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Tax Articles

Kiddie Tax Example Question

Question: Sam, age 15, came into your office to have his taxes prepared. He has wages of $6,500, interest income of $1,500, and dividend income of $5,500. He is claimed as a dependent by his parents, however his parents have not filed their return yet and Sam wants to complete his return now. Can you…


Charitable Deduction of Parochial School Tuition

Meir Katz (J.D. 2010, Georgetown) has posted The Economics of § 170: A Case for the Charitable Deduction of Parochial School Tuition on SSRN. It is fascinating. Here is the abstract: That payments for parochial school tuition are not deductible under § 170 is a foregone conclusion in the eyes of many tax policy scholars.…


Audit Reconsideration Request

‘Audit reconsideration’ requests the IRS to reconsider action it has taken with the taxpayer by allowing the taxpayer to present information that may not have been available to the IRS previously. This procedure is used when an assessment has been made due to an audit of the taxpayer’s return or when the IRS has created…


IRS Releases Form 8941 to Help Small Businesses Claim New Health Care Tax Credit

The Internal Revenue Service released a draft version of the form that small businesses and tax-exempt organizations will use to calculate the small business health care tax credit when they file income tax returns next year. The IRS also announced how eligible tax-exempt organizations –– which do not generally file income tax returns –– will…


How to obtain copies of tax returns and canceled checks from the Colorado Department of Revenue

Taxpayers who need to get copies of Colorado tax forms (including electronically filed returns) and canceled checks submitted to the Department of Revenue must use the “Request for Copies” form DR 5714 available on the Colorado Taxation Web site through this link: NOTE: In an effort to avoid identity fraud, the department requires taxpayers…


Release of IRS Lien/Levy due to hardship

IRC Sec. 6343(a)(1) provides that, if under regulations prescribed by the secretary, the secretary has determined that a levy is creating an economic hardship due to the financial condition of the taxpayer, the secretary must release all or a part of the taxpayer’s property or rights to property. A levy creates an economic hardship due…


Tax Avoidance Transaction – ROBS – Rollover as Business Start-up

ROBS – Rollover (of tax deferred or retirement $$) as Business Start ups – arrangements were created to secure available funds held in tax-deferred savings (usually under a prior employer’s plan) for an aspiring entrepreneur without incurring resultant tax liabilities that would ordinarily apply to a distribution. Whether ROBS are abusive or not is a…


New reporting rules for passive activities force group decisions

As part of the IRS’s continuing efforts to require greater disclosure of tax positions and strategies on returns, it recently released new, mandatory disclosure rules for grouping passive activities. Rev. Proc. 2010-13 for the first time mandates that passive-activity groupings and regrouping, as required under Code Sec. 469 regulations, be disclosed on the taxpayer’s return.…


Charitable Donations – Tax Tips

Charitable contributions must be made to qualified organizations to be deductible. You can ask any organization whether it is a qualified organization and most will be able to tell you. Charitable contributions are deductible only if you itemize deductions using Form 1040, Schedule A. You generally can deduct your cash contributions and the fair market…