IRS AUDITS
IRS AUDITS The IRS is stepping up audits of taxpayers at a rapid pace. Each of the past several years there has been a significant addition of Revenue Agents (RA) and Revenue Officers (RO); those responsible for auditing returns and collecting taxes. In addition, the IRS has been improving its already sophisticated computer programs, resulting […]
IRS Stepping up Audits
I expect to see a significant increase in the number of audits by the IRS. The trend has been upward for several years now and I expect that to continue. As I have previously stated, one of the primary areas of interest by the IRS is Schedule C businesses. The IRS is in the process of […]
FIRST TIME HOMEBUYER’S CREDIT EXTENDED
The much used first time homebuyer’s tax credit has received congressional approval and has just been signed by the President . The measure was included in H.R. 3548, extension of unemployment benefits. According to the National Association of Realtors, as many as 1.2 million new and resale home transactions were completed as a result of the first time […]
FIRST TIME HOMEBUYER’S CREDIT EXPIRING
The American Recovery and Reinvestment Act included up to an $8,000 credit for first time homebuyers (the credit is actually 10% of the value of the home purchased, up to $8,000). A first time homebuyer is someone who has not owned a house in the three years prior to the purchase. Unlike the 2008 homebuyer’s […]
Who’s Afraid of the Big Bad Wolf?
I just attended an intensive training program on dealing with the IRS. One of the instructors, at prominent tax lawyer, said that, based on his experience, about 15% of the U.S. population becomes functionally illiterate when they receive an IRS letter. Another 5 – 10% breaks out in a cold sweat and many are afraid […]
Experience Level of IRS Auditors
I went to a party the other day and asked a man to whom I had just been introduced, what he did. His response was very telling. He said, “Don’t get mad at me, but I have just recently gone to work for the IRS.” When I said it didn’t make me mad, that I […]
So Far, So Good!
So Far, So Good! Have you heard the one about a man who jumped out off the 20th floor of a building? As he was falling past the 10th floor, someone yelled out to him, “How’s it going?” He replied “so far, so good.” A few days ago I just had a conversation with […]
Office in Home expense
Have you ever heard anyone, including your tax professional say, “don’t take the home office deduction because it is a red flag to the IRS?” Several years ago there was a lot of emphasis by the IRS on the Office in Home (OIH) deduction and it scared a lot of taxpayers from taking it. IRS […]
Income and self employment taxes for small businesses
Small business taxes Federal taxes: income and self employment taxes Impact on personal income tax. When you own and operate your own business, in almost all cases [the exception is a C Corporation], the income or (loss) from the business passes through to your individual income tax return (Form 1040). Business income increases the […]