IRS Offers Guidance on Barter Reporting

In its simplest form, bartering is the trading of one product or service for another, usually with no exchange of cash. With the economy in its present state, the IRS has seen an increase in bartering exchanges. As a result,

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Posted in Barter

941 vs. 944 filing – Revenue Proceedure

Revenue Procedure In Rev. Proc. 2009-51, IRS sets forth procedures for employers to opt in to filing Form 944 (Employer's Annual Federal Tax Return) and for employers previously notified to file Form 944 to opt out and file Forms 941

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Posted in Employment Tax

ITIN issuance generates questionable returns

Billions of dollars in tax credits are being provided to Individual Taxpayer Identification Number filers without adequate verification of eligibility, according to the Treasury Inspector General for Tax Administration. The Internal Revenue Service provides ITINs to individuals who are not

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Posted in ITIN

IRS starts special unit targeting the wealthy

The IRS is setting up a special unit that will take a more skeptical look at the various strategies used by the wealthy to reduce their tax burden (see Shulman Has ‘Some Sympathy’ for CPA Concerns). That includes trusts, real

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Posted in Appeals & Audit Resolution, Tax Abuse, Tax Fraud, Tax Guidance & Preparation, Uncategorized

NEW – Schedule L for Standard Deductions

The IRS has released a new tax form, Schedule L, Standard Deduction for Certain Filers (2 pages including instructions, pdf) for use with 2009 tax returns. Taxpayers may need to use this form if they are claiming various additions to

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Posted in Tax Guidance & Preparation, Tax Problems & Requests, Tax Relief, Taxable Income

Net Operating Losses

Sec. 172(a) allows taxpayers to deduct against a tax year's income those net operating losses both carried over to the tax year from previous tax years and carried back from later tax years. An NOL basically is the excess of

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Posted in Net Operating Loss, NOL

Hobby Losses

Sec. 183 denies loss deductions beyond income earned from activities in which the taxpayer does not intend to make a profit. These deductions are typically referred to as "hobby losses." Generally, an activity is presumed to be carried on for-profit

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Posted in Business Expense, Hobby

Gambling Losses

Sec. 165(d) limits all but professional gamblers from taking losses incurred in a wagering activity to the amount of any gains. As a result, a taxpayer cannot claim a deduction for losses incurred while gambling or betting in excess of

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Posted in Gamble

Abandoment Losses

While a taxpayer conducts a trade or business, one or more items of business property may suddenly stop being useful. For a variety of reasons, the taxpayer may choose to stop conducting business with the property or permanently discard it.

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Posted in Rental Real Estate

Bad Debt Losses

Code Sec. 166, titled "Bad Debts," generally controls who is entitled to a bad debt deduction and when a bad debt may be deducted. Sec. 166 conditions treatment generally on whether a bad debt is incurred in a trade or

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Posted in Cancelled Debt
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