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Tax Articles

Injured Spouse IRS Form 8379 Explained

IRS Form 8379 (Injured Spouse Allocation) helps calculate the allocation of income and tax liability to each spouse for the purpose of determining how much of an overpayment should be applied to a spouse’s liability and how much is refunded to the non-liable spouse. For tax purposes, a liability includes debts for federal or state taxes, child support, and delinquent student loans.…


Questions Asked by the IRS in an Initial Interview Audit

The following is a sample set of questions the IRS uses when conducting an initial ‘interview’ Mandatory Statements/Questions by IRS: IRS Agent /Officer Name? Taxpayer Name? Audit Date/time? Do you have concerns regarding the audit process? I have enclosed a copy of Pub 1 and Notice 609, which was included with your Internal Revenue Service…


Retirement Plan Early Distribution Tax Consequences

Payments received from your Individual Retirement Arrangement before you reach age 59 ½ are generally considered early or premature distributions. Early distributions must be reported to the IRS and are usually subject to an additional 10 percent tax.  Distributions you rollover to another IRA or qualified retirement plan are not subject to the additional 10…


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.…


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…


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…


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…


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…