This is the third in a series of articles on issues surrounding the Taxation of Settlements and Verdicts. This article identifies some of the things you can do to protect the character of the award. Allocate Damages. If a settlement agreement allocates the settlement payment among items taxable as ordinary income, items taxable as a [...]
This is the second in a series of articles on issues surrounding the Taxation of Settlements and Verdicts. This article addresses the amounts that can be excluded from gross income. Amounts Excluded. Internal Revenue Code Section 104(a)(2) excludes from gross income compensatory damages: 1. Received through prosecution of a legal suit or action or through [...]
This is the first in a series of articles on issues surrounding the Taxation of Settlements and Verdicts. The article addresses the initial question of whether these amounts are included in gross income. General Rule. The proceeds from a settlement or verdict are part of the taxpayer’s gross income, unless the taxpayer can prove that [...]
Much of the information the IRS has collected from or about a taxpayer in an audit or collection situation is available to the taxpayer. This includes the Revenue Agent’s or Revenue Officer’s notes and many of the documents they have collected about the taxpayer. Detailed information about what is available through the FOIA request is [...]
This is the tenth post in the Collection Options series. This series is dedicated to presenting individuals and businesses with options for dealing with outstanding tax obligations. Taking No Action. Some taxpayers have the option of taking no action to resolve their outstanding tax obligations with the Internal Revenue Service. The IRS has ten years [...]
This is the ninth post in the Collection Options series. This series is dedicated to presenting individuals and businesses with options for dealing with outstanding tax obligations. Innocent Spouse/Separation of Liability/Equitable Relief. IRC 6015. The tax liability on a joint return will often be the result of the conduct of just one of the spouses, [...]
This is the eighth post in the Collection Options series. This series is dedicated to presenting individuals and businesses with options for dealing with outstanding tax obligations. Offer in Compromise – Minnesota Department of Revenue. The starting point for an Offer to the Minnesota Department of Revenue is similar to the IRS. Determine the net [...]
This is the seventh post in the Collection Options series. This series is dedicated to presenting individuals and businesses with options for dealing with outstanding tax obligations. Offer in Compromise – IRS. The IRS and the MDR have the authority to settle, or compromise, tax liabilities by accepting less than full payment under certain circumstances. [...]
This is the sixth post in the Collection Options series. This series is dedicated to presenting individuals and businesses with options for dealing with outstanding tax obligations. Installment Agreement – MDR Guidelines. The Department of Revenue states that it does not have specific payment plan guidelines. It determines the appropriateness of an installment plan for [...]
This is the fifth post in the Collection Options series. This series is dedicated to presenting individuals and businesses with options for dealing with outstanding tax obligations. Installment Agreement – IRS. The IRS has the option of accepting payments through an installment agreement if the installments will pay the tax in full, plus interest, within [...]