Municipal Bond Interest Can Be Taxable – Make Sure You Trust Your Broker Is Competent

I am so sick and tired of late night commercials selling snake oil. My latest angst comes from claims of tax free municipal bonds. Not all municipal bonds offer tax free interest so the next time slick Rick the broker

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Posted in Alternative Minimum Tax (AMT), Municipal Bond

Foreign Income Reporting IRS Publication 515

IRS Publication 515, Withholding of Tax on Nonresident Aliens and Foreign Entities, includes a table of income source rules, including pay for personal services, interest, rents, royalties, income from natural resources, scholarship and fellowship grants, and guarantees of indebtedness. I must write from experience

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Posted in Foreign Income

IRS Audit Guidelines Assessing Asset Dissipation

If you are delinquent on taxes you may be considering some IRS payment arrangement whereby your total tax liability will be considered satisfied in exchange for a payment plan that is less then the full amount owed. Two different plans that

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Posted in Abusive Tax Shelter

What is a Foreigner for US Tax Purposes? IRS Forms W-8BEN + 1042-S

I have had the pleasure of helping many people new to either living or conducting business in the USA determine their tax liability to the US Treasury and have grown increasingly surprised about the confusion over who or what type

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Posted in Foreign Income, Immigrant, Undocumented Alien

Alternative Minimum Tax – AMT and Unexpected Investment Income

It is no secret that the US Congress' growing inability to agree on matters of substance is both disturbing and frustrating. The Alternative Minimum Tax (AMT) problem of not automatically adjusting for inflation is yet another example of the collective

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Posted in Alternative Minimum Tax (AMT)

Retirement Savings Required Minimum Distributions (RMD’s)

Many people turning 70 see themselves in the prime of their life. A pervasive problem among this group is this idea of a Required Minimum Distribution (RMD) from their retirement savings accounts. Many people do not like to withdraw money

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Posted in Investment Income, IRA, Retirement

Nonprofit Formation – IRS Form 1023

Your organization can indeed be a nonprofit organization within your state but not be tax-exempt with the IRS. The only way to obtain FEDERAL 501(c)(3) tax-exempt status is to file IRS Form 1023. I've done this many times and felt compelled to blog

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Posted in Non-profit

IRS Offers in Compromise Work Under the Right Circumstances, but ….

The Offer In Compromise (OIC) is prepared on IRS Form 656 and must include a detailed statement of financial position with substantiating documentation (bank statements etc.) prepared on one of the many IRS Form 433's. To know which 433 to

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Posted in Offer In Compromise

Late Filing 1120 Penalties

For those of you just now starting to get failure to timely file notices for your Subchapter S Corporation, the only relief available to the S corporation for the failure to timely file penalty under §6699 is reasonable cause. There

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Posted in Small Business, Sub-chapter S

Reconstruction of Tax Records

Treasury Regulation 1.274-5 allows for a deduction without complete documentation if you can show that you have 'substantially complied' with adequate adequate record keeping requirements. This statute is code for ... be nice to your examiner. Basically the practice of disallowing

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Posted in IRS Appeal, IRS Audit, IRS Enforcement, IRS Examination, IRS Mediation, IRS Penalties, Tax Abuse, Tax Credit, Tax Deductible Expenses, Tax Fraud, Tax Guidance & Preparation, Tax Problems & Requests, United States Treasury
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