The IRS shifted its focus to international issues about ten years ago. This included having the penalty group within the IRS’s Small Business/Self-Employed division focus on international reporting penalties. This is in addition to the Treasury’s FBAR filing requirements. The SB/SE division’s focus on penalties started with a few penalty notices. The number of these…
Tax Articles
Investment vs. Business Tax Losses
Our tax laws make a distinction between income and losses attributable to capital assets. The distinction draws a line in the sand. Assets that are capital produce capital gain and losses. Other assets do not. This in turn has a number of other impacts, such as on the timing of when income and losses are…
When Does the IRS Issue a Lock-in Letter?
Contents1 When Does the IRS Issue a Lock-in Letter?2 Facts & Procedural History3 The IRS’s Withholding Compliance Program and the IRS Incorrect W4 Letter4 What Triggers an IRS Lock-in Letter?5 How Long Does a Federal Lock-in Letter Last?6 How Do I Get Out of the Withholding Compliance Program?7 Responding to the IRS’s Letters – Where…
Adequate Dislcosure to Avoid Six Year IRS Statute
The IRS has a limited period of time to conduct audits. It often fails to finish the audit within this period of time. There are even instances where the IRS does not even start the audit until after this time period has passed. This raises tough questions for taxpayers. Taxpayers expect some finality with their…
Sale of Residence: Poor Financial Decision
We all have financial ups and downs in life. Some of these ups and downs are due to circumstances beyond our control. Be it good luck, bad luck or something else. Many of these circumstances are not foreseeable. There are also circumstances that are due to our own making. Be it poor financial decisions or…
Getting the IRS to Pay for Your Tax Attorney
An IRS audit or notice comes with a cost for the taxpayer who receives it. The cost can include additional tax, interest, and even penalties. Even if the taxpayer did everything correctly, the IRS audit or notice still comes with a cost. The cost can include the time and effort the taxpayer has to expend…
Tax Planning for Start-Up Costs
New business ventures will typically incur losses in the first year or years. These losses can sometimes be used to offset the business owner’s other income. In a way, this tax loss offset and the tax savings is akin to an interest-free loan from the Federal government. Congress has imposed some limitations on this type…
What is a Repetitive IRS Audit?
When it comes to the IRS and audits, there are times when a taxpayer may feel like they can’t win. This is often true. If you have been reading this site for some time, you may recall our article involving Five Audits in Ten Years and the court concluding that this many audits in such…
Is a Divorce a Divorce for Tax Purposes?
Each state has its own laws. This includes laws that say how one gets married and how one gets divorced. State laws provide a method for accomplishing both acts. The laws of foreign countries usually have similar laws and processes. Religious bodies and affiliations have similar rules and processes. This raises some interesting questions as…
IRS Collectors Influence on Settlemet Offer
The IRS makes decisions about tax returns, back taxes, etc. These decisions may be made by one or more persons within the IRS. These decisions may be made by IRS employees whose job functions and missions are not the same. This is most evident in the context of IRS audits. The IRS auditor’s mission is…