The Start of an IRS Audit: To Disclose or Not?

If a taxpayer submits an amended return at the start of an IRS audit, can they avoid penalties for doing so?  The rules allow large case taxpayers to make post-audit disclosures and avoid penalties. But what about smaller taxpayers?  Should they make disclosures to IRS auditors at the start of the audit process?  The Beigalski…Continue readingThe Start of an IRS Audit: To Disclose or Not?

Deducting Travel Expenses for Travel Away from Home

Contractors and business owners are able to deduct travel costs for travel away from home. This typically includes mileage and lodging costs. The amount of these expenses can be substantial. The IRS frequently audits and adjusts these expenses. Even with perfect records, the expenses may not be allowable depending on where the taxpayer’s “tax home”…Continue readingDeducting Travel Expenses for Travel Away from Home

IRS Audits for Car & Truck Expenses, What You Need to Know

There are a number of issues that the IRS frequently examines on audit.  Car and truck expenses are high on that list.  The applicable rules and court cases must be reviewed before presenting records to the IRS to substantiate car and truck expenses.  This article examines several of these rules and court cases. Deductible Car &…Continue readingIRS Audits for Car & Truck Expenses, What You Need to Know

Can I Deduct My Clothing Costs?

Can you take a deduction for clothing?  What if you purchase the clothing for work and would not otherwise have purchased the clothing?  What if the clothing is only worn at work?  This is a common dispute that comes up on audit with the IRS.  The Farolan v. Commissioner, T.C. Summary Opinion 2018-28, case provides…Continue readingCan I Deduct My Clothing Costs?

The Ins and Outs of the IRS’s Bank Deposit Analysis

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…Continue readingThe Ins and Outs of the IRS’s Bank Deposit Analysis

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…Continue readingDeducting Mileage for Business With Minimal Activities

Can the IRS Disclose My Tax Return?

Clients often ask us whether the IRS can disclose information that they provided to the IRS.  The short answer is “no,” but there are a number of exceptions.  This article examines the rules that prohibit IRS employees from disclosing taxpayer information and some of the remedies that are available if the IRS violates the rules.…Continue readingCan the IRS Disclose My Tax Return?

Have an IRS Dispute, What You Need to Know About IRS Appeals

If you have and IRS dispute brewing and you have not been able to resolve the matter with the IRS, you are probably going to have to ask the IRS Office of Appeals to consider the case. The IRS Office of Appeals is the administrative forum for resolving tax disputes. It provides taxpayers with an…Continue readingHave an IRS Dispute, What You Need to Know About IRS Appeals

About the IRS’s Whistleblower Program

The IRS has the ability to pay you for information leading to the recovery of unpaid taxes. The payouts from the IRS’s “whistleblower” program can be significant. The payout can be up to 30 percent of the tax, penalties, and interest the IRS collects. There are a number of rules that have to be considered…Continue readingAbout the IRS’s Whistleblower Program

Electing Small Tax Case Treatment in U.S. Tax Court

Taxpayers often handle cases in the U.S. Tax Court by themselves. This is typically the first time the taxpayer has been involved in a court case and the taxpayers are not familiar with the rules or how a court case is handled. Luckily, the U.S. Tax Court provides instruction on how to go about doing…Continue readingElecting Small Tax Case Treatment in U.S. Tax Court