IRS provides guidance on new rules for employment tax levies
Mike Habib, EA
The IRS has issued interim guidance to its directors and collection area offices that explains when it is permissible to issue a levy to collect employment taxes without first giving the taxpayer a pre-levy collection due process (CDP) notice.
The IRS is authorized to take [...]

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Distressed asset trust transactions identified as listed transactions
Mike Habib, EA
In a Notice, the IRS has identified a distressed asset trust (DAT) transaction as a listed transaction under Reg. § 1.6011-4(b)(2), Code Sec. 6111 and Code Sec. 6112. In such a transaction, a tax-indifferent party contributes one or more distressed assets with a high basis and [...]

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Reconstructing Your Records
Mike Habib, EA
Reconstructing records after a disaster may be essential for tax purposes, getting federal assistance or insurance reimbursement. Records that you need to prove your loss may have been damaged or destroyed in a casualty. While it may not be easy, reconstructing your records may be essential for:
* Tax [...]

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Direct from the IRS
Mike Habib, EA
Is an Offer in Compromise Right for You?
Should the IRS determine that a taxpayer is unable to pay the liability in a lump sum or through an installment agreement and has exhausted the search for other payment arrangements the last option would be to file an Offer in Compromise (OIC).
An [...]

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As per the IRS Offer in Compromise
Mike Habib, EA
If taxpayers are unable to pay a tax debt in full and an installment agreement is not an option, they may be able to take advantage of an offer in compromise (OIC). Generally, an OIC should be viewed as a last resort after taxpayers have explored all [...]

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Most common questions by corporations and other business entities on 1099 reporting requirements. Below is a direct IRS response to frequently asked question on 1099 issues.
Mike Habib, EA
IRS provides further guidance on Form 1099 reporting
Questions on Corporations. Generally, payments to corporations are not reported on Form 1099-MISC, Miscellaneous Income. Here are some of the questions [...]

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IRS and treaty partners target Liechtenstein accounts
Mike Habib, EA
An IRS news release reports that IRS is initiating enforcement action involving more than 100 U.S. taxpayers to ensure proper income reporting and tax payment in connection with accounts in Liechtenstein.
Observation: IRS is not alone in raising concerns about such accounts. [...]

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Supreme Court won’t review case holding that partner must pay tax on escrowed disputed funds
Mike Habib, EA
The Supreme Court has declined to review a decision of the U.S. Court of Appeals for the First Circuit that an individual who was a partner in a partnership had to pay tax on his distributive share of the [...]

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As you probably know by now, I specialize in representing individuals and businesses before the IRS and any taxing authority.
Mike Habib, EA
IRS strengthened enforcement policies, along with their new and complex tax regulations, makes it essential to properly plan for and manage IRS examinations or collections efforts in a proactive manner. Applying new dispute resolution [...]

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Want to stop a wage levy or a bank levy? Read on….
Mike Habib, EA
If you have not noticed, the IRS is getting more aggressive in their collection, and audit activities. Enforcement actions is at its highest level for years now!
Here is the scoop directly from the IRS
Fiscal Year 2007 Enforcement and Services Results
The IRS continues [...]

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Tax Return Preparer Fraud
Since I recently represented an innocent couple who were victims of Tax Return Preparer Fraud, and successfully helped them in their audit, I thought you might be interested in the info below.
Per the IRS:
FS-2008-10, January 2008
Return preparer fraud generally involves the preparation and filing of false income tax returns by preparers who [...]

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In an effort to stimulate the economy, the recently-enacted Economic Stimulus Act of 2008 requires the U.S. Treasury to send rebate checks to eligible individuals.
Who qualifies for rebates, how they are calculated, and what, if anything extra, needs to be done to get one.
You’ve probably heard that the government is going to be sending [...]

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Tax problem with capital gain taxes, S Corp capital gain tax problem
Ninth Circuit holds that gain was recognized on disputed sale in shareholder’s forced buyout
Glenn Hightower v. Comm., (CA9 2/12/2008)
The Court of Appeals for the Ninth Circuit, affirming the Tax Court’s decision, has held that an individual who had been a 50% co-owner of [...]

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IRS gets tougher on variable prepaid forward contracts with share lending arrangements Variable Prepaid Forward Contracts Incorporating Share Lending Arrangements
An IRS coordinated issue paper for all industries concludes that variable prepaid forward contract (VPFC) transactions that incorporate a share lending or similar agreement permitting the counterparty to borrow or dispose of the pledged shares [...]

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Final substitute return regs adopt temporary and proposed regs with one minor changeT.D. 9380, 2/12/2008; Reg. § 301.6020-1
Mike Habib, EA
In 2005, IRS issued temporary (also issued as proposed regs) that broadened the scope of when IRS-prepared substitute returns (SFR) are valid. Specifically, the temporary regs provide that a document or set of documents (including a [...]

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IRS tax problem, IRS penalty, IRS Tax court ruling in favor of taxpayer
Tax Court found that it could hear challenge to frivolous return penalty before rejecting summary judgment in favor of IRS
Callahan (2008), 130 TC No. 3
After determining that the taxpayers could challenge a frivolous return penalty before it, the Tax Court went on to [...]

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IRS targets tool reimbursement plans that recharacterize wagesEmployee Tool & Equipment Alert
on IRS’s website http://www.irs.gov/businesses/article/0,,id=178028,00.html
IRS has established a cross divisional team to address significant concerns with employee tool and equipment plans that purport to be valid accountable plans. Taxpayers that are considering implementing these plans, which are widely marketed to various industries, including the [...]

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Changes made to Form 1042-S (Foreign Person’s U.S. Source Income Subject to Withholding)
Mike Habib, EA
The IRS has made some changes to the electronic/magnetic media filing procedures for 2007 Form 1042-S, Foreign Person’s U.S. Source Income Subject to Withholding, and also released the 2008 version of the form. Form 1042-S is filed by withholding agents to [...]

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Music composer tax related capital gain treatment
IRS Temp reg describes how and when to elect capital gain treatment for self-created musical works
T.D. 9379, 02/07/2008, Reg. § 1.1221-3T; Preamble to Prop Reg 02/07/2008, Prop Reg § 1.1221-3
IRS has issued a temporary reg on the time and manner for making an election under Code Sec. 1221(b)(3) to [...]

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Employment tax penalty abatement, Payroll tax problem, Abate tax penaltyCourt says bank error (not employee error) may be reasonable cause to abate employment tax assessment
Mike Habib, EA
Don Johnson Motors, Inc. v. U.S., DC TX, 101 AFTR 2d 2008-370, Civil Action No. B-06-047, 12/21/07
Employment tax problem? Get representation today!
A Texas U.S. district court has ruled that [...]

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S corporations tax challenges by the IRS and other taxing authorities
Tax Advocate’s Report highlights S corporation issues
Despite the fact that Subchapter S corporations are the most common corporate entity (over three million S corporations filing returns in fiscal year 2006), the National Taxpayer Advocate’s 2007 Annual Report notes that IRS is still struggling to develop [...]

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How to handle the IRS at your Front Door? Is a Revenue Officer or a Revenue Agent visiting you soon?
If you find yourself face to face with an IRS Agent (Revenue Officer for collection issues, or Revenue Agent for audit and examination issues), at your front door you must remember to avoid these common mistakes:
[...]

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