Taxpayers Learn Hard Lesson About Filing Deadlines
File your tax returns in a timely manner, or your filing status may be determined for you – by the IRS. That’s the lesson Donald Thomas Salzer and his wife learned the hard way. They failed to file income tax returns for 2008 and 2009. Mrs. Salzer had refused to sign the 2008 and 2009…
Last-Minute IRA Contribution OK with Proper Request
The date of an irrevocable letter of authorization that an individual sent to a financial services company should be considered the date of the contribution to his retirement account, the IRS determined in a recent private letter ruling. This situation involved a taxpayer who sent his financial services company a letter of authorization (LOA) instructing…
Donate Property – Claim a Tax Deduction?
With tax season 2014 fast approaching, a few tips regarding donating property seem in order. Specifically, clothing, household items and cars are the most common items donated to qualified organizations. To receive a tax deduction, you need to donate the property to a qualified organization. A qualified organization includes nonprofit groups that are religious, charitable,…
Tax Debate: No Small Potatoes?
For Zack Brown, Danger is his middle name. Really! Apparently his name is Zack Danger Brown. So who is Zack Brown? He is an online pseudo-celebrity on a site called Kickstarter. In exchange for money provided by strangers, Brown will make a potato salad. That’s all there is to it! What is really fascinating about…
Something Missing? Shortened Numbers Safeguard Identity
Final IRS regulations make permanent, and expand the scope of, proposed regulations that allow the use of truncated, or shortened, taxpayer identification numbers on payee statements and certain other documents. A truncated taxpayer identification number (TTIN) displays only the last four digits of a taxpayer identifying number and uses asterisks or X’s for the first…
A Loan Should Look Like a Loan
A business owner who advanced funds to a new employee was not entitled to deduct as a business bad debt either the funds that he knowingly advanced or the funds that the employee misappropriated from the business, the Tax Court determined recently. Ronald Dickinson was a self-employed consultant. He hired Terry DuPont, a former employee,…
Technical Termination Doesn’t End Amortization
A new partnership formed because of a “technical termination” must continue amortizing any startup and organizational expenses over the remaining portion of the amortization period adopted by the terminating partnership, according to final regulations issued by the IRS. A “technical termination” occurs if a partnership is terminated by a sale or an exchange of a…
Beneficiary Spouses Face Important IRA Decisions
Most husbands and wives name their spouse as the primary beneficiary of their IRA. What does a surviving spouse need to consider as the beneficiary? Like any other beneficiary of a decedent’s IRA, a surviving spouse can receive a distribution as a beneficiary. But a surviving spouse who is the sole beneficiary of the decedent’s…
Pot Business to IRS: Take My Taxes, Please!
A marijuana business in Colorado has filed a lawsuit against the IRS because the IRS is assessing a penalty for paying the taxes in U.S. currency – in other words, cash, according to the Denver Post. The IRS requires employers to pay federal withholding taxes using the Electronic Federal Payment System (EFPS). It charges a…
Small Businesses May be Eligible for Insurance Credit
The IRS has issued final regulations on the tax credit available to certain small business employers that offer health insurance coverage to their employees (TD 9672). An eligible small employer (ESE) is an employer that has no more than 25 full-time equivalent employees (FTEs) employed during its tax year and whose employees have annual full-time…