Gary Weiss CPA

The Tax Code contains many taxpayer rights and protections. However, because the Tax Code is so large and complex, many taxpayers, who do not have the advice of a tax professional, are unaware of their rights. To clarify these protections, the IRS recently announced a Taxpayer Bill of Rights, describing 10 rights taxpayers have when dealing with the agency. Taxpayer education The idea for a Taxpayer Bill of Rights has been percolating for several years. One of the leading proponents has been National Taxpayer Advocate Nina Olson. In January 2014, Olson told Congress that a Taxpayer Bill of Rights was […]

Since 2009, the IRS has operated an Offshore Voluntary Disclosure Program (OVDP) for U.S. taxpayers who have failed to disclose foreign assets or report foreign income from those assets to the IRS or Treasury. The program provides reduced penalties and other benefits, thus giving taxpayers an opportunity to address their past noncompliance and “become right” with the government. The IRS reports that 45,000 taxpayers have made voluntary disclosures since 2009 and have paid $6.5 billion in back taxes, interest, and penalties. In 2014, the IRS made important changes to the OVDP, with the expectation that the revised program will lead […]

A recent decision by the U.S. Supreme Court clarifies how taxpayers may challenge an IRS summons where the taxpayer claims the summons was issued for an improper purpose. A taxpayer has a right to conduct an examination of IRS officials regarding their reasons for issuing a summons when the taxpayer points to specific facts or circumstances plausibly raising an inference of bad faith, the Court held. The Court took a different approach than one adopted by the Eighth Circuit Court of Appeals, which had brought the case to the Supreme Court. IRS summons power The IRS has many tools in […]

Taxpayers who are self-employed must pay self-employment tax on their income from self-employment. The self-employment tax applies in lieu of Federal Insurance Contributions Act (FICA) taxes paid by employees and employers on compensation from employment. Like FICA taxes, the self-employment tax consists of taxes collected for Social Security and for Medicare (hospital insurance or HI). The self-employment tax is levied and collected as part of the income tax. The tax must be taken into account in determining an individual’s estimated taxes. The self-employed taxpayer is responsible for the self-employment tax, in effect paying both the employer’s and the employee’s share […]

The simple concept of depreciation can get complicated very quickly when one is trying to determine the proper depreciation deduction for any particular asset. Here’s only a summary of some of what’s involved. Identifying the asset The modified accelerated cost recovery system (MACRS) is generally, but not always, used to depreciate tangible depreciable property placed in service after 1986. The MACRS deduction is computed on Form 4562, Depreciation and Amortization. Intangible property may not be depreciated under MACRS, but it may be amortized in certain situations. Real estate may not be depreciated, but buildings situated on it may. Sound recordings, […]

In its July 2014 issue of Tax News, the California Franchise Tax Board (FTB) addresses a variety of personal income and corporation franchise and income tax issues, including the following: tax bills of interest; avoiding the minimum tax or annual tax for entities ceasing business (a business entity that has not conducted business for the year may avoid the minimum franchise tax or annual tax for current and subsequent taxable years if it meets all of the following requirements: (1) file a final franchise or annual tax return timely, including extension, for the preceding taxable year and mark it final; (2) conduct […]

As an individual or business, it is your responsibility to be aware of and to meet your tax filing/reporting deadlines. This calendar summarizes important tax reporting and filing data for individuals, businesses and other taxpayers for the month of July 2014. July 2 Employers. Semi-weekly depositors must deposit employment taxes for payroll dates June 25–27. July 7 Employers. Semi-weekly depositors must deposit employment taxes for payroll dates June 28–July 1. July 9 Employers. Semi-weekly depositors must deposit employment taxes for payroll dates July 2–4. July 10 Employees who work for tips. Employees who received $20 or more in tips during […]

The IRS continues to provide guidance and instructions relating to the disclosure and reporting of offshore assets under the Foreign Account Tax Compliance Act of 2010 (FATCA). FATCA was enacted to help the IRS identify U.S. taxpayers with financial accounts and other assets overseas, to curb tax evasion by taxpayers hiding assets, and to ensure that taxpayers were reporting all their income. After a long transition period, it is now coming into full force. A major component of the IRS strategy to halt tax avoidance using offshore accounts is to offer a voluntary disclosure program, basically giving account holders a […]

In a taxpayer-friendly ruling, the IRS recently determined that a surviving spouse could roll over two Roth IRAs, which were payable to a trust controlled by her, into her own Roth IRA. The taxpayer’s late husband had maintained the Roth IRAs and created the trust. Roth IRAs The taxpayer’s husband had two Roth IRAs. He designated a trust as the beneficiary of the two Roth IRAs, with the provision that upon his death, his wife would become the sole trustee of the trust. The husband also directed that the trust be divided into two sub-trusts (Marital Trust and Family Trust). […]

The U.S. Supreme Court ruled in June that inherited IRAs are not “retirement funds” exempt from a debtor’s bankruptcy estate. Unlike funds in other accounts, funds in inherited IRAs are not set aside for the purpose of retirement, the Court held. Background An individual created an IRA and named her daughter as the beneficiary. The individual died and the beneficiary elected to take monthly distributions from the account. Sometime later, the beneficiary sought Chapter 7 bankruptcy protection. The beneficiary wanted to exclude the inherited IRA from the bankruptcy estate. The dispute went first to the bankruptcy court, which ruled against […]