Tax Return Preparer Fraud Since I recently represented an innocent couple who were victims of Tax Return Preparer Fraud, and successfully helped them in their audit, I thought you might be interested in the info below. Per the IRS: FS-2008-10, January 2008 Return preparer fraud generally involves the preparation and…
In an effort to stimulate the economy, the recently-enacted Economic Stimulus Act of 2008 requires the U.S. Treasury to send rebate checks to eligible individuals. Who qualifies for rebates, how they are calculated, and what, if anything extra, needs to be done to get one. You’ve probably heard that the…
Tax problem with capital gain taxes, S Corp capital gain tax problem Ninth Circuit holds that gain was recognized on disputed sale in shareholder’s forced buyout Glenn Hightower v. Comm., (CA9 2/12/2008) The Court of Appeals for the Ninth Circuit, affirming the Tax Court’s decision, has held that an individual…
IRS gets tougher on variable prepaid forward contracts with share lending arrangements Variable Prepaid Forward Contracts Incorporating Share Lending Arrangements An IRS coordinated issue paper for all industries concludes that variable prepaid forward contract (VPFC) transactions that incorporate a share lending or similar agreement permitting the counterparty to borrow or…
Final substitute return regs adopt temporary and proposed regs with one minor changeT.D. 9380, 2/12/2008; Reg. § 301.6020-1 Mike Habib, EA In 2005, IRS issued temporary (also issued as proposed regs) that broadened the scope of when IRS-prepared substitute returns (SFR) are valid. Specifically, the temporary regs provide that a…
IRS tax problem, IRS penalty, IRS Tax court ruling in favor of taxpayer Tax Court found that it could hear challenge to frivolous return penalty before rejecting summary judgment in favor of IRS Callahan (2008), 130 TC No. 3 After determining that the taxpayers could challenge a frivolous return penalty…
IRS targets tool reimbursement plans that recharacterize wagesEmployee Tool & Equipment Alert on IRS’s website https://www.irs.gov/businesses/article/0,,id=178028,00.html IRS has established a cross divisional team to address significant concerns with employee tool and equipment plans that purport to be valid accountable plans. Taxpayers that are considering implementing these plans, which are widely…
Changes made to Form 1042-S (Foreign Person’s U.S. Source Income Subject to Withholding) Mike Habib, EA The IRS has made some changes to the electronic/magnetic media filing procedures for 2007 Form 1042-S, Foreign Person’s U.S. Source Income Subject to Withholding, and also released the 2008 version of the form. Form…
Music composer tax related capital gain treatment IRS Temp reg describes how and when to elect capital gain treatment for self-created musical works T.D. 9379, 02/07/2008, Reg. § 1.1221-3T; Preamble to Prop Reg 02/07/2008, Prop Reg § 1.1221-3 IRS has issued a temporary reg on the time and manner for…
Employment tax penalty abatement, Payroll tax problem, Abate tax penalty Court says bank error (not employee error) may be reasonable cause to abate employment tax assessment Mike Habib, EA Don Johnson Motors, Inc. v. U.S., DC TX, 101 AFTR 2d 2008-370, Civil Action No. B-06-047, 12/21/07 Employment tax problem? Get…