TIGTA study finds modest audit rate increase for C corps but marked increase for passthroughs ( S Corps)
Trends in Compliance Activities Through Fiscal Year 2007, TIGTA Reference Number 2008–30–095
A recently released TIGTA (Treasury Inspector General for Tax Administration) report reveals that despite a slight uptick in FY 2007, IRS audits of corporations have declined dramatically [...]

• Comments Off

TIGTA issues statutory review of IRS compliance with legal guidelines when issuing levies [ Audit Report No. 2008-30-097 ]:
During the process of issuing levies, IRS has been complying with legal guidelines regarding proper notification and the protection of taxpayer rights, the Treasury Inspector General for Tax Administration (TIGTA) reported in a recent audit.
The agency [...]

• Comments Off

Houses passes legislation that would make sure certain government contractors pay employment taxes – Foreign shell companies payroll tax problemsMike Habib, EAmyIRSTaxRelief.com
The House of Representatives has passed legislation [H.R. 5719, Sec. 18, 4/15/08] proposed by Representatives Brad Ellsworth (D-Ind.) and Rahm Emanuel (D-Ill.) that seeks to end the practice of U.S. government contractors setting [...]

• Comments Off

District court allows $60 million of income to be offset by Son-of-Boss shelter Sala v. U.S. (DC Co 4/22/08) 101 AFTR 2d ¶ 2008–720 Mike Habib, EAmyIRSTaxRelief.com
A district court has allowed an individual to offset $60 million of compensation income with losses from a Son-of-Boss transaction.
Facts. Carlos E. Sala had income in 2000 [...]

• Comments Off

Payments made by retailer in connection with sales promotion weren’t taxable – PLR 200816027
Mike Habib, EA
myIRSTaxRelief.com
The IRS has privately ruled that payments made by a retailer in connection with a sales promotion were nontaxable purchase price adjustments and they weren’t subject to reporting or withholding.
Facts. Taxpayer, which owns retail stores, advertised [...]

• Comments Off

Enhanced tax breaks make it an especially good time to buy business autos Mike Habib, EAmyIRSTaxRelief.com
Thanks to economic woes in general and financial trouble for auto manufacturers in particular, it’s a good time to shop for a new vehicle, if you can afford to do so. Thanks to bonus first year depreciation deductions under the [...]

• Comments Off

Tax Court properly denied separate filer equitable innocent spouse relief – Christensen, (CA 9 4/21/2008) 101 AFTR 2d ¶ 2008-705
Mike Habib, EA
MyIRSTaxRelief.com
The Ninth Circuit has affirmed the Tax Court’s dismissal of a taxpayer’s claim for equitable innocent spouse relief under Code Sec. 6015(f). The Ninth Circuit agreed with the Tax Court’s finding that [...]

• Comments Off

Qualified joint venture’s rental real estate income isn’t subject to self-employment tax – Chief Counsel Advice 200816030 Mike Habib, EAmyIRSTaxRelief.com
In Chief Counsel Advice (CCA), IRS has concluded that the qualified joint venture election under Code Sec. 761(f) doesn’t cause self-employment tax to be imposed on income from a rental real estate business that [...]

• Comments Off

TIGTA audit reviews effectiveness of IRS processing of Heavy Highway Vehicle Use Tax Return [Audit Report No. 2008-40-089]:
The IRS should encourage more states to participate in its Alternative Proof of Payment Program for the collection of the Heavy Highway Vehicle Use Tax (also known as the Heavy Vehicle Use Tax), the Treasury Inspector General [...]

• Comments Off

The IRS OKs deferral of income from intellectual property payments
Mike Habib, EA
myIRSTaxRelief.com
The IRS has privately ruled that a taxpayer could defer reporting income from intellectual property payments until the tax year following the tax year of receipt of the payments under a revenue procedure governing advance payments.
Background. Under the accrual basis method of accounting, [...]

• Comments Off

Grantor’s power to substitute trust property didn’t trigger inclusion in estate – Rev Rul 2008-22, 2008-16 IRB 796 Mike Habib, EAmyIRSTaxRelief.com
A new revenue ruling concludes that the corpus of an irrevocable trust that a grantor created during life is not includible in his gross estate under Code Sec. 2036 or Code Sec. 2038 [...]

