Letter 2202B: Initial Contact Letter for Audits
If you received an audit notice it is important to note the timeline and the request for information within the letter, failure to timely respond may result in limited options for resolution later.
Cannabis Business Use of Section 471(c)
Cannabis related businesses face special tax challenges, which can in part be alleviated through proper deduction of costs of goods sold (COGS).
IRS announces thousands of micro-captive insurance audits to begin in coming months
The IRS announced today that it plans to begin auditing several thousand more taxpayers that have operated section 831(b) or micro-captive insurance companies in the coming months. The IRS has been aggressively pursing taxpayers operating section 831(b) captives for several years, and it has been...
The IRS Breaks Its Silence on Cryptocurrency and It Isn’t Good News
After nearly five years, the IRS has finally broken its silence on cryptocurrency by issuing Revenue Ruling 2019-24, which provides some clarification regarding the tax treatment of cryptocurrency. This article summarizes what the IRS has told us and notes those items that still have not been addressed by the IRS. If you are involved in cryptocurrency investments, purchases, sales, or mining operations, these details are important because, as previously discussed, the IRS and United States Treasury Department are auditing taxpayers whom they believe to be involved in cryptocurrency, and the IRS has frequently warned that it intends to pursue criminal prosecution of those taxpayers that do not accurately disclose their cryptocurrency transactions.
Improving Employees’ Health and Reducing Employment Taxes Through A Wellness Plan
Can I receive Employment Tax Benefits and Improve my Employees' Health? If you find yourself searching for a plan that encourages your employees to hit the gym instead of eating cake in the break room, you may stumble across some health plans that encourage employees to get healthy and saves you...
I received a letter from the IRS regarding my cryptocurrency (virtual currency). Now what?
The IRS now has information regarding U.S. individuals who have cryptocurrency and are sending out automated letters to these individuals. The letter from the IRS is numbered Letter 6174-A, and it states, “We have information that you have or had one or more accounts containing virtual currency but may not have properly reported your transaction involving virtual currency, which include cryptocurrency and non-crypto virtual currencies.” In summary, if you invested in a cryptocurrency, or have a mining operation, you should be on the lookout for correspondence from the IRS regarding your involvement and make sure that you have properly reported all your income from virtual currency sources, including information returns (W-2s, 1099s).
Taxing Issues for Divorcing Parents: Dependent Exemptions, Head of Household Filing Status, Dependent Care Credit, Child Tax Credit, and Higher Education Tax Credits
The Tax Cuts and Jobs Act of 2018 made significant changes to the Tax Code, including child-related tax issues. If you are going through a divorce, be sure that your family law attorney is aware of Dependent Exemptions, Head of Household, Dependent Care Credit, Child Tax Credit, and Higher Education Tax Credits to ensure that you are properly represented during divorce. Merely addressing these issues in a divorce decree is not enough because rarely does the Tax Code respect the provisions of the divorce decree. Instead, you must ensure that you have taken the necessary steps to meet the requirements in the Tax Code.
IRS announces that it will waive penalties for many whose tax withholding and estimated tax payments fell short in 2018
The IRS announced today, during the government shutdown, that it will waive the estimated tax penalty for many taxpayers whose 2018 federal income tax withholding and estimated tax payments fell short of their total tax liability for the year.
Do you have a legal obligation to file an amended income tax return?
You’ve recently discovered an error on your income tax return. Do you have a duty to notify the IRS? Generally, no, you have no legal obligation file an amended income tax return, but in some circumstances, it may be beneficial to file an amended income tax return. However, taxpayers should carefully consider whether to file an amended income tax return, and if they decide to file one, they should time the filing carefully.
The Qualified Offer: An Important Tool When Litigating Against the IRS
If you find yourself in litigation with the IRS, or in the middle of an administrative dispute that seems to be going nowhere, it’s time to consider a taxpayer’s best friend: the qualified offer. The qualified offer provisions allow taxpayers to recover fees and costs when the IRS rejects a settlement offer, and the taxpayers win a determination that requires a lesser amount than the offer.
How Can I Get Rid of Tax Penalties?
Our tax system is based on voluntary reporting, and the Tax Code is full of different penalty provisions to encourage accurate voluntary reporting by penalizing those that do not. Even if all you did was fail to timely file your return and timely pay the amount shown on your return, you could be facing penalties of as much as 45% of the tax that you owe. But don’t despair; there are several ways to alleviate penalties. This article will focus on the three most common penalties: failure to file, failure to pay, and accuracy-related penalties.
New Year, New Alimony Tax Rules
The Tax Cuts and Jobs Act is the first significant tax reform effort by Congress in more than 30 years, and it repeals the deduction for alimony and separate maintenance payments starting in 2019. Learn about the new changes and account during 2018.
