IRS Audits Archives

Taxpayer Loses for Tax Court Petition Filed 11 Seconds Late

The voluntary nature of income tax returns in the United States means that taxpayers are responsible for reporting their income and paying the appropriate taxes. Taxpayers do this largely as it is the right thing to do. This is premised on a perception that the tax system has some elements of being fair and uniform…

Tax on Funds Received as an Intermediary Conduit

As tax attorneys in Houston, we often see investments made by local ethnic communities that are focused on investing overseas or raising money from overseas. This often involves those who immigrate to the U.S. from foreign countries, and do well in the U.S. financially. The investments are often made based on direct knowledge of opportunities…

The Tax System as “a Game of Monopoly”

If you are a small business owner or an individual who works or even claimed a deduction for a child on your tax return, the IRS may go to great lengths to scrutinize your tax filings. This is particularly true if you are successful and earn any income. The more successful you are, the more…

Using Accounting Records in Tax Court

Whether one likes it or not, the federal government is their business partner. The tax code is often compared to a partnership agreement that sets out the share of the income that belongs to the federal government. Continuing the analogy, the records the business keeps are the support for making the allocation between the taxpayer…

The IRS’s Bank Deposit Analysis

When conducting an audit involving income tax returns, the IRS will almost always check for unreported income. The IRS has specific procedures for conducting this type of income verification. This often involves a bank deposit analysis by the IRS agent. This type of analysis can be used to identify unreported income, but it can also…

S Corporation: Distribution of Appreciated Assets

Those who set up S corporations usually do so as their accountant told them that it could save taxes. This is often true. The S corporation can result in tax savings. This may include the standard reduction in self-employment/payroll taxes or, for more advanced tax planning, income taxes. The ability to freeze the value of…

The Qualified Nonpersonal Use Vehicle

What Congress provides with one provision, it often takes away with another. This can result in legal challenges whereby the court creates exceptions. The exceptions can be modified and qualified by later legislation. This creates a labyrinth that one has to navigate to determine how an item is treated for federal income tax purposes. The…

Double Tax on Inter-Company Transfers

There are those who make things happen. They are usually the ones doing what it takes even when doing so is difficult, tiring, and draining. They are the ones that often make personal sacrifices and take risks to succeed. They are the ones that had the luck or grit to stick with something to see…

IRS Documentation for Travel Expenses

Business travel expenses are deductible. These are expenses for business trips and work trips, such as car and truck expenses, airfare and hotels and lodging. It can also include travel meals. Those looking to deduct business trip expenses are running a risk as the IRS frequently disallows these expenses on audit. It does so even…

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…