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 [...]

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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 [...]

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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 [...]

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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 [...]

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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 [...]

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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.

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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 [...]

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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 [...]

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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 [...]

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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 [...]

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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 [...]

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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 [...]

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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 [...]

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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 [...]

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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 [...]

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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, [...]

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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 [...]

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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. [...]

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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 [...]

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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 [...]

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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, [...]

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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 [...]

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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 [...]

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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 [...]

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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 [...]

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