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Tax Litigation Archives

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.

In-depth: how the IRS botched the first-time home buyer tax credit

In our last post we discussed a recent study of the IRS' administration of the first-time home buyer tax credit program. It appears that the IRS has sent erroneous payment demands to some taxpayers who owe nothing while failing to catch a few pretty obvious fraud schemes related to the tax credit. The most recent study into the IRS' antics highlights the importance of calling an experienced Orange County tax law attorney if you are contacted by the IRS. An attorney will properly manage and document all interactions with the IRS so a taxpayer will not fall victim to the failings of the IRS.

California home buyer tax credits an issue for the IRS

An experienced California tax law attorney should be called anytime that an Orange County resident is contacted by the IRS. Any contact with the IRS can indicate that a taxpayer is under investigation or being audited and that it is time to seek a tax professional. It is important not to talk directly to the IRS even if you have not committed tax fraud or tax evasion. Honest taxpayers can find themselves in trouble for misstatements and an experienced tax attorney can properly deal with the IRS to avoid a misstatement becoming a huge headache for a taxpayer.

Common tax penalties for Orange County taxpayers

Dealing with the IRS can be a daunting task for any California resident. A tax liability can arise out of a variety of situations and there several different types of tax penalties that the IRS can impose on a taxpayer. An experienced California tax law attorney can help work with the IRS to reduce or eliminate penalties. The abatement of penalties may mean a significant reduction in the overall tax burden of an Orange County taxpayer because penalties can cause a tax debt to spiral out of control.

IRS to small business owners: don't leave money on the table

The IRS and the Department of Health and Human Services will conduct a new round of outreach to small business owners in Orange County and throughout the country. The outreach efforts will target small business owners that may not be aware of whether they qualify for the Small Business Health Care Tax Credit. This tax credit was a part of last year's Affordable Care Act.

IRS announces it will end the two-year innocent spouse limit

Most married couples in Orange County file a joint tax return. Although both spouses filing a joint return are legally responsible for ensuring the accuracy of their return, the most common practice is for one spouse to take primary control for filing the return. The less-involved spouse may look over the return before signing it, but frequently spouses will sign returns prepared by their partners without much thought.

California taxpayers should remember charitable deduction letters

Although tax considerations are not the primary reason why most Californians donate to charity, the charitable deduction is heavily relied on by some individuals and businesses to plan how to dispose of unwanted property. Many Orange County taxpayers are dismayed when their charitable deductions are disallowed by the IRS due to a lack of documentation. The frequency of these disallowances makes it important for California taxpayers to remember to "get the letter."

Tax court decision may lead to more Orange County tax deductions

One California woman with a house full of cats recently won a tax court battle that may have implications for taxpayers in Orange County and the rest of the country. The woman is a 59-year-old Oakland resident who lives in a modest 1,500-square-foot house that she used to provide care to about 70 feral cats as a volunteer for "Fix Our Ferals."

Corporate Tax Code Is Too Full of Loopholes

It seems fair to say that no one is entirely happy with the American corporate tax code. It is also fair to say that many people who deal with the corporate tax code hate it passionately. One of the biggest problems with the code is an aspect of it that corporate America might be the happiest with: it is constantly Changing as a result of successful lobbying by corporations to have new tax breaks inserted into the corporate tax code.