If you have ever been through an IRS audit, you know that the IRS likes to review records. The IRS expects you to have these records. It also expects you to produce the records timely and without question. But you have the right to request records from the IRS too. The Freedom of Information Act (FOIA) provides one way for taxpayers to access this information. This article provides an overview of FOIA and the primary argument the IRS makes for not producing records. The Freedom of
Tax Articles
Mentally Incompetent Subject to Frivolous Return Penalty
In Chief Counsel Memo 201623010, the IRS addressed whether Section 6702 frivolous return penalty can be abated due to the taxpayer’s mental incapacity. One would think that a mentally incapacitated person would not be liable for a penalty for filing a frivolous tax return. Mental Incapacity, Generally The law recognizes that mental incapacity as a […]
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Mentally Incompetent Owes Frivolous Return Penalty
In Chief Counsel Memo 201623010, the IRS addressed whether Section 6702 frivolous return penalty can be abated due to the taxpayer’s mental incapacity. One would think that a mentally incapacitated person would not be liable for a penalty for filing a frivolous tax return. Mental Incapacity, Generally The law recognizes that mental incapacity as a… Continue reading Mentally Incompetent Owes Frivolous Return Penalty
Submit a Frivolous Tax Return or Document to the IRS?
We all do things that we regret. It is part of being human. This article addresses one of these things. Specifically, it addresses what you need to do if you filed a frivolous tax return or other document with the IRS and the IRS is attempting to impose a penalty on you for doing so. The Frivolous Return PenaltyThe frivolous return penalty is found in Section 6702 of the tax code. It is a $5,000 tax penalty. It applies if:You file a document that purports to be an income tax return.The
A Look at the IRS Automated Underreporter Program
The IRS uses a computer matching system to make various tax adjustments. The IRS refers to this as its automated underreporter program. This program adjusts millions of taxpayer accounts each year. The program generally goes unnoticed, until there is a problem. The Newman v. Commissioner, T.C. Memo. 2016-125, case provides an example of how this […]
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A Look at the IRS Automated Underreporter Program
The IRS uses a computer matching system to make various tax adjustments. The IRS refers to this as its automated underreporter program. This program adjusts millions of taxpayer accounts each year. The program generally goes unnoticed, until there is a problem. The Newman v. Commissioner, T.C. Memo. 2016-125, case provides an example of how this… Continue reading A Look at the IRS Automated Underreporter Program
Get a Notice CP2000 from the IRS? Here is What You Need to Know
No one wants to get a letter from the IRS. Even seeing the envelope is scary enough. The IRS’s Notice CP2000 is even scarier. The IRS issues the Notice CP2000 to alert you to changes it is making to you tax accounts. It almost always means that the IRS is increasing the amount of tax you owe. If you received a CP2000, here is what you need to know.Why Did the IRS Send You a Notice CP2000?The short answer is that the IRS thinks you did not correctly report your income tax liability. More
What You need to Know about the IRS Federal Tax Lien When Selling Property | Part 3
This is the third part of a three part series of articles that explain what you need to know about the federal tax lien if you have unpaid tax debts. The IRS’s federal tax lien can have a devastating impact on your personal finances. You may be thinking that you can just transfer property to a third party to avoid the IRS’s federal tax lien or wondering what happens if you do this. The Federal Tax LienThe first installment in this series explained that the federal tax lien is basically a “you
Ski Condo Held in Revocable Trust Not Subject to Federal Tax Lien
In U.S. v. Kimball, No. 2:14-CV-521-DBH, the U.S. District Court in Maine held that a federal tax lien did not attach to a ski condo held in trust even though the trust was a revocable trust and the taxpayer had access to the condo and he paid the expenses for the condo with his personal […]
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Ski Condo Held in Revocable Trust Not Subject to Federal Tax Lien
A Look at the IRS Automated Underreporter ProgramIn U.S. v. Kimball, No. 2:14-CV-521-DBH, the U.S. District Court in Maine held that a federal tax lien did not attach to a ski condo held in trust even though the trust was a revocable trust and the taxpayer had access to the condo and he paid the… Continue reading Ski Condo Held in Revocable Trust Not Subject to Federal Tax Lien