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IRS Audits Tax Procedure

IRS Announces Significant Changes to Audit Process

The Large Business & International or LB&I division of the IRS recently announced significant changes to the way its IRS auditors gather information from taxpayers. These announcements were made by directives issued by the LB&I Commissioner to all LB&I agents, which makes it mandatory for IRS agents to follow the directives. Reasons for The Changes […]

Categories
IRS Audits Tax Procedure

IRS De-Coordinates All Coordinated Issue Papers

The IRS de-coordinated its remaining Coordinated Issue Papers yesterday. This is the final step in the IRS ending its coordinated issue or tiered program. The IRS’s coordinated issue or tiered program was how the IRS was identifying and working challenging tax issues that presented compliance problems. Coordinated Issue Papers were instructions for IRS auditors on […]

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Federal Income Tax Recordkeeping Tax Deductions Tax Procedure

Car and Truck Expenses Allowed Based on Mileage Not Actual Costs, Absent Records

In Aivatzidis v. Commissioner, T.C. Summary Opinion 2013-105, the U.S. Tax Court concluded that a professional driver could deduct expenses based on mileage, but not for actual expenses. This case provides an example of why drivers should compute car and truck expenses based on mileage if they do not have sufficient records. Facts & Procedural […]

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IRS Audits Tax Procedure

IRS Closing Agreement Valid Even If Not Reviewed by the Joint Committee on Taxation

In AM 20133301F, the IRS addressed the validity of a closing agreement that was not submitted to the Joint Committee on Taxation or JCT for review prior to signing the agreement. The Facts In The Ruling Were As Follows: The taxpayer was an insurance company whose tax returns were being audited by the IRS. The […]

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IRS Appeals IRS Audits Tax Procedure

About IRS Appeals AJAC Project

The IRS Office of Appeals just released a memo describing its changes pursuant to its Appeals Judicial Approach Culture (AJAC) project.  These changes do not really break new ground, but they address a few key issues that are often in dispute in appeals cases. About the IRS Office of Appeals The IRS Office of Appeals is […]

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Federal Income Tax Recordkeeping Tax Deductions Tax Procedure

Fashion Retailers Business Expenses Disallowed as Routine Substantiation Case

In Heinbockel v. Commissioner, T.C. Memo. 2013-125, the U.S. Tax Court considered a routine substantiation case and disallowed business expense deductions for a fashion clothing retailer. This case presents an opportunity to consider how to present routine substantiation cases to the IRS and to the courts. Facts & Procedural History Mrs. Heinbockel was in the […]

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Federal Income Tax Recordkeeping Tax Deductions Tax Procedure

Taxpayer Use of Estimates for Deductions

Can you use publicly available sources of statistical information when you have no records to support the amount of your expenses?  The court addressed this in Murray v. Commissioner, T.C. Summary Opinion 2012-66, which involved the IRS’s use of third party statics. Facts & Procedural History Mr. Murray worked as a truck driver for National Freight, […]