It’s that time of year. And if you’re filing your tax return on your own, we know your process: Step 1. Enter all income. Step 2. Enter all known expenses and deductions. Step 3. Wait hours (maybe even days) before filing to brainstorm: What else can I possibly deduct?? As tax professionals, we’ve heard some [...]
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Recently the United States Tax Court ruled that a taxpayer selling unimproved lots on a regular basis cost him capital gains treatment (Flood, TC Memo. 2012-243). A day trader (who also ran a real estate business) purchased 250 lots over the course of 8 years at bargain prices with the intention of reselling them at [...]
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We have recently devoted a lot of our attention to the rising number of audits our clients are facing (see “High $ Mortgage Holders, Be Ready for Mail-In Audits” and “IRS Shifting Focus“). Yesterday, an article posted on American Express’ Openforum.com caught our attention. According to the article entitled, “Majority of IRS Audits of Small [...]
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Yesterday I worked on what I believe was our 7th or 8th mail-in audit received over the course of the past year regarding limitations on deductible mortgage interest. Without a doubt, the IRS is sending out more and more requests to individuals with large mortgage interest deductions who must, in turn, prove they are following [...]
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According to the Kiplinger Tax Letter, April 13, 2012 “The IRS is shifting the focus of its examinations of businesses. Fewer resources will be devoted to very large corporations.” Instead the Service will be turning their attention this year towards pass-through entities (S Corporations and Partnerships), midsize firms (those with assets between $10 million and [...]
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According to the December 9th Kiplinger Tax Letter, “in the past 5 years, there has been an 800% increase in accuracy penalties assessed on individuals and nearly threefold jump in penalties on businesses.” However, some of the agents assessing these penalties may have been a little over-eager as “almost 25% of the $1 billion in [...]
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If you have received an IRS examination of your tax return and don’t agree with the results of the exam, it’s important to know your rights when it comes to the appeals process. If you ever find yourself in such a situation, it will be good to know the facts. For instance: You will receive documentation [...]
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