TaxAudit Blog

Tag: IRS

clock on an audit report

The fact is that there is no standard answer to how long it will take for the IRS to finish up your audit and tell you what, if anything, you owe.

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File folders - one with the word Audit on the tab

Responding to an IRS audit is not the easiest thing to do. Surviving an audit is much easier with professional representation.

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IRS Audit

Generally, the IRS has three years form the date the return is filed to conduct an audit. However, there are exceptions to this three-year rule.

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Boy standing in front of chalkboard with a finger on his chin

The first thing to do is to check every name and Social Security number listed on the return with what is listed on their Social Security cards.

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Internal Revenue Service sign next to traffic light

Returns are being processed, and refunds are being issued. Things seem back to normal.

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Four Ice Cream Cones

So, what happens if you miss an Installment Agreement payment and/or can no longer make the agreed upon payments?

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Bowl of Ice Cream

Sometimes it only takes six little letters to strike fear in the bravest of taxpayers: IRS IOU (technically, it's not an IOU, but rather a bill).

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Pencil pointing to the words Amount You Owe on tax form

Congress reauthorized the IRS to use private debt collection agencies, or PDC, to collect outstanding tax liabilities.

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Passport with Denied stamped across it

The IRS can request the State Department to revoke a currently active passport of a U.S. taxpayer with severely delinquent tax debt.

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Person receiving fast food

The IRS is currently offering this cash payment alternative at participating 7-Eleven stores in 34 states.

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Handcuffs laying on a 1040 form

I got a phone call from the IRS last week; well, the very-computer-sounding voice said it was the IRS. "Hello, this is the IRS. We've been trying to reach you"

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Man in swimming pool holding up trophy and Gold Medal

The IRS is well aware that the U.S. Olympic Committee pays medalists a cash bonus of $25,000 for winning gold, $15,000 for silver, and $10,000 for bronze.

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$20 bill, American Flag, and Capital Building

Did you know that when you owe money to the IRS that cannot be paid in full within four months or within six years on a monthly payment plan?

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Four glasses

Part of the return review may include the IRS contacting other third parties in order to validate the information listed on the return.

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Pencil on Monthly Expense Guidelines paper

There are only two months left in the year. What can I do now to avoid paying a big tax liablity on my Schedule C business next year?

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Block with Tax words on it

The letter you hoped would never come arrived. You open it and discover the IRS has graciously sent you an invitation to their work mileage deduction review.

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Crime scene tape and magnifying glass over 1040 tax forms

Tax nightmares aren’t just for scammers. They can happen to people who make innocent mistakes, and even to those who believe they are doing the right thing.

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$20 bill, American Flag, and Capital Building

In essence, the flat tax is a system of taxation where one tax rate is applied to some types of income with no deductions.

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hat

What do “Scarface” Capone and a tax audit have to do with each other? They actually do have a bit of a connection. Scarface went to prison for TAX EVASION!

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Stock Chart

I got a CP2000 notice from the IRS. It says I owe $12,269 for securities I sold in 2013. I purchased the stock in 2005 and sold it at a loss of almost $10,000..

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diamond ring

While I was working out at the gym, someone broke into my locker and stole my diamond ring. It’s my wedding ring and I always take it off before doing...

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businessman in wheelchair

Are disability payments taxable? This is a good question, but there is no correct general yes or no answer. The taxability of disability payments depends on...

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Woman

I do PR in the Bay Area. My hairstylist says I can deduct my entire salon bill on my taxes because it helps me look good at events. Is this correct?

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path going through forest

I want to donate to my favorite politician’s 2016 campaign for our state’s House of Representatives. Are there limits to how much I can deduct?

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1040 Pie Chart

To increase the business offerings at my mailbox rental business, I became a Notary Public this year. So far I made about $1,000 from my notary service.

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Rx bottle that says Affordable Care Act

I received a 1095-A form for health insurance info from the Vermont Health Insurance Exchange/Marketplace after I had already filed my taxes.

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Pen, calculator, and blocks that spell out TAX on financial papers

I would really appreciate some advice on filing estimated taxes. Please let me know if you provide this service.

