Protecting Yourself in IRS Collection Matters

The key to slowing down or even preventing the IRS from taking enforcement action is to make certain the IRS representative you are working with places the installment agreement proposal in “pending” status. In order for an installment agreement proposal to

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Posted in IRS Collections

Can a Personal Service Corporation (PSC) elect Sub-chapter S Status? IRS Form 2553

This is a GREAT question that I've been getting lately. The basic answer is - as ALWAYS - it depends. Internal Revenue Code (IRC) 448(d)(2) defines a qualified personal service corporation as an entity where substantially all of the activities

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Posted in Personal Service Corporation, Sub-chapter S

IRS Appeals – Innocent Spouse Claims

This is an overview of actions the Appeals Officer takes during IRS Appeals consideration of an innocent spouse case. It references the IRS IRM 25.15.12.10.  The IRS Appeals Officer is to consider the facts and circumstances of the case and

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Posted in Innocent Spouse Relief, IRS Appeal

IRS Innocent Spouse Consideration – Form 8857

By completing IRS Form 8857 (Request for Innocent Spouse Relief) the innocent spouse is attesting he or she should not be held responsible for the other spouse’s liability. If approved, it does not eliminate the liability; it effectively transfers all of it to the

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Posted in Innocent Spouse Relief

Injured Spouse IRS Form 8379 Explained

IRS Form 8379 (Injured Spouse Allocation) helps calculate the allocation of income and tax liability to each spouse for the purpose of determining how much of an overpayment should be applied to a spouse’s liability and how much is refunded to the non-liable spouse. For

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Posted in Injured Spouse Relief

How to Determine What is a Business vs. What is a Hobby

Only by considering all the facts and circumstances of each situation can you determine whether an expense was incurred in a “trade or business,”and whether it was an “ordinary and necessary” expense for that business, making it a deductible expense. Before you

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Posted in Business Expense, Hobby

Questions Asked by the IRS in an Initial Interview Audit

The following is a sample set of questions the IRS uses when conducting an initial 'interview' Mandatory Statements/Questions by IRS: IRS Agent /Officer Name? Taxpayer Name? Audit Date/time? Do you have concerns regarding the audit process? I have enclosed a

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Posted in IRS Appeal, IRS Audit, IRS Collections, IRS Examination, IRS Penalties, IRS Penalty and Interest Abatement

Retirement Plan Early Distribution Tax Consequences

Payments received from your Individual Retirement Arrangement before you reach age 59 ½ are generally considered early or premature distributions. Early distributions must be reported to the IRS and are usually subject to an additional 10 percent tax.  Distributions you

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Capital Gains and Losses – IRS form 1040 Schedule D

Everything you own and use for personal or investment purposes is a capital asset including a home, household furnishings and stocks and bonds held in a personal account.  When a capital asset is sold, the difference between the amount you

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Posted in Capital Gain, Capital Loss

Expanded 2011 Adoption Credit – IRS Form 8839

The Adoption Tax Credit in 2010 was increased to $13,170 and made refundable for qualified expenses paid to adopt an eligible child by the Affordable Care Act.  Basically this means that as a parent who completed an adoption in 2010

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Posted in Adoption
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