Tax returns contain highly sensitive financial and personal information, which raises concerns about privacy and confidentiality. This article delves into the legal framework and practical considerations surrounding the disclosure of tax returns, exploring who can access them and under what circumstances. Taxpayer Bill of Rights: The Right to Confidentiality The Taxpayer Bill of Rights (TBOR) … Read more
Inheritance tax, a state-level levy imposed on the transfer of property or assets from a deceased individual to their beneficiaries, is distinct from the federal estate tax. While the federal government does not impose an inheritance tax, six states currently maintain this form of taxation: Iowa, Kentucky, Maryland, Nebraska, New Jersey, and Pennsylvania. Understanding which … Read more
The Cohan rule is a legal doctrine that allows taxpayers to estimate certain tax deductions when they lack precise records of actual expenses. Named after the taxpayer in the landmark case Cohan v. Commissioner, this rule provides taxpayers with a degree of flexibility in substantiating their deductions, particularly when faced with incomplete or missing documentation. … Read more
The Internal Revenue Service (IRS) is tasked with the critical responsibility of enforcing the nation’s tax laws. To effectively carry out this mission, the IRS employs a specialized force of law enforcement officers known as Special Agents. These agents possess the authority to investigate financial crimes, execute search warrants, and make arrests, all while carrying … Read more
The Internal Revenue Service (IRS) conducts annual maintenance on its e-filing system, resulting in a temporary shutdown period during which taxpayers cannot electronically file their tax returns. This shutdown typically occurs in late fall or early winter for individual returns and late December or early January for business returns. Individual Return Shutdown For the 2023 … Read more
Navigating the complexities of the Internal Revenue Service (IRS) can be daunting, especially when faced with financial hardship. The IRS recognizes the challenges individuals may encounter and offers hardship provisions to alleviate the burden of tax obligations. This guide delves into the qualifications, procedures, and implications of IRS hardship withdrawals, early withdrawals, and loans, empowering … Read more
Understanding IRS Audit Timeframes The Internal Revenue Service (IRS) plays a crucial role in ensuring compliance with tax laws and regulations. As part of its responsibilities, the IRS conducts audits to verify the accuracy of tax returns and assess potential discrepancies. Taxpayers may wonder about the time frame within which the IRS can examine their … Read more
An IRS installment agreement is a formal arrangement between a taxpayer and the Internal Revenue Service (IRS) that allows the taxpayer to pay off their tax debt in monthly installments. While installment agreements can provide taxpayers with much-needed relief from the burden of tax debt, it’s crucial to understand the consequences of defaulting on the … Read more
The second stimulus check, officially known as the Economic Impact Payment 2, was a one-time payment of up to $600 for individuals and $1,200 for married couples filing jointly. The payments were issued in December 2020 and January 2021, and most eligible Americans received the full amount. However, some individuals reported receiving only half of … Read more
Filing taxes can be a daunting task, and it’s easy to make mistakes. One common mistake is forgetting to claim a 1099 form on your tax return. 1099 forms are used to report income from sources other than your employer, such as self-employment income, dividends, and interest. If you fail to report all of your … Read more