Your tax return was selected for audit. The auditor reviewed your information and disallowed some of your deductions. As a result, you owe additional taxes including penalties and interest. How could this happen? You been using a trusted CPA for years to prepare your tax returns.
How Long Can the IRS Make Adjustments to My Tax Return?
On 4/15 of every year, us tax practitioners are happy for two reasons. First, the tax season is basically over. But more importantly is the number two reason. Tax returns filed more than 3 years ago can generally be no longer changed by the IRS. Continue reading…
First-Time Abatement Relief, IRS Failure
According to a report by the Treasury Inspector General for Tax Administration (TIGTA), 1.45 million taxpayers were not informed that they qualified for penalty relief under the First-Time Abatement Relief program. TIGTA estimated that the amount of penalties left unabated totaled more than $181 million. Continue reading…
IRS Audit Risk – Reclassifying S Corporation Distributions as Wages
In our previous blog, we discussed the issues with paying no officer wages. Your S Corporation is properly paying officer wages. Is the amount reasonable? The IRS is hitting small businesses for paying unreasonably low officer wages. Continue reading…
Questions on the New "fiscal cliff" Regulations
Questions: Please clarify the “new” “fiscal cliff” income tax regulations regarding:
Taxes on capital gains and dividends will also rise to 20 percent. Is the rise progressive. i.e. only applies to unearned income over $500,000 ?
Taxes will also rise by five percentage points for large estates, over what amount ?
Married couples who earn $300,000 or more will face caps on itemized deductions and exemptions. Please clarify Continue reading…
IRS Audit Risk – Reporting No Wages to S Corporation Officer
An S Corporation is a popular entity structure for small businesses. Many tax practitioners help small business set up S Corporations to reduce self-employment tax. This strategy can back fire if the corporation reports unreasonably low or no compensation to the officers/owners. This is an audit risk as the IRS is cracking down on business for not reporting officer wages.
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Tax Question – Issuing MISC-1099 to a LLC
Question: Do I need to issue a 1099 MISC for services paid to a LLC? Continue reading…
Tax Question: Help on Closing Down LLC
Question: When a company decides to close and they have about $15,000 in inventory that the owners will keep, do the owners need to do anything special for their taxes other than their normal tax return? The company is an LLC. Continue reading…
Payroll Failure to File, Failure to Pay, and Deposit Penalties
In a previous blog, we discussed the penalties for late individual annual tax returns. This blog reviews the penalties for late payroll tax returns. The failure to file and failure to pay penalties for payroll returns are the same compared to individual tax returns. However, there is also a failure to deposit penalty for payroll returns.
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IRS S Corporation Late Filing Tax Penalty
If the S-Corporation tax return is filed late, the IRS will add a tax penalty.
S-Corporation tax returns are generally due on March 15. If an extension is filed, the S-Corporation tax return is due on September 15. When the tax return is filed late the IRS will add a tax penalty based on the number of months late. The tax penalty can be removed under certain circumstances. Learn More on how to remove tax penalty or penalty abatement. Continue reading…