Substantiating business expenses is a common problem for businesses going through an audit with either the Internal Revenue Service (IRS) or the Minnesota Department of Revenue (MDR). In previous blog articles, we addressed the first, second, and third steps of a four step process in an IRS or MDR substantiation audit. This article will [...]
Substantiating business expenses is a common problem for many businesses going through an audit with either the Internal Revenue Service (IRS) or the Minnesota Department of Revenue (MDR). In previous blog articles, we addressed the first and second steps of a four step process in an IRS or MDR substantiation audit. This article will focus [...]
Substantiating business expenses is a common problem for many businesses going through an audit with either the Internal Revenue Service (IRS) or the Minnesota Department of Revenue (MDR). In a previous blog article, we addressed the first step of a four step process in an IRS or MDR substantiation audit: proving the payment of expenses. [...]
This is the first post in the Frequently Asked Tax Questions in Family Law Cases series. This series is intended to answer questions family attorneys frequently ask us regarding tax issues. Question: Each parent pays 50% of the child care costs to the provider. Can both parents take the tax credit for child and dependent [...]
Taxpayers and representatives often ask us: how long does the IRS have to make changes to an individual income tax return and assess additional taxes? Another way to phrase this question is: how long is the IRS’s “statute of limitations on assessment” for individual income taxes? In most cases, the answer is that the IRS [...]
Many individuals and businesses fail to file their income tax returns for multiple years for a variety of reasons, usually stemming from life and business pressures that made it almost impossible for them to file their returns. When they finally have the time and motivation to prepare and file the returns, they realize that they [...]
One of the most critical issues a taxpayer can face during an IRS audit is deciding what information to provide to the IRS. The IRS will typically request information either informally through an Information Document Request (IDR), or formally through an Administrative Summons (Summons). Deciding how to respond can depend on which type of request [...]
Substantiating business expenses is a common problem for many businesses going through an audit with either the Internal Revenue Service (IRS) or Minnesota Department of Revenue (MDR). The IRS and MDR have expectations of what they believe to be proper record keeping. Meeting these expectations can be difficult and the requirements can vary depending on [...]
Purchasing and renting real estate can be profitable. It can also generate significant tax benefits. However, the Internal Revenue Code limits some of the tax benefits to taxpayers who are not “real estate professionals,” as defined in IRC Section 469(c)(2). In most circumstances, real estate rental activities are passive activities. The losses from a passive [...]
In Scharf v. Comm’r 32 T.C. Memo 1247 (1973) acq, in result, 1974 WL 36031, the United States Tax Court decided, and the IRS had acquiesced to the decision, that a charitable contribution deduction was available for the donation of a building (albeit partially destroyed) to a volunteer fire department for demolition in firefighter training [...]