Responding Effectively to an IRS Notice of Tax Audit

If you have had the unpleasant, even panic-inducing experience of receiving a tax audit notice from the IRS, you probably want to know exactly what lies ahead. A tax audit is simply an accounting practice in which IRS representatives will review your personal or business finances in order to make certain that one or more…

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Should I have my CPA or tax preparer who completed my tax return handle my IRS audit or should I retain a tax attorney?

Using your CPA or Tax Preparer: The advantages of using your CPA include familiarity with your return, your financial affairs and/or business.  The CPA’s professional fees will likely be less compared to hiring a Tax Attorney.  Lastly, you likely have a professional history and trust with your CPA. Using a Tax Attorney: Let’s face it,…

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The Maryland Comptroller is auditing my business regarding sales and use tax reporting. Can I be held personally liable for those taxes even though they relate to my business?

Yes. If the Comptroller finds your business liable for sales and use tax, then you could be held personally liable for the tax, interest, and penalties assessed. Maryland law extends personal liability for sales and use tax to different individuals based on the type of entity involved in the audit.  For example: If your business…

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ACA Requirements Create Confusion for Some Filers

With millions of Americans preparing to file their tax returns in advance of the April 15 deadline, many are discovering that key provisions of the Affordable Care Act (ACA) are impacting their liabilities more than they anticipated. This can lead to unpleasant surprises for the unwary who may have been expecting a much larger refund…

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Will the Affordable Care Act (Obamacare) – Employer Mandate Complicate Worker Classification Issues for Business Owners?

Absolutely!  The already multifaceted laws governing the differentiation of “Employee” or “Independent Contractor” is further complicated by the Affordable Care Act’s (“ACA”) employer mandate set to be implemented in 2015.  The employer mandate will expand complicated regulations and include increased enforcement actions by the IRS. The employer mandate requires certain employers with 100 or more…

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Who is the IRS targeting for an audit?

In general, the IRS targets the low hanging fruit, shakes the taxpayer’s tree, money falls and the US Treasury is happy.  The taxpayers selected are not happy as they just endured months of stress dealing with the audit, costly professional fees and a likely tax debt that includes interest and penalties. The IRS has a…

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What risks do real estate professionals encounter when selected for an IRS examination?

For those real estate professionals who want to deduct their passive rental losses against ordinary income, in addition to substantiating rental income and expenses reported on their return, they will need to prove that they are “real estate professionals” who “materially participate” in their rental operations. While this appears simple, I assure you it is…

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Does the IRS have a new rule regarding tips at bars and restaurants?

Yes. Effective January 1, 2014, the IRS will begin to reclassify certain automatic tips as service charges. For example, an 18% gratuity charged to parties of six or more will likely be classified as a service charge rather than a tip. This will have a significant impact on restaurants, bars, banquet halls, and other food service establishments.  Businesses are…

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