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Person on computer attempting ID theft

The IRS estimates they received over 2.4 million fraudulent returns for the 2013 filing year. If you’ve been the victim of this type of crime…

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houses

My husband and I bought a home. We sold our old house a few months later. Will the profit on the old house be taxed if we do not roll it into the new house?

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Roof on brick house

The expenses I paid out on my rental were $12,000 more than my rental income, yet my tax return shows a deductible rental loss of zero. Why?

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Tax scammer

These thieves use a legitimate taxpayer’s name, address and social security number to file a fraudulent return claiming a large refund, and then divert...

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Internal Revenue Service building with traffic signal in front displaying a red light

If you get audited, do they send a letter or do they call you? In most instances, the IRS will send you a letter notifying you of the audit.

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Yellow sign that says Retirement Ahead

You want to save money towards your retirement, but your employer does not offer a retirement plan, such as a 401(k). You are not alone...

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Green sign that says Retirement Next Exit

You just found out your Uncle Jerry passed away and that he had listed you as the sole beneficiary to his traditional IRA account. You go down to the bank...

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Personal Development, Guiding Skills, Help, Coaching, Learning

My wife is training to begin her career as a life coach. Can the expenses of her training, including tuition, room, board & travel, be tax deductible?

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Rx bottle that says Affordable Care Act

You might have thought that with the new Health Care Reform more of all the money you spend on health insurance and medical expenses would be deductible.

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woman on the phone holding baby

I am a policy and procedure writer for a company. Due to my long commute, my boss lets me work from home one day a week. Can I write off my home office?

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keyboard that says Crowd Funding

Crowdfunding is a popular way to raise funds for businesses, charities and individuals. It occurs when someone asks others to contribute to their idea or cause.

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man and woman getting married

My wife and I are preparing our taxes, and, due to her employment situation(s) and our investments, we have received a number of 1099s...

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Internal Revenue Service building with traffic signal in front displaying a red light

Are you short on cash and don’t have the money to pay your tax bill? The IRS does have a few options for the taxpayer who is cash short at tax time.

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W-2 Wage Statement

 filed my tax return, and then a W-2 came in the mail for a job I worked earlier this year that I had forgotten about. How do I file this? 

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two people looking over financial charts

My wife has an IRA under professional management with a financial advisor here in Portland. Can we deduct the fees charged for his services?

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$100 bill

The holidays have come and gone, footballs are filling the air as bowl games and playoffs are well underway, and it’s time to start thinking about…taxes.

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Tax scammer

What form do I file with the IRS for 2014 for a fraud case where I lost lots of money. The fraud case was adjudicated and the offender now sits in Fed Prison.

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The Grinch

The holiday season is a time for giving, but if you don’t follow the carefully prescribed rules for charitable giving, the IRS may disallow your deduction.

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Gift wrapped in five dollar bill

I’ve never been married and I have no children. I’ve been successful in my career and have some money saved. I want to give my six nieces and nephews $20,000

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Yellow house with white fence

I just had my home refinanced to a lower interest rate and to a 15-year fixed mortgage. What are some of the things that are associated with refinancing...

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Retirement Ahead Sign

Did you retire this year or turn 70 prior to July 1st? You may have think about Required Minimum Distributions (RMDs).

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identity theft

 received a phone call from IRS telling me that I owe them $2,500. They said they sent me a letter in January of 2014 that I signed for telling me the errors...

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Rx bottle that says Affordable Care Act

We heard about it all the way back in 2010, but the Individual Mandate − or Minimum Essential Coverage − did not go into effect until this year.

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Block with Tax words on it

My husband passed in February of this 2104. We have always filed a joint return. What do I need to do this year?

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Hands holding a heart

We loaned our car to a missionary home for a visit and fundraising. Can we deduct the mileage as a charitable contribution?

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Student desk with books and apple on it

I have a daughter who is eligible for the American Opportunity Tax Credit of $2,500.00. Can she also use the Lifetime Educational Tax Credit of $4,000.00?

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Football Field

Sunday during the fall is a huge day of the week for many Americans. Namely, the sporting fiends with professional football fever. The National Football...

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RV driving on the road

Can I claim the interest I pay on my RV on Schedule A as mortgage interest on a second home? As long as your RV loan is secured by the RV and the...

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Flood

Casualty losses can happen to taxpayers, such as a fire caused by a faulty heater. Do you have copies of your important documents in a safe place? 

