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tax controversies Archives

CA surprises Amazon merchants with state tax bills

The state of California just sent a Pennsylvania man a notice that he could owe over a million dollars in California state taxes. The tax bill is the result of a recent change in tax law that allows states to collect sales tax from those who sell goods to residents within their state even if they do not have operations in the state.

Own cryptocurrency? Tips to avoid scrutiny from the IRS.

The Internal Revenue Service (IRS) has ramped up its efforts to track down taxpayers who have failed to report cryptocurrency. The most recent effort involved mass mailings to taxpayers who own the asset, whether they were required to report it on their tax filings. More on that effort is discussed in a previous post, available here.

Itemized or standardized: Which tax deduction is right for you?

The Tax Cuts and Jobs Act (TCJA) was the biggest piece of tax reform in decades. Although it led to many notable changes, one that impacts almost every taxpayer involved an increase to the standardized deduction amount. Upon passage of this law, the standardized deduction rates were set at $12,200 for tax payers filing singly or married filing separately, $24,400 for those married filing jointly and $18,350 for those filing as head of household for the current filing year.

Do you need to renew your ITIN?

An Individual Taxpayer Identification Number (ITIN) is defined by the Internal Revenue Service (IRS) as a tax processing number assigned by the IRS to taxpayers who are not eligible to receive a Social Security Number (SSN). These numbers are helpful for those who require a federal tax identification number but cannot get an SSN. Although intended only for tax identification purposes, it is not uncommon for schools and banks to also refer to these numbers for identification purposes.

Health aids and tax deductions: IRS provides guidance

Recent tax reform resulted in an increase in the standardized reduction. As a result, taxpayers need to carefully review potential deductions before deciding if itemization is in their best interest. One item taxpayers may not take into consideration which could result in deductions: health aids.  

IRS cryptocurrency mailings fuel confusion on tax requirements

The Internal Revenue Service (IRS) is not known for providing clear and easy to follow information. Unfortunately, the agency’s recent mailings to those who hold digital currencies provides yet another example of the confusing and misleading information the agency can provide.

How does SALT cap impact CA residents?

A provision within the Tax Cuts and Jobs Act (TCJA) limited the State and Local Tax (SALT) deduction. This limit had a disproportionate impact on high tax states like California and New York. As a result, tax professionals expect residents in these high tax states to consider moving to other, lower tax states.

Did the IRS just pounce on Bitcoin gains?

Bitcoin has jumped in value in recent months. The digital currency reported a jump in value three times that of the reported numbers in 2018, a “record-breaking” second quarter. With this in mind, it may not come as a surprise that the Internal Revenue Service (IRS) just announced it is sending out letters to over 10,000 taxpayers suspected of failing to report digital assets like Bitcoin.

Treasury Department denies states’ SALT workaround attempts

Residents in high tax states like California, Connecticut and New York have voiced frustration over some provisions included within the new tax law. One specific provision in the Tax Cuts and Jobs Act (TJCA) that hit taxpayers who reside within these states hard was the state and local tax (SALT) limitation.