Taxpayers who participate in their employer’s retirement plan are not able to deduct contributions the taxpayer makes to their IRA retirement account. This is also true for taxpayers who are entitled to participate in their employer’s retirement plan, but choose not do so. In Colombell v. Commissioner, T.C. 2006-184, the court considered whether an employee… Continue reading Part-Time Employee Not Entitled to Deduction for IRA Contribution
Tax Articles
The IRS’s New Appeals Arbitration Program
The IRS Office of Appeals provides a great forum for resolving IRS tax disputes. While appeals settles a lot of cases, it doesn’t settle them all. This is where the IRS arbitration program comes in. It is for those close cases that almost settled, but didn’t. The IRS recently released Revenue Procedure 2006-44, which sets out… Continue reading The IRS’s New Appeals Arbitration Program
Tax Resolution Firm Job Posting: The Industry Needs to be Regulated….
I thought that I would share with you this Craigslist post that one of my clients forwarded to me: TAX RESOLUTION ASSOCIATES ——————————————————————————– Tax resolution associates wanted for Boulder financial company. ATTENTION: YOU DO NOT HAVE TO HIT A $25k OR $30k FOR BONUS!!!!!!!!!!!We pay 15% at $15k, 20% at $20k and 25% at $25k.… Continue reading Tax Resolution Firm Job Posting: The Industry Needs to be Regulated….
French Exempt Low Wage Employees from Payroll Taxes: Could it Work in the US?
It is always interesting to hear about how other countries address tax issues. Like the United States, the French government collected higher than expected tax revenues last year. Where the United States government opted to keep the tax revenues, the French government has proposed to use the tax revenues to exempt minimum wage employees who… Continue reading French Exempt Low Wage Employees from Payroll Taxes: Could it Work in the US?
Interest Abatement: What is a Ministerial Act?
The IRS is authorized to abate or remove interest where there is a ministerial act. Okay, so what does that mean? What is a ministerial act? The Beall vs. United States, 170 F. Supp. 2d 709 (E.D. Tex. 2001), case provides an opportunity to consider this question. Facts & Procedural History The Bealls were limited… Continue reading Interest Abatement: What is a Ministerial Act?
Deducting Investment Advisor Fees Paid by Trusts
There has been a split in the various circuit courts of appeals regarding the deductibility of investment advisor fees paid by trusts. The Second Circuit Court of Appeals, in William Rudkin Testamentary Trust v. Commissioner of Internal Revenue, recently held that investment advisor fees paid by trusts are limited by the Section 67 two percent… Continue reading Deducting Investment Advisor Fees Paid by Trusts
Texas Tax Attorney Contests IRS Bypass Letter
In People’s Source International, LLC v. United States, the IRS issued an Aurora, Texas tax attorney a bypass letter. A bypass letter is a letter that the IRS sends to a taxpayer when the IRS believes that the taxpayer’s tax attorney has failed to respond to IRS requests. The Texas tax attorney contested the bypass… Continue reading Texas Tax Attorney Contests IRS Bypass Letter
Ex-Spouse’s Defense for Tax Discharged in Bankruptcy
What if an ex-spouse who is jointly liable for the tax waits until after the other ex-spouse’s bankruptcy discharge and argues that the taxes were not discharged in bankruptcy as the tax return was invalid? The court addressed this in Kuhl v. United States, No.?05-6570-BK (2nd. Cir. 2006). Facts & Procedural History Ms. Kuhl owed the IRS… Continue reading Ex-Spouse’s Defense for Tax Discharged in Bankruptcy
Compensatory Damages May Not be Taxable: Let the Tax Refunds Begin
This is one of those fascinating cases. Despite the long line of case law, the US Court of Appeals for the District Circuit, in Murphy v. Internal Revenue Service, has held that Section 104(a)(2) is unconstitutional. Facts & Procedural In Muphy’s Case Murphy was awarded compensatory damages for emotional distress and loss of reputation. Murphy… Continue reading Compensatory Damages May Not be Taxable: Let the Tax Refunds Begin
Increased Fees for IRS Tax Installment Agreements
The IRS recently reviewed the government cost of processing IRS tax payment installment agreements, which has resulted in the IRS proposing to increase the costs for filing IRS installment agreements. The IRS tax payment installment agreement is one of the remedies of last resort to taxpayers who have outstanding tax liabilities. There are a number… Continue reading Increased Fees for IRS Tax Installment Agreements