Tax Litigation Law Office of Scott Kauffman
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February 2011 Archives

Received an audit? Learn from someone who's been there before

No one wants to open their mailbox and discover an envelope from the Internal Revenue Service. Tax payers know that such an ominous package usually means that they have been selected for an audit. The prospect of undergoing an audit can be incredibly nerve wrecking, even for individuals who are completely confident in their ability to file everything correctly.

Innocent Spouse Relief Is Available, But Difficult to Get

It is common for married couples to file a joint tax return. Most couples save money by filing together. One big disadvantage, though, is that if you file jointly, you are liable for any mistakes or intentional misstatements made by your spouse.

Tips on IRS Publication 17

Internal Revenue Service Publication 17, Your Federal Income Tax, is a guide to each step of an individual federal income tax return. This publication explains tax laws, including explanations of new laws for the 2010 tax year, and deductions that have expired and can no longer be taken.

IRS Announces Terms of New Offshore Account Amnesty

Holders of offshore bank accounts that the Internal Revenue Service would look on as tax evasion have a new incentive to declare the accounts to the IRS. The penalties have not been relaxed as much as they were with the last amnesty offer, but the latest offer still includes non-prosecution.

IRS Targets S Corporation Owners Who Take Low Salaries

The IRS won a federal district court case last month that is could have serious tax implications for many closely-held businesses. The tax litigation case was against a CPA who is the owner of an S Corporation. Many private firms like to form S Corporations, which have a maximum of one hundred shareholders. By forming an S Corporation, profits pass to owners without an extra layer of tax. In the U.S. today, there are nearly four million S Corporations.

Tax Court Allows Business Losses for Horse-Breeding Couple

At the end of last year, a U.S. Tax Court examined a case where a couple had claimed business losses in their horse breeding activities. The IRS challenged the couple's claim that the horse breeding activities were a for-profit operation. Their company, American Paint Horse, had not generated a profit in ten years of operation.