Tax Preparer Standard of Conduct – realistic possibility vs. more likely than not

The Small Business and Work Opportunity Tax Act of 2007 heightened the standards of conduct that must be met by tax preparers from ‘nonfrivolous’ to ‘reasonable’ basis for disclosed positions and from ‘realistic possibility of success on the merits (33%chance that a position would be sustained) to reasonable belief that the position would more likely…

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Pitfalls of itemizing deductions

These days, pretty much the only taxpayers who can itemize are those who have mortgages with high balances, those whose incomes are in the high six figures or above, with a heavy state tax burden, or the very ill, with no medical insurance.  After all, if you refinanced two years ago into a $150,000 mortgage…

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Paying taxes and fearing deportation

File form W7 with a cerifying acceptance agent and obtain a Individual Taxpayer Identification Number (ITIN). An ITIN is a number issued by the IRS that allows non citizens residing in the US to file income tax returns. This number and the accompanying return are not to be shared with the INS. Read on For…

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IRS Statute of Limitations

Do Taxes Ever Expire? Many Americans believe that an IRS debt is a debt for life and that the tax collector can hound them to the grave. Thankfully, that is not the case and there are statutory time limits on the ability of the IRS to examine and collect taxes. Basically, IRS has 10 years…

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Tax incentives for organ donations

Lisa Milot (Georgia) has published Find 45 Willamette L. Rev. 67′ target=_blank>The Case Against Tax Incentives for Organ Transfers, 45 Willamette L. Rev. 67 (2008). Here is the Conclusion: Upon initial consideration, providing tax incentives for organ donations might seem to reflect a sound legislative and ideological approach, consistent with the current tax code. In…

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Tips for recently married or divorced taxpayers

If you were married or divorced recently, there are a couple of things you’ll want to do to ensure the name on your tax return matches the name registered with the Social Security Administration. If a taxpayer takes their spouse’s last name or if both spouses hyphenate their last names, they may run into complications…

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Tips for tax payers making a move – IRS Form 8822

If you changed your home or business address, you’ll want to remember these six tips to ensure you receive any refunds or correspondence from the IRS. You can change your address on file with the IRS in several ways: Correct the address legibly on the mailing label that comes with your tax package; Write the…

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Taxable Incove Vs. Financial Accounting Income

Daniel N. Shaviro (NYU) has published The Optimal Relationship between Taxable Income and Financial Accounting Income: Analysis and a Proposal, 97 Geo. L.J. 423 (2009). Here is the abstract: The persistence of the book-tax gap, or excess of companies’ reported financial accounting income over their taxable income, suggests that accounting manipulation and tax sheltering remain…

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Temporarily suspend income recognition from the purchase of below par business debt

The economy is contracting rapidly. At the heart of this contraction are the twin problems of plummeting demand and a “liquidity crisis” in which banks, having suffered immense losses and waiting for the next shoes to drop, are strapped for capital and afraid to lend. One feature of the current crisis is that the debts…

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Identity Theft + the IRS what you need to know

1. If you receive a letter or notice from the IRS which leads you to believe someone may have fraudulently used your Social Security Number, respond immediately to the name and address or phone number printed on the IRS notice. 2. If you receive a letter from the IRS that indicates more than one tax…

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