Reliance on a Tax Preparer to e-File a Return Is Not Reasonable Cause
Taxpayers are subject to a late filing penalty under Internal Revenue Code (IRC) §6651(a)(1), unless the delay is due to reasonable cause and not willful neglect. The Supreme Court in Bo... TheTaxBook
Income Statement Verified by a CPA Is Not Substantiation
For some types of expenses, lack of substantiation can be overcome. If a taxpayer establishes that a deductible expense has been paid but cannot establish the precise amount, the Tax Court may estimate the amount under the s... TheTaxBook
Notice and Opportunity for Hearing Before Levy
When tax remains unpaid, the Internal Revenue Service (IRS) may levy any property or right to property of the taxpayer to satisfy the tax liability. However, before such levy is made, the IRS must issue a notice to the taxpayer i... TheTaxBook
Be Careful of What You Post Online
When married couples file a joint tax return, they are both liable for any tax due on the return. A spouse may seek relief from joint and several liability under the procedures established in Internal Revenue Code (IRC) §6015(b) if:i A) A joint r... TheTaxBook
Things to Discuss with Clients at 2023 Appointments
New Beneficial Ownership Information Reporting Rules On September 29, 2022, the Financial Crimes Enforcement Network (FinCEN) issued a final rule implementing the bipartisan Corporate Transparency Act’s (CTA) beneficial ownership information (BOI) r... TheTaxBook
Important Tax News You Can Use
Penalty Relief for 2019 and 2020 Tax Returns The Internal Revenue Service (IRS) is providing relief for taxpayers from certain failure-to-file penalties with respect to tax returns for the ... TheTaxBook
Ethical Issues to Consider in Recent Tax News
More Options to Correct Returns Electronically The Internal Revenue Service (IRS) has announced that more forms can now be amended electronically. These include people filing corrections to the Form 1040-N... TheTaxBook
The PTC, Itemized Deductions, Employer Leave-Based Donation Programs, Tracking Refunds, and Bribes
Premium Tax Credit Regulations Amended Wages are deductible by a C corporation in computing taxable income, but dividends are not. In a closely held corporation, the owners might decide to take ... TheTaxBook
Important Compliance Issues
C Corporation Reasonable Compensation Wages are deductible by a C corporation in computing taxable income, but dividends are not. In a closely held corporation, the owners might decide to take distributions in the form of sal... TheTaxBook
Tax Season News You Can Use
Schedules K-2 and K-3 The Internal Revenue Service (IRS) has posted changes to the 2021 partnership instructions for Schedules K-2 and K-3 (Form 1065) on its website, www.ir... TheTaxBook
Important Things to Know for Tax Year 2021 Returns
Infrastructure Investment and Jobs Act On November 5, 2021, Congress passed the Infrastructure Investment and Jobs Act (H.R. 3684), which President Biden is expected to sign into law. The new law addresses provisions rel... TheTaxBook
2021 Employee Retention Credit Overview
Employee Retention Credit Guidance for First and Second Quarters of 2021 The Internal Revenue Service (IRS) has now released guidance to address changes made by the Consolidated Appropriations Act, 2021, for... TheTaxBook
Recent Court Cases of Interest
Gambling Loss Not Deductible as Casualty Loss The Ninth Circuit Court of Appeals has ruled that the taxpayer’s gambling losses did not qualify as deductible casualty losses. The taxpayer gambled occasionally, but only small amounts, and... TheTaxBook
Things You Need to Know for Tax Year 2021
Advanced Payments of Child Tax Credit to Begin July 15 The Internal Revenue Service (IRS) has announced that the first monthly payment of the expanded and newly advanceable child tax credit from the American Rescue Plan will b... TheTaxBook
Avoid Penalties by Doing Your Due Diligence
New Due Diligence Requirements For tax year 2020, the Consolidated Appropriations Act, 2021, allows eligible taxpayers to elect to use their 2019 earned income to figure the 2020 earned income credit (EIC) or additional child tax cred... TheTaxBook
IRS Updates Small Business Accounting Method Regulations
The Internal Revenue Service (IRS) has issued final regulations to implement the changes to the accounting method rules made by the Tax Cuts and Jobs Act (TCJA). Under Internal Revenue Code (IRC) §448(c), a business with gross receipts under $25 m... TheTaxBook