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Tax Articles

IRS Changes Lien Process

The IRS is making important changes to its lien filing practices that will lessen the negative impact on taxpayers. The changes include: Tax Lien Thresholds – The IRS will significantly increase the dollar thresholds when liens are generally filed. The new dollar amount is in keeping with inflationary changes since the number was last revised.…

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What Income is Taxable? What Income is NOT Taxable? IRS Publication 525

Generally, most income you receive is considered taxable but there are situations when certain types of income are partially taxed or not taxed at all.  Examples of NON Taxable income include: Adoption Expense Reimbursements for qualifying expenses Child support payments Gifts, bequests and inheritances Workers’ compensation benefits Meals and Lodging for the convenience of your…

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What is an Enrolled Agent?

An enrolled agent (EA) is a federally licensed tax practitioner who has technical expertise in the field of taxation and is empowered by the US Treasury to represent taxpayers for audits, collections and appeals before the IRS.  Only enrolled agents demonstrate their competence in matters of taxation and report their hours of continuing professional education…

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Documents Required When Negotiating Payment with the IRS

Alimony or Child Support Received Commission statement Completed Form 433- A, B or F Copies of delinquent tax returns and /or ASFR returns Explain in detail why the taxpayer is not able to full pay or borrow to pay Employer’s information including work number Investment income Life insurance policies cash out value Number of individual’s…

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Characterizing Liquidating Distributions – Wallis, et ux. v. Commissioner TC Memo 2009-243

Liquidating payments made by a partnership to a retiring partner are governed by §736.  In general, if the payments are in exchange for partnership property, the amount received in excess of the exiting partner’s outside basis in his partnership interest is taxed as capital gain.  On the other hand, if the payments represent a distributive share of partnership income or are deemed to be guaranteed…

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Bartering

Bartering is the trading of one product or service for another. Usually there is no exchange of cash. However, the fair market value of the goods and services exchanged must be reported as income by both parties. A barter exchange functions primarily as the organizer of a marketplace where members buy and sell products and…

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Be Sure to Allocate Costs If You Share Ownership: US Tax Court Summary Opinion 2010-15: Sword v. Commissioner

Unless of course you are married and filing a joint tax return, whereby the IRS essentially classifies both individuals together as a single tax payer, you should take care to allocate costs equitably for items of shared ownership. In US Tax Court Summary Opinion 2010-15 (Sword v. Commissioner) the tax payer as parents took advantage…

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