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Articles Houston Tax

Foreign Trust Owner Liable for 35% IRS Penalty

The IRS shifted its focus to international issues about ten years ago. This included having the penalty group within the IRS’s Small Business/Self-Employed division focus on international reporting penalties. This is in addition to the Treasury’s FBAR filing requirements. The SB/SE division’s focus on penalties started with a few penalty notices. The number of these…Continue…Continue readingForeign Trust Owner Liable for 35% IRS Penalty

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Investment vs. Business Tax Losses

Our tax laws make a distinction between income and losses attributable to capital assets. The distinction draws a line in the sand. Assets that are capital produce capital gain and losses. Other assets do not. This in turn has a number of other impacts, such as on the timing of when income and losses are…Continue…Continue readingInvestment vs. Business Tax Losses

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Increased Tax Withholding & the IRS’s Lock-in Letter

Many taxpayers get behind in paying the IRS as a result of IRS audits. Others have tax balances as they are self-employed or contractors and they simply do not make estimated payments. There are others who owe tax as they instruct their employers to withhold too little income tax from their paychecks. The IRS has…Continue…Continue readingIncreased Tax Withholding & the IRS’s Lock-in Letter

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Adequate Dislcosure to Avoid Six Year IRS Statute

The IRS has a limited period of time to conduct audits. It often fails to finish the audit within this period of time. There are even instances where the IRS does not even start the audit until after this time period has passed. This raises tough questions for taxpayers. Taxpayers expect some finality with their…Continue…Continue readingAdequate Dislcosure to Avoid Six Year IRS Statute

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Poor Financial Decisions an Unforeseen Circumstance?

We all have financial ups and downs in life. Some of these ups and downs are due to circumstances beyond our control. Be it good luck, bad luck or something else. Many of these circumstances are not foreseeable. There are also circumstances that are due to our own making. Be it poor financial decisions or…Continue…Continue readingPoor Financial Decisions an Unforeseen Circumstance?

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Getting the IRS to Pay for Your Tax Attorney

An IRS audit or notice comes with a cost for the taxpayer who receives it. The cost can include additional tax, interest, and even penalties. Even if the taxpayer did everything correctly, the IRS audit or notice still comes with a cost. The cost can include the time and effort the taxpayer has to expend…Continue…Continue readingGetting the IRS to Pay for Your Tax Attorney

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Tax Planning for Start-Up Costs

New business ventures will typically incur losses in the first year or years. These losses can sometimes be used to offset the business owner’s other income. In a way, this tax loss offset and the tax savings is akin to an interest-free loan from the Federal government. Congress has imposed some limitations on this type…Continue…Continue readingTax Planning for Start-Up Costs

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What is a Repetitive IRS Audit?

When it comes to the IRS and audits, there are times when a taxpayer may feel like they can’t win. This is often true. If you have been reading this site for some time, you may recall our article involving Five Audits in Ten Years and the court concluding that this many audits in such…Continue…Continue readingWhat is a Repetitive IRS Audit?

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Is a Divorce a Divorce for Tax Purposes?

Each state has its own laws. This includes laws that say how one gets married and how one gets divorced. State laws provide a method for accomplishing both acts. The laws of foreign countries usually have similar laws and processes. Religious bodies and affiliations have similar rules and processes. This raises some interesting questions as…Continue…Continue readingIs a Divorce a Divorce for Tax Purposes?

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IRS Collectors Influence on Settlemet Offer

The IRS makes decisions about tax returns, back taxes, etc. These decisions may be made by one or more persons within the IRS. These decisions may be made by IRS employees whose job functions and missions are not the same. This is most evident in the context of IRS audits. The IRS auditor’s mission is…Continue…Continue readingIRS Collectors Influence on Settlemet Offer