• Comments Off

Offsets in Senate Finance’s farm bill include Schedule F loss limits, optional self-employment tax, and information reporting
Mike Habib, EA
MyIRSTaxRelief.com
On April 18, the Senate Finance Committee conferees on the farm bill announced $2.4 billion of reforms/offsets – “double the reforms in the House or Senate bills alone” – that could be used to fully offset the [...]

• Comments Off

IRS proposed regs would update federal tax lien priority provisions for holders of security interests
Preamble to Prop Reg 04/16/2008, Prop Reg § 301.6323(b)-1, Prop Reg § 301.6323(c)-2, Prop Reg § 301.6323(f)-1, Prop Reg § 301.6323(g)-1
Mike Habib, EA
myIRSTaxRelief.com
IRS has issued proposed regs on the priority of federal tax liens against certain persons under Code Sec. [...]

• Comments Off

IRS Oversight Board Annual Report 2007 is now available – see more details below
Mike Habib, EAmyIRSTaxRelief.com
As you can see from the report below, the IRS places “enforcement” as their TOP priority, that will involve enforcement of their collection activity of back taxes owed, and enforcement of their tax audit activity.
The IRS must strive to [...]

• Comments Off

You missed the tax deadline April 15th, so now what?

Mike Habib, EA
myIRSTaxRelief.com
Although the IRS has received a record number of returns this year, there are still thousands of people who did not file tax returns on April 15th. The reasons for this are numerous, but the IRS research shows that often people do not [...]

• Comments Off

No refund suit is allowed in the absence of a timely claim filed with IRS
U.S. v. Clintwood Elkorn Mining Co., (S Ct 4/15/2008) 101 AFTR 2d ¶ 2008–696 Mike Habib, EAmyIRSTaxRelief.com
The Supreme Court, reversing the Court of Appeals for the Federal Circuit, has held that the plain language of Code Sec. 7422(a) [...]

• Comments Off

IRS acquiesces to TLC Leasing – explains meals deduction limit in employee leasing setting Rev Rul 2008-23, 2008-18 IRB
TRUCKER TAX RELIEF & TRUCKER TAX PROBLEM RESOLUTION
Mike Habib, EA
myIRSTaxRelief.com
IRS has acquiesced to the Eighth Circuit’s holding in Transport Labor/Contract Leasing (TLC Leasing) that a company leasing truck drivers to client companies wasn’t subject to [...]

• Comments Off

IRS Begins Focus on Foreign Athletes
and Entertainers

The IRS recently launched an Issue Management Team focused
on improving U.S. income reporting and tax payment complianceby foreign athletes and entertainers who work in the United States.The initial focus is on those engaged in tennis, golf and music. Theseindividuals and those associated with arranging their appearances inthe U.S. [...]

• Comments Off

Failure to follow IRS procedure prevented use of longer NOL carryback
Tualatin Valley Builders Supply, Inc. v. U.S. 101 AFTR 2d ¶ 2008–688
Mike Habib, EA
myIRSTaxRelief.com
The Ninth Circuit, affirming a district court, has held that a taxpayer could not use the special 5-year carryback period that applied for net operating losses arising [...]

• Comments Off

IRS rules that withholding exceptions for employees in foreign country don’t apply – Chief Counsel Advice 200814010
Mike Habib, EA
myIRSTaxRelief.com
In Chief Counsel Advice (CCA), IRS has held that a U.S. employer had to withhold on wages it paid to employees working in a foreign country. The withholding exception under Code Sec. 3401(a)(8)(A)(ii) (dealing [...]

• Comments Off

Foreclosure Prevention Act of 2008 – Senate passes housing stimulus bill
Mike Habib, EAmyIRSTaxRelief.com
On Apr. 10, the Senate by a vote of 84 to 12 approved H.R. 3221, the “Foreclosure Prevention Act of 2008,” the Senate housing stimulus bill. Before final passage of the bill, the Senate approved an amendment offered by Senator John Ensign [...]

