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A recent change to the tax code means that some taxpayers may be able to take a deduction on qualified overtime compensation. The deduction covers the amount above and beyond a taxpayer’s normal rate of pay.

Like other agencies and businesses, the IRS increasingly relies on programs and technology to streamline its work. This includes using an algorithm to audit returns.

The IRS has the right to examine taxpayers’ returns. The agency cannot, however, repeatedly audit the same taxpayer for the same issue, and there was either no change or a minor change. The IRS refers to this practice as repetitive examinations.

Every year, taxpayers who have certain foreign financial accounts must report them. Individuals report by filing a Report of Foreign Bank and Financial Accounts (FBAR) on the Financial Crimes Enforcement Network (FinCEN) Form 114. Those who fail to file face steep penalties.

The months after losing a spouse can be stressful. In addition to managing grief, the loss of a partner often comes with significant paperwork and bureaucracy. That something may slip through the cracks isn’t surprising. If it relates to estate taxes, however, it can potentially have serious financial implications.

Taxpayers aren’t always able to pay their taxes on time. Failing to pay on time not only triggers interest payments but may also involve other financial penalties. In some cases, taxpayers may get relief from penalties if they can show reasonable cause for why they failed to file on time.

Receiving an IRS Summons can seem intimidating, and individuals may feel that it’s easier to simply hand over whatever the IRS wants. In cases when a taxpayer believes a summons is overly broad, the taxpayer has the right to challenge a summons.

Owning a second home, especially in retirement, isn’t unusual. Others may not want the responsibility of owning a second home and instead rent homes in Arizona to escape winter. What many don’t realize is that, even if their residency remains in another state, they may still be on the hook for paying taxes in Arizona.

With the latest news release from the IRS, we can expect increased scrutiny for Employee Stock Ownership Plans.

When the IRS wants to collect a tax debt, it has several options, including tax liens and levying property to satisfy a debt. But when the government is concerned that following the usual collection procedures will result in a loss to the government, they can use a jeopardy assessment or levy.

Section 6321 of the Internal Revenue Code (IRC) grants the Internal Revenue Service (IRS) the ability to issue liens on a taxpayer's property. Overall, this provision is very broad, covering almost any delinquent taxes, but there are subtleties in the law that can profoundly impact taxpayers' liability.

If the IRS has levied and seized your property, you probably have many questions about how this works and whether you can recover your property. In some cases, you can recover your property if you act quickly enough, make alternate payment arrangements, or you can show the property seizure creates an economic hardship.

From news articles to casual conversations, people often use the terms “tax fraud” and “tax evasion” as if these two things are the same. But, in the eyes of the law, these concepts are not synonyms. They're different concepts with distinct requirements and consequences. Tax Fraud vs. Tax Evasio...

If you're facing prosecution for a tax crime, you may be considering fleeing the United States to avoid prison and wonder what would happen if you do so. It's impossible to state all of the possible outcomes in a blog post—for that, you need an experienced attorney to review your case—but we can ...

How long does the Internal Revenue Service have to collect unpaid taxes from you? The statute of limitations under the Internal Revenue Code is then years that begins running after the first notice you receive foran outstanding tax balance.

A taxpayer’s intent, or reasons, for underreporting income or otherwise having errors on a tax return matters. The IRS divides this into willful and non-willful conduct.

Arizona is a "community property" state, meaning the law supports that spouses share ownership of assets acquired during their marriage. This can include any debts that are owed by spouses to the Internal Revenue Service. The IRS uses a two-step process to determine what qualifies as community property regarding one spouse's debt. In determining the

Whether a taxpayer’s activity is a business or a hobby can potentially affect their taxes and tax liability. The IRS defines a hobby as an activity a person pursues for enjoyment and not for making a profit. Businesses, in comparison, are activities that are engaged in for the purpose of making a profit.

Taxpayers have the right to minimize their tax liability. The problem arises when they use illegal or prohibited practices to escape their liability. One of these banned methods is known as sham transactions.

Recognizing that even the best-run businesses often have gaps in their documentation, the Cohan Rule fills out a middle ground, allowing businesses to claim expenses even when they’re missing receipts or other needed documentation. The rule essentially recognizes that businesses incur expenses, and estimates of those expenses are reasonable.

Under the new rules, partners no longer have a role to play in any audit or examination. They aren’t even notified of the audit and won’t be part of any defense during the examination. While the partnership itself will be notified of the audit, individual partners won’t be informed.

Mistakes happen on tax returns. In some cases, the IRS will request a revision, and the taxpayer will correct the mistake. In other cases, the taxpayer may need to pay not only the unpaid taxes and interest but also a penalty.

When the IRS is investigating a taxpayer for mistakes on a tax return or a lack of a return, the agency has the power to gather evidence. This includes books, papers, records, and other documents that might be relevant for the investigation.

When employers fail to pay payroll taxes, the IRS may assess them under the Trust Fund Recovery Penalty (TFRP). The IRS may assess the TFRP against anyone who is responsible for collecting and paying these taxes and willfully fails to pay them.

One of the lesser-known branches of the IRS is the Office of Professional Responsibility (OPR), which oversees professionals who work with taxpayers. OPR’s responsibilities include ensuring tax advisors and other tax professionals follow Circular 230’s standards.