Guide to IRS Penalties

Contents1 Guide to IRS Penalties2 Failure to File and Failure to Pay Penalty2.1 Legal Authority2.2 Postmarked Date Rule2.3 Extensions2.4 Penalty Amount3 Estimated Tax Penalties3.1 Penalty Amount4 Failure to Deposit Penalty4.1 Deposit Due date4.2 Penalty Amount5 Return Related Penalties5.1 Legal Authority5.2 Penalty Amount6 Information Return Penalties6.1 Legal Authority6.2 Penalty Amount7 Penalty Abatement Guide to IRS Penalties There are … Read more

IRS “Dirty Dozen” Tax Scams for 2016

IRS “Dirty Dozen” Tax Scams I was inspired to create this post by a few clients that contacted us recently. Read on to learn how to protect yourself from IRS scams. The names below are fictitious to preserve client confidentiality. Client #1 “Bob”: Bob went to a tax return preparer named “Jimmy” to have his … Read more

Unreported Income

Contents1 IRS Income Examination Process2 Direct vs. Indirect Methods3 Why Would the IRS Use an Indirect Method?3.1 Formal Indirect Methods of Determining Income4 Summary IRS Income Examination Process How does Uncle Sam know that you haven’t reported income if you don’t receive W-2s or 1099s? And you’re also clever enough not to deposit your unreported income … Read more

Choosing a Tax Professional

Contents1 Choosing a Tax Professional2 Enrolled Agent (EA)3 Certified Public Accountant (CPA)4 Tax Attorney (JD)5 Situations Where you may Need a Tax Attorney6 “Tax Professionals” You Should Always Stay Away From Choosing a Tax Professional Who should you hire when you have a tax problem? Enrolled Agent (EA) An enrolled agent is authorized by the IRS … Read more

Rental Property Losses

Contents1 Rental Property Losses2 General Rule: Rentals are Passive Activities2.1 $25,000 Special Allowance Loss2.2 Qualified Disposition2.3 Real Estate Professional Rental Property Losses It is not uncommon for real estate investors to have rental property losses. The goal for many investors is not cash flow, but rather to hold on to the property for future appreciation. … Read more

Hire an Independent Contractor or an Employee?

Contents1 Hire an Independent Contractor or an Employee?2 Difference between an employee and independent contractor3 The pros and cons of employee vs. independent contractor4 Forms and taxes5 Conclusion Hire an Independent Contractor or an Employee? Your business is growing and you need help. Do you hire an employee or an independent contractor? Difference between an … Read more

Incorporating your Small Business

Contents1 Incorporating your Small Business2 Why Should you Incorporate?3 How do you Incorporate?4 LP, LLP, LLLP, LLC, Inc…what do I choose?4.1 Sole Proprietorship4.2 General Partnership4.3 Limited Partnership4.4 Corporation4.5 Limited Liability Partnership4.6 Limited Liability Company5 The Best Structure for Your Business Incorporating your Small Business Why Should you Incorporate? So you’ve set up your small business or sole … Read more

Attorneys’ Fees – Are they Deductible?

Contents1 Attorneys’ Fees – Are they Deductible?2 Basic Rule3 Examples of Deductible Attorneys’ Fees4 Examples of Non-deductible Attorneys’ Fees Attorneys’ Fees – Are they Deductible? The good news for taxpayers is that attorneys’ fees in relation to tax services for individuals and small business issues are deductible! Basic Rule The basic rule is that attorneys’ … Read more

Can You Settle Your IRS Debts?

Contents1 Can IRS Debts be Settled?2 Chapter 7 Bankruptcy3 Offer in Compromise3.1 Pre-Qualifiers for Filing an OIC3.2 Requirements for Filing an OIC3.3 How much should you offer?3.4 Special circumstances3.5 What if your offer is rejected?4 Offer-in-Compromise vs. Chapter 7 Bankruptcy4.1 Applying for OIC before Chapter 7 filing4.2 Applying for OIC after Chapter 7 discharge4.3 Which one … Read more