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Tax Articles

What to do IF you do not agree with an IRS Examiner

If you do not agree with the proposed changes of your assigned examiner, you tell this to the examiner by saying or writing  ‘I do not agree with your changes.’.  The first thing the examiner must do is explain to you your appeal rights.  If he/she doesn’t you ask for a supervisor. It is in…


IRS Examination Selection Criteria

Your tax return may be examined for any one of a number of reasons, and the exam can take place in any one of a variety of ways, in a variety of locations, and quite frankly without you even knowing about it.  It really is quite remarkable but your return may be selected for examination…


IRS Helps Small Employers Claim New Health Care Tax Credit; Forms and Additional Guidance Now Available on Small Business Health Care Tax Credit

The Internal Revenue Service today released final guidance for small employers eligible to claim the new small business health care tax credit for the 2010 tax year. Today’s release includes a one-page form and instructions small employers will use to claim the credit for the 2010 tax year. New Form 8941, Credit for Small Employer…


How to Prepare a Request for an Appeal of an IRS Examination – IRS Form 12203

If you decide you want to present your dispute to IRS Appeals, you will need to prepare a request for Appeals and mail it to the office that sent you the decision letter. There are essentially 2 types of requests For Appealing an Examination 1.  Small Case Request – Prepare a small case request instead…


Difference between a real estate professional, a dealer in real property and an investor in real estate for tax purposes

A real estate professional must spend more than one half his/her time on ‘real property business.’  Unless the real estate professional ‘materially participates’ in rental activity losses are passive. A real estate dealer of real property sells and buys properties on a frequent and substantial basis and usually carries an inventory of properties for sale. …


Passive Activities and the Real Estate Professional – IRC 469(c)(7) and Reg. 1.469-9

A qualifying real estate professional may deduct rental real estate losses for each rental in which he/she materially participates provided 3 tests are passed: More than one half of the taxpayer’s personal services must be in real property business.  ‘Real property’ trade or business activity includes: development, construction, acquisition, conversion, rental, management, leasing, and brokerage. …


Passive Asset Disposition

There are two distinct issues to evaluate when disposing of a passive  asset: Is the disposition considered to be a qualifying disposition under reg 1.469 making the losses deductible? Is the gain on the sale truly passive income and entered on IRS form 8582 triggering deductibility of unrelated passive losses? Current and suspended losses are…


Adoption Tax Credits including Tax Credit Carry Forwards are now FULLY REFUNDABLE in tax year 2010 According to IRS Notice 2010-66

According to Marilyn E. Brookens, an attorney in the IRS Office of Associate Chief Counsel (Income Tax and Accounting), “Effective for the 2010 tax year, the adoption tax credit is a FULLY REFUNDABLE TAX CREDIT.  The credit was made refundable by Section 10909 of the Patient Protection and Affordable Care Act.  The refundable credit is…