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Tax Articles

How to Respond to the ’90 Day’ IRS Letter aka Statutory Notice of Deficiency – IRS Publication 3598

IF you find yourself ‘running out of time’ on the 90 day period, filing a tax court petition and paying court fees and representing yourself pro-se or hiring a tax court lawyer are last choice decisions. They are costly and tax court I hate to say it usually favors the government. The best solution is to…


Restaurants and Bars: IRS Audit Technique Guide an Introduction

Regardless of the type of restaurant one fact that is consistent when it comes to IRS audits is that all restaurants have numerous sales transactions with small(er) dollar amounts, taking place in a short time frame, such as during lunch or dinner. Many restaurants, especially smaller or closely held ones, are cash intensive and employees…


Partial Payment Installment Agreements with the IRS – some requirements

According to the Internal Revenue Manual Chapter a full Collection Information Statement is required for all Partial Payment Installment Agreements (PPIA’s). IRS Forms 433A or 433B must be completed to determine the taxpayer’s ability to pay Conditional expenses are not allowed for PPIAs. Only necessary expenses are permitted. For in-business trust fund accounts (employment…


How to Get a ‘Fresh Start’ with the IRS

According to IR-2011-20 published on Feb. 24, 2011, in its latest effort to help struggling taxpayers, the Internal Revenue Service announced a series of new steps to help people get a fresh start with their tax liabilities. The goal is to help individuals and small businesses meet their tax obligations, without adding unnecessary burden to taxpayers.…


How do you request a CDP or equivalent hearing with the Offi ce of Appeals?

Complete IRS Form 12153, Request for a Collection Due Process or Equivalent Hearing, or other written request with the same information and send it to the address shown on your lien or levy notice. To request an equivalent hearing, you must check the Equivalent Hearing box on line 6 of Form 12153 or if you don’t use Form 12513 write that…


Severance Payments NOT Subject to FICA Tax according to court, but ….

In February 2010, a federal district court in U.S. v. Quality Stores, Inc., (DC MI 2/23/2010) 105 AFTR 2d 2010-1110, ruled that severance payments made to terminated employees by a company going out of business were not “wages” subject to FICA. The Court said that “…where severance payments are intended to serve the same purpose as social security benefits, i.e., support for workers in…


Tax Treatment of Land Easement Transactions Rental Income vs. Sales Proceeds

According to the National Association of Tax Preparers the key to reporting transactions that involve land easements is to first determine whether the payment represents rental income or sale proceeds.  If the taxpayer was leasing a land easement for a specific period of time to (for example sake) a cellular provider, the taxpayer should be…