• Comments Off

Memo explains how state property tax credits are taxed and reported – Chief Counsel Advice 200814022
Mike Habib, EA
myIRSTaxRelief.com
In Chief Counsel Advice, IRS has explained the proper federal income tax treatment of certain state property tax credits and the extent to which the state must provide information reports about the credits to IRS [...]

• Comments Off

IRS wrongfully revoked DLC’s tax-exempt status
Democratic Leadership Council, Inc. v. U.S., 101 AFTR 2d ¶ 2008-661
Mike Habib, EA
myIRSTaxRelief.com
A district court has held that IRS violated its own regs when it retroactively revoked the tax exempt status of the Democratic Leadership Council (DLC) as a Code Sec. 501(c)(4) social welfare organization.
Facts. In ‘85, several prominent [...]

• Comments Off

Kickback Income Tax Fraud – Ballard finally prevails in reversal by Eleventh Circuit
Ballard, (CA 11 4/7/2008) 101 AFTR 2d ¶ 2008-659
Mike Habib, EA
myIRSTaxRelief.com
In the latest chapter of a case with a long and storied history, the Eleventh Circuit rejected the Tax Court’s findings that a taxpayer fraudulently failed to pay tax on kickback income. Instead, [...]

• Comments Off

The most important IRS Tax Development in Q1 2008
Mike Habib, EA
myIRSTaxRelief.com
While the Economic Stimulus Act of 2008 was the most significant development in the first quarter of 2008, many other tax developments may affect you, your family, and your livelihood. The new law changes and other key developments are summarized below. Please [...]

• Comments Off

Avoiding IRS Tax Penalties and the Tax Gap
Mike Habib, EA
myIRSTaxRelief.com

IRS — The Internal Revenue Code imposes many different kinds of penalties, ranging from civil fines to imprisonment for criminal tax evasion.
If you do not file your return and pay your tax by the due date, you may have to pay a penalty. You may also [...]

• Comments Off

Final regs detail donee’s filing requirements for qualified intellectual property contributions
T.D. 9392, 04/04/2008; Reg. § 1.6050L-2
Mike Habib, EA
MyIRSTaxRelief.com
IRS has issued final regs explaining the information return requirements for donees receiving net income from qualified intellectual property contributions made after June 3, 2004.
Background. A taxpayer’s deduction for the donation of “qualified intellectual property” – patents, [...]

• Comments Off

Estate and Gift Tax Relief – Joint Committee Staff examines options for reforming transfer taxes Mike Habib, EAMyIRSTaxRelief.com
The Staff of the Joint Committee on Taxation has released JCX-23-08, Taxation Of Wealth Transfers Within A Family: A Discussion Of Selected Areas For Possible Reform. This document, which was prepared in conjunction with an Apr. 3, 2008 [...]

• Comments Off

District court holds that stipends paid to medical residents were exempt from FICA
Regents of the University of Minnesota v. U.S. (DC MN 4/1/2008) 101 AFTR 2d ¶ 2008-647
Mike Habib, EAmyIRSTaxRelief.com
A district court has held that stipends paid by the Regents of the University of Minnesota to medical residents were exempt from FICA under the Code [...]

• Comments Off

New, changed and expired provisions affect 2008 individual estimated tax Mike Habib, EAMyIRSTaxRelief.com
Apr. 15, 2008 is the due date for affected calendar year taxpayers to make their first installment of 2008 estimated tax. There aren’t any drastic changes in the estimated tax rules themselves for 2008. However, there are a number of new, changed [...]

• Comments Off

Retired insurance agents’ renewal commissions didn’t qualify for FICA special timing rule
Mike Habib, EAmyIRSTaxRelief.com
Chief Counsel Advice 200813042
In a Chief Counsel Advice (CCA), IRS has ruled that because renewal commissions paid to its retired employees were subject to a substantial risk of forfeiture as of the insurance agents’ retirement dates, an insurance company couldn’t take those [...]

• Comments Off

Truckers Tax Relief – Are you a truck driver with tax problems?
If you’re a truck driver and owe the IRS, you’re better off resolving your tax debt now. As you know, tax problems do not go away by themselves! Stop your IRS wage garnishment today, stop your IRS bank levy today, and release your [...]

• Comments Off