You now that old adage, “the bigger they are, the harder they fall”? Well, you can bet that the IRS believes that is true. Because, with their cuts in funding, the IRS has decided that the rich and the small business owner are the best targets for their audits.
Continue reading Many happy returns?
Given the current state of politics in America, the IRS is being underfunded. No, I am not just talking about the fact that there is a desire to have the government spend less money- but spending less money for an agency that is responsible for collecting the government’s money doesn’t really make sense in the first place.
Continue reading What Happens When the IRS Runs Out Of Money…
One of the services we provide our small business clients is to insure that the payment of reasonable compensation. No, I don’t mean what they pay their employees (although we do that, as well, when requested). No, I am talking about the pay they take for themselves- the owners of the S Corporation or an LLC operating as an S corporation.
Continue reading Reasonable Compensation
I warned you guys. The second the IRS was going to get their hands on the credit and debit card transactions. Moreover, they are right, as I said.
Continue reading Your gross receipts may be underreported…
I am so tired of hearing how corporations pay 35% of their income to the Internal Revenue Service. That fiction needs to stop- now. There are a slew of companies that paid nome o corporate inctaxes in 2012 (and years prior).
Continue reading Tax Rate Fictions
I’ve long advocated the use of IRA’s to expand one’s business interests. The issue is that there is a VERY fine line dividing what can and cannot be done- in a legal sense.
Continue reading Self Directed Investment Retirement Accounts (SDIRA)
Are you planning to file your taxes yourself? If you are single, an employee, and don’t own a home- then I agree, that’s a great thing to do. Once any of these attributes change, then there a great deal of options available to you that will let you save money. And, that’s where talented folks like our staff actually save you more money than you would pay us to determine the lowest taxes you ar legally required to pay.
Continue reading T-40 and counting
It’s tax time. No, really.
Corporations have to file by the ides of March. And, those entities that need to provide K-1’s to their stockholders (S entities, LLC’s operating as S) incur substantial penalties for late filing. About $ 100 per K-1 per month. (Yes, it can amount to thousands of dollars for those entities with numerous stockholders.)
When we travel on business, we are required to track our expenses. ( OK, only if we expect to deduct these costs as legal expenses.) Typically, that means that we keep our receipts and prepare an expense report. (Substantiation is required by IRC 274 (d).)
Continue reading Food, Entertainment, and the IRS
Many of you know that we provide accounting services, as part of our offerings. That also includes tax planning and preparation. Yes, we believe that everyone has the right to pay the lowest amount of taxes required by law. (No, we don’t believe that gains that private equity firms obtain are “carried interest”, but we don’t make the law, either. Lobbyists do. [Don’t believe for one minute that the American Legislative Exchange Council (ALEC) doesn’t write the bulk of the laws of the states and our Federal government enact. If that were true, those state laws enacted recently would not have such identical verbiage.]) We also work with a few law firms, serving as business advisors and financial managers. One of which is a family law firm. It’s not very unusual for family law clients to want to turn their soon-to-be ex-spouses into the IRS. Another such client specializes in business and employee law, who also have folks who want to turn in various companies for tax fraud. All of this is becoming even more pronounced as folks have found that Bradley Birkenfeld was provided a $ 104 million windfall for turning in his employer, UBS. And, Mr. B is a convicted felon for refusing to divulge information demanded by the IRS about that same fraud! Most folks had no idea that in 2006 the award structure was changed to afford “tattletales” or “whistleblowers” up to 30% of the collected taxes as an award. (It did take the US Tax Court to impose upon the IRS to follow this law. But, that’s another story.) 
What does it take? Form 211. And, you need the 411 to fill it out. Because if there is not a lucid narrative, legal evidence, and a memorandum of law accompanying the filing, the odds are you will get nothing and your claim will go nowhere. (The IRS is NOT going to do any hard work for you. It’s your potential award.) And, don’t try to include stolen information or attorney-client (or legal tax representative-client) communciations- they are inadmissible. As you can surmise from Mr. B’s award, the claimant does not have to be ‘Mr. Goody Two Shoes’. But, you can’t be among those who plannned or initiated the fraud, either! It’s also not a get rich quick scheme. The average time for prosecution and collection of a whistleblower claim can be four years; seven years is not out of the question. Oh… one more very important fact. The award you receive is taxable, subject to withholding by the IRS. However, the fees you pay to a firm like ours to help your prepare the submission are fully deductible- above the line, so your tax is on the net award, not the total award. Happy hunting!
Continue reading Toot-toot!