Archive | IRS Tax Audits

The IRS and Married Couples: Real Estate

June 15, 2017  |   Posted by :   |   International Tax Planning,IRS Tax Audits   |   0 Comments

Two new cases in 2017 have been recently decided by the US Tax Court, which involves married couples with Real Estate: 1. Asad, TC Memo. 2017-8: Husband & Wife who each owned rental property deducted large losses on their joint tax returns. They later divorced. As per the divorce agreement, the divorced couple wanted to […]

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IRS, Celebrities and Taxes

June 14, 2017  |   Posted by :   |   IRS Tax Audits   |   0 Comments

Celebrities though famous (and adulated by fans) like the rest of the US taxpayers must pay their taxes timely or have IRS tax problems. Whether due to an adverse audit result or failures to pay taxes due, American legends like Willie Nelson once had his entire estate seized by the IRS for his advisor’s failure […]

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IRS Tax Audits: Taxpayer Good Faith Misinterpretation of the Law

June 05, 2017  |   Posted by :   |   IRS Tax Audits   |   0 Comments

Under the case, Mortensen v. Commr. 440 F.3d 375, 385 (6th Cir. 2006), it was held that reasonable minds could differ over tax reporting. In the US Supreme Court case of United States v. Bishop, 412 US 346, 360, 36 L.Ed. 2d 941, 93 S.Ct. 2009 (1973) the Supreme Court stated: “In our complex tax […]

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IRS Wealth Tax Squad – Update

May 17, 2017  |   Posted by :   |   High Net Worth Investor,IRS Tax Audits   |   0 Comments

The IRS released audit stats on their audits of high-wealth taxpayers (over $10 income or assets) by their recently formed special IRS tax unit, The Wealth Squad. For Tax year 2015, 450 IRS Wealth Squad audits were initiated. These IRS audits are expensive, and time consuming starting with an expansive IRS document request, which will […]

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Tax Planning and Legal Authority

April 10, 2017  |   Posted by :   |   IRS Tax Audits,Tax Evasion   |   0 Comments

The US Supreme Court has a long history of supporting legal tax planning while disavowing illegal tax evasion (which has both civil and criminal consequences). Please see the authorities cited below. In 1864, in the case of US v. Isham 84 US 496 (1864) the US Supreme Court considered the Stamp Duty (Tax) and stated […]

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IRS Tax Audits – Criminal Tax (2017)

March 16, 2017  |   Posted by :   |   IRS Tax Audits   |   0 Comments

The IRS reported that in fiscal year 2016 they initiated 3,395 federal criminal tax cases thru the IRS/Criminal Investigation Division (which is the only federal law enforcement agency with jurisdiction over federal tax crimes). The focus of these cases included: money laundering, public corruption, cyber-crimes. For FY 2016, the IRS/CI conviction rate was 92%. The […]

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New IRS Tax Rules (2017)

March 15, 2017  |   Posted by :   |   IRS Tax Audits   |   0 Comments

In IR-2016-139 (10/25/16) for tax year 2017 the following new IRS tax rules apply: 1) Standard Deduction: Singles: $6,350 (2016: $6,300) Married: $12,700 (2016: $12,600) 2) Personal Exemption Singles: $4050 (2016: same) This exemption is subject to a phase out and is reduced by 2% for each $2500 of Adjusted Gross Income over threshold AGI […]

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IRS Tax Audit Rates (2017)

February 08, 2017  |   Posted by :   |   IRS Tax Audits   |   0 Comments

In a groundbreaking study the TaxFoundation.org released a study of IRS tax audits for the 2015 Fiscal Year (thru 9/30/15, the most recent tax year for which IRS tax audit statistics have been released), which revealed the following: 1. The overall IRS audit rate has dropped from 1.1% (2010), 1 in 90 taxpayers to .8% […]

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IRS Tax Audit Risks – 2016

January 19, 2017  |   Posted by :   |   IRS Tax Audits   |   0 Comments

On 12/19/16 Fox Business News published “9 Tax Audit Red Flags for the IRS” by Sean Williams. As a background, the Tax Foundation found that the US Tax Code is now 10.1m words. The instructions to complete a basic Form 1040 are more than 100 pages long. Although historically the IRS only audits about 1% […]

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IRS Tax Audits: The Wealth Squad

November 09, 2016  |   Posted by :   |   IRS Tax Audits   |   0 Comments

For wealthy taxpayers with over $10m in income, the IRS has a special tax audit division, the Global High Wealth Industry Group (the “Wealth Squad”). The IRS Wealth Squad falls under the IRS Large Business and International Division (formerly Large and Midsize Business Division). The Wealth Squad was formed in 2010 to audit “high wealth […]

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