2020 brings a new tax year and, as usual, a new year also brings changes in federal tax law. Some cases deduction amounts remain unchanged for 2019, such as medical and dental expenses, state and local sales tax, and the percentage limit for charitable cash donations...
Month: March 2020
WHAT IS THE IRS VOLUNTARY DISCLOSURE PRACTICE?
The legal duty of taxpayers to fully comply with federal tax laws is the foundation of “Voluntary compliance” in the American tax system. Most taxpayers, in fact, voluntarily comply with this duty, however, there are always some that fail. The IRS has an impressive...
UNPAID TAXES MAY CAUSE THE LOSS OF YOUR PASSPORT
The Fixing America’s Surface Transportation (FAST) Act allows the IRS to notify the State Department with the names of those taxpayers certified as owing a seriously delinquent tax debt, which is currently $52,000 or more. Federal law, through the Internal...
TAX CHECKLIST FOR CLOSING A BUSINESS
There are certain actions that businesses typically take when closing. A business ending its operations must file an annual return for the year it goes out of business. It must file the final employment tax returns for any employees. A business must also make...
BUSINESS RELATED IRS AUDIT TRIGGERS
The mere act of placing the envelope that contains a tax return into a mailbox may be a cause of stress for most taxpayers. None of us want to do anything that will alert the IRS to take a closer look at our tax returns. IRS examinations, or “audits” as they...
ESTABLISHING THAT AN ACTIVITY IS FOR PROFIT
The IRS makes the presumption that an activity is a business and established to make a profit if it has made a profit in, at least, three of the prior five years. The business must be substantially the same during this time period. If a business fails to make a...
WHEN IS A HOBBY A BUSINESS?
Millions of taxpayers have hobbies. Some of these hobbies generate income for taxpayers, while others actually are legitimate business enterprises. Whether it is a true business or a hobby, taxpayers must report any income earned from hobbies. IRS rules and...
ARE YOU ELIGIBLE FOR AN OFFER-IN-COMPROMISE?
The IRS provides payment alternatives for any taxpayer with delinquent taxes. The requirements of these programs can be complicated and may require the assistance of a qualified tax professional. The IRS suggests such assistance may be useful in helping...
SOME FACTS ABOUT IRS AUDITS
The IRS audited approximately 1.0 million tax returns in Calendar Year 2017. This was less than 1% of all returns, approximately 0.5 percent. The IRS conducted 74.8 percent of Fiscal Year 2018 through correspondence audits. Of these 1.0 million audits of tax...