As a CPA, it always shocked me when I reviewed a tax return that wasn’t prepared in accordance with the applicable tax law. I’m not talking about a mistake on the application of laws. I’m saying that I saw fraudulent tax returns. Let me given you an example. A client referred a taxpayer to us to assist in an IRS issue. I met with the taxpayer and found out that the IRS wanted the refund back that it gave her. In order to determine if the IRS notice was correct, we reviewed the tax return. The IRS was stating that the taxpayer shouldn’t have taken a deduction for mortgage interest and for a large amount of charitable deduction. Read Article »
Are those emails from the IRS real?
Posted on September 3, 2011 in Advice
Many of our clients and I’m sure a lot of other taxpayers have received emails from the IRS. Well, I’m here to tell you ignore them. They are not real. The IRS does not make initial contact with any taxpayer or tax advisor through email. The IRS has been communicating this statements since 2006. Read the link to the IRS website below. The IRS does have email, but they barely even use it with tax professionals due to these sorts of issues and for security purposes. Read Article »
Tax & Business Update – Fall 2011
Posted on August 27, 2011 in Articles
Take advantage of business and tax laws that may expire for good on December 31, 2011. Mos of these tax laws benefit businesses. If Congress doesn’t extends certain business tax write-offs, make sure you consider the following items before December 31, 2011. Read Article »
IRS hires more agents
Posted on August 21, 2011 in Advice
So, I have been telling everyone that IRS audits are up, especially in the metropolitan areas. It makes sense, doesn’t it? If the government is broke and needs more money, then they will hire more agents to audit more people. According to a Treasury Inspector General for Tax Administration Report (Number 2011-30-071), the number of IRS employees increased from 103,811 in in 2006 to 107,622 in 2010. in 2009, the IRS hired more than 2,000 revenue agents and tax compliance officers and during 2010, they added another 1,300 revenue agents. These new hires are on top of the existing agents. Read Article »
Are Damages or Punitive Damages Taxable?
Posted on August 15, 2011 in Articles
The quick answer is damages or awards received for physical injuries or sickness are generally not taxable. However, punitive damages or awards are generally taxable if they are paid to compensate a taxpayer for non-personal injuries. Internal Revenue Code (IRC) Section 104 is the area of law that defines the taxable treatment of compensation for injuries or sickness. Read Article »
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