Entertainment Industry Income tax help
Every working Entertainer in the US is required to file his or her income tax returns on time and this means going through every receipt and transaction made throughout the previous year to make sure that everything is properly and accurately reported.
Unfortunately, filing your income tax return on time is a [...]

• Comments Off

Southern California Tax Relief Services
IRS tax Relief, FTB tax Relief, BOE tax Relief, EDD tax relief
At Mike Habib, EA, a SoCal tax firm, we understand that being notified that your tax return is being challenged by the IRS or the FTB can be scary. When you are faced with an audit, or a collection action, [...]

• Comments Off

IRS to Audit 6,000 Companies to Test Employment Tax Compliance
Source: Bloomberg
By Ryan J. Donmoyer
Sept. 18 (Bloomberg) — The Internal Revenue Service will audit 6,000 U.S. companies to determine whether they pay all their required employment taxes to fund Social Security and Medicare benefits.
The IRS said the audits will provide data for its first statistical [...]

• Comments Off

Watchdog Growls At IRS‘ Audits By Mail
Source: forbes.com
A new report from the Treasury Inspector General for Tax Administration lends support to growing complaints about the Internal Revenue Service’s big audit-by-mail program.
The IRS has increasingly relied on these correspondence audits, focused on one or two narrow issues, to maintain its audit coverage of normal taxpayers as [...]

• Comments Off

IRS Tax Audits and Examination
The US Internal Revenue Service organizes audits and examinations on tax returns to ensure tax compliance by both individuals and businesses. But because it’s virtually impossible to actually audit and examine every ITR for discrepancies, the audits are mostly randomized so your chances of getting picked for a particular year [...]

• Comments Off

Construction Industry Tax Issues

Accumulated Earnings Tax

Closely held C corporations are more likely to accumulate earnings and profits beyond the reasonable needs of the business in order to avoid income taxes on its shareholders than are large C corporations. Each accumulated earnings case is unique. No pro forma guide for calculating a taxpayer’s reasonable [...]

• Comments Off

IRS to seek more regulation of tax preparers
The IRS reported that it is working on new rules that will require paid tax preparers to be licensed. This will improve tax compliance and reduce tax preparer fraud; IRS Commissioner Doug Shulman announced that on June 4, 2009.
A whopping eighty percent of taxpayers get help with their [...]

• Comments Off

UBS CLIENT PLEADS GUILTY TO FILING FALSE TAX RETURN HID ASSETS WORTH $3 MILLION IN SECRET SWISS BANK ACCOUNT
Ft. Lauderdale Yacht Broker Second UBS Client Charged, First to Plead Guilty
WASHINGTON – Robert Moran, of Lighthouse Point, Fla., pleaded guilty on criminal information charging him with filing a false income tax return, the Justice [...]

• Comments Off

U.S. JUDGE BARS TWO CONNECTICUT RESIDENTS FROM PREPARING FEDERAL TAX RETURNS FOR OTHERS
Father and Daughter Prepared Tax Returns That Falsified and Inflated Deductions for Customers
WASHINGTON – A federal district court in Connecticut has permanently barred Wethersfield residents Deowraj Buddhu and his daughter, Sunita Buddhu, from preparing federal tax returns for others. Mr. Buddhu [...]

• Comments Off

IRS is hiring hundreds of Internal Revenue Agents
The IRS is hiring hundreds of Internal Revenue Agents – It’s a great time to join the agency!
The IRS has begun a major hiring effort to fill hundreds of critical jobs nationwide. Most of these jobs are for internal revenue agent positions (look for series number 0512). At [...]

• Comments Off

What are your chances for being audited? IRS’s 2008 data book provides some clues IR 2009-22
Mike Habib, EA Tax Relief & Tax Problem Resolution

IRS has issued its annual data book, which provides statistical data on its fiscal year (FY) 2008 activities. As this article explains, the data book provides valuable information about how many [...]

• Comments Off

TIGTA assesses how well IRS Examination function scrutinizes all open tax periods during audits [Audit Report No. 2009-30-034]:

IRS Examination function employees do not always appropriately inspect and examine prior and/or subsequent year tax returns when warranted, the Treasury Inspector General for Tax Administration (TIGTA) said in a new audit.

