How does the IRS apply partial payments when a trust fund penalty has been assessed? Can the IRS apply payments to the trust fund portion of the employment taxes or must it apply the payment to the non-trust fund penalty portions? Trust Fund & Non-Trust Fund Tax Employers are generally required to withhold employment taxes… Continue reading Strategy for Paying Late Employment Taxes
Tax Articles
Can One Spouse Cause IRS to Void Other’s Alimony Deduction?
If a divorce decree says that a payment to an ex-spouse, does that mean that it is alimony the ex-spouse has to report as income for Federal income tax purposes? And if not, can the ex-spouse who receives the payment request a ruling from the IRS to say that the payment was not taxable to… Continue reading Can One Spouse Cause IRS to Void Other’s Alimony Deduction?
Non-Profit No More
The IRS Can Sometimes Take A Hardline With Taxpayers For example, the IRS often takes a hard line with taxpayers in instances where the taxpayer is a non-profit and it fails to timely file a tax return. In these cases the IRS will has the power to revoke the taxpayer’s non-profit status, but in many… Continue reading Non-Profit No More
Taxation of Employee Donated Sick Leave
Employees often want to donate paid sick-leave time to deserving co-workers who find themselves in a pinch. The IRS recently released another ruling, Private Letter Ruling 200720017, that identifies a few of the planning considerations in donating sick leave to co-workers. Income Tax on Donations of Sick Leave The federal tax consequences of donating paid… Continue reading Taxation of Employee Donated Sick Leave
Court Cannot Force Taxpayer to Hire Tax Attorney
If someone does not want to hire a tax attorney, can the court force the taxpayer to hire one? The court addresses this issue in the United States v. Baucom, 486 F.3d 822, 829 (4th Cir. 2007) (and combined United States v. Davis) court case. The Facts & Procedural History Taxpayers Martin Louis Baucom and… Continue reading Court Cannot Force Taxpayer to Hire Tax Attorney
IRS Tax Attorneys Realign Organization Structure
The IRS Office of Chief Counsel employs the IRS’s own tax attorneys. These attorneys handle most of the civil tax court matters for the IRS. The IRS released IRS Office of Chief Counsel Notice CC-2007-012 which says that the Procedure and Administration Section of the Office of Chief Counsel subsidiary legal divisions have been reorganized into… Continue reading IRS Tax Attorneys Realign Organization Structure
City of Chicago Takes Church Property For Un-Owed Taxes
The recent Beth-El All Nations Church case shows just how far state and local tax collectors will go to collect taxes – even when the taxes are not owed. Facts set out by the court: An employee of the City of Chicago mistakenly addressed a notice to Beth-El All Nations Church at 1534 East 63rd… Continue reading City of Chicago Takes Church Property For Un-Owed Taxes
Florida Department of Revenue Harasses Taxpayer
Some states have a very poor record with regard to collecting taxes via legal means. The State of Florida is one of those states. In the recent In re: Omine case the Eleventh Circuit Court of Appeals details the Florida Department of Revenue’s illegal collection activities. Facts & Procedural History On Omine Case Gregg and… Continue reading Florida Department of Revenue Harasses Taxpayer
Prepayment: to Deduct in Year 1 or Year 2?
Say you are an accrual method taxpayer and you hire someone to provide a service to you in year one, the service is to be provided to you over a twelve month period, and you prepay the person for this yet to be provided service. When can you claim a deduction for this prepayment? The… Continue reading Prepayment: to Deduct in Year 1 or Year 2?
Offer in Compromise Deemed Accepted by the IRS
The IRS consumes volumes of information. It processes this information largely by processing paper forms. This includes paper forms submitted by you, the taxpayer and your tax attorneys, and by internal forms created by IRS employees. This inefficient paper form submission and processing is complemented by an insistence on sending taxpayer notices by mail. The… Continue reading Offer in Compromise Deemed Accepted by the IRS