The IRS almost always checks for unreported income when it audits an income tax return. The IRS does this by analyzing the deposits made in the taxpayer’s bank accounts. But what if a deposit was not taxable, as in the case of an amount received for a third party and paid out to a third……
Category: Tax Law
Deducting Mileage for Business With Minimal Activities
Can you deduct car and truck expenses, such as mileage, if your business has minimal activities? The court addressed this in Samadi v. Commissioner, T.C. Summary Opinion 2018-27, which provides an opportunity to consider the question. Facts and Procedural History The facts and procedural history for the case are not unusual. The taxpayer obtained a real……
Can the IRS Take Property Purchased in a Business Name?
If you owe the IRS back taxes but want to buy real estate or some other type of property, can you form a legal entity and use it to acquire property and thereby put the property beyond the IRS’s reach? The court recently addressed this in United States v. Jones, No. 8:17-cv-2389-T-24 AEP (M.D. Fla.……
IRS Refuses to Enforce Lien, Leaving Taxpayer Without Recourse
If the IRS has a superior lien on real estate, it should enforce its lien and apply the sales proceeds to reduce the taxpayer’s unpaid taxes. But what if there is a junior lien that acquires the real estate first? Can the IRS work out a deal with the junior lien holder and divert a……
Managing IRS Debts With Retirement Account Assets
Retirement accounts can present a number of challenges when trying to resolve an IRS debt. The IRS considers a retirement account as an asset in its collection analysis. The recent Scanlon v. Commissioner, T.C. Memo. 2018-51, court case provides an opportunity to consider the impact of retirement assets on IRS collection matters. The Facts &……
About the IRS Certificate of Discharge
The IRS’s lien for unpaid taxes attaches to all property owned by the individual. This can prevent the individual from selling or transferring their property or refinancing the property. There are several potential remedies that can help in this situation. One of these remedies is the IRS certificate of discharge. The IRS Certificate of Discharge……
Can the IRS Collect from a Single-Member LLC?
When trying to settle a tax debt with the IRS or manage the collection process, there are often questions as to whether the IRS can collect from a legal entity owned by the taxpayer. This often comes up in the context of a limited liability company that has one owner. You may be surprised to……
A Closer Look at Innocent Spouse Relief
Innocent spouse relief allows one spouse or ex-spouse to be relieved of liability for an income tax incurred during the marriage. This relief can provide a much-needed lifeline to taxpayers who are divorced or contemplating divorce. Injured Spouse Relief is not Innocent Spouse Relief Before considering the innocent spouse rules, it is helpful to consider……
Congress Provides Significant Relief for Back Taxes
There are winners and losers when it comes to the recent tax changes proposed by Congress. As it turns out, those who owe back taxes to the IRS may be in the winner category. The proposed changes will significantly increase the amount of income that is beyond the IRS’s reach. If the legislation is passed……