxes. James is a master at sorting through details on tax issues and used this to reach correct tax applications to the benefit of the bank.” Senior Vice President at Zions Bank

Mona Sheung


“James is a very hard working and diligent, someone I respect and trust!"

ControllerClient Service Manager at FIOH Global Asset Management and Strategies, LLC

2014-05-14T12:21:25+00:00
“James is a very hard working and diligent, someone I respect and trust!" ControllerClient Service Manager at FIOH Global Asset Management and Strategies, LLC

Irina Butorina



“James has been helping me with my taxes since 2010 and I am happy about how effective his solutions are and most important – I am very happy with the money he saves for me. His ability to focus on taxes like nobody I have ever seen is actually amazing. He asks a lot of questions always looking for ways to lower my taxes. Don’t be surprised to get detailed emails discussing your issues without any charge on his part at odd hours of the day or night. He cares about his work and I have been always amazed at how he comes up with tax ideas that really work and are legal which is a very important thing for me. He is friendly and fast thinking and returns your phone call promptly, is easy to reach, and will make sure you pay the least amount of taxes possible. He is a God sent tax geek and I would highly recommend James to anyone of my friends.”
Doctor of Medicine

2014-05-14T12:16:15+00:00
“James has been helping me with my taxes since 2010 and I am happy about how effective his solutions are and most important – I am very happy with the money he saves for me. His ability to focus on taxes like nobody I have ever seen is actually amazing. He asks a lot of questions always looking for ways to lower my taxes. Don’t be surprised to get detailed emails discussing your issues without any charge on his part at odd hours of the day or night. He cares about his work and I have been always amazed at how he comes up with tax ideas that really work and are legal which is a very important thing for me. He is friendly and fast thinking and returns your phone call promptly, is easy to reach, and will make sure you pay the least amount of taxes possible. He is a God sent tax geek and I would highly recommend James to anyone of my friends.” Doctor of Medicine

Raffaele Mari


“James is a seasoned tax professional who has excellent technical and communication skills. He is a quick study and focuses on providing value-added services. He is a team player who is willing to do whatever it takes to deliver results in a cost-effective manner. I have enjoyed the opportunity to work with James and am confident that anyone would be very satisfied with his work.”

Managing Director, Global Wealth Management

2014-05-14T12:12:00+00:00
“James is a seasoned tax professional who has excellent technical and communication skills. He is a quick study and focuses on providing value-added services. He is a team player who is willing to do whatever it takes to deliver results in a cost-effective manner. I have enjoyed the opportunity to work with James and am confident that anyone would be very satisfied with his work.” Managing Director, Global Wealth Management

Silina Dudkina

I have great respect for James and his firm Tax Client Services. He is personable, trustworthy and frankly brilliant in his field. His tax and accounting experience, knowledge and ethical character are of the highest standards. He has the ability to focus on key tax issues that make a difference that is rarely seen these days. Its hard to find a CPA who is highly competent, who you can trust, and one that will not over-charge you! His many strengths include how determined and focused he is in taking care of his clients tax and accounting problems. James is a polished and experienced tax professional, one whom you can count on to go the extra mile and who will do everything possible to ensure his clients pay the absolute minimal amount of taxes possible. I highly recommend this tax professional!

Studying to be a Nurse

2014-05-14T12:09:40+00:00
I have great respect for James and his firm Tax Client Services. He is personable, trustworthy and frankly brilliant in his field. His tax and accounting experience, knowledge and ethical character are of the highest standards. He has the ability to focus on key tax issues that make a difference that is rarely seen these days. Its hard to find a CPA who is highly competent, who you can trust, and one that will not over-charge you! His many strengths include how determined and focused he is in taking care of his clients tax and accounting problems. James is a polished and experienced tax professional, one whom you can count on to go the extra mile and who will do everything possible to ensure his clients pay the absolute minimal amount of taxes possible. I highly recommend this tax professional! Studying to be a Nurse

Dirk Wierema


“As the Corporate Controller at Ampro Computers, I hired James to prepare and update four years of amended corporate Federal and State tax returns. While on this project James expertise in Federal and State taxes helped to defer a significant tax liability for our company. James was very easy to work with and took the time to explain complex tax regulations in a way that was easy to understand. I would highly recommend James.”

Controller – Zetta, Inc.

2014-05-14T12:15:06+00:00
“As the Corporate Controller at Ampro Computers, I hired James to prepare and update four years of amended corporate Federal and State tax returns. While on this project James expertise in Federal and State taxes helped to defer a significant tax liability for our company. James was very easy to work with and took the time to explain complex tax regulations in a way that was easy to understand. I would highly recommend James.” Controller – Zetta, Inc.

Benny Lee


“A person’s expertise can be differentiated in terms of the following classes: Novice, Beginner, Intermediate, Expert, and World-Class Guru.
My observation of Jim’s practice and understanding of all tax intricacies both from corporate and individual would place him in the class of a World-Class Guru.”

Vice President, Information Technology – East West Bank

2014-05-14T12:01:56+00:00
“A person’s expertise can be differentiated in terms of the following classes: Novice, Beginner, Intermediate, Expert, and World-Class Guru. My observation of Jim’s practice and understanding of all tax intricacies both from corporate and individual would place him in the class of a World-Class Guru.” Vice President, Information Technology – East West Bank

Why TCS?

Tax Client Services (TCS) is dedicated to helping you with all of your tax and accounting needs, including maximizing your after-tax cash flow by minimizing your tax liability.

Experience

James was born in Seattle, Washington though he spent the greater portion of his early years in Hawaii. Completing his Bachelor of Economics from the University of Santa Barabar, James was hired by PricewaterhouseCoopers.

Selecting a Tax Professional

When you’re looking for a talented and skillful tax professional, the one thing you absolutely need is to select someone who is well versed in tax law. Not requiring this could cost you greatly in both lost cash flow and additional stress...