One of the areas that the IRS more frequently becomes involved in deals with expenses that are deducted by a closely-held corporation. Many expenses are personal to the stockholder/employee. When the IRS reviews such expenses and disallows the expenses for business purposes, the...
So in that I'm a self professed ski bum I often get asked on the chair lift by total strangers how someone can legitimately deduct the cost of s ski trip on their taxes. Today for some strange reason I felt compelled to research the...
It is blowing my mind how many people this year have become unwittingly liable for the Alternative Minimum Tax. Good people who thought they had been withholding enough taxes now find themselves owing big. The people hit the hardest seem to have a few common...
The key to slowing down or even preventing the IRS from taking enforcement action is to make certain the IRS representative you are working with places the installment agreement proposal in “pending” status. In order for an installment agreement proposal to be placed in pending status,...
This is a GREAT question that I've been getting lately. The basic answer is - as ALWAYS - it depends. Internal Revenue Code (IRC) 448(d)(2) defines a qualified personal service corporation as an entity where substantially all of the activities involve the performance of services...
This is an overview of actions the Appeals Officer takes during IRS Appeals consideration of an innocent spouse case. It references the IRS IRM 25.15.12.10. The IRS Appeals Officer is to consider the facts and circumstances of the case and all pertinent information when making...
By completing IRS Form 8857 (Request for Innocent Spouse Relief) the innocent spouse is attesting he or she should not be held responsible for the other spouse’s liability. If approved, it does not eliminate the liability; it effectively transfers all of it to the spouse who created the liability. A...
IRS Form 8379 (Injured Spouse Allocation) helps calculate the allocation of income and tax liability to each spouse for the purpose of determining how much of an overpayment should be applied to a spouse’s liability and how much is refunded to the non-liable spouse. For tax purposes, a liability includes debts...
Only by considering all the facts and circumstances of each situation can you determine whether an expense was incurred in a “trade or business,”and whether it was an “ordinary and necessary” expense for that business, making it a deductible expense. Before you can determine whether expenses may be deducted,...
Questions Asked by the IRS in an Initial Interview Audit. The following is a sample set of questions the IRS uses when conducting an initial 'interview' Mandatory Statements/Questions by IRS: IRS Agent /Officer Name? Taxpayer Name? Audit Date/time? Do you have concerns regarding the audit process? ...