Above the Line

This week, the IRS announced that it requested an injunction be issued against Martha Jones. According to the complaint, Jones claimed invalid and illegal deductions and charitable contribution carryovers, failed to sign returns, and failed to discuss returns with taxpayers. The IRS reviewed 56 returns and found errors on all of them, with an average deficiency of $4,700 per return. The IRS estimated that Jones prepared over 200 returns (she claimed 50 to 100), but since she did not ...

It’s one of my favorite questions, and one that I get every year.

No, not really. But there also isn’t a straightforward answer, either.

In general, the IRS has three years from the later of when a return is filed or is due to assess additional tax (remember, filing the return qualifies as an assessment). See 26 USC 6501. After that, the IRS is stuck with ...

No one – no one – likes performance reviews. Whether your firm/company does them mid-year, at the end of the year, or some other time, it’s pretty much a given that it doesn’t matter which side of the table you’re on – giver or recipient – you’re not going to be happy.

But at least it’s private (for most people). Your boss (probably) doesn’t stand at the head of the department and say “Bob really screwed up this year! Boy, it’s ...

Breaking news over at Tax Prof Blog: Despite Congressional orders to the contrary, the IRS still labels people as ‘Tax Protester,’ ‘Constitutionally Challenged,’ and the like. Congress’ concern was that people so labeled would have a stigma attached to them, and so, in 1998 prohibited the use of such terms. In a recent report, TIGTA indicated that 196 out of 80 million returns still used the label (a small, small number, to be sure, but still…).

On the other hand, ...

They want more information about your 2008 tax return, specifically some deductions on your Schedule A. Problem is, those records got lost when you moved last month, and you’re not sure you can prove all of your expenses. Is all lost?

There’s only a handful of ways to put money in the state’s coffers. One is to raise taxes, an unpopular option, which could backfire. Another is to increase enforcement via audits, equally unpopular. A third is an amnesty, which avoids the unpleasantness of the other two options, and allows non-filers to get an albatross off their necks and avoid penalties and interest to boot. Even better, there may be no requirement to file timely afterward (though it’s probably a good ...

If you commit a crime these days – particularly white-collar crime, such as identity theft, or fraud – you’re likely to also be hit with tax-related charges. Take Kathy Chen, for example. Ms. Chen – who, in addition to being a real estate agent, owned a tax service, two financial service firms and an escrow firm – used information gained from those businesses to either steal or create wholly fictitious identities. She – and her alleged co-conspirators – then ...

The IRS has released their report on 2008 tax data.

It’s 190 pages of engrossing reading.

Ok, maybe not, but it does serve as a useful guide for answering that annual question: How much can I deduct?

The correct answer, of course, is: you can deduct what you actually paid (assuming you can deduct anything, of course), and not a penny more. But for those clients who are skittish about taking the deduction in the first place (I’ve had clients refuse to ...

A Massachusetts District Court – in a decision not likely to go unchallenged – has said that the Defense Of Marriage Act (DOMA for short) violates the 10th Amendment. While that has good implications for same sex couples who wish to file joint returns, it really just means that the battle over the rights of same sex couples continues.

And while I’d love to not have to prepare 3 tax returns for RDPs here in California, the truth is, for the ...