Failing to Issue Form W-2 to Corporate Officers

A corporate officer who performs substantial services for the corporation and receives compensation is considered to be an employee. The corporation should issue a Form W-2 reporting the compensation as wages and withhold proper amounts for federal income tax, FICA, and FUTA purposes. Recently, the IRS Small Business/Self-Employed Division issued a memorandum providing guidance to…

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Gambling revenue recognition

A retired widow who enjoys playing the slot machines became a regular patron of a casino, and traveled there with friends every other week or so during 2004. Normally the widow would spend at least eight hours at the casino and then return home. However, sometimes she would stay longer and return home after two…

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Currently Not Collectible

Currently Not Collectible means that a taxpayer has no ability to pay his or her tax debts. The IRS can declare a taxpayer “currently not collectible,” after the IRS receives evidence that a taxpayer has no ability to pay. Such evidence is usually obtained from the taxpayer on IRS Form 433-F, Collection Information Statement. A…

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Tax-Free Employer-Provided Health Coverage Now Available for Children under Age 27

As a result of changes made by the recently enacted Affordable Care Act, health coverage provided for an employee’s children under 27 years of age is now generally tax-free to the employee, effective March 30, 2010. The Internal Revenue Service announced today that these changes immediately allow employers with cafeteria plans –– plans that allow…

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Beware of ‘friend’ who offers to prepare your taxes.

One good reason to use a professional tax preparer to do your taxes may be the cautionary tale that appeared the other day in a Washington State newspaper. The Kitsap Sun reported that a Bremerton woman told police there that an older friend who prepared her taxes for two years had fraudulently received $4,884 in…

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HIRE Act of 2010 – Hiring Incentives to Restore Employment

The Hiring Incentives to Restore Employment (HIRE) Act, which was signed into law on March 18th, 2010 provides tax incentives for hiring and retaining workers and purchasing equipment and many other business assets. It also includes new measures that heighten disclosure and reporting requirements for foreign accounts. Some key features of the Act are discussed…

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Certificate of Discharge of Property From Federal Tax Lien

There is no standard form available for an application for a Certificate of Discharge of Property from a Federal tax lien. This makes the application a type written letter. Submit your request and all accompanying documents in duplicate to the IRS, Attention Technical Services Group Manager. Use Publication 435 to determine where to mail your…

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Reliance on TurboTax Does Not Excuse Taxpayer From Penalty for Errors on Tax Return: Tax Court Rules

The Tax Court yesterday rejected the taxpayer’s use of the “Geithner defense” and held that blaming TurboTax for errors on her return did not excuse her from penalties. Lam v. Commissioner, T.C. Memo. 2010-82 (Apr. 19, 2010): Petitioners’ 2004 and 2005 joint Forms 1040 … were prepared by Ms. Lam using TurboTax. In 2004 and…

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Cash Audit Technique Guide

The purpose of this audit techniques guide (ATG) is to provide guidance for the examination of income in a cash intensive business. This guide can be used during all phases of the examination but is not all-inclusive The accurate reporting of income and expenses by cash intensive businesses has been the subject of various studies…

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