Statutory Stock Options – IRS Form 3921

There are essentially two kinds of stock options, statutory and non-statutory.  If you exercise an Incentive Stock Option during 2010, you should have received IRS Form 3921, Exercise of an Incentive Stock Option Under Section 422(b), or a statement, from the corporation for each transfer made during 2010. The corporation should have provided you with the…

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IRS Collection Financial Standards Used in Calculating Repayment of Delinquent Taxes Effective March 1st, 2011

IRS Collection Financial Standards Used in Calculating Repayment of Delinquent Taxes Effective March 1st, 2011 Collection Financial Standards are used to help determine a taxpayer’s ability to pay a delinquent tax liability. Allowable living expenses include those expenses that meet the necessary expense test. The necessary expense test is defined as expenses that are necessary to…

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Amended Tax Return – IRS Form 1040X

An amended tax return generally allows you to file your taxes again to correct your filing status, your income or to add deductions or credits you may have missed on previously filed Forms 1040, 1040A or 1040EZ. Use IRS Form 1040X, Amended U.S. Individual Income Tax Return, to file an amended income tax return. An amended return must…

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Gift Tax – Revised IRS Form 709 – Is THAT Gift taxable?

The IRS released revised instructions to Form 709 Gift Tax Return. The revised instructions change the rules for allocating the unified credit to prior gifts. For 2017, the annual gift tax exclusion is $14,000.  That means you can give up to $14,000 to as many different people as you want as a gift without being subject to…

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IRS Examination Program Still Burdensome to the Taxpayer Requiring Effective Representation

The Correspondence and Discretionary Examination Program (the Program) conducts examinations otherwise known as AUDITS exclusively by mail to reduce Internal Revenue Service (IRS) operational costs and minimize the burden on taxpayers. I along with other taxpayer advocates have expressed concerns with: the length of the examination process, the lack of consideration given to information sent…

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Medical Expenses Paid for a Parent Are Deductible

Report the deduction on the Schedule ‘A’ – even if the parent did not meet the gross income requirements for the dependency exemption, the parent will still meet the definition of a dependent for purposes of medical expenses paid according to CFR 26 Section 213(a). To answer a specific question, a parent’s W-2 earnings will not prevent…

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IRS Penalties

When it comes to filing a tax return – or not filing one – the IRS can assess a penalty if you fail to file, fail to pay or both. Here are eight important points the IRS wants you to know about the two different penalties you may face if you do not file or…

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Paying Estimated Taxes IRS Form 1040ES IRS

IRS Form 1040ES, Estimated Tax for Individuals, provides all you’ll need to pay estimated taxes. This includes instructions, worksheets, schedules and payment vouchers. Another good source for information is IRS Publication 505, Tax Withholding and Estimated Tax You may need to pay estimated taxes during the year depending on what you do for a living and what type…

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Reporting Large Cash Transactions – IRS Form 8300

Businesses that receive more than $10,000 in cash in one transaction (or several related transactions) must file IRS Form 8300, Report of Cash Payments Over $10,000 Received in a Trade or Business. According to Program Manager Technical Advice (PMTA) 2010-012. Reg. §1.6050I-1(c)(1) and the instructions to Form 8300, “cash” means coin or currency of the United States or any…

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Tax Refund Withholdings and Offsets

If you owe money because of certain delinquent debts, the IRS or the Department of Treasury’s Financial Management Service (FMS), which issues IRS tax refunds, can offset or reduce your federal tax refund or withhold the entire amount to satisfy the debt. If you owe federal or state income taxes your refund will be offset…

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