The IRS has announced several new compliance campaigns focusing on S corporations. This is needed as the audit rate for S corporation is extremely low. The most recent IRS compliance campaign focuses on shareholder stock basis issues for S corporation owners. Those who have significant S corporation losses or large distributions should take time to… Continue reading The IRS Recent Focus on S Corp Owners
Tax Articles
Travel Expenses Allowed for Repetitive Pattern of Travel
The IRS frequently challenges travel expenses. These expenses have a higher substantiation requirement, which the IRS uses to disallow every expense no matter how reasonable or how certain it is that the expense was incurred. But what if it was exceedingly certain that the expense was incurred and there is a method for computing the… Continue reading Travel Expenses Allowed for Repetitive Pattern of Travel
Records Needed for Partial Asset Dispositions
Taxpayers often overlook “partial asset dispositions.” Their tax advisers do too. This may be due to it being a depreciation issue that seems unimportant. It may also be that the partial asset disposition is a relatively new concept. Regardless, partial asset dispositions can save taxpayers quite a bit in taxes (it is a timing issue,… Continue reading Records Needed for Partial Asset Dispositions
How to Set Up Self-Service Payroll in Quickbooks
Most successful business get to the point when they need to hire their first employee. This is a big step […]
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Voluntary Disclosure to IRS of Privileged Communication
The attorney-client privilege projects confidential communications with attorneys. It allows the attorney to avoid disclosing protected communications. But what if the attorney voluntarily discloses information and the disclosure is to the IRS about a tax matter? The court addresses this in Gaetano v. United States, No. 19-1122 (6th Cir. 2019). Facts & Procedural History This… Continue reading Voluntary Disclosure to IRS of Privileged Communication
Using Warrants to Make Future Purchases of S Corporation Stock
Can you make a gift to charity but retain the right to pull back the value of the gift in the future, and still get a charitable deduction for the gift? The court said “no” in In Re Stapley, No. 09-47699 RLE (Bankr. N.D. Cali. 2019). The failed tax shelter included an S corporation whose… Continue reading Using Warrants to Make Future Purchases of S Corporation Stock
Can the IRS Ignore the Legal Existence of a Corporation?
If a taxpayer forms a legal entity and it is taxed as a C corporation, can the IRS disregard the legal existence of the corporation and assess the corporation’s tax to the owner? The court addresses this in Russell v. Commissioner, T.C. Memo. 2019-146. Facts & Procedural History The taxpayer filed his personal income tax… Continue reading Can the IRS Ignore the Legal Existence of a Corporation?
How to Add Customers in QuickBooks
Whether you sell goods or provide services, you need to keep a record of your customers. Adding new customers in […]
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The Timing Trap: Failed Installment Sales
What happens if you sell an asset and are to receive payments in the future, but your accountant fails to elect the installment method? Do you have to report the full amount of the gain in the year of sale? What happens if the buyer fails to make the payments in subsequent years? The IRS… Continue reading The Timing Trap: Failed Installment Sales
How to Add Vendors in QuickBooks
One of the first steps you need to deal with after setting up your QuickBooks account is to add vendors. A Vendor or Supplier refers to any person or business that provides you with goods or services. It could be your internet provider, your landlord,…