Auditors reviewed [...]

• Comments Off

As you can see from the article below, the IRS tax code is getting more complicated than ever. Further, the IRS’s reach of audits has no limits.
If you have a tax problem, can not pay your tax bill or is facing an IRS tax audit contact us now.
Tax problem complicates Geithner’s confirmation process
As reported by the [...]

• Comments Off

Capital contributions did not restore or increase shareholders’ tax bases in loans to S corporations Nathel, (2008) 131 TC No. 17
Mike Habib, EA
The Tax Court has held that taxpayers’ capital contributions to S corporations did not constitute income to the S corporations and that the contributions did not restore or increase their tax [...]

• Comments Off

Once is enough as far as collection of the trust fund recovery penalty is concerned Chief Counsel Advice 200838027

The IRS has issued a new Chief Counsel Advice (CCA) on the trust fund recovery penalty. The IRS notes that the CCA may not be used or cited as precedent.
IRC §6672, imposes a penalty on [...]

• Comments Off

TIGTA review finds small number of cases where IRS employees harassed taxpayers while attempting to collect taxes [Audit Report No. 2008-10-162]:
In 2007, there were five cases involving Fair Tax Collection Practices (FTCP) violations for which an IRS employee received administrative disciplinary action, according to a recent audit by the Treasury Inspector General [...]

• Comments Off

IRS OKs use of one property to engineer a reverse and forward like-kind swap Chief Counsel Advice 200836024

In Chief Counsel Advice (CCA), IRS has given its blessing to the use of one property to engineer both a completed reverse like kind exchange and an attempted forward like kind exchange. The forward exchange was necessary [...]

• 1 Comment

Like many of us, you’ve probably dreamed of turning a hobby or avocation into a regular business. You won’t have any unusual tax headaches if your new business is profitable. However, if the new enterprise consistently generates losses (deductions exceed income), IRS may step in and say it’s a hobby—an activity not engaged in [...]

• Comments Off

Do you have back tax returns that are Unfiled? Are you missing the records and forms necessary to file your tax returns?
The IRS will not allow you to file an offer in compromise or get an installment agreement if you are not current on filing your back tax returns.
If you have a refund coming to you and you file more than 3 years past the due date, the IRS will keep the refund.

• Comments Off

IRS Fact Sheet reviews whether a hobby is actually a for-profit endeavor [Fact Sheet 2008-23]:
Taxpayers must follow appropriate guidelines when determining whether an activity is engaged in for profit, such as a business or investment activity, or is engaged in as a hobby, IRS said in a new fact sheet published on the [...]

• Comments Off

To disclose or not to disclose, that is the question.
Hiding Income Offshore is not the way to go.
Mike Habib, EA
For years, offshore accounts have been a hot topic in popular culture and for the IRS; most recently Liechtenstein has been mentioned, however the IRS is interested in accounts anywhere in the world that generate income [...]

• Comments Off

If It Seems Too Good to Be True, It Probably Is
Tax Return Preparer Fraud
Mike Habib, EA
Dishonest tax return preparers can cause many problems for taxpayers who fall victim to their schemes. These scam artists make their money in a number of ways including skimming a portion of their clients’ refunds, charging a percentage of [...]

• Comments Off

Yes, we are all fed up with the cost of fuel.
No, I’m sorry to report, not everyone is eligible for the fuel tax credit.
Fuel Tax Credit Scams
Mike Habib, EA
The IRS has recently added fraud involving the fuel tax credit to the list of frivolous tax claims being put forth by individuals and businesses. The [...]

• Comments Off

Tiered discount allowed in real estate FLP gift tax case

In Astleford, a memorandum decision, the Tax Court permitted a taxpayer to apply a tiered discount in the context of a family limited partnership owning interests in real estate.
Facts. On 8/1/96, Mrs. Astleford formed the Astleford Family Limited Partnership (“AFLP”) to facilitate the [...]

• Comments Off

IRS Announces ‘Dirty Dozen’
Tax Scams for 2008
Phishing Scams, Fuel Tax Credits, Frivolous Arguments, Hiding Income Offshore Top the 2008 Tax Scams

WASHINGTON — The Internal Revenue Service today issued its 2008 list of the 12 most egregious tax schemes and scams, highlighted by Internet phishing scams and several frivolous tax arguments.
Topping this year’s list [...]

