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Tax Articles

LOOKOUT SMALL BUSINESS OWNERS FILING IRS Form 1120-S or 1065 – Net Operating Loss (NOL) Carry backs trigger Alternative Minimum Tax (AMT)

Please be advised that Net Operating Losses carried back to previous tax years can trigger an Alternative Minimum tax liability in the previous tax year that the loss was carried to, even if you originally did not have a tax liability in the year the loss was carried to. More importantly the Internal Revenue Code…


Who should and who must file an income tax return – refundable tax credits

To determine if you are obligated by law to file a US tax return and pay US income taxes you should consult the instruction book that accompanies the IRS form 1040.  You must file a federal income tax return if your income is above a certain level; which varies depending on your filing status, age…


Situations that would not qualify for IRS Fast Track Mediation

  1. Issues for which there is no legal precedent

  2. Issues where the courts have rendered opposing or differing decisions in different jurisdictions

  3. Industry Specialization Program issues

  4. An issue for which you filed a request for competent authority assistance

  5. Service Center penalty appeals cases

  6. Service Center Offer in Compromise cases

  7. Collection Appeals Program cases

  8. Automated Collection System cases

  9. Constitutional issues

Choosing a Tax Preparer

If you pay someone to prepare your tax return, know that you are legally responsible for what’s on your tax return even if it is prepared by someone else. So, it is important to choose carefully when hiring an individual or firm to prepare your return. Most return preparers are professional, honest and provide excellent…



The Taxpayer Advocate’s 2010 annual report to congress describes continuing concern that IRS collection practices inflict unnecessary harm on financially struggling taxpayers and fail to achieve the IRS’s overriding objective of increasing long-term voluntary compliance with the tax laws.  “Tax collection requires a delicate balancing of the government’s interest in collecting revenue and ensuring that…


Common Terms used in IRS Appeals

90-day letter Term includes the 150-day letter. Admin File A file consisting of one or more examined tax returns of a taxpayer, the report of examination, and all papers, correspondence, and other documents relative to the taxpayer’s liability for the year or years involved. An administrative file may also consist of collection related documents such…


IRS Fast Track Mediation: Small Businesses + Self Employed

The IRS released Announcement 2011-05 creating opportunity for small business and self-employed taxpayers to use the Fast Track Settlement process to resolve disputes within the IRS’s Small Business/Self Employed (SB/SE) units of the IRS in certain locations including Chicago, Ill.; Houston, Texas; St. Paul, Minn.; Philadelphia, Pa.; central New Jersey, and San Diego, Laguna Niguel, and…


Dept of Justice Program to Shut Down Schemes and Scams – Check out your Tax Return Preparer

The Department of Justice, Tax Division, working together with the IRS, has intensified its efforts to shut down fraudulent tax return preparers and promoters of tax-fraud schemes, using both civil and criminal enforcement. Under the Tax Division’s civil injunction program, the Division files a lawsuit seeking a court order that prohibits a person from engaging in…


Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 aka ‘Bush Tax Cut Extensions’

Individuals The following Bush tax cuts that expired for tax years beginning after December 31, 2009, under the Economic Growth and Tax Relief Reconciliation Act of 2001  (EGTRRA), are extended through 2011: • Election to claim itemized deduction for state/local sales taxes. • Interest deduction for mortgage insurance premiums. • Up-to-$250 above-the-line deduction for teachers’ out-of-pocket…