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Woman filling out a tax form

When it comes to proving deductions taken on a tax return, the burden of proof is on the taxpayer, according to the Internal Revenue Code (IRC). 

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Dictionary with the focus on the word Taxpayer

If you made an mistake on your taxes or omitted required information, such as a late-received W-2 or K-1, you can file an amended return on Form 1040X.

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Woman filling out a tax form

It’s still not too late to make adjustments to your withholding or estimates to make sure your 2014 taxes will be done correctly and you will not be surprised..

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Woman holding house keys

We bought our home in 2009, in Arkansas, did major improvements, and then leased it out from 2010 though 2014. We now have the place up for sale...

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Clock pointing the time hands towards the word TAX

The overall percentage of individual tax returns examined in 2013, published by IRS, is about 1%; however, this number only takes into account “examinations”

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Nurse helping woman

My brother is in assisted living; what part of his expenses can be deducted? He needs assistance with getting dressed and all daily hygiene activities.

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Soldier Saluting the American Flag

Let’s talk about business deductions for members of the military. The same rules apply for active duty personnel and reservists.

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3 Armed Forces Members

If you are a member of the U.S. Armed Forces, there are tax breaks written just for you. Merchant Mariners and American Red Cross employees do not qualify...

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Ocean

We have been asked to build some basic boxes to be used as a stage for a company. They plan to pay us but are not placing us on their payroll as employees.

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Dice

If you like to gamble, you probably already know that your gambling winnings are considered income, especially if you gamble within the United States.

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Yellow house with white fence

I completed a short sale in 2014 and was wondering if it’s possible to avoid taxes on the difference. I sold it for $142,000, the bank got $127,000, and the...

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Man asleep at desk

Years ago, I was just like most people when it came to taxes. Just the thought of doing my tax return gave me hives. I had been burned twice at tax time...

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Flooded street with sign that says High Water

My house got water in it this past month. I needed to clean up the mess, replace the carpet, pad and doors.  My insurance would not cover the loss.

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Application for Health Coverage form

Now that the furor, for the most part, over the Affordable Care Act has subsided a bit, let's take a quick look at the PENALTY for not abiding by this law?

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Supreme Court

This decision is likely to impact many taxpayers, particularly anyone expecting to inherit an IRA from a parent or someone else.

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Dress Shirts

Could you advise on how the value of items is determined for charitable contributions? I am about to donate several of my designer suits to charity. 

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Gavel

Yes, Uncle Sam loves lawsuit settlements just like plaintiffs do. Before you start spending the money, there are some things you need to know.

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Dictionary with the focus on the word Taxpayer

For several years, National Taxpayer Advocate Nina Olson has been arguing for the simplification and codification of taxpayer rights and responsibilities.

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Man on couch talking to Psychotherapist

My wife has her own business as a psychotherapist and is the only person involved, i.e., she has no employees. She frequently has to submit claims to insurers..

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glasses and pen laying on top of tax form

There are so many ways that taxpayers have tried to do an end run on the tax system that the IRS issues an updated consumer alert each year titled...

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Divided wedding cake with groom on one side and the bride on the other

Taxpayers who must pay alimony to a former spouse may deduct it from his/her tax return as an adjustment to income.

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Room partially painted

How do you know if you have spent substantially full time repairing and maintaining a rental property when you stay in it so it doesn't count as a personal day?

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Internal Revenue Service building with traffic signal in front displaying a red light

The IRS generally won’t look for you unless you owe them money. If you don’t file for a refund within 3 years of the original due date of the return...

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Tax Return Preparer Credentials

All paid tax return preparers are required to have an IRS PTIN (Preparer Tax Identification Number) which they must enter on the tax returns they prepare.

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Rolled up receipt

If you have a dedicated credit card for your business, can you use the statement as the receipt for your business entertainment, meals, travel, etc.?

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change button on a keyboard

Do feel motivated to give money to an organization after the last hurricane/tornado/flood/fire? Did you get a phone call, email, personal appeal by someone?

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Basketball resting on a Basketball Court

While we call it the “Jock Tax,” it really is a tax that does affect a variety of people, but we are focusing on the NBA because of the extensive travel habits.

