As published in the Winter Park/Maitland Observer, Thursday Jan. 3, 2012 Edition Offers... Read More »
It’s Easy to Steal IRS Refunds
Two years ago we addressed the IRS’s flawed refund procedure in False Refund Schemes and Backwards IRS Return Processing Rules. Today, Jay Weaver of the Miami Herald gives a distressing update in Scammers Steal IRS Refunds with Ease: “We are seeing defendants once involved in other types of crimes [such as drug trafficking] getting involved in identity-theft schemes,…
Read Full Article Categorized in: Individual Taxation, IRS Procedure, News, Tax CrimesAICPA Opposes IRS Fees, Fingerprinting of Tax Preparers
WebCPA reports that the American Institute of CPAs (AICPA) is asking the Internal Revenue Service to reconsider some of the fees it plans to charge for competency exams and fingerprinting as part of its tax preparer oversight program. The new fees would apply to individuals who are required to take the IRS competency examination in…
Read Full Article Categorized in: Announcements, IRS Procedure, News, Regulation of Tax PreparersConscripting Tax Preparers Part 2: EITC Due Diligence Requirements
Last year I wrote a post titled IRS Disbars CPA for Relying on Client’s Income and Expense Numbers about a disturbing trend by the IRS to draft private tax preparers and force them to work as IRS auditors without pay. Here’s what I said: Tax preparers are advocates for their taxpayer clients and do not work for the IRS. Even…
Read Full Article Categorized in: IRS Audits, IRS Procedure, Regulation of Tax PreparersIRS Use of Tax Liens Often Violates its Stated Mission
Paul Caron discusses Danshera Cords’ Brandeis Law Review article Lien on Me: Virtual Debtors Prisons, The Practical Effects of Tax Liens and Proposals for Reform, 49 Brandeis L.J. 341 (2011): This Article discusses the harm that a notice of federal tax lien can cause an individual as a result of the effect of filing a notice of…
Read Full Article Categorized in: IRS Liens and Levies, IRS Procedure, Taxpayer RightsBeware IRS Employees Who Have Power But Lack Status
The following will come as no suprirse to anyone who has spent any amount of time dealing with the IRS and other government agencies. Michael Martinez of CNN writes: A new study by three universities shows that people holding positions of power with low status tend to demean others, one of the authors said. The…
Read Full Article Categorized in: IRS Procedure, News, Taxpayer RightsCompensation of S Corporation Shareholders
Tony Nitti has published a great piece over at The Tax Adviser which explains the current state of affairs on the issue of compensation of S Corporation shareholders. Here is the Executive Summary, but read the whole thing. S corporation shareholders generally prefer dividend distributions of their S corporations’ profits over compensation payments from the…
Read Full Article Categorized in: S Corporations, Tax TipsIRS Fails to Timely Respond to Taxpayer Inquiries
WebCPA once again reports that the IRS is not following its own rules: The Internal Revenue Service isn’t meeting a self-imposed 30-day deadline of responding to written inquiries from taxpayers, according to a new report. The report, from the Treasury Inspector General of Tax Administration, found that of 73 correspondence cases sampled from the IRS’s…
Read Full Article Categorized in: IRS Procedure, News, Taxpayer RightsGreat News for Innocent Spouses: IRS Eliminates 2 Year Rule
Paul Caron reports that yesterday the IRS released (IR-2011-80) Notice 2011-70 which abandons the rule that requires innocent spouses to make their claims for relief within 2 years from the date IRS collection activity first began: The IRS today announced that it will extend help to more innocent spouses by eliminating the two-year time limit…
Read Full Article Categorized in: Innocent Spouse Relief, IRS Procedure, NewsIRS Fails to Notify Taxpayers and Their Representatives of Tax Lien Filings
The Treasury Inspector General for Tax Administration (TIGTA) reports what tax practitioners have known for years (emphasis is mine): After filing Notices of Federal Tax Lien, the Internal Revenue Service (IRS) must notify the affected taxpayers in writing, at their last known address, within five business days of the lien filings. However, as noted in previous…
Read Full Article Categorized in: IRS Liens and Levies, IRS ProcedureD.C. Circuit Says Taxpayer Group Can Challenge IRS Refund Procedure
The The BLT, the Blog of Legal Times, reports that a divided federal appeals court in Washington said a group of taxpayers will be allowed to challenge the procedure the IRS set up to refund billions of dollars collected through an unlawful tax on telephone calls: The full U.S. Court of Appeals for the D.C. Circuit…
Read Full Article Categorized in: Court Cases, IRS ProcedureBut We Need More Auditors
Joe Kristan tells of the case of Estate of Louise Paxton Gallagher, T.C. Memo. 2011-148 where the Tax Court made a valuation ruling more favorable to the taxpayer than what it had originally claimed on its tax return: The executor files an estate tax return valuing a 15% interest in an LLC at $34,936,000. The IRS audits the…
Read Full Article Categorized in: Court Cases, Estate Tax, IRS ProcedureIRS Tax Software? Is it Coming?
A few weeks ago I wrote in No-Brainer of the Week: Don’t have the IRS Prepare Your Tax Return: My first tip for taxpayers who are seeking someone to prepare their tax returns is this: Don’t have the IRS do it! The reasons for this are obvious to everyone but the IRS. Here are my top 5:…
Read Full Article Categorized in: IRS Procedure, Legislative WatchEx-IRS Commissioner Blames Lawyers and Accountants for IRS Failures
Here’s an instant classic from Paul Caron: New York Times op-ed, Lawyers and Accountants Once Put Integrity First, by [former IRS Commissioner] Mark. W. Everson: It will take decades to fully untangle the causes of the 2008 financial crisis, but as our economy fitfully heals, it would be prudent to ask whether lawyers and accountants…
Read Full Article Categorized in: IRS Audits, IRS ProcedureNearly 40% of IRS Seizures are Illegal
This doesn’t come as a surprise to me, but it’s still disturbing. The Treasury Inspector General for Tax Administration has released its Fiscal Year 2011 Review of Compliance With Legal Guidelines When Conducting Seizures of Taxpayers’ Property (2011-30-049). It found that the IRS failed to follow the law in 38% of all seizures. In conducting its statutory…
Read Full Article Categorized in: IRS Procedure, News, Taxpayer RightsDon’t Kill the Tax Messenger
We deal with a lot of people who are being audited or pursued by the IRS and almost to a man they develop a deep loathing for this government agency. But, as James Maule reports in If Congress Says So, Don’t Blame the IRS, in most cases it’s just a case of killing the messenger: What’s interesting is…
Read Full Article Categorized in: IRS Procedure, Legislative Watch