Income Shifting to Reduce Tax for Real Estate Sale

Income shifting is a fundamental income tax planning concept. It involves strategically allocating income among related taxpayers to minimize the overall tax liability. This may be intended to use up tax attributes of one taxpayer (such as deductions or tax credits), take advantage of tax deferral options to delay paying taxes, or take advantage of…

Court Says IRS Can Assess Form 5471 Penalties

Our federal tax system is code-based. This means that most of what the law is can be found in statutes. The premise is that one can read the statutes and get a general idea of what the law is. This is why when it comes to tax law, each word matters. Adding or removing a…

Third-Party Liability for Repaying Employee Retention Credits

Many businesses outsource their human resources to third parties called Professional Employer Organizations (“PEOs”). PEOs are particularly popular with small businesses. The benefits of using a PEO include allowing the business to focus on its business operations rather than HR activities and giving employees access to better employee benefits. This is achieved by having the…

Can a Co-Inheritor Do a 1031 Exchange?

Those who create wealth often accumulate assets to store the value of wealth they create. This includes assets that store value and produce additional income, such as real estate. In many cases, the wealth creator has put considerable time and effort into building their portfolio of investments. But when they die, those who inherit are…

IRS Can Force Business to Use Payroll Service, Court Rules

When a business fails to pay its payroll taxes, the consequences can be severe. The IRS has several collection tools at its disposal to collect unpaid payroll taxes. This includes liens, levies, and even criminal charges against the business owners. The IRS recently attempted to expand its collection powers to prevent future non-compliance. In United…

Tax Form Mixup Can Extend the IRS’s Statute of Limitations

Suppose you file a tax return and, months or years later, you get a letter from the IRS saying that it will not accept the tax return. The IRS letter says that you used the wrong tax form. And maybe even change the facts so that the IRS mailed this letter to you, but you…

When the IRS Comes Knocking: Addressing Tax Fraud

Tax fraud typically involves neglecting tax responsibilities, such as by not filing returns or evading tax payments, or engaging in deliberate actions to obstruct the IRS’s assessment or collection of taxes. The compliance problems that are later found to be tax fraud usually involve actions that pyramid over time. This timing issue arises as repeated…

The Stock Sale as a Sham Transaction

Taxpayers are continually seeking ways to avoid or minimize their tax liabilities. And rightfully so, as taxes take a significant amount of profit or gain from any deal or effort. Take the case of a lawsuit award. You sue someone and settle or win the case. There are nuances, but generally, you are usually taxed…

Family Court Orders are No Excuse for Unpaid Taxes

Financial ups and downs are a normal part of life, and many of us will face a time when our finances take a hit. This can be challenging, especially when we have to juggle different financial needs and demands. Divorce and marital problems often lead to major financial troubles. During a divorce, it’s common for…