It is always interesting to review what tax measures the Legislature is or has been considering. Here are a few of the tax measures that are or were being considered: Lifetime learning accounts. Amends the Internal Revenue Code to: (1) establish a tax-exempt lifelong learning account for the payment of certain employee higher education and training expenses;… Continue reading A Smattering of Tax Measure Legislation
Tax Articles
Is an Insurance Agents Repayment of Advanced Commissions Cancellation of Debt Income?
If an insurance company makes loans to its life insurance agents in lieu of wages and the insurance agents use a portion of those funds to repay costs to the insurance company, how is that taxed? The court addressed this in Harper v. Commissioner, T.C. Summary Opinion 2007-133. Facts & Procedural History Mrs. Harper was in the… Continue reading Is an Insurance Agents Repayment of Advanced Commissions Cancellation of Debt Income?
Truck Driver Not Entitled to Deductions When Records Destroyed
In Clark v. Commissioner, T.C. Memo. 2007-172, the U.S. Tax Court held that a truck driver who did not file tax returns was not entitled to deduct expenses where his records were destroyed in a fire. Facts & Procedural History Mr. Clark was a truck driver. He was employed by Jimmy Harris Trucking, Inc., Vandy… Continue reading Truck Driver Not Entitled to Deductions When Records Destroyed
There is no Place Like Home (or is There?)
Have you ever said something like “I can’t wait to go home?” If so, you may not know what the term “home” means. According to the IRS, the term “home” means the taxpayer’s “principal place of business.” I am guessing that very few (if any) taxpayers consider their place of business their home. Our federal Tax Code… Continue reading There is no Place Like Home (or is There?)
Tax Refund Fraud Committed by Prisoners
The government has limited resources available to detect and prosecute tax fraud. Fraudulent tax refund schemes by prisoners continue to present a compliance burden for the IRS. The United States v. Turturro, 06-12033 (11th Cir. 2007) case provides a good example of this type of fraudulent scheme. Facts & Procedural History Turturro was in prison… Continue reading Tax Refund Fraud Committed by Prisoners
Courts Says No Criminal Fraud, IRS Imposes Civil Fraud Penalty
Say you are convicted of a tax crime and the criminal judge finds that your conduct has not risen to the level of tax fraud. Should a civil court later say that this same conduct does in fact rise to the level of tax fraud? In Maciel v. Commissioner, the Ninth Circuit Court of Appeals… Continue reading Courts Says No Criminal Fraud, IRS Imposes Civil Fraud Penalty
Tax Evasion Twist
One way to avoid a tax evasion conviction is to show that the underlying tax is not owed. The recent United States v. Kayser case provides a slightly different twist on this defense. The Court Sets Out The Following Facts From November 1998 to May 2000, A2Z USA, Inc. employed Kayser first as a salesperson… Continue reading Tax Evasion Twist
Payroll Taxes: The Single Member LLC Owner (Again)
Many taxpayers do not understand the implications of operating a business as a LLC when it comes to payroll tax liabilities. Apparently even some accounting firms do not fully understand this concept. The recent McNamee v. Dept. of Treasury case involves a six-person accounting firm that was operated as a single member LLC. The accounting… Continue reading Payroll Taxes: The Single Member LLC Owner (Again)
Real Estate Purchase Price Reduction
The term “income” is broad. It includes just about any money or gain that a person receives. There are exceptions, however. Take the purchase price reduction. Assume Party A sells property to Party B for $100. Party A will likely have a gain on the sale. The gain is income and may trigger income tax.… Continue reading Real Estate Purchase Price Reduction
Substantial Compliance: Convincing the IRS to Look the Other Way
A professor can increase overall class scores for extra credit. A police officer is authorized to issue warnings for minor traffic infractions. What about IRS auditors? Do IRS revenue agents have this authority when conducting IRS audits? Our laws generally excuse minor infractions. This is often referred to as the doctrine of substantial compliance. The… Continue reading Substantial Compliance: Convincing the IRS to Look the Other Way