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We are often asked if an error on a prior year tax return can be corrected if it results in an increased tax in the current year. The answer is “maybe.” There are two issues that have to be considered, namely, whether (1) there is still time to correct the prior year tax return and,……
Category: Tax
Have a Foreign Bank Account? What You Need to Know
There are many advantages of having a foreign bank account, such as convenience, hedging against currency risk, etc. For U.S. persons, those advantages have to be weighed against the reporting requirements. Our laws require most foreign bank accounts be reported. There can be stiff civil and criminal penalties for failing to do so. The Foreign……
U.S. Foreign Tax Credit Not Impacted by Repayment of Foreign Tax Refund
The tax assessment and collection process in most foreign countries is markedly different than the process in the U.S. These differences can present a number of challenges for U.S. citizens who reside in foreign countries. In Sotiropoulos v. Commissioner, T.C. Memo. 2017-75, the court considered one of these challenges, namely, how does one determine whether…
Court Considers Economic Substance in S Corp Transactions
The IRS challenges some tax positions by asserting that the transactions lack economic substance. This can allow the government to unwind or ignore transactions that comply with our tax laws if there is no legitimate business purpose for the transactions other than tax savings. There is a growing body of court cases that helps define…
Am I Required to File a Tax Return?
It can take a considerable amount of time to actually prepare and file a tax return. The IRS puts the time and cost at 13 hours and $210 dollars for the average income tax return. The numbers jump to 22 hours and $430 for the average business income tax return. Luckily, many taxpayers are not……
8 Things About the IRS Offer in Compromise
An offer in compromise is a legal agreement between you and the IRS that settles your tax debt for less than the full amount you owe. It provides you with a path for paying off your tax debt and getting a “fresh start.” If you have unpaid tax debts, here are eight things you need……
Eight Things You Need to Know About the IRS Offer in Compromise Program
An offer in compromise is a legal agreement between you and the IRS that settles your tax debt for less than the full amount you owe. It provides you with a path for paying off your tax debt and getting a “fresh start.” If you have unpaid tax debts, here are eight things you need…Continue…
Tips For Finding the Right Tax Firm
There are quite a few tax firms out there. It can be hard to tell one from another. While there are a number of factors to consider when hiring a tax firm, here are several tips on how to whittle down the list. Identify what you need from a tax firm. Do you need tax……
10 Common Complaints About Tax Return Preparers
Here are ten of the common complaints that are filed with the IRS about tax return preparers: Claims false exemptions or dependents or claims false expenses, deductions, or credits on your tax return. Files a tax return that does not match the the copy provided to you. Fails to file your tax returns. Fails to……
When the IRS Seizes Your Property…
The IRS has the authority to take your funds or property if you do not pay your taxes. This is commonly referred to as a “seizure.” Our Tax Code and the IRS’s Internal Revenue Manual provide specific rules and procedures the IRS has to follow to seize your property. Here are the four primary rules……