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…
IRS Tax Audit Penalties
In a typical non-criminal IRS tax audit case, the IRS may assess accuracy related penalties or civil fraud penalties for tax adjustments not in your favor. The penalties can be significant causing you more pain with the whole audit process. What are these two penalties? 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…
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…
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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Tax Help Question on Volunteering
Question: My father is retired and volunteers about 40 hours per week at the church doing maintenance. He was told my a business owner to open an LLC and get a letter from the church for his work to used as a tax deduction. Is this really plausable since they LLC wouldn’t be generating income? How would this effect his personal taxes? Is there a way to actually do this? Thank you. Continue reading…
Tax Return Failure to File and Failure to Pay Penalties
We have prepared delinquent returns for many clients. When the client gets the tax bill, the client is astonished on the amount of penalties and interest charged. We usually tell clients that if you owe taxes from four years ago, you can double it to estimate how much is owed today.
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Tax Question – Help on Paying Back Payroll Taxes
Question: I owe back IRS payroll taxes. I am planning to sell some assets to help pay off the taxes. How do you recommend I pay the taxes? Continue reading…