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The word TAX spelled out with tiles on paper money and next to a stack of coins

I hate allowing the government an interest free loan. This year I had a penalty for owing too much at the end of the year. So my question is: how…

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drive through window

First job ever? What do you do about those pesky tax forms they gave you at the job? How do you fill them out? Why are they taking all that money out!?

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The Capital

Some of the more popular tax breaks the bill would have extended are the tuition and fees deduction; the state and local sales tax deduction...

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Handcuffs laying on a 1040 form

My son was arrested in December of 2012 and spent the entire year of 2013 in jail awaiting trial. During that year I paid his attorney fees, car payments...

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man laying on grass relaxed

You may have heard that if you are self-employed, or you are expected to entertain clients as part of your job, you can deduct the costs of those meals...

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Homes surrounded by mountains

I bought a house in Arizona in 1996 for $95,000. I did two cash-out refi’s totaling about $30,000 through 2004. I sold the house in 2014 for $165,000, and..

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Clock pointing the time hands towards the word TAX

You got your return filed on time and you’ve got a nice big refund coming. But the funds don’t show up in your bank account when you expected them to. Now what?

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Woman blowing bubbles on couch with child

My two children live with my ex. He is the custodial parent but we have joint custody. I pay child support and they come over to my house almost every weekend.

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TAX DAY written with blocks

You owe money to the IRS – now what? Don’t faint, don’t freak out, and don’t worry! There are simple ways to take care of that balance due.

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Tax Day and April 15th stamps by stack of papers

The April 15th deadline is approaching. Taxpayers are most likely to make errors on returns when they are rushing to finish their returns before the deadline.

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Piggy bank

Under 59½? Need some extra cash? Don’t use your retirement! It isn’t a savings account or a piggy bank to be used to buy an extra pizza on Saturday night

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Money

If you are upset about the national debt, you can make a deductible charitable contribution to the Bureau of the Public Debt to help out.

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Man and Woman riding in a red car

I use my car in my business. How much of it is tax deductible, and what type of travel is deductible? Are my trips going back and forth to work deductible?

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Calculator and Stethoscope

Feeling sick? Broke a foot? Broke a tooth? Kids in braces? Are these deductible on your taxes? Well – maybe. Medical, dental, and even alternative health care..

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Key in locked box

The fastest way to get your money without paying additional fees is to e-file your return and have the money Direct Deposited to your bank account.

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Partially painted room

I was an owner contractor on the restoration of my house. I bought some used construction equipment to do the work, items like gas powered pressure washer...

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Silhouette of Micheal Jackson

Michael Jackson stirs up many good memories for me. I mean he is the Elvis of my generation. I vividly remember getting his Thriller record for Christmas...

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city

In a recent case of tax evasion, Ty Warner, the creator of “Beanie Babies” was hit with $53.6 million in penalties for hiding money offshore.

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identity theft

Tax scams increase exponentially during the income tax filing season. If you want to avoid being a victim, be aware that when someone offers you a “chance of...

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Scammer

Phone Scams: There are numerous phone and internet scams claiming to be the IRS (or other government agencies). Do not give personal information to anyone...

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Hand holding stack of 100 dollar bills giving it to another hand

In order to qualify for an Earned Income Tax Credit (EITC) of up to $6,044, you must first meet these two qualifications: You must have earned income...

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ipad

As for an individual with a business, it is beneficial to research what is on the market in regards to business accounting software. There are numerous...

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Gold Record

I’m sure you remember when Susan Boyle became an overnight web sensation. Since then, thousands of hopeful musicians, writers, artists, and dancers...

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stack of large books

 It’s a long story that begins long before the arrival of the first Form 1040 Income Tax Return of Annual Net Income of Individuals...

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expert highlighted

Introducing Carolyn Richardson! Our highly effective and experienced tax audit professional from Hawaii! With her three decades of tax experience,…

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Tips

Here are some simple tips to help you reduce your audit risk: Proofread your tax return A mistake on just one figure or item can present IRS audit flags…

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This blog does not provide legal, financial, accounting, or tax advice. The content on this blog is “as is” and carries no warranties. TaxAudit does not warrant or guarantee the accuracy, reliability, and completeness of the content of this blog. Content may become out of date as tax laws change. TaxAudit may, but has no obligation to monitor or respond to comments.