Our federal tax system is one of voluntary compliance: each taxpayer is expected to correctly report and pay their tax liabilities to the IRS. For a variety of reasons, this plan often fails. The IRS has many ways to find taxpayers who either fail to report their...
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Firm News
FTB First Time Penalty Abatement Proposed
The FTB may be getting on board with the IRS by offering a first-time penalty abatement for qualified taxpayers. The relief would begin with tax year 2022 and provide one-time relief of failure-to-file or failure-to-pay penalties. This is just one of the provisions...
IRS Inventory Report – 2021 Returns Completed
The IRS has been working hard to catch up on the processing of 2021 income tax returns and related correspondence that were delayed due to the pandemic and staffing shortages. More than 4.7 million original individual income tax returns were filed in 2021; by the end...
The IRS’ Position on Abusive Micro-captive Insurance Transactions is Upheld
While micro-captive insurance policies may be about as clear as mud to many people, what is crystal clear is that a U.S. Court of Appeals affirmed the IRS’ position that abusive micro-captive insurance transactions are sham transactions resulting in a disallowance of...
National Taxpayer Advocate Delivers Her Annual Report to Congress
Although the IRS performed well under difficult circumstances, Erin Collins, IRS National Taxpayer Advocate, dubbed 2021 the most challenging year taxpayers and tax professionals have ever experienced in her annual report to Congress issued in January. Among top...
IRS Sees Dollar Signs in Marijuana Related Businesses
The IRS has determined it can collect far more in unpaid taxes from Marijuana Related Businesses (MRBs) than other industries ripe for audit. As a result, the IRS has been focusing on MRB audits for civil assessments which in some cases become criminal referrals. If...
IRS Reminder: Correctly Classify your Workers!
Recently the IRS released some tax tips for small business owners and self-employed individuals. One critical reminder for all business owners: correctly identify workers as either employees or independent contractors. Misclassifying an employee as an independent...
Rental Properties are Hot – Handle with Care
With more people looking to move into homes with an office to work from home these days, some taxpayers are trying their hands as landlords. While a property owner must report rental income, there are many deductions including repairs, operating expenses, and...
Leaving California to Save on Taxes? Be Sure You Really Go!
As California taxpayers leave the state in droves, so too does the FTB review subsequent income activities to ensure the taxpayers have really left the state. The Bracamontes learned this hard truth recently when the California Office of Tax Appeals (OTA) issued its...
IRS Helps Taxpayers with Current Installment Agreements
The IRS announced today that it will help taxpayers who have an Installment Agreement with the IRS but cannot pay their new tax balances by adding the balance to the existing Installment Agreement if the taxpayer qualifies. If you owe the IRS tax payments for past...
