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Tax Articles

Trends in IRS Collection and Enforcement

According to a report filed by the Treasury Inspector General for Tax Administration there has been a 19 % increase of enforcement personnel serving in the Collection and Examination function of the IRS since Fiscal Year 2006. Whereas on average overall IRS staffing increased 4 percent during this same period, from 103,811 employees in Fiscal Year 2006…


What is a Real Estate Professional?

In reviewing James F. Moss, et ux. v. Commissioner 135 TC No. 18 to be a real estate professional, a taxpayer must meet two requirements: (1) More than one-half of the taxpayer’s personal services must be performed in real property trades or businesses in which he materially participates; and (2) The taxpayer must perform more than 750 hours of service in real property…


IRS Accuracy Related Penalties

Section 6662(a) and (b)(1) imposes a penalty equal to 20 percent of the underpayment of tax due to negligence or intentional disregard of the rules or regulations.  If your attitude toward the preparation of your tax returns appears to be cavalier you will definitely be held accountable for the penalty.  That is why it is very important to craft each…


What is a Church?

The IRS developed 14 criteria to evaluate applications for church foundation status. If a church does not meet these criteria, it will not receive tax exempt status. The criteria are weighted with the four most important of these being: • A complete organization of ordained ministers ministering to their congregations. • The provision of regular religious services and religious education…


Alimony Deduction

Back from vacation! Nashville, TN! Awesome town! In reviewing Paul T. Banach v. Commissioner – TC Memo 2010-33 – I learned that payments may be claimed as alimony under §215 if all four requirements of §71(b)(12) are met. Payment in cash will be considered alimony only if the: (1) payment is received by (or on behalf of) a…


What The IRS Instructs You To Do If You Have NOT Filed Your Taxes

Basically the simple answer is file your tax forms with both the US Federal government and applicable state governments.  Start by filing the previous 3 years of income tax returns ASAP. It is possible the IRS may have already filed returns for you. Under Section 6020(b) of the Internal Revenue Code, the IRS may file a…


IRS Mileage Deduction Rate Increases: $0.55.5-Business; $0.23-Medical or Moving; and, $0.14-Charitable

The rate will increase to 55.5 cents a mile for all business miles driven from July 1, 2011, through Dec. 31, 2011. This is an increase of 4.5 cents from the 51 cent rate in effect for the first six months of 2011, as set forth in Revenue Procedure 2010-51. In recognition of recent gasoline…


IRA’s Cannot Hold Sub-Chapter ‘S’ Stock: Trusts Can Though

To be taxed as an S corporation, a C corporation must elect S status by filing IRS Form 2553. Electing S status is fairly simple for a new or existing corporation, but meeting the requirements for S status can be more complex when the C corporation is not owned by an individual. Eligibility is based on §1361, which states only a “small…


Protective Tax Refund Claim

Protective refund claims are filed to preserve a taxpayer’s right to claim a refund when the taxpayer’s right to the refund is contingent on future events like future litigation, and may not be determinable until after the statute of limitations expires. Without a protective refund claim, taxpayers will only have a three-year statute of limitations in which to seek a refund. For example as…