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December 2011 Archives

More last-minute tax saving tips

The year is not over and it is not too late to make some shrewd moves to save on your yearly tax bill. In our last post we discussed the importance of proper tax planning for high income individuals and the fact that some deductions may trigger an IRS audit. We also discussed three tax saving tips that the IRS recently issued including donating to charity, installing green-energy appliances, and making changes to an investment portfolio.

IRS releases last-minute tax reduction tips

Orange County residents with high incomes are more likely to itemize their tax deductions and to be targeted by an IRS audit. The IRS is more likely to scrutinize the deductions that a high-income earner takes and the failure to provide supporting documentation for a deduction can get a taxpayer into serious legal trouble.

What to do if you receive a 90-day or 30-day letter from the IRS

In our last post we discussed the importance of calling a California tax law attorney when the IRS sends a notice of deficiency. A notice of deficiency is also called a 90-day letter because it states that a taxpayer has 90 days to either submit a Form 1040 tax return, consent to the IRS' deficiency assessment, or explain why the taxpayer is not required to file taxes.

The consequences of ignoring a notice of deficiency

The IRS' collection procedures can be unfair and complicated. When the IRS decides that an Orange County resident owes money, it can simply take the money it feels entitled to. A California tax law attorney can help those who face levies and other collection actions fight against the harsh collection practices of the IRS.

IRS warns of fines and jail time for offshore bank account holders

In our last post we discussed a recent speech by IRS Commissioner Douglas H. Shulman on offshore bank accounts and the IRS' continuing pursuit of California residents with undisclosed foreign assets. The IRS is going to continue to pressure banks and foreign governments to disclose the identity of California taxpayers with hidden assets. Shulman said that the IRS has more tax evasion cases and banks on its radar and that he expects a new wave in tax evasion prosecutions in the coming years.

IRS Commissioner highlights offshore tax evasion crackdown

IRS Commissioner Douglas H. Shulman recently gave a speech at the 24th Annual Institute on Current Issues in International Taxation. One of the things that the commissioner focused on was the IRS' increasing scrutiny on taxpayers with offshore bank accounts.

Rental activity losses and the rule of "material participation"

Last week we discussed the tax court case of one California couple that was audited for deducting losses for their rental properties. Rental activity is typically considered a "passive activity" under the tax code and is therefore subjected to a limit. California taxpayers with rental properties can avoid this limit on losses if they qualify as "real estate professionals" that materially participated in the rental of a given property. We discussed particular requirements of the "real estate professional test" in last week's post.

IRS slaps $500k tax lien on Christie Brinkley's estate

Having a tax lien placed on your property is not only embarrassing but a lien can also ruin real estate deals and compromise lines of credit based on the property. The IRS routinely places levies and liens on taxpayers and the IRS often makes mistakes in doing so. Unfortunately the burden is on the property owner to file a wrongful levy claim to prove that a tax lien or levy is invalid. An experienced Irvine wrongful levy claims attorney can help California taxpayers properly file wrongful levy claims and help repair some of the damage that the IRS has done.

Passive activities and the "real estate professional" test under the tax code

In our last post we discussed the importance of hiring an experienced California tax litigation attorney when the IRS refuses to reasonably handle the negotiations surrounding an unfavorable audit. We also discussed a recent tax court case in which California taxpayers challenged the IRS' characterization of their rental losses as "passive activity losses" that were subject to certain limitations.

California couple takes IRS to court over passive activity losses

When the IRS fails to reasonably negotiate with a taxpayer, an experienced California tax litigation attorney should be prepared to take a client's case to court. Depending on the issues involved in a tax case, a case will be directed to the United States Tax Court, United States District Court, or the United States Court of Claims. Although going to court is not the first option for many taxpayers, sometimes going to tax court is the only way to aggressively challenge an unfavorable audit.