Now that April 15 has passed, many California taxpayers are breathing a sigh of relief that they don't have to deal with the IRS for another year. However, that may not be the case. It is in the days, weeks and even months following April 15 that the IRS sends letters...
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California Court Holds Reasonable Cause for Penalty Abatement due to the Advice of a Professional only Qualifies when Ambiguity Exists for the Taxpayer
The Ninth Circuit Court of Appeals held that erroneous advice from an accountant that an estate tax return (IRS Form 706) could be extended for filing and payment purposes by one year did not qualify for penalty abatement as "reasonable cause."In Knappe v. United...
The IRS and California gain over $1B from Zuckerberg
Most everyone knows that Mark Zuckerberg is the founder and CEO of the popular social media site Facebook. What may not have been as well known until recently is that Zuckerberg owes more than $1 billion in taxes to the IRS and the state of California. That represents...
Court Holds That Compensation Paid to S-Corporation’s Sole Employee Was Unreasonable
Recently, in Watson, P.C. v. Unites States, 668 F.3d 1008 (8th Cir. 2012), the Court of Appeals held that the Internal Revenue Service (IRS) properly re-characterized S-Corporation distributions as wages and were therefore subject to employment taxes. Watson should...
IRS claims it can read your e-mail without a warrant
Recently, the IRS has publicly stated their position that there is no expectation of privacy regarding electronic communications, and that they may be able to view your electronic communications without a warrant.To read more, click here.
No IRS Form 8938 (Statement of Specified Foreign Financial Assets) is Required to File with Forms 1120, 1120S, 1065 and 1041 for 2012
Domestic Entity filers for tax year 2012 are not required to file Form 8938. The IRS anticipates issuing regulations in the future that will require a domestic entity to file Form 8938; but, until such regulations are issued, only individuals must file Form 8938....
Tax Court Limits Northern California Couples’ Real Estate Rental Loss Due To Passive Activity Rule
With the economic downturn the U.S. tax court has seen its fair share of cases tackling the limitation of real estate losses.In Hassanipour v. Commissioner, the U.S. Tax Court, held that a couple's losses from their rental activities were limited under IRC section...
Draft Form 8957, FATCA Registration Released
A draft of IRS Form 8957, which will be used to register financial instutions for FATCA, has been relased. To learn more, click here to view the IRS' announcement.
IRS Releases 2012 Data Book: Criminal Investigations Referrals and Prosecutions Continue to Rise
The Internal Revenue Service recently released the 2012 IRS Data Book, which is, in essence, a snapshot of IRS's activities for the 2012 fiscal year.The Data Book describes activities conducted by the IRS from Oct. 1, 2011, through Sept. 30, 2012, and includes...
Seven Tips for Taxpayers with Foreign Income
The IRS reminds U.S. citizens and residents who lived or worked abroad in 2012 that they may need to file a federal income tax return. If you are living or working outside the United States, you generally must file and pay your tax in the same way as people living in...
