Medical Expense Deduction Allowed for Lactation Supplies

Under Internal Revenue Code §213 an expense is considered for medical care if it is paid for the diagnosis, cure, mitigation, treatment or prevention of disease. It is deductible on the taxpayer’s Schedule A, subject to 7.5 percent of adjusted gross income for the

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Posted in Medical Expenses

Professional Gambler’s Loss Limited to Winnings. However….

IRC §165(d) stipulates that gambling losses shall be allowed only to the extent of the gains from such transactions. The IRS also cites Valenti v. Commissioner to deny professional gambler's deductions for their net gambling losses in excess of winnings. However gambling-related travel expenses are not subject to

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Posted in Business Expense, Business Income, Gamble

Communicating with the IRS Requires Organized + Detailed Note Taking

When you call the IRS I suggest doing it as early in the work day as possible to minimize wait time.  Have a pen and pad of paper in hand and ideally be sitting in front of a computer.  Write

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Posted in Appeals & Audit Resolution, Basis, IRS Appeal, IRS Audit, IRS Collections, IRS Enforcement, IRS Examination, Tax Court, Tax Guidance & Preparation, Tax Problems & Requests

Overstated Basis Causes Understated Income However …..

The lesson I learned today is that an overstatement of basis (cost of an asset) could result in an understatement of income in the future when the asset is sold but is not necessarily the same as under reported income that,

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Posted in Asset Classification, Basis, Business Expense, Rental Real Estate

Burden of Proof

The IRS as many of you are painfully aware is often looked upon as accusing first without due process requiring the tax payer to shoulder the burden of proof in regards to his or her innocence relevant to the Internal

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Posted in Appeals & Audit Resolution, Cancelled Debt, IRS Appeal, IRS Audit, IRS Collections, IRS Enforcement, IRS Examination, IRS Levy, IRS Lien, IRS Mediation, IRS Penalties, IRS Penalty and Interest Abatement

IRS Expanding Audits to Unrelated Tax Years and Tax Matters

According to the Treasury Inspector General for Tax Administration (TIGTA) the IRS needs to expand audits to other tax years and tax matters when large dollar amounts are involved in a preexisting audit making it all the more important to

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Posted in Appeals & Audit Resolution, Audit Reconsideration, IRS Audit, IRS Collections, IRS Enforcement, IRS Examination, IRS Mediation

IRS Implications of Paying Yourself

Another fabulous question came my way today from a small business owner that is actually proving to be monetarily successful and wants to know how to pay herself while minimizing her tax burden. Basically the answer depends first on the

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Posted in Paying Taxes, Payroll Tax Problems, Sole Proprietor, Sub-chapter S, Tax Guidance & Preparation

Make Sure the Person You Are Paying to Sign Your Tax Return Has A Practitioner Tax Identification # (PTIN) IRS Notice 2011-80

I routinely get calls from taxpayers who thought they had a solid trusting relationship with their tax adviser only to discover otherwise.  The stories involved are usually quite tragic as the relationship one has with their tax adviser has been

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Posted in PTIN

United States Postal Service Advantage – Post Mark Date v. Delivery Date

In discussing expiration dates to the 90 day notice I rediscovered an interesting fact this morning about the difference between a post mark date and a delivery date worth researching and posting. Generally speaking when sending in packages to the

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Posted in Tax Court, Tax Guidance & Preparation

How to Request an IRS Private Letter Ruling

The first revenue procedure published each year provides the necessary guidance to request a letter ruling. The current guidance is in IRS Rev. Proc. 2011-1. A private letter ruling (PLR) is a written response by Chief Counsel to a taxpayer that interprets

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Posted in Privacy, Private Letter Ruling
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