Tax News

Click each link to view the PDF

IRS Audit

  • IRS Regulations on Adequate Records for Travel and Entertainment

    Documentary evidence, such as receipts, paid bills, or similar evidences sufficient to support an expenditure is required for these items.

  • IRS AUDIT – WHAT RECORDS TO KEEP

    IRS regulations state that records required to be maintained by the IRS must be accurate, but no particular form is required. However, other IRS guidelines specify these.

  • IRS AUDIT – WHAT THE IRS LOOKS FOR

    The second question (the first being: “Why me?”) everyone asks after they open the IRS envelope and read the “audit invitation” is: “What are they going to be looking for?”

  • IRS AUDIT – WHY TO KEEP RECORDS

    In short, anything that has a bearing on your income tax return and affects your tax liability in any way must be available for inspection when requested by the IRS.

Entities

  • SHOULD I FORM A C-CORP?

    When it comes to choosing the form of your business, some tax pros feel that C corporations have become “the forgotten entity” among entrepreneurs.

  • SHOULD I FORM AN S-CORP?

    Let’s explore the pros and cons of setting up an S corporation.

  • SHOULD I FORM AN LLC?

    LLCs are a bit of a hybrid of other forms of business. Like C corporations and S corporations, LLCs can provide you with some protection against personal liability. But for tax purposes, LLCs are treated more like partnerships.

  • SHOULD I FORM A PARTNERSHIP?

    Here are five factors to keep in mind if you’re thinking about doing business as a partnership.

Deductions

  • HOW TO PROVE DEDUCTIONS WITH NO RECORDS

    The regulations provide an exception to the normal substantiation requirements where the taxpayer can establish that at one time he possessed adequate records and that his inability to produce them is attributable to fire, flood, or other casualty beyond his control.

  • CLIENT INFO – TRAVEL EXPENSES

    Section 162 allows a deduction for all the ordinary and necessary expenses paid or incurred in carrying on a trade or business.

Entities – Selection & Comparison

  • Entities - Selection

    Pick the business entity that’s right for you. There are several common variables that many entrepreneurs give at least some thought to when considering what legal form their business should take.

  • S CORPORATION SHAREHOLDERS SELF EMPLOYMENT TAX

    Tax Court rules that S Corp Owners Must pay Social Security and Medicare tax on profits.

  • Entities - Comparison

    The Advantages and Disadvantages of Various Entities Compared to LLC’s

  • S CORPORATION – HEALTH INSURANCE RULES FOR SHAREHOLDERS

    The type of entity may greatly affect where this insurance premium expense may be deducted on the individual’s personal income tax return.

Special Tax Situations

  • HOW MUCH RENTAL LOSS CAN YOU DEDUCT ON YOUR TAX RETURN

    How much rental loss can you deduct on your tax return?

  • HOW TO GET A TAX BREAK IF YOU RAISE HORSES

    We successfully argued that in the matter when the IRS declared a client’s horse farm to be a “hobby” rather than a business and disallowed his farm losses, that he was in compliance with statutory law and case law.

  • FRAUDULENT CONVEYANCE TO AVOID OR HINDER THE IRS

    Under the law of fraudulent conveyance a transfer made by a debtor is fraud perpetrated against the creditor whether the claims of the creditor were made before or after the transfer if the debtor made the transfer in either of these ways.

  • INCOME FROM CANCELLATION OF INDEBTEDNESS

    Taxpayers, other than C corporations, are permitted to exclude income attributable to cancellation of qualified real property business indebtedness.

  • RENTALS – REPAIRS VS. IMPROVEMENTS

    Rental Property – Repairs vs. Improvements – What is the difference?

For Business Owners

  • EMPLOYEE OR INDEPENDENT CONTRACTOR

    An employer must generally withhold federal income taxes, withhold and pay social security and Medicare taxes, and pay unemployment tax on wages paid to an employee. An employer does not generally have to withhold or pay any taxes on payments to independent contractors.

  • HOW TO GET A FEIN

    Private businesses in any of the 50 states can fill out Form SS-4 online and get an ID number quickly.

  • MILEAGE DEDUCTION RULES PER THE UNITED STATES TAX COURT

    The amount of business mileage allowed as a deduction to a salesman was substantially reduced because of his failure to substantiate expenses by keeping a daily record.

What the IRS Watches For

  • TAX EVASION, FAILURE TO FILE RETURNS

    Tax crimes involving transferring ownership of assets to trusts, falsely encumbering assets, moving money to offshore accounts, and using multiple bank accounts.

  • NON-CASH CHARITABLE CONTRIBUTIONS – TAX COURT