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Tax Articles

Colorado Sales Tax Update

General Be mindful of your new tax account number. The Colorado Department of Revenue has moved sales tax into its new tax accounting system. The improved system allows the department to process and distribute taxes more efficiently and assist businesses better than the current system. As part of this change, tax account numbers went to eight digits.…


Summary, Deficiency and Jeopardy IRS Assessments

Collection of federal taxes starts with an assessment of tax due. The assessment serves two functions. It is the government’s mechanism for keeping records and recording a liability. The assessment, authorizing the government to collect, is equivalent to the final judgment that a general creditor must obtain to collect a debt. The IRS makes assessments…


Time Period for Collecting Taxes

By law, the IRS has the authority to collect outstanding Federal taxes for 10 years from the date your tax liability was assessed. The 10-year collection period is suspended: ●  while the IRS and the Ofice of Appeals consider a request for an installment agreement or an offer in compromise. ●  from the date you request a CDP hearing until Appeals…


IRS Centralized Insolvency Operation

Call 800-913-9358 to reach the Centralized Insolvency Operation. Hours are 7 a.m. to 10 p.m. eastern time. If the IRS is a creditor in a bankruptcy case, and you determine that IRS was not originally listed as a creditor, notification of the filing should be sent to IRS to prevent violations of the automatic stay. Send…


Financial Statements: Compilation Vs. Review (SSARS) No. 19

Yesterday I had the pleasure of attending a tax conference sponsored by the Public Accountant Society of Colorado.  This particular topic presented by Dr. Pat Seaton of the University of Northern Colorado caught my attention.  The following is a compilation of my notes from this most excellent presentation on the difference between compiling a financial…


Sale Leaseback

From a tax perspective the fundamental issue is whether a legitimate business purpose exists for the formation of a distinct entity to do a sale leaseback. If one exists and this is pursued all elements of the transaction should meet an arms length standard and be at fair market value. For a sale-leaseback, the business…


Business Ownership Succession Planning

Consideration 1: Selling your business interest outright. When you sell your business interest to a family member or someone else, you receive cash (or assets you can convert to cash) that can be used to maintain your lifestyle or pay your estate taxes. You choose when to sell—now, at your retirement, at your death, or anytime in between. As long…


American Opportunity Credit

Under the American Recovery and Reinvestment Act (ARRA), more parents and students will qualify over the next two years for a tax credit, the American opportunity credit, to pay for college expenses. The American opportunity credit is not available on the 2008 returns taxpayers are filing during 2009. The new credit modifies the existing Hope…


How to Account for Net Operating Loss when Merging Entities

You can merge both a profitable entity with an entity that has a Net Operating Loss assuming that both entities have common ownership or sufficient overlap and a limited history of owner shifts. The Net Operating Loss of the dissolved entity can be utilized for the surviving entity according to Section 381 of the Internal…


IRS has an UPDATED Offer-In-Compromise Form

The IRS has revised Form 656, Offer in Compromise. When submitting an offer use the March 2011 revision of Form 656. Beginning July 5, the IRS will not accept outdated forms. If an offer is submitted on an outdated form, the IRS will return it. Here’s the rub though, the IRS will only return Form…