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Category: Tax Laws

Determining Filing Status

13 June, 2013 | Tax Laws

Determining Filing Status When taxpayers file their income tax return, one of the first questions required is their filing status.  Filing an income tax return with the correct filing status is important for taxpayers; the filing status is used to determine filing requirements, the standard deductions, correct tax, and eligibility for tax credits. The correct filing status can not only impact the benefits you receive, and the amount of taxes you... CONTINUE READING

IRS Calls Practitioners over EITC Claims

20 February, 2013 | Tax Laws

IRS Calls Practitioners over EITC Claims The Earned Income Tax Credit, often called the EITC, is a tax credit that can help taxpayers keep more of what they earn.  It is a refundable federal income tax credit for individuals and families who earn low or moderate income.  When the EITC exceeds the amount of tax owed, there is a refund for taxpayers who claim and qualify for the credit.  In order to qualify, you must file a tax return and meet a set of r... CONTINUE READING

The IRS, Tax Preparers and the US Supreme Court

6 February, 2013 | Tax Laws

The IRS, Tax Preparers and the US Supreme Court On March 13, 2012, three tax preparers filed a lawsuit against the Internal Revenue Service in the U.S. District Court for the District of Columbia.  They filed the suit because they believed that the IRS did not have the authority to license tax preparers. The plaintiffs claimed that Congress did not give the IRS authority to license tax preparers, and the IRS cannot give itself that power. Beginni... CONTINUE READING

Tax Court and S Corporation Wages

31 December, 2012 | Tax Laws

Tax Court and S Corporation Wages A recent tax court case, David E. Watson, P.C. v United States, has upheld the IRS re-characterization of S corporation distributions as wages. The individual shareholder-employee in the case, David Watson, CPA, was a partner in an accounting firm.  Watson made a mistake in the level of compensation he was entitled to for his business.  In 2002, Watson received a salary of $24,000, but was receiving $203,... CONTINUE READING

The Use of Mail Delivery Services to Timely File a Petition with Tax Court

21 December, 2012 | Tax Laws

The Use of Mail Delivery Services to Timely File a Petition with Tax Court A timely mailed petition to Tax Court can be treated as if it was timely filed, even if not received by the filing due date if mailed using an acceptable mail carrier. Therefore, a petition received by the Court after the 90-day period is considered to be received timely if the date of the U.S. Postal Service postmark was stamped on the envelope that is within the 90-day period.... CONTINUE READING

When it Comes to Tax Reform, “Keep it Simple”

25 November, 2012 | Tax Laws

The debate on tax reform in this country has been around as long as there have been income taxes. The very first time a federal income tax was imposed was on August 15, 1861 as part of the Revenue Act of 1861 in order to help pay for the Civil War. The first peacetime tax was imposed in 1894 when Congress passed the Wilson-Gorman Tariff which imposed a 2% tax on all incomes over $4000 per year (that equals $107,446 in 2011 dollars) which meant that less than 10% of all households would pay any t... CONTINUE READING

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IRS Form 12277: Request to Withdraw Form 668(Y) Filing

Summary The IRS Form 12277, Application for Withdrawal of Filed Form 668(Y), is used to request the withdrawal of a federal tax lien filed by the IRS due to unpaid tax liabilities. The form applies when you need to remove the public lien notice and qualify for withdrawal. To be eligible...