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Tax Litigation Archives

Tax audit warning flags, part 3: be wary of unusual tax deductions

Beauty, it's often said, is in the eye of the beholder. But that isn't really true of tax deductions. No matter how necessary a certain expense may seem to a given taxpayer, that doesn't mean the IRS will agree.

Tax audit warning flags, part 2: not reporting miscellaneous income

It's true that the U.S. income tax system relies to a considerable agree on voluntary compliance. But that does not mean the IRS is solely dependent on a taxpayer's own disclosures. To the contrary: the IRS often has other sources of information about your possible income sources.

Tax audit warning flags, part 1: vindictive former spouse

No one knows exactly what Google's famous algorithm is. Nor does anyone outside the IRS know exactly what triggers a tax audit. But based on experience, it is possible to make certain educated assumptions about what the warning flags for IRS audits are.

The IRS and federal budget cuts: furloughs to be delayed until after April 15

In our February 11 post, we discussed the prospect that federal budget cuts could affect the ability of the IRS to assistance taxpayers and to enforce tax law through audits and investigations. These cuts, known by the shorthand term "sequester," began taking effect on March 1.

IRS regulation of tax preparers: an update

It's been over a month now since a federal judge ruled that the IRS had exceeded its statutory authority in its proposed new regulatory framework for professional tax preparers. As we discussed in our January 30 post, California's state-level regulation of preparers remains in place despite the ruling.

IRS warns against scammers who use the IRS name

It's bad enough being contacted by the IRS about a potential audit or an ongoing investigation. But in some ways it's even worse when scammers and various bad online actors send bogus e-mails purporting to be from the IRS. These scammers attempt to use the IRS name - or even its logo - to trick people into revealing personal information.

California small business owners face end of partial capital gains exclusion

The word "taxes" is a very general one. In practice, there are many different types of taxes. In part, this is because there are so many levels of government: not only federal, but also state and local. It therefore isn't only the decisions of the IRS that can loom large over taxpayers. In California, the decisions of the Franchise Tax Board can do so as well.

IRS whistleblower program is under scrutiny

The term "whistleblower" provides an excellent example of the difference between literal and figurative language. Someone who exposes suspected wrongdoing, perhaps because of financial incentives, rarely blows a literal whistle. But the impact of figurative whistleblowers looms large in many different arenas.