Taxpayer who didn’t pick up his mail couldn’t challenge tax liability at Onyango, (6/24/2014) 142 TC No. 24 The Tax Court has held that, where IRS sent a notice of deficiency, often called a 90 day letter, to a taxpayer’s legal residence that was returned to IRS by the Postal Service when the taxpayer didn’t

The IRS has announced that they may audit up to 100% of Sub S companies where no payroll has been paid, especially to officers. It will be important to look at all returns to be sure  payroll is there. This does not mean all profit has to paid out in dividends. It used to be

 Taxpayer salvages partial deduction for unsubstantiated trucking expenses based upon Cohan rule In a recent decision, the Tax Court applied the Cohan  rule which allows a taxpayer to claim expenses for his business even where he cannot support the business expenses. The court permitted a taxpayer to claim a partial deduction for business mileage and

It is better to have a long history of dividend increases over a short one, and more dividend growth over less. Emphasizing dividend growth over current yield also seems to chime with the times. Investors are concerned about the impact of rising interest rates on high-yielding stocks, and it’s plausible that more growth-oriented issues could

Mortgage foreclosure was passive activity disposition despite COD income exclusion In Chief Counsel Advice, IRS has concluded that a foreclosure on real property subject to recourse debt qualifies as a fully taxable disposition for purposes of the disposition-of-passive-activity rules, even though the taxpayer’s cancellation of debt (COD) income that resulted from the foreclosure was excluded

THE NUTS AND BOLTS OF THE CREDIT FOR SMALL EMPLOYERS’ HEALTH INSURANCE PREMIUMS   The Patient Protection and Affordable Care Act of 2010 provides a general business credit for small employers to help offset up to 50% of the cost incurred in funding employees’ health insurance premiums. Businesses are allowed to take the credit for two consecutive

Court finds that unmarried dad was custodial parent entitled to child tax breaks The Tax Court has held that an unmarried dad was the custodial parent of his minor son and that the son was his “qualifying child” for each of the two years at issue. As a result, he was entitled to various child

Corporate officers’ liability for responsible person penalty upheld on summary judgment   Even if you do not own any stock in a corporation, you can be personally held to pay unpaid payroll taxes on all employees. So be sure that all payroll taxes are paid regardless of whether it puts the company at risk of

The Section 1411 surtax and the real estate professional Beginning with the 2013 tax year, Code Sec. 1411 imposes a 3.8% surtax on net investment income of designated high-income taxpayers. Net investment income may include rental income, but not if the rental activity constitutes a trade or business under general principles of tax law (Section 162) and

Higher tax rates increase importance of choosing tax efficient investments The major options available to an individual for equity investments are actively managed mutual funds, index mutual funds, exchange traded funds (ETFs), and direct investment in stocks. Under the American Tax Relief Act of 2012, upper income investors face significantly higher tax rates on equity