If a debt is canceled or forgiven, other than as a gift or bequest, the debtor generally must include the canceled amount in gross income for tax purposes. A debt includes any indebtedness for which the debtor is liable or which attaches to property the debtor holds.
Under the Bank Secrecy Act, U.S. residents or a person in and doing business in the United States must file a report with the U.S. Treasury if he or she has a financial account in a foreign country with a value exceeding $10,000 at any time during the calendar year. Taxpayers comply with this law by noting the account on their tax return and by filing Form 90-22.1, the Foreign Bank and Financial Account Report (FBAR). Willfully failing to file an FBAR report can be punished under both civil and criminal law.
The total number of audits of individual returns increased in 2010. Those who earned less than $200,000 had about a 1 percent chance of being audited. Those with incomes of $200,000 and more had about a 3 percent chance of being audited.
Preparation is essential to successfully representing your client during audit. The better you prepare for an audit the better the ultimate result for your client..
2.20 Generally, any
Many tax controversies are better resolved sooner rather than later. Accordingly, it is often to your client’s advantage for you to begin work on the case promptly. Your first goal should be to accurately gather the necessary information. You must control this information gathering process. Otherwise, the client will often inundate you with reams of useless information while neglecting to hand over truly important documents. The initial interview with the client is an important step in your preparation for audit.
As part of its new oversight program of the nation’s tax return preparation industry, the Internal Revenue Service recently announced it will send letters to approximately 100,000 tax return preparers who prepared returns in 2011 but failed to follow new requirements.
An overemphasis on cycle time creates incentives for IRS employees to take actions quickly, even where doing so produces inaccurate results or delays the final resolution of problems.
PURCHASE REPRESENTING THE AUDITED TAXPAYER BEFORE THE IRS FROM THOMSON WEST REPRESENTING THE AUDITED TAXPAYER BEFORE THE IRS You may also own one of the best selling books by tax professionals who represent taxpayers in IRS examinations.…
PURCHASE REPRESENTATION BEFORE THE UNITED STATES TAX COURT FROM THOMSON WEST REPRESENTATION BEFORE THE UNITED STATES TAX COURT By: - Robert E. McKenzie and Jeffry J. Erney and Thomas J. Callahan and Gregory J. Gawlik Custom Search This…
SPOUSAL RELIEF By Robert E, McKenzie ©2011 Custom Search Although many taxpayers enjoy substantial tax benefits from filing joint returns, those benefits may be outweighed when a tax deficiency or unpaid balance is asserted for a return. The…