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Tax Articles

What happens with suspended prior year losses when a now non-passive activity generates net income?

If the current year non-passive activity triggers deductibility of prior year suspended passive activity losses, IRC 469(f) permits a prior year passive loss to offset current year income from the same activity, even though that income might be non-passive in the current year. While net income or gain on sale is non-passive, it may be…


Tests for Material Participation IRC 469(h) Reg. 1.469-5T

Material participation is regular, consistent and substantial personal involvement in operations. It is required in businesses, farms, rental real estate owned by real estate professionals, most vacation rentals, hotels, motels, and B&B’s, etc.. Basically most anything reported on IRS form K-1 Line 1 for partnership or ‘S’ Corp businesses should evaluate material participation issues. For…


Stop messing around, take it to IRS Appeals

My mantra lately is becoming …. ‘take it to appeals. Stop messing around.’ The Appeals function offers an additional forum for taxpayers to resolve conflicts and mediate disputes with all operating divisions inside the IRS. The IRS Appeals function should be viewed as an asset to the tax payer. The IRS Appeals function is substantially…


Partial Payment IRS Installment Agreement PPIA

The PPIA is an installment agreement that pays back less than what is owed to the IRS because of the expiration of the statue of limitations for collection. It is requested by filing out  IRS form 433. The PPIA was formally authorized in the American Jobs Creation Act of 2004 which amended Internal Revenue Code…


When to File Collection Appeal Request (CAP) IRS form 9423

A Collection Appeal Request (CAP) –  IRS Form 9423 – is filed in response to the IRS enforcing collection against an accrued amount they believe they are owed by you or the denial or termination of an installment agreement. Except in specific cases involving asset seizure, a conference with the collections function manager is required in…


When to file a request for a Collection Due Process or Equivalent Hearing (CDP) IRS form 12153

The IRS Restructuring and Reform Act of 1998 established the Collection Due Process or Equivalent Hearing (CDP), which is an appeal filed in response to the following collection actions: Notice of Federal Tax Lien Filing and Your Right to a Hearing under IRC Sec. 6320; Notice of Intent to Levy and Notice of Your Right…


Certificate of Lien WITHDRAWAL

A certificate of lien withdrawal will remove the tax lien from the taxpayer’s credit report. The IRS has discretionary authority to withdraw a lien if one of the four criteria is met according to the 1996 Taxpayer Bill Of Rights The lien filing was premature or not in accordance with the IRS procedures. The taxpayer and the IRS entered…