Most people who run a side venture know the IRS can be a difficult business partner. It happily takes a cut when the venture makes money. It often refuses to share in the pain when the venture loses money. The hobby loss rules are one of the tools the IRS uses to do this. So… Continue reading Lose the Hobby Loss Fight, But Save the Farm
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Most taxpayers opt to hire professionals to prepare their tax returns. Tax professionals understand the complexities of deductions, credits, and reporting requirements that can overwhelm even sophisticated business owners and investors. Once the tax returns are filed and a few years pass without incident, most taxpayers reasonably assume those tax years are closed forever. But… Continue reading Is a Taxpayer Accountable for their Tax Preparer’s Fraud?
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What one expects as data or information a business would commonly capture and maintain has changed dramatically over time. Readers who are older will appreciate this. The truth is that businesses tracked financial ins and outs and a few other items in the 1980s and leading up to the early 2000s. It was the addition… Continue reading Software Failures Can be Reasonable Cause for IRS Penalties
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Our federal tax system depends on voluntary compliance by a large segment of taxpayers. Encouraging compliance, while deterring and punishing non-compliance, remains the IRS’s greatest challenge. To meet this challenge, Congress has armed the IRS with a myriad of civil and criminal tax penalties. These penalties are designed to address different types of non-compliance, from… Continue reading Frivolous Tax Returns Avoid Accuracy-Related Penalties
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We know that we can take steps to minimize our taxes. Our tax laws allow for this and, on review, the courts have made this clear. Tax penalties are usually the problem with taking tax positions in situations that are not entirely clear. Taxpayers who find themselves having to make decisions in these gray areas… Continue reading Court: Complex Tax + Professional Advice = No Tax Penalty
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