Category: Taxes & IRS Audits - Law Offices of Daily & Toups

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What Is A Deductible Business Expense?

Small business owners and self-employed people are always looking for ways to maximize their tax savings. The key to legally cutting your business taxes to the bone is knowing the best ways to deduct business operating expenses to produce the very lowest taxable income. That’s the focus of this article. We’ll complete the picture with the rules for writing off assets purchased for your business. First, how is your business income taxed? The U.S. government taxes a...

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Tax Law for Small Business Owners

Take it from one small business owner to another: Operating a business without the right tax knowledge is like skydiving without a parachute—certain to end in calamity. Many business failures stem from ignoring the record keeping and taxes. Like it or not, the government is always your business partner. Tax knowledge has powerful money-saving potential. It can give you a fatter bottom line than your competitors who don’t bother to learn. For instance, there are several ways...

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Step by Step Guide on How to Apply for an Estate (Probate) EIN or TIN Online

An EIN—also known as an employer identification number—is often used to identify an estate when there is an active probate. The EIN is provided by the IRS and should be obtained by the personal representative or executor once the letters testamentary or letters of administration have been issued. The EIN is necessary for the personal representative to open up an estate bank account at a local or national bank. The estate bank account is used to...

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Offer in compromise: How to Get the IRS to Accept Your Offer

Would you like to wipe your tax slate clean at an enormous discount? The IRS has accepted less than 1% of a tax bill and called it even. There is no legal right to ever have a valid tax bill reduced by the IRS. It is entirely a matter of government discretion whether or not you qualify for an Offer in Compromise—referred to as an Offer or an OIC. In all but a few instances, the...

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Tax Audit FAQ: Common Issues When Dealing With the IRS

In this article, we have collected the 20 most commonly asked questions about tax audits and briefly answered them for your reading pleasure. Explore our tax content to find in-depth information about each question. Frequently Asked Questions Our website is filled with an in-depth discussion regarding specific dealings with the IRS. Sometimes, all one needs is a quick tip. Below is a list of the questions I am most frequently asked with regard to handling IRS audits. Thankfully,...

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IRS Audits: Timing is Everything

The IRS is powerful, but not without limit. After getting over the shock of reading “we have selected your federal income tax return for examination,” look carefully at the year or years on the audit notice. In general, after you file a tax return, the IRS has only three years to begin and end an audit of that return. If you filed it before the due date, April 15, the three years start running from April 15. If...

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IRS Audits: Top Six Field Audit Issues

Some field audits last a couple of hours and are wrapped up that day. In extreme cases, a revenue agent may spend hundreds of hours over a year or two conducting a field audit. The typical field audit, however, involves an interview with the revenue agent that lasts an hour or two, followed by the revenue agent spending ten to 15 hours reviewing your records. Introduction The vast majority of people who are subjected to a field audit...

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The IRS Appeals Protest Letter

IRS appeals rules differ, depending on the amount of taxes you are disputing from an audit. It's important to know at which thresholds the IRS separates requests. Smaller cases allow for a less formal appeal request while larger cases require more in-depth communication. Below, you'll find an overview of these two case determinations and how the IRS assesses them. Under $25,000: Small Case Request If the total amount you’re disputing for any one tax year is not more than...

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Tax Court: How the IRS Handles ‘Regular Cases’

If you want to contest in tax court an audit outcome of over $50,000 for any one year, your case will be considered a regular case. Most people hire a tax pro to represent them when arguing a regular case. A Trial in Tax Court If your case reaches the trial stage, the judge may not be that patient with a taxpayer representing him- or herself. Strict court procedures and rules of evidence apply. After the trial, you...

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Should You File a Tax Return While Under Audit?

Here’s one way to minimize the expansion of your audit: Don’t file a tax return while an office (read here) or field (read here) audit is in progress. This rule does not apply if the IRS is conducting a correspondence audit (read here). If you file your return during an office or field audit, the audit is likely to be expanded to include that return. When April 15 rolls around, file a request for an extension to October...

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