Vernoia, Enterline + Brewer, CPA LLC

Archive for February, 2016

Top 10 tax litigated issues

National Taxpayer Advocate identifies top 10 tax litigated issues

Male Judge In Courtroom

The IRS’s cutbacks in taxpayer services could erode voluntary compliance with the tax laws and lower tax revenues, National Taxpayer Advocate Nina Olson has told Congress in her annual report. Olson also discussed tax-related identity theft, services to taxpayers living abroad, user fees, tax-exempt organizations, and identified the top 10 most litigated tax issues. (more…)

Like-kind exchange under Code Section 1031

IRS determines exchange of property was like-kind exchange under Code Sec. 1031

The IRS has concluded that an exchange of aircraft was tax-free under Code Sec. 1031 because the aircraft were held for productive use in a trade or business, as required for a like-kind exchange under Code Sec. 1031. Although the business that owned the aircraft did not operate at a profit, that business leased the aircraft to a related company that used them in a profitable trade or business. (more…)

How do I? Prove business expenses

Cafe paper cheque

Everyone in business must keep records. Among other things, good records will help a business prepare the business tax returns, and will support items reported on tax returns. Taxpayers also must keep their business records available for inspection by the IRS.

In order to claim any deduction, a business owner, like any taxpayer, must prove two things: what expenses were for and that the expense was in fact paid or incurred. (more…)

FAQ: Can the IRS impose penalties if a return is not filed or tax not paid?

Yes, the IRS can impose penalties if a tax return is not timely filed or if a tax liability is not timely paid. As with all IRS penalties, the rules are complex. However, a taxpayer may avoid a penalty if he or she shows reasonable cause. (more…)

Tax-related identity theft remains serious problem as filing season begins

In recent years, identity theft has mushroomed and as the filing season starts, tax-related identity theft is especially prevalent. Identity thieves typically file fraudulent returns early in the filing season, before unsuspecting taxpayers file their legitimate returns. Criminals gamble that the IRS will not detect the false return and will issue a fraudulent refund. (more…)

Transit benefits parity made retroactive and permanent

The Protecting Americans from Tax Hikes Act of 2015 (PATH Act) extended and enhanced many popular tax breaks for individuals and businesses. Included in the large number of extended incentives is transit benefits parity. Moreover, Congress made transit benefits parity permanent. Many individuals may benefit from this tax break, depending on their employers. (more…)

New ACA information forms debut for 2016 filing season

As the 2016 filing season gets underway, many individuals will be receiving new information returns from their employers and/or health insurance providers. The information returns reflect new reporting requirements put in place by the Affordable Care Act. Some taxpayers will need to wait to file their returns until they receive their information returns, but most taxpayers will not. (more…)