• Comments Off

IRS or State Payroll Tax Audit & Employment Tax Audit
The word audit can strike a very real sense of fear into the hearts of even the most courageous of men. When you own a business, there is even more at stake than a few minor penalties or fees; you can lose everything you’ve worked so [...]

• Comments Off

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

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

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

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 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

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

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

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

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

Homes sold by estate beneficiary remained subject to federal estate tax liens
First American Title Insurance Co., et al. v. U.S. (CA9 3/27/2008) 101 AFTR 2d ¶ 2008-622
Mike Habib, EA
MyIRSTaxRelief.com
The Court of Appeals for the Ninth Circuit, affirming a district court, has held that title companies couldn’t recover estate taxes that they paid [...]

• Comments Off

IRS Regs clarify Code Sec. 501(c)(3) exempt status and impact of excise taxes
Mike Habib, EA
MyIRSTaxRelief.com
T.D. 9390, 03/27/2008; Reg. § 1.503(c)(3)-1, Reg. § 53.4958-2IRS has issued final regs clarifying the substantive requirements for tax exemption under Code Sec. 501(c)(3) and the relationship between those requirements and the imposition of Code Sec. 4958 excise taxes. The final [...]

• Comments Off

IRS issues proposed regs reflecting PPA changes and guidance for notice of retroactively effective plan amendments
Mike Habib, EA
myIRS.TaxRelief.com
Prop Reg § 1.411(d)-3(a)(1); Prop Reg § 54.4980F-1, Q&A 8(d); Prop Reg § 54.4980F-1, Q&A 9(f); Prop Reg § 54.4980F-1, Q&A 9(g); Prop Reg § 54.4980F-1, Q&A 11(a)(7); Prop Reg § 54.4980F-1, Q&A 18(a)(4); Prop Reg § 54.4980F-1, [...]

• Comments Off

If you owe the IRS, you’re better off resolving your tax debt now. As you know, tax problems do not go away by themselves! Stop IRS wage garnishment today, stop IRS bank levy today, and release IRS tax lien today.
As you can see from the statement below by Mr. Douglas H. Shulman, [...]

• Comments Off

What are your chances for being audited? IRS’s 2007 data book provides some clues
Mike Habib, EA
myIRSTaxRelief.comIRS has issued its annual data book, which provides statistical data on its fiscal year (FY) 2007 activities. As this article explains, the data book provides valuable information about how many tax returns IRS examines (audits), and what categories of [...]

• Comments Off

Investors suffered theft loss in connection with company that issued sub-prime loans
Mike Habib, EA
myIRSTaxRelief.comA Chief Counsel Advice (CCA) has concluded that a theft occurred in connection with investors’ losses on loans to a company engaged in writing sub-prime loans. However, it determined that whether and when a theft occurred for any particular investor, and what [...]

• Comments Off

IRS unveils 2008 list of notorious tax scams – the “Dirty Dozen”
Mike Habib, EA
myIRSTaxRelief.com
IRS has recently unveiled its latest list of notorious tax scams, which it calls the “Dirty Dozen,” highlighted by Internet phishing scams and several frivolous tax arguments. New to the “Dirty Dozen” this year is a scheme, which IRS auditors discovered, that [...]

• Comments Off

How to compare tax relief and resolution service companies?
Customer…Beware!

How To Keep From Getting Ripped Off?
Many “Tax Negotiation” companies out there will absolutely rip you off. These unscrupulous firms will take your money regardless of whether they can help you or not. They’ll lie to you and tell you they can [...]

• Comments Off

Examination and Compliance Check Processes For Exempt Organizations
Mike Habib, EAmyIRSTaxRelief.com
The Internal Revenue Service has a variety of tools at its disposal to make certain that tax-exempt organizations comply with federal law designed to ensure they are entitled to any tax exemption they may claim.
The responsibility for administering these procedures belongs to the Exempt Organizations (EO) [...]

• Comments Off

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 [...]

• Comments Off

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 [...]

• Comments Off

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 [...]

• Comments Off