Cash Transaction Archives - John R. Dundon II, Enrolled Agent
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Cash Transaction

26 Jan

Posted at 00:00h in Amortization, Business Expense, Cash Transaction, Disallowed Expenses, IRS Appeal, IRS Audit, IRS Enforcement, IRS Examination, Marijuana

As many of you know who follow my tax musings via this blog, I recently led a team of people that shepherded a Marijuana Dispensary through the IRS Examination and Appeals functions. The dispensary in question was owned and operated by a taxpayer who in...

15 Jan

Posted at 00:00h in Business Expense, Business Income, Cash, Cash Transaction, Employee Business Expense, Employment Tax, Entity Classification, FICA, Income, Independent Contractor, Payroll Tax Problems

I was talking with a taxpayer the other day who registered as an LLC with Colorado Secretary of State. She developed an intriguing business model that is doing remarkably well according to the financial statement. As part of a tax planning conversation our discussion surrounding...

04 Jun

Posted at 00:00h in Abusive Tax Shelter, Basis, Boot, Capital Gain, Capital Loss, Cash Transaction, Deductible Expense, Distributions, Tax Guidance & Preparation

According to IRC 357(a) if property transferred to a corporation in an IRC 351 nonrecognition transaction is subject to a liability, the assumption of that liability by the corporation generally is not treated as taxable "boot" for purposes of determining the amount of any taxable gain on...

10 Feb

Posted at 00:00h in Appeals & Audit Resolution, Asset Classification, Business Expense, Cash Transaction, COGS, IRS Mediation, Marijuana, Net Operating Loss, NOL, Tax Abuse, Tax Court, Tax Guidance & Preparation, Tax Problems & Requests

The Internal Revenue Code is a complex beast.  In the lunacy of it all I've been asked to define 'trafficking' as it relates to 26 USC § 280E - Expenditures in connection with the illegal sale of drugs which states as follows: "No deduction or credit shall be allowed...

29 May

Posted at 00:00h in Cash, Cash Transaction, Cohan, Tax Court, Tax Deductible Expenses, Tax Guidance & Preparation, Tax Problems & Requests

As I understand the Cohan rule under the IRS' Guidelines For Determining Noncompliance, taxpayers are allowed a deduction for an estimated amount of expenses when it is clear the taxpayer is entitled to a deduction but is unable to establish the exact amount of the deduction. Specifically the IRS...

14 Apr

Posted at 00:00h in Cash Transaction, IRS Audit, IRS Collections, IRS Examination, IRS Penalties, IRS Penalty and Interest Abatement

Businesses that receive more than $10,000 in cash in one transaction (or several related transactions) must file IRS Form 8300, Report of Cash Payments Over $10,000 Received in a Trade or Business. According to Program Manager Technical Advice (PMTA) 2010-012. Reg. §1.6050I-1(c)(1) and the instructions to Form 8300, “cash”...

22 Apr

Posted at 00:00h in Audit Technique Guide, Cash Transaction

The purpose of this audit techniques guide (ATG) is to provide guidance for the examination of income in a cash intensive business. This guide can be used during all phases of the examination but is not all-inclusive The accurate reporting of income and expenses by cash...

18 Jul

Posted at 00:00h in Business Expense, Cash Transaction, FBAR, IRS Appeal, IRS Audit, IRS Collections, IRS Enforcement, IRS Examination, Paying Taxes, Tax Deductible Expenses, Tax Guidance & Preparation

In a tax emergency, would you be ready? Well– good tax records not only help you prepare your tax return. They also help you answer questions if your return is selected for examination or prepare a response if you are billed for additional tax. Fortunately, you...

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