Truck drivers are on the road and focused on driving. They do not have access to an organized office or have time to stop and process paperwork. So they are an easier target than some other types of taxpayers. This is why truck drivers are frequently targeted by IRS auditors. Truck drivers also earn above-average… Continue reading Per Diem for Truck Drivers (Explained)
Tax Articles
IRS Does Not Have to Hold Open CDP Hearing to Include All Tax Years
In Williams v. Commissioner, T.C. Memo. 2009-159, the U.S. Tax Court concluded that the IRS did not abuse its discretion by failing to hold open a collection due process or CDP hearing request pending the assessment of tax in and consolidation of other tax years with the current CDP hearing request. Facts & Procedural History … Continue reading IRS Does Not Have to Hold Open CDP Hearing to Include All Tax Years
FedEx Corporation v. United States: Taxpayer Can Pick & Choose Between Regulations
In FedEx Corporation v. United States, Dkt. No. 08-2423, the U.S. District Court for the Western District of Tennessee concluded that FedEx could rely on the internal use software provisions in the 2001 Final Regulations and the taxpayer-favorable discovery test in the 2003 Final Regulations in computing its research tax credit. The taxpayer did not… Continue reading FedEx Corporation v. United States: Taxpayer Can Pick & Choose Between Regulations
Standard for Research Activities for the R&D Tax Credit
In United States v. McFerrin, 570 F.3d 672, the Fifth Circuit Court of Appeals concluded that the trial court applied the wrong standard for determining what research is qualified and failed to estimate the amount of research expenses for the research tax credit. Facts & Procedural History Arthur R. McFerrin (“McFerrin”) is a prominent chemical… Continue reading Standard for Research Activities for the R&D Tax Credit
Innocent Spouse Relief Granted Despite Knowledge of Error on Return
Innocent spouse tax relief can provide a remedy for spouses who are liable for taxes reported on a jointly filed income tax return. It is an equitable remedy. But is it available if the tax is due to an obvious error on the tax returns that the spouses both signed? The court addressed this in Denton… Continue reading Innocent Spouse Relief Granted Despite Knowledge of Error on Return
Truck Driver Not Entitled to Deduct Meal and Supply Expenses
In Elsayed v. Commissioner, T.C. Summary Opinion 2009-81, the U.S. Tax Court reviewed meal and unreimbursed expenses incurred by a truck driver. This is a common tax problem for truck drivers. This case shows the difficulties truck drivers have in capturing and substantiating their expenses for tax purposes. Facts & Procedural History Elsayed was employed… Continue reading Truck Driver Not Entitled to Deduct Meal and Supply Expenses
Financial Statements: What You Need to Know
A business’s ability to generate earnings consistently over time is a major driver for investors and a key for the business’s financial management to understand the past, current and on-going financial position. Financial statements can greatly aid in …
Rental Losses for Real Estate Agents
Is a real estate agent a real estate professional? This is an important question if the real estate agent also owns rental real estate that throws off tax losses. The answer dictates whether real estate agents are able to deduct rental losses against non-rental income. The court addresses this question in Agarwal v. Commissioner, T.C.… Continue reading Rental Losses for Real Estate Agents
Offer in Compromise: Documenting the Value of Assets
The IRS carefully examines the value of the taxpayer’s assets when it considers whether to accept an offer in compromise based on doubt as to collectiblity. Even a few dollars can result in a rejected offer. Substantiation is key. The Wright v. Commissioner, T.C. Memo. 2008-259, case is an example. It involves a $2,000 offer… Continue reading Offer in Compromise: Documenting the Value of Assets
Abate Tax Penalties for Anxiety & Depression for 911 Attacks
Can tax penalties be abated for anxiety and depression due to the death of a spouse to cancer and the September 11, 2001 terrorist attacks on the World Trade Center? The court addressed this in Kwosh v. Commissioner, T.C. Memo. 2008-204, in light of the 10 percent addition to tax on early retirement distributions and… Continue reading Abate Tax Penalties for Anxiety & Depression for